G.R. No. L-58184 October 30, 1981 there is an unconstitutional application.
there is an unconstitutional application. There was not even a categorical assertion to that
FREE TELEPHONE WORKERS UNION, petitioner,
vs.
THE HONORABLE MINISTER OF LABOR AND EMPLOYMENT, THE NATIONAL LABOR
RELATIONS COMMISSION, and THE PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, respondents.
FERNANDO, C.J.:
The constitutionality of the amendment to the Article of the Labor Code regarding strikes
"affecting the national interest" 1 is assailed in this petition which partakes of the nature of a
prohibition proceeding filed by the Free Telephone Workers Union. As amended, the Article
now reads: "In labor disputes causing or likely to cause strikes or lockouts adversely affecting
the national interest, such as may occur in but not limited to public utilities, companies engaged
in the generation or distribution of energy, banks, hospitals, and those within export processing
zones, the Minister of Labor and Employment may assume jurisdiction over the dispute and
decide it or certify the same to the Commission for compulsory arbitration. Such assumption or
certification shall have the effect of automatically enjoining the intended or impending strike or
lockout. If one has already taken place at the time of assumption or certification, all striking or
locked out employees shall immediately return to work and the employers shall immediately
resume operations and readmit all workers under the same terms and conditions prevailing
before the strike or lockout. The Minister may seek the assistance of law enforcement agencies
to ensure compliance with this provision as well as with such orders as he may issue to enforce
the same." 2 It is the submission of petitioner labor union that "Batas Pambansa Blg. 130 in so
far as it amends article 264 of the Labor Code delegating to the Honorable Minister of Labor
and Employment the power and discretion to assume jurisdiction and/or certify strikes for
compulsory arbitration to the National Labor Relations Commission, and in effect make or
unmake the law on free collective bargaining, is an undue delegation of legislative
powers. 3 There is likewise the assertion that such conferment of authority "may also ran (sic)
contrary to the assurance of the State to the workers' right to self-organization and collective
bargaining. 4
On the CRUCIAL ISSUE PRESENTED; THE Court holds that petitioner was not able to make
out a case of an undue delegation of legislative power. There could be, however, an
unconstitutional application. For while the Constitution allows compulsory arbitration, it must
be stressed that the exercise of such competence cannot ignore the basic fundamental
principle and state policy that the state should afford protection to labor. 5 Whenever, therefore,
it is resorted to in labor disputes causing or likely to cause strikes or lockouts affecting national
interest, the State still is required to "assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work. 6 At this stage of the
litigation, however, in the absence of factual determination by the Ministry of Labor and the
National Labor Relations Commission, this Court is not in a position to rule on whether or not
1|C ONSTI 1
effect by petitioner's counsel which was indicative of the care in his choice of words. He only
assumed that the conferment of such authority may run counter to the right of the workers to
self-organization and collective bargaining. The petition then cannot prosper.
The facts alleged in the petition relevant for the purpose of determining whether or not there is
an undue delegation of legislative power do not sustain the claim of petitioner union. On
September 14, 1981, there was a notice of strike with the Ministry of Labor for unfair labor
practices stating the following grounds " 1) Unilateral and arbitrary implementation of a Code
of Conduct, a copy of which is attached, to the detriment of the interest of our members; 2)
Illegal terminations and suspensions of our officers and members as a result of the
implementation of said Code of Conduct; and 3) Unconfirmation (sic) of call sick leaves and its
automatic treatment as Absence Without Official Leave of Absence (AWOL) with
corresponding suspensions, in violation of our Collective Bargaining Agreement." 7After which
came, on September 15, 1981, the notification to the Ministry that there was compliance with
the two-thirds strike vote and other formal requirements of the law and Implementing
Rules. 8 Several conciliation meetings called by the Ministry followed, with petitioner
manifesting its willingness to have a revised Code of Conduct that would be fair to all concerned
but with a plea that in the meanwhile the Code of Conduct being imposed be suspended a
position that failed to meet the approval of private respondent. Subsequently, respondent, 9 on
September 25, 1981, certified the labor dispute to the National Labor Relations Commission
for compulsory arbitration and enjoined any strike at the private respondent's
establishment. 10 The labor dispute was set for hearing by respondent National Labor Relations
Commission on September 28,
1981. 11 There was in the main an admission of the above relevant facts by public respondents.
Private respondent, following the lead of petitioner labor union, explained its side on the
controversy regarding the Code of Conduct, the provisions of which as alleged in the petition
were quite harsh, resulting in what it deemed indefinite preventive suspension apparently the
principal cause of the labor dispute. At this stage, as mentioned, it would be premature to
discuss the merits, or lack of it, of such claim, the matter being properly for the Ministry of Labor
to determine.
The very next day after the filing of the petition, to be exact on September 29, 1981, this Court
issued the following resolution: "Considering the allegations contained, the issues raised and
the arguments adduced in the petition for certiorari with prayer for a restraining order, the Court
Resolved to (a) require the respondents to file an [answer], not a motion to dismiss, on or before
Wednesday, October 7, 1981; and (b) [Set] this case for hearing on Thursday, October 8, 1981
at 11:00 o'clock in the morning. 12 After the parties were duly heard, Solicitor General Estelito
P. Mendoza 13 appearing for the public respondents, the case was considered ripe for
decision. 14
To repeat, while the unconstitutionality of the amendatory act has not been demonstrated, there
is no ruling on the question of unconstitutional application, especially so as to any alleged
infringement in the exercise of the power of compulsory arbitration of the specific modes
provided in the Constitution to assure compliance with the constitutional mandate to "afford
protection to labor" being at this stage premature.
1. The allegation that there is undue delegation of legislative powers cannot stand the test of
scrutiny. The power which he would deny the Minister of Labor by virtue of such principle is for
petitioner labor union within the competence of the President, who in its opinion can best
determine national interests, but only when a strike is in progress. 15 Such admission is
qualified by the assumption that the President "can make law," " an assertion which need not
be passed upon in this petition.'What possesses significance for the purpose of this litigation is
that it is the President who "Shall have control of the ministries. 16 It may happen, therefore,
that a single person may occupy a dual position of Minister and Assemblyman. To the extent,
however, that what is involved is the execution or enforcement of legislation, the Minister is an
official of the executive branch of the government. The adoption of certain aspects of a
parliamentary system in the amended Constitution does not alter its essentially presidential
character. Article VII on the presidency starts with this provision: "The President shall be the
head of state and chief executive of the Republic of the Philippines. 17 Its last section is an even
more emphatic affirmation that it is a presidential system that obtains in our government. Thus:
"All powers vested in the President of the Philippines under the 1935 Constitution and the laws
of the land which are not herein provided for or conferred upon any official shall be deemed
and are hereby vested in the President unless the Batasang Pambansa provides
otherwise. 18There is a provision, of course, on the Prime Minister, but the Constitution is
explicit that while he shall be the head of the Cabinet, it is the President who nominates him
from among the members of the Batasang Pambansa, thereafter being "elected by a majority
of all the members thereof. 19 He is primarily, therefore, a Presidential choice. He need not
even come from its elected members. He is responsible, along with the Cabinet, to the
Batasang Pambansa for the program of government but as "approved by the
President. 20 His term of office as Prime Minister "shall commence from the date of his election
by the Batasang Pambansa and shall end on the date that the nomination of his successor is
submitted by the President to the Batasang Pambansa. Any other member of the Cabinet or
the Executive Committee may be removed at the discretion of the President. 21 Even the
duration of his term then depends on the Presidential pleasure, not on legislative approval or
lack of it. During his incumbency, he exercises supervision over all ministries, 22 a recognition
of the important role he plays in the implementation of the policy of the government, the
legislation duly enacted in pursuance thereof, and the decrees and orders of the President. To
the Prime Minister can thus be delegated the performance of the administrative functions of
the President, who can then devote more time and energy in the fulfillment of his exacting role
as the national leader. 23 As the only one whose constituency is national it is the President who,
by virtue of his election by the entire electorate, has an indisputable claim to speak for the
country as a whole. Moreover, it is he who is explicitly granted the greater power of control of
such ministries. He continues to be the Executive, the amplitude and scope of the functions
entrusted to him in the formulation of policy and its execution leading to the apt observation by
Laski that there is not one aspect of which that does not affect the lives of all. The Prime Minister
can be of valuable assistance indeed to the President in the discharge of his awesome
responsibility, but it is the latter who is vested with powers, aptly characterized by Justice Laurel
in Planas v. Gil 24 as "broad and extraordinary [being] expected to govern with a firm and steady
hand without vexation or embarrassing interference and much less dictation from any
source. 25 It may be said that Justice Laurel was referring to his powers under the 1935
Constitution. It suffices to refer anew to the last section of the article of the present Constitution
on the presidency to the effect that all powers vested in the President of the Philippines under
2|C ONSTI 1
the 1935 Constitution remain with him. It cannot be emphasized too strongly that under the
1935 Constitution. "The Executive power shall be vested in the President of the Philippines. 26
2. A later decision, Villena v. Secretary of Interior 27 greater relevance to this case. The opinion
of Justice Laurel, again the ponente, made clear that under the presidential system, "all
executive and administrative organizations are adjuncts of the Executive Department, the
heads of the various executive departments are assistants and agents of the Chief Executive,
and, except in cases where the Chief Executive is required by the Constitution or the law to act
in person or the exigencies of the situation demand that he act personally, the multifarious
executive and administrative functions of the Chief Executive are performed by and through
the executive departments, and the acts of the secretaries of such departments, performed and
promulgated in the regular course of business, are, unless disapproved or reprobated by the
Chief Executive, presumptively the acts of the Chief Executive. 28 At the time of the adoption
of the present Constitution on January 17, 1973, this Court had cited with approval the above
ruling of Villena in twelve cases. 29 It is particularly noteworthy that the first decision
promulgated under the present Constitution reiterating the above doctrine is
Philippine American Management Co. v. Philippine American Management Employees
Association. 30 For the question therein involved, as in this case, is the statutory grant of
authority to the then Secretary of Labor, now Minister of Labor, by the Minimum Wage Law to
refer to the then existing Court of Industrial Relations for arbitration the dispute that led to a
strike. It is indisputable, according to the opinion, that in the very petition, the Secretary of Labor
on January 6, 1972, pursuant to the Minimum Wage Law, "endorsed the controversy on the
precise question of whether or not petitioner Philippine American Management Company was
complying with its mandatory terms. What was done by him, as a department head, in the
regular course of business and conformably to a statutory provision is, according to settled
jurisprudence that dates back to an authoritative pronouncement by Justice Laurel in 1939
in Villena v. Secretary of the Interior, presumptively the act of the President, who is the only
dignitary who could, paraphrasing the language of the decision, disapprove or reprobate it.
What other response could be legitimately expected from respondent Court then? It could not
just simply fold its hands and refuse to pass on the dispute. 31 The Villena doctrine was stressed
even more in denying a motion for reconsideration by a more extensive citation from the
ponencia of Justice Laurel: "Without minimizing the importance of the heads of the various
departments, their personality is in reality but the projection of that of the President. Stated
otherwise, and as forcibly characterized by Chief Justice Taft of the Supreme Court of the
United States, "each head of a department is, and must be, the President's alter ego in the
matters of that department where the President is required by law to exercise authority." ...
Secretaries of departments, of course, exercise certain powers under the law but the law
cannot impair or in any way affect the constitutional power of control and direction of the
President. As a matter of executive policy, they may be granted departmental autonomy as to
certain matters but this is by mere concession of the executive, in the absence of valid
legislation in the particular field. If the President, then, is the authority in the Executive
Department, he assumes the corresponding responsibility. The head of a department is a man
of his confidence; he control and directs his acts; he appoints him and can remove him at
pleasure; he is the executive, not any of his secretaries. It is therefore logical that he, the
President, should be answerable for the acts of administration of the entire Executive
Department before his own conscience no less than before that undefined power of public
opinion which, in the language of Daniel Webster, is the last repository of popular
government. 32 So it should be in this case.
3. Even on the assumption, indulged in solely because of the claim earnestly and vigorously
pressed by counsel for petitioner, that the authority conferred to the Minister of Labor partakes
of a legislative character, still no case of an unlawful delegation of such power may be
discerned. That is the teaching from Edu v. Ericta 33 Thus: "What cannot be delegated is the
authority under the Constitution to make laws and to alter and repeal them; the test is the
completeness of the statute in all its term and provisions when it leaves the hands of the
legislature, To determine whether or riot there is an undue delegation of legislative power, the
inquiry must be directed to the scope and definiteness of the measure enacted. The legislature
does not abdicate its functions when it describes what job must be done, who is to do it, and
what is the scope of his authority. For a complex economy, that may indeed be the only way in
which the legislative process can go forward. A distinction has rightfully been made between
delegation of power to make the laws which necessarily involves a discretion as to what it shall
be, which constitutionally may not be done, and delegation of authority or discretion as to its
execution to be exercised under and in pursuance of the law, to which no valid objection can
be made. The Constitution is thus not to be regarded as denying the legislature the necessary
resources of flexibility and practicability. To avoid the taint of unlawful delegation, there must
be a standard, which implies at the very least that the legislature itself determines matters
principle and lays down fundamental policy. Otherwise, the charge of complete abdication may
be hard to repel. A standard thus defines legislative policy, marks its limits, maps out its
boundaries and specifies the public agency to apply it. It indicates the circumstances under
which the legislative command is to be effected. It is the criterion by which legislative purpose
may be carried out. Thereafter, the executive or administrative office designated may in
pursuance of the above guidelines promulgate supplemental rules and regulations. The
standard may be either express or implied. If the former, the non-delegation objection is easily
met. The standard though does not have to be spelled out specifically. It could be implied from
the policy and purpose of the act considered as a whole. ... This is to adhere to the recognition
given expression by Justice Laurel in a decision [Pangasinan Transportation v. Public Service
Commission] announced not-too-long after the Constitution came into force and effect that the
principle of non-delegation 'has been made to adapt itself to the complexities of modem
governments giving rise to the adoption, within certain limits, of the principle of "subordinate
legislation" not only in the United States and England but in practically all modern governments
He continued: 'Accordingly, with the growing complexity of modern life, the multiplication of the
subjects of governmental regulation, and the increased difficulty of administering the laws,
there is a constantly growing tendency toward the delegation of greater powers by the
legislature and toward the approval of the practice by the courts.' Consistency with the
conceptual approach requires the reminder that what is delegated is authority non-legislative
in character, the completeness of the statute when it leaves the hands of Congress being
assumed. Our later decisions speak to the same effect. Thus from Justice J.B.L. Reyes
in People v. Exconde; 'It is well established in this jurisdiction that, while the making of laws is
a non-delegable activity that corresponds exclusively to Congress, nevertheless the latter may
constitutionally delegate authority to promulgate rules and regulations to implement a given
legislation and effectuate its policies, for the reason that the legislature often finds it
impracticable (if not impossible) to anticipate and provide for the multifarious and complex
3|C ONSTI 1
situations that may be met in carrying the law into effect. All that is required is that the regulation
should be germane to the objects and purposes of the law; that the regulation be not in
contradiction with it; but conform to the standards that the law prescribes.' 34 Batas Pambansa
Blg. 130 cannot be any clearer, the coverage being limited to "strikes or lockouts adversely
affecting the national interest."
4. The strict rule on non-delegation was enunciated by Justice Laurel in People v.
Vera, 35 Which declared unconstitutional the then Probation Act. 36 Such an approach,
conceded, by some constitutionalists to be both scholarly and erudite nonetheless aroused
apprehension for being too rigid and inflexible. While no doubt appropriate in that particular
case, the institution of a new mode of treating offenders, it may pose difficulty for social and
economic legislation needed by the times. Even prior to the above-cited Pangasinan
Transportation decision, Justice Laurel himself in an earlier decision, People v. Rosenthal in
1939, promulgated less than two years after Vera, pointed out that such doctrine of non-
delegation "has been made to adopt itself to the complexities of modern governments, giving
rise to the adoption, within certain limits, of the principle of 'subordinate legislation' not only in
the United States and England but in practically all modern governments. The difficulty lies in
the fixing of the limit and extent of the authority. While courts have undertaken to lay down
general principles, the safest is to decide each case according to its peculiar environment,
having in mind the wholesome legislative purpose intended to be achieved. 37 After which, in
came the even more explicit formulation in Pangasinan Transportation appearing in the quoted
excerpt from Edu v. Ericta. There is no question therefore that there is a marked drift in the
direction of a more liberal approach. It is partly in recognition of the ever increasing needs for
the type of legislation allowing rule-making in accordance with standards, explicit or implicit,
discernible from a perusal of the entire enactment that in Agricultural Credit and Cooperative
Financing Administration v. Confederation of Unions in Government Corporations and
Offices" 38 the then Justice, now the retired Chief Justice and presently Speaker, Makalintal
had occasion to refer to "the growing complexities of society" as well as "the increasing social
challenges of the times. 39It would be self-defeating in the extreme if the legislation intended to
cope with the grave social and economic problems of the present and foreseeable future would
founder on the rock of an unduly restrictive and decidedly unrealistic meaning to be affixed to
the doctrine of non-delegation. Fortunately with the retention in the amended Constitution of
some features of the 1973 Constitution as originally adopted leading to an appreciable measure
of concord and harmony between the policy-making branches of the government, executive
and legislative, the objection on the grounds of non- delegation would be even less persuasive.
It is worth repeating that the Prime Minister, while the choice of the President, must have the
approval of all members of the Batasang Pambansa. 40 At least the majority of the cabinet
members, the Ministers being appointed by the President, if heads of ministries, shall come
from its regional representatives. 41 So, also, while the Prime Minister and the Cabinet are
responsible to the Batasang Pambansa for the program of government, it must be one
"approved by the President. 42 While conceptually, there still exists a distinction between the
enactment of legislation and its execution, between formulation and implementation, the
fundamental principle of separation of powers of which non-delegation is a logical corollary
becomes even more flexible and malleable. Even in the case of the United States, with its
adherence to the Madisonian concept of separation of powers, President Kennedy could state
that its Constitution did not make "the Presidency and Congress rivals for power but partners
for progress [with the two branches] being trustees for the people, custodians of their WHEREFORE, the petition is dismissed for lack of merit. During the pendency of the
heritage. 43 With the closer relationship provided for by the amended Constitution in our case, compulsory arbitration proceedings, both petitioner labor union and private respondent are
there is likely to be even more promptitude and dispatch in framing the policies and thereafter enjoined to good faith compliance with the provisions of Batas Pambansa Blg. 130. No costs.
unity and vigor in their execution. A rigid application of the non-delegation doctrine, therefore,
would be an obstacle to national efforts at development and progress. There is accordingly
more receptivity to laws leaving to administrative and executive agencies the adoption of such
means as may be necessary to effectuate a valid legislative purpose. It is worth noting that a
highly-respected legal scholar, Professor Jaffe as early as 1947, could speak of delegation as
the "dynamo of modern government. 44 He then went on to state that "the occasions for
delegating power to administrative offices [could be] compassed by a single
generalization. 45 Thus: "Power should be delegated where there is agreement that a task must
be performed and it cannot be effectively performed by the legislature without the assistance
of a delegate or without an expenditure of time so great as to lead to the neglect of equally
important business. Delegation is most commonly indicated where the relations to be regulated
are highly technical or where their regulation requires a course of continuous decision. 46 His
perceptive study could rightfully conclude that even in a strictly presidential system like that of
the United States, the doctrine of non-delegation reflects the American "political philosophy
that insofar as possible issues be settled [by legislative bodies], an essentially restrictive
approach" may ignore "deep currents of social force. 47 In plainer terms, and as applied to the
Philippines under the amended Constitution with the close ties that bind the executive and
legislative departments, certain features of parliamentarism having been retained, it may be a
deterrent factor to much needed legislation. The spectre of the non-delegation concept need
not haunt, therefore, party caucuses, cabinet sessions or legislative chambers.

5. By way of summary, this Court holds that Batas Pambansa Blg. 130 insofar as it empowers
the Minister of Labor to assume jurisdiction over labor disputes causing or likely to cause strikes
or lockouts adversely affecting the national interest and thereafter decide it or certify the same
the National Labor Relations Commission is not on its face unconstitutional for being violative
of the doctrine of non-delegation of legislative power. To repeat, there is no ruling on the
question of whether or not it has been unconstitutionally applied in this case, for being
repugnant to the regime of self-organization and free collective bargaining, as on the facts
alleged, disputed by private respondent, the matter is not ripe for judicial determination. It must
be stressed anew, however, that the power of compulsory arbitration, while allowable under
the Constitution and quite understandable in labor disputes affected with a national interest, to
be free from the taint of unconstitutionality, must be exercised in accordance with the
constitutional mandate of protection to labor. The arbiter then is called upon to take due care
that in the decision to be reached, there is no violation of "the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of
work. 48 It is of course manifest that there is such unconstitutional application if a law "fair on
its face and impartial in appearance (is) applied and administered by public authority with an
evil eye and an unequal hand. 49 It does not even have to go that far. An instance of
unconstitutional application would be discernible if what is ordained by the fundamental law,
the protection of labor, is ignored or disregarded.

4|C ONSTI 1
EN BANC
[ GR No. 94571, Apr 22, 1991 ]
TEOFISTO T. GUINGONA v. GUILLERMO CARAGUE +
DECISION
273 Phil. 443
GANCAYCO, J.:
This is a case of first impression whereby petitioners question the constitutionality of the
automatic appropriation for debt service in the 1990 budget.
As alleged in the petition, the facts are as follows:
The 1990 budget consists of P98.4 Billion in automatic appropriation (with P86.8 Billion for debt
service) and P155.3 Billion appropriated under Republic Act No. 6831, otherwise known as the
General Appropriations Act, or a total of P233.5 Billion,[1] while the appropriations for the
Department of Education, Culture and Sports amount to P27,017,813,000.00. [2]
The said automatic appropriation for debt service is authorized by P.D. No. 81, entitled
"Amending Certain Provisions of Republic Act Numbered Four Thousand Eight Hundred Sixty,
as Amended (Re: Foreign Borrowing Act)," by P.D. No. 1177, entitled "Revising the Budget
Process in Order to Institutionalize the Budgetary Innovations of the New Society," and by P.D.
No. 1967, entitled "An Act Strengthening the Guarantee and Payment Positions of the Republic
of the Philippines on Its Contingent Liabilities Arising out of Relent and Guaranteed Loans by
Appropriating Funds For The Purpose."
There can be no question that petitioners as Senators of the Republic of the Philippines may
bring this suit where a constitutional issue is raised. [3] Indeed, even a taxpayer has personality
to restrain unlawful expenditure of public funds. [4]
The petition seeks the declaration of the unconstitutionality of P.D. No. 81, Section 31 of P.D.
No. 1177, and P.D. No. 1967. The petition also seeks to restrain the disbursement for debt
service under the 1990 budget pursuant to said decrees.
Respondents contend that the petition involves a pure political question which is the repeal or
amendment of said laws addressed to the judgment, wisdom and patriotism of the legislative
body and not this Court.
In Gonzales,[5] the main issue was the unconstitutionality of the presidential veto of certain
provisions, particularly Section 16 of the General Appropriations Act of 1990, R.A. No.
6831. This Court, in disposing of the issue, stated
"The political question doctrine neither interposes an obstacle to judicial determination of the
rival claims. The jurisdiction to delimit constitutional boundaries has been given to this Court. It
5|C ONSTI 1
cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by
no means does away with the applicability of the principle in appropriate cases.
'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 a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government.'
"With the Senate maintaining that the President's veto is unconstitutional, and that charge
being controverted, there is an actual case or justiciable controversy between the Upper House
of Congress and the executive department that may be taken cognizance of by this Court."
The questions raised in the instant petition are
"I. IS THE APPROPRIATION OF P86 BILLION IN THE P233 BILLION 1990 BUDGET
VIOLATIVE OF SECTION 5, ARTICLE XIV OF THE CONSTITUTION?
II. ARE PD No. 81, PD No. 1177 AND PD No. 1967 STILL OPERATIVE UNDER THE
CONSTITUTION?
III. ARE THEY VIOLATIVE OF SECTION 29(1), ARTICLE VI OF THE CONSTITUTION?" [6]
There is thus a justiciable controversy raised in the petition which this Court may properly take
cognizance of.
On the first issue, the petitioners aver
"According to Sec. 5, Art. XIV of the Constitution:
'(5) The State shall assign the highest budgetary priority to education and ensure that teaching
will attract and retain its rightful share of the best available talents through adequate
remuneration and other means of job satisfaction and fulfillment.'
"The reason behind the said provision is stated, thus:
'In explaining his proposed amendment, Mr. Ople stated that all the great and sincere piety
professed by every President and every Congress of the Philippines since the end of World
War II for the economic welfare of the public schoolteachers always ended up in failure and
this failure, he stated, had caused mass defection of the best and brightest teachers to other
careers, including menial jobs in overseas employment and concerted actions by them to
project their grievances, mainly over low pay and abject working conditions.
'He pointed to the high expectations generated by the February Revolution, especially keen
among public schoolteachers, which at present exacerbate these long frustrated hopes.
'Mr. Ople stated that despite the sincerity of all administrations that tried vainly to respond to
the needs of the teachers, the central problem that always defeated their pious intentions was
really the one budgetary priority in the sense that any proposed increase for public
schoolteachers had to be multiplied many times by the number of government employees in
general and their equitable claims to any pay standardization such that the pay rate of teachers
is hopelessly pegged to the rate of government workers in general. This, he stated,
foredoomed the prospect of a significant pay increase for teachers.
'Mr. Ople pointed out that the recognition by the Constitution of the highest priority for public
schoolteachers, and by implication, for all teachers, would ensure that the President and
Congress would be strongly urged by a constitutional mandate to grant to them such a level of
remuneration and other incentives that would make teaching competitive again and attractive
to the best available talents in the nation.
'Finally, Mr. Ople recalled that before World War II, teaching competed most successfully
against all other career choices for the best and the brightest of the younger generation. It is
for this reason, he stated, that his proposed amendment if approved, would ensure that
teaching would be restored to its lost glory as the career of choice for the most talented and
most public-spirited of the younger generation in the sense that it would become the
countervailing measure against the continued decline of teaching and the wholesale desertion
of this noble profession presently taking place. He further stated that this would ensure that
the future and the quality of the population would be asserted as a top priority against many
clamorous and importunate but less important claims of the present.' (Journal of the
Constitutional Commission, Vol. II, p. 1172)
"However, as against this constitutional intention, P86 Billion is appropriated for debt service
while only P27 Billion is appropriated for the Department of Education in the 1990 budget. It is
plain, therefore, that the said appropriation for debt service is inconsistent with the Constitution,
hence, void (Art. 7, New Civil Code)."[7]
While it is true that under Section 5(5), Article XIV of the Constitution Congress is mandated to
"assign the highest budgetary priority to education" in order to "insure that teaching will attract
and retain its rightful share of the best available talents through adequate remuneration and
other means of job satisfaction and fulfillment," it does not thereby follow that the hands of
Congress are so hamstrung as to deprive it the power to respond to the imperatives of the
national interest and for the attainment of other state policies or objectives.
As aptly observed by respondents, since 1985, the budget for education has tripled to upgrade
and improve the facility of the public school system. The compensation of teachers has been
doubled. The amount of P29,740,611,000.00[8] set aside for the Department of Education,
Culture and Sports under the General Appropriations Act (R.A. No. 6831), is the highest
budgetary allocation among all department budgets. This is a clear compliance with the
aforesaid constitutional mandate according highest priority to education.
Having faithfully complied therewith, Congress is certainly not without any power, guided only
by its good judgment, to provide an appropriation, that can reasonably service our enormous
debt, the greater portion of which was inherited from the previous administration. It is not only
a matter of honor and to protect the credit standing of the country. More especially, the very
survival of our economy is at stake. Thus, if in the process Congress appropriated an amount
6|C ONSTI 1
for debt service bigger than the share allocated to education, the Court finds and so holds that
said appropriation cannot be thereby assailed as unconstitutional.
Now to the second issue. The petitioners made the following observations:
"To begin with, Rep. Act 4860 entitled 'AN ACT AUTHORIZING THE PRESIDENT OF THE
PHILIPPINES TO OBTAIN SUCH FOREIGN LOANS AND CREDITS, OR TO INCUR SUCH
FOREIGN INDEBTEDNESS, AS MAY BE NECESSARY TO FINANCE APPROVED
ECONOMIC DEVELOPMENT PURPOSES OR PROJECTS, AND TO GUARANTEE, IN
BEHALF OF THE REPUBLIC OF THE PHILIPPINES, FOREIGN LOANS OBTAINED OR
BONDS ISSUED BY CORPORATIONS OWNED OR CONTROLLED BY THE GOVERNMENT
OF THE PHILIPPINES FOR ECONOMIC DEVELOPMENT PURPOSES INCLUDING THOSE
INCURRED FOR PURPOSES OF RE-LENDING TO THE PRIVATE
SECTOR, APPROPRIATING THE NECESSARY FUNDS THEREFOR, AND FOR OTHER
PURPOSES,' provides:
'SEC. 2. The total amount of loans, credits and indebtedness, excluding interests, which the
President of the Philippines is authorized to incur under this Act shall not exceed one billion
United States dollars or its equivalent in other foreign currencies at the exchange rate prevailing
at the time the loans, credits and indebtedness are incurred: Provided, however, That the total
loans, credits and indebtedness incurred under this Act shall not exceed two hundred fifty
million in the fiscal year of the approval of this Act, and two hundred fifty million every fiscal
year thereafter, all in United States dollars or its equivalent in other currencies.
'SEC. 5. It shall be the duty of the President, within thirty days after the opening of every regular
session, to report to the Congress the amount of loans, credits and indebtedness contracted,
as well as the guarantees extended, and the purposes and projects for which the loans, credits
and indebtedness were incurred, and the guarantees extended, as well as such loans which
may be reloaned to Filipino-owned or controlled corporations and similar purposes.
'SEC. 6. The Congress shall appropriate the necessary amount out of any funds in the National
Treasury not otherwise appropriated, to cover the payment of the principal and interest on such
loans, credits or indebtedness as and when they shall become due.'
"However, after the declaration of martial law, President Marcos issued PD 81 amending
Section 6, thus:
SEC. 7. Section six of the same Act is hereby further amended to read as follows:
'SEC. 6. Any provision of law to the contrary notwithstanding, and in order to enable the
Republic of the Philippines to pay the principal, interest, taxes and other normal banking
charges on the loans, credits or indebtedness, or on the bonds, debentures, securities or other
evidences of indebtedness sold in international markets incurred under the authority of this Act,
the proceeds of which are deemed appropriated for the projects, all the revenue realized from
the projects financed by such loans, credits or indebtedness, or on the bonds, debentures,
securities or other evidences of indebtedness, shall be turned over in full, after deducting actual
and necessary expenses for the operation and maintenance of said projects, to the National
Treasury by the government office, agency or instrumentality, or government-owned or
controlled corporation concerned, which is hereby appropriated for the purpose as and when
they shall become due. In case the revenue realized is insufficient to cover the principal,
interest and other charges, such portion of the budgetary savings as may be necessary to
cover the balance or deficiency shall be set aside exclusively for the purpose by the
government office, agency or instrumentality, or government-owned or controlled corporation
concerned: Provided, That, if there still remains a deficiency, such amount necessary to cover
the payment of the principal and interest on such loans, credit or indebtedness as and when
they shall become due is hereby appropriated out of any funds in the national treasury not
otherwise appropriated: x x x
"President Marcos also issued PD 1177, which provides:
'SEC. 31. Automatic appropriations. All expenditures for (a) personnel retirement premiums,
government service insurance, and other similar fixed expenditures, (b) principal and interest
on public debt, (c) national government guarantees of obligations which are drawn upon,
are automatically appropriated: Provided, that no obligations shall be incurred or payments
made from funds thus automatically appropriated except as issued in the form of regular
budgetary allotments.'
and PD 1967, which provides:
'Section 1. There is hereby appropriated, out of any funds in the National Treasury not
otherwise appropriated, such amounts as may be necessary to effect payments on foreign or
domestic loans, or foreign or domestic loans whereon creditors make a call on the direct and
indirect guarantee of the Republic of the Philippines, obtained by:
'a. The Republic of the Philippines the proceeds of which were relent to government-owned or
controlled corporations and/or government financial institutions;
'b. government-owned or controlled corporations and/or government financial institutions the
proceeds of which were relent to public or private institutions;
'c. government-owned or controlled corporations and/or financial institutions and guaranteed
by the Republic of the Philippines;
'd. other public or private institutions and guaranteed by government-owned or controlled
corporations and/or government financial institutions.
'Section 2. All repayments made by borrower institutions on the loans for whose account
advances were made by the National Treasury will revert to the General Fund.
'Section 3. In the event that any borrower institution is unable to settle the advances made out
of the appropriation provided therein, the Treasurer of the Philippines shall make the proper
recommendation to the Minister of Finance on whether such advances shall be treated as
equity or subsidy of the National Government to the institution concerned, which shall be
considered in the budgetary program of the Government.
"In the 'Budget of Expenditures and Sources of Financing Fiscal Year 1990,' which
accompanied her budget message to Congress, the President of the Philippines, Corazon C.
Aquino, stated:
7|C ONSTI 1
'Sources Appropriation
'The P233.5 billion budget proposed for fiscal year 1990 will require P132.1 billion of new
programmed appropriations out of a total P155.3 billion in new legislative authorization from
Congress. The rest of the budget, totalling P101.4 billion, will be sourced from existing
appropriations: P98.4 billion from Automatic Appropriations and P3.0 billion from Continuing
Appropriations (Fig. 4).
"And according to Figure 4, xxx, P86.8 billion out of the P98.4 Billion are programmed for debt
service. In other words, the President had, on her own, determined and set aside the said
amount of P98.4 Billion with the rest of the appropriations of P155.3 Billion to be determined
and fixed by Congress, which is now Rep. Act 6831." [9]
Petitioners argue that the said automatic appropriations under the aforesaid decrees of then
President Marcos became functus oficio when he was ousted in February, 1986; that upon the
expiration of the one-man legislature in the person of President Marcos, the legislative power
was restored to Congress on February 2, 1987 when the Constitution was ratified by the
people; that there is a need for a new legislation by Congress providing for automatic
appropriation, but Congress, up to the present, has not approved any such law; and thus the
said P86.8 Billion automatic appropriation in the 1990 budget is an administrative act that rests
on no law, and thus, it cannot be enforced.
Moreover, petitioners contend that assuming arguendo that P.D. No. 81, P.D. No. 1177 and
P.D. No. 1967 did not expire with the ouster of President Marcos, after the adoption of the 1987
Constitution, the said decrees are inoperative under Section 3, Article XVIII which provides
"Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions, and
other executive issuances not inconsistent with this Constitution shall remain operative until
amended, repealed, or revoked." (Emphasis supplied.)
They then point out that since the said decrees are inconsistent with Section 24, Article VI of
the Constitution, i.e.,
"Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt,
bills of local application, and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with amendments." (Emphasis
supplied.
whereby bills have to be approved by the President, [10] then a law must be passed by Congress
to authorize said automatic appropriation. Further, petitioners state said decrees violate
Section 29(1) of Article VI of the Constitution which provides as follows –
"Sec. 29(1). No money shall be paid out of the Treasury except in pursuance of
an appropriation made by law.
They assert that there must be definiteness, certainty and exactness in an
appropriation,[11] otherwise it is an undue delegation of legislative power to the President who
determines in advance the amount appropriated for the debt service.[12]
The Court is not persuaded.
Section 3, Article XVIII of the Constitution recognizes that "All existing laws, decrees, executive
orders, proclamations, letters of instructions and other executive issuances not inconsistent
with the Constitution shall remain operative until amended, repealed or revoked."
This transitory provision of the Constitution has precisely been adopted by its framers to
preserve the social order so that legislation by the then President Marcos may be
recognized. Such laws are to remain in force and effect unless they are inconsistent with the
Constitution or are otherwise amended, repealed or revoked.
An examination of the aforecited presidential decrees show the clear intent that the amounts
needed to cover the payment of the principal and interest on all foreign loans, including those
guaranteed by the national government, should be made available when they shall become
due precisely without the necessity of periodic enactments of separate laws appropriating funds
therefore, since both the periods and necessities are incapable of determination in advance.
The automatic appropriation provides the flexibility for the effective execution of debt
management policies. Its political wisdom has been convincingly discussed by the Solicitor
General as he argues
"x x x First, for example, it enables the Government to take advantage of a favorable turn of
market conditions by redeeming high-interest securities and borrowing at lower rates, or to shift
from short-term to long-term instruments, or to enter into arrangements that could lighten our
outstanding debt burden debt-to-equity, debt-to-asset, debt-to-debt or other such
schemes. Second, the automatic appropriation obviates the serious difficulties in debt
servicing arising from any deviation from what has been previously programmed. The annual
debt service estimates, which are usually made one year in advance, are based on a
mathematical set or matrix or, in layman's parlance, 'basket' of foreign exchange and interest
rate assumptions which may significantly differ from actual rates not even in proportion to
changes on the basis of the assumptions. Absent an automatic appropriation clause, the
Philippine Government has to await and depend upon Congressional action, which by the time
this comes, may no longer be responsive to the intended conditions which in the meantime
may have already drastically changed. In the meantime, also, delayed payments and
arrearages may have supervened, only to worsen our debt service-to-total expenditure ratio in
the budget due to penalties and/or demand for immediate-payment even before due dates.
Clearly, the claim that payment of the loans and indebtedness is conditioned upon the
continuance of the person of President Marcos and his legislative power goes against the intent
and purpose of the law. The purpose is foreseen to subsist with or without the person of
Marcos."[13]
The argument of petitioners that the said presidential decrees did not meet the requirement
and are therefore inconsistent with Sections 24 and 27 of Article VI of the Constitution which
requires, among others, that "all appropriations, x x x bills authorizing increase of public debt"
must be passed by Congress and approved by the President is untenable. Certainly, the
framers of the Constitution did not contemplate that existing laws in the statute books including
existing presidential decrees appropriating public money are reduced to mere "bills" that must
again go through the legislative mill. The only reasonable interpretation of said provisions of
8|C ONSTI 1
the Constitution which refer to "bills" is that they mean appropriation measures still to be passed
by Congress. If the intention of the framers thereof were otherwise they should have expressed
their decision in a more direct or express manner.
Well-known is the rule that repeal or amendment by implication is frowned upon. Equally
fundamental is the principle that construction of the Constitution and law is generally applied
prospectively and not retrospectively unless it is so clearly stated.
On the third issue that there is undue delegation of legislative power, in Edu vs. Ericta,[14] this
Court had this to say
"What cannot be delegated is the authority under the Constitution to make laws and to alter
and repeal them; the test is the completeness of the statute in all its terms and provisions when
it leaves the hands of the legislature. To determine whether or not there is an undue delegation
of legislative power, the inequity must be directed to the scope and definiteness of the measure
enacted. The legislature does not abdicate its function when it describes what job must be
done, who is to do it, and what is the scope of his authority. For a complex economy, that may
indeed be the only way in which legislative process can go forward...
'To avoid the taint of unlawful delegation there must be a standard, which implies at the very
least that the legislature itself determines matters of principle and lays down fundamental
policy...
'The standard may be either express or implied … from the policy and purpose of the act
considered as whole…
In People vs. Vera,[15] this Court said "the true distinction is between the delegation of power
to make the law, which necessarily involves discretion as to what the law shall be, and
conferring 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."
Ideally, the law must be complete in all its essential terms and conditions when it leaves the
legislature so that there will be nothing left for the delegate to do when it reaches him except
enforce it. If there are gaps in the law that will prevent its enforcement unless they are first
filled, the delegate will then have been given the opportunity to step in the shoes of the
legislature and exercise a discretion essentially legislative in order to repair the omissions. This
is invalid delegation.[16]
The Court finds that in this case the questioned laws are complete in all their essential terms
and conditions and sufficient standards are indicated therein.
The legislative intention in R.A. No. 4860, as amended, Section 31 of P.D. No. 1177 and P.D.
No. 1967 is that the amount needed should be automatically set aside in order to enable the
Republic of the Philippines to pay the principal, interest, taxes and other normal banking
charges on the loans, credits or indebtedness incurred as guaranteed by it when they shall
become due without the need to enact a separate law appropriating funds therefor as the need
arises. The purpose of these laws is to enable the government to make prompt payment and/or
advances for all loans to protect and maintain the credit standing of the country.
Although the subject presidential decrees do not state specific amounts to be paid,
necessitated by the very nature of the problem being addressed, the amounts nevertheless are
made certain by the legislative parameters provided in the decrees. The Executive is not of
unlimited discretion as to the amounts to be disbursed for debt servicing. The mandate is to
pay only the principal, interest, taxes and other normal banking charges on the loans, credits
or indebtedness, or on the bonds, debentures or security or other evidences of indebtedness
sold in international markets incurred by virtue of the law, as and when they shall become
due. No uncertainty arises in executive implementation as the limit will be the exact amounts
as shown by the books of the Treasury.
The Government budgetary process has been graphically described to consist of four major
phases as aptly discussed by the Solicitor General:
"The Government budgeting process consists of four major phases:
1. Budget preparation. The first step is essentially tasked upon the Executive Branch and
covers the estimation of government revenues, the determination of budgetary priorities and
activities within the constraints imposed by available revenues and byborrowing limits, and the
translation of desired priorities and activities into expenditure levels.
Budget preparation starts with the budget call issued by the Department of Budget and
Management. Each agency is required to submit agency budget estimates in line with the
requirements consistent with the general ceilings set by the Development Budget Coordinating
Council (DBCC).
With regard to debt servicing, the DBCC staff, based on the macroeconomic projections of
interest rates (e.g. LIBOR rate) and estimated sources of domestic and foreign financing,
estimates debt service levels. Upon issuance of budget call, the Bureau of Treasury computes
for the interest and principal payments for the year for all direct national government borrowings
and other liabilities assumed by the same.
2. Legislative authorization. At this stage, Congress enters the picture and deliberates or acts
on the budget proposals of the President, and Congress in the exercise of its own judgment
and wisdom formulates an appropriation act precisely following the process established by the
Constitution, which specifies that no money may be paid from the Treasury except in
accordance with an appropriation made by law.
Debt service is not included in the General Appropriations Act, since authorization therefor
already exists under RA No. 4860 and 245, as amended and PD 1967. Precisely in the light
of this subsisting authorization as embodied in said Republic Acts and PD for debt service,
Congress does not concern itself with details for implementation by the Executive, but largely
with annual levels and approval thereof upon due deliberations as part of the whole obligation
program for the year. Upon such approval, Congress has spoken and cannot be said to have
delegated its wisdom to the Executive, on whose part lies the implementation or execution of
the legislative wisdom.
3. Budget Execution. Tasked on the Executive, the third phase of the budget process covers
the various operational aspects of budgeting. The establishment of obligation authority
ceilings, the evaluation of work and financial plans for individual activities, the continuing review
9|C ONSTI 1
of government fiscal position, the regulation of fund releases, the implementation of cash
payment schedules, and other related activities comprise this phase of the budget cycle.
Release from the debt service fund is triggered by a request of the Bureau of the Treasury for
allotments from the Department of Budget and Management, one quarter in advance of
payment schedule, to ensure prompt payments. The Bureau of Treasury, upon receiving
official billings from the creditors, remits payments to creditors through the Central Bank or to
the Sinking Fund established for government security issues (Annex F).
4. Budget accountability. The fourth phase refers to the evaluation of actual performance and
initially approved work targets, obligations incurred, personnel hired and work accomplished
are compared with the targets set at the time the agency budgets were approved.
There being no undue delegation of legislative power as clearly above shown, petitioners insist
nevertheless that subject presidential decrees constitute undue delegation of legislative power
to the executive on the alleged ground that the appropriations therein are notexact,
certain or definite, invoking in support therefor the Constitution of Nebraska, the constitution
under which the case of State v. Moore, 69 NW 974, cited by petitioners, was decided. Unlike
the Constitution of Nebraska, however, our Constitution does not require a definite, certain,
exact or 'specific appropriation made by law.' Section 29, Article VI of our 1987 Constitution
omits any of these words and simply states:
'Section 29(1). No money shall be paid out of the treasury except in pursuance of an appro-
priation made by law.
More significantly, there is no provision in our Constitution that provides or prescribes any
particular form of words or religious recitals in which an authorization or appropriation by
Congress shall be made, except that it be 'made by law,' such as precisely the authorization or
appropriation under the questioned presidential decrees. In other words, in terms of time
horizons, an appropriation may be made impliedly (as by past but subsisting legislations) as
well as expressly for the current fiscal year (as by enactment of laws by the present Congress),
just as said appropriation may be made in general as well as in specific terms. The
Congressional authorization may be embodied in annual laws, such as a general appro-
priations act or in special provisions of laws of general or special application which appropriate
public funds for specific public purposes, such as the questioned decrees. An appropriation
measure is sufficient if the legislative intention clearly and certainly appears from the language
employed (In re Continuing Appropriations, 32 P. 272), whether in the past or in the present." [17
Thus, in accordance with Section 22, Article VII of the 1987 Constitution, President Corazon
C. Aquino submitted to Congress the Budget of Expenditures and Sources of Financing for the
Fiscal Year 1990. The proposed 1990 expenditure program covering the estimated obligation
that will be incurred by the national government during the fiscal year amounts to P233.5
Billion. Of the proposed budget, P86.8 is set aside for debt servicing as follows:
"National Government Debt Service Expenditures, 1990 (in million pesos)
 Foreign
Domestic
RA 4860,
RA 245, as Total
as amended,
amended
PD 1967

Interest
P36,861 P18,570 P55,431
Payments
Principal
16,310 15,077 31,387
Amortization
__________ __________ __________
Total P53,171 P33, 647 P86,818"[18]
__________ __________ __________

as authorized under P.D. 1967 and R.A. 4860 and 245, as amended.
The Court, therefor, finds that R.A. No. 4860, as amended by P.D. No. 81, Section 31 of P.D.
1177 and P.D. No. 1967 constitute lawful authorizations or appropriations, unless they are
repealed or otherwise amended by Congress. The Executive was thus merely complying with
the duty to implement the same.
There can be no question as to the patriotism and good motive of petitioners in filing this
petition. Unfortunately, the petition must fail on the constitutional and legal issues raised. As
to whether or not the country should honor its international debt, more especially the enormous
amount that had been incurred by the past administration, which appears to be the ultimate
objective of the petition, is not an issue that is presented or proposed to be addressed by the
Court. Indeed, it is more of a political decision for Congress and the Executive to determine in
the exercise of their wisdom and sound discretion.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.

SO ORDERED.

10 | C O N S T I 1
G.R. No. 182249 March 5, 2013
TRADE AND INVESTMENT DEVELOPMENT CORPORATION OF THE
PHILIPPINES, Petitioner,
vs.
CIVIL SERVICE COMMISSION, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari 1 of Trade and Investment Development
Corporation of the Philippines (TJDCORP) seeking the reversal of the decision 2 dated
September 28, 2007 and the resolution 3 dated March 17, 2008 of the Court of Appeals (CA) in
CA-G.R. SP. No. 81058. The assailed CA rulings affirmed the resolutions,4 dated January 31,
2003 and October 7, 2003, of the Civil Service Commission (CSC), invalidating Arsenio de
Guzman’s appointment as Financial Management Specialist IV in TIDCORP. The CA
subsequently denied the motion for reconsideration that followed.
Factual Antecedents
On August 30, 2001, De Guzman was appointed on a permanent
status as Financial Management Specialist IV of TIDCORP, a government-owned and
controlled corporation (GOCC) created pursuant to Presidential
Decree No. 1080. His appointment was included in TIDCORP’s Report on
Personnel Actions (ROPA) for August 2001, which was submitted to the
CSC – Department of Budget and Management (DBM) Field Office. 5
In a letter6 dated September 28, 2001, Director Leticia M. Bugtong disallowed De Guzman’s
appointment because the position of Financial Management Specialist IV was not included in
the DBM’s Index of Occupational Service.
TIDCORP’s Executive Vice President Jane U. Tambanillo appealed7 the invalidation of De
Guzman’s appointment to Director IV Agnes Padilla of the CSC-National Capital Region (NCR).
According to Tambanillo, Republic Act No. (RA) 8494, which amended TIDCORP’s charter,
empowers its Board of Directors to create its own organizational structure and staffing pattern,
and to approve its own compensation and position classification system and qualification
standards. Specifically, Section 7 of RA 8494 provides:
11 | C O N S T I 1
Section 7. The Board of Directors shall provide for an organizational structure and staffing
pattern for officers and employees of the Trade and Investment Development Corporation of
the Philippines (TIDCORP) and upon recommendation of its President, appoint and fix their
remuneration, emoluments and fringe benefits: Provided, That the Board shall have exclusive
and final authority to appoint, promote, transfer, assign and re-assign personnel of the
TIDCORP, any provision of existing law to the contrary notwithstanding.
All positions in TIDCORP shall be governed by a compensation and position classification
system and qualification standards approved by TIDCORP's Board of Directors based on a
comprehensive job analysis and audit of actual duties and responsibilities. The compensation
plan shall be comparable with the prevailing compensation plans in the private sector and shall
be subject to periodic review by the Board no more than once every four (4) years without
prejudice to yearly merit reviews or increases based on productivity and profitability. TIDCORP
shall be exempt from existing laws, rules and regulations on compensation, position
classification and qualification standards. It shall, however, endeavor to make the system to
conform as closely as possible to the principles and modes provided in Republic Act No. 6758.
On the basis of Section 7 of RA 8494, Tambanillo argued that TIDCORP is authorized to adopt
an organizational structure different from that set and prescribed by the CSC. Section 7
exempts TIDCORP from existing laws on compensation, position classification and
qualification standards, and is thus not bound by the DBM’s Index of Occupational Service.
Pursuant to this authority, TIDCORP’s Board of Directors issued Resolution No. 1185, s. 1998
approving the corporation’s re-organizational plan, under which De Guzman was appointed
Financial Management Specialist IV. De Guzman’s appointment was valid because the plan
providing for his position followed the letter of the law.
Tambanillo also noted that prior to De Guzman’s appointment as Financial Management
Specialist IV, the position had earlier been occupied by Ma. Loreto H. Mayor whose
appointment was duly approved by Director Bugtong. Thus, Director Bugtong’s invalidation of
De Guzman’s appointment is inconsistent with her earlier approval of Mayor’s appointment to
the same position.
The CSC-NCR’s Ruling
Director Padilla denied Tambanillo’s appeal because De Guzman’s appointment failed to
comply with Section 1, Rule III of CSC Memorandum Circular No. 40, s. 1998, which requires
that the position title of an appointment submitted to the CSC must conform with the approved
Position Allocation List and must be found in the Index of Occupational Service. Since the
position of Financial Management Specialist IV is not included in the Index of Occupational
Service, then De Guzman’s appointment to this position must be invalid. 8 Director Padilla
pointed out that the CSC had already decided upon an issue similar to De Guzman’s case in
CSC Resolution No. 011495 (Geronimo, Rolando S.C., Macapagal, Vivencio M. Tumangan,
Panser E., Villar, Victor G., Ong, Elizabeth P., Re: Invalidated Appointments; Appeal) where it
invalidated the appointments of several Development Bank of the Philippines (DBP) employees
because their position titles did not conform with the Position Allocation List and with the Index
of Occupational Service. Like TIDCORP, the DBP’s charter exempts the DBP from existing
laws, rules, and regulations on compensation, position classification and qualification
standards. It also has a similar duty to "endeavor to make its system conform as closely as
possible to the principles under the Compensation and Position Classification Act of 1989
(Republic Act No. 6758, as amended)."9
Lastly, Padilla stressed that the 1987 Administrative Code empowers10 the CSC to formulate
policies and regulations for the administration, maintenance and implementation of position,
classification and compensation.
TIDCORP’s appeal to the CSC-CO
In response to the CSC-NCR’s ruling, TIDCORP’s President and CEO Joel C. Valdes sent
CSC Chairperson Karina Constantino-David a Letter11 appealing Director Padilla’s decision to
the CSC-Central Office (CO). Valdes reiterated TIDCORP’s argument that RA 8494 authorized
its Board of Directors to determine its own organizational structure and staffing pattern, and
exempted TIDCORP from all existing laws on compensation, position classification and
qualification standards. Citing Javellana v. The Executive Secretary, et al., 12 Valdes asserted
that the wisdom of Congress in granting TIDCORP this authority and exemption is a political
question that cannot be the subject of judicial review. Given TIDCORP’s functions as the
government’s export credit agency, its Board of Directors has been provided flexibility in
administering its personnel so that it can hire qualified employees from the private sector, such
as banks and other financial institutions.
In addition, prior actions of the CSC show that it recognized TIDCORP’s exemption from all
laws regarding compensation, position classification and qualification standards of its
employees. The CSC has approved prior appointments of TIDCORP’s officers under its July
1, 1998 re-organization plan. It also approved Mayor’s previous appointment as Financial
Management Specialist IV. Further, a memorandum dated October 29, 1998 issued by the
CSC-NCR noted that "pursuant to Sec. 7 of RA 8494, TIDCORP is exempt from existing laws,
rules and regulations on compensation, position classification and qualification standards."13
The CSC-CO’s ruling
In its Resolution No. 030144,14 the CSC-CO affirmed the CSC-NCR’s decision that De
Guzman’s appointment should have complied with CSC Memorandum Circular No. 40, s. 1998,
as amended by CSC Memorandum Circular No. 15, s. 1999. Rule III, Section 1(c) is explicit in
requiring that the position title indicated in the appointment should conform with the Position
Allocation List and found in the Index of Occupational Service. Otherwise, the appointment
shall be disapproved. In disallowing De Guzman’s appointment, the CSC-CO held that Director
Bugtong was simply following the letter of the law.
According to the CSC-CO, TIDCORP misconstrued the provisions of Section 7 of RA 8494 in
its attempt to bypass the requirements of CSC Memorandum Circular No. 40, s. 1998. While
12 | C O N S T I 1
RA 8494 gave TIDCORP staffing prerogatives, it would still have to comply with civil service
rules because Section 7 did not expressly exempt TIDCORP from civil service laws.
The CSC-CO also supported the CSC-NCR’s invocation of CSC Resolution No. 011495. Both
the charters of the DBP and TIDCORP have similar provisions in the recruitment and
administration of their human resources. Thus, the ruling in CSC Resolution No. 011495 has
been correctly applied in TIDCORP’s appeal.
Lastly, the CSC-CO noted that the government is not bound by its public officers’ erroneous
application and enforcement of the law. Granting that the CSC-NCR had erroneously approved
an appointment to the same position as De Guzman’s appointment, the CSC is not estopped
from correcting its officers’ past mistakes.
TIDCORP moved to reconsider15 the CSC-CO’s decision, but this motion was
denied,16 prompting TIDCORP to file a Rule 65 petition for certiorari 17 with the CA. The petition
asserted that the CSC-CO committed grave abuse of discretion in issuing Resolution No.
030144 and Resolution No. 031037.
The Appellate Court’s Ruling
The CA denied18 TIDCORP’s petition and upheld the ruling of the CSC-CO in Resolution No.
030144 and Resolution No. 031037. The CA noted that filing a petition for certiorari was an
improper recourse; TIDCORP should have instead filed a petition for review under Section 1,
Rule 43 of the Rules of Court. The CA, however, brushed aside the procedural defect, ruling
that the assailed resolutions should still stand as they are consistent with law and
jurisprudence.
Citing Central Bank of the Philippines v. Civil Service Commission, 19 the CA stood by the CSC-
CO’s ruling that it has authority to approve and review De Guzman’s appointment. The CSC
has the power to ascertain whether the appointing authority complied with the requirements of
the law; otherwise, it may revoke the appointment. As TIDCORP is a government-owned
corporation, it is covered by civil service laws and is therefore bound by the CSC’s jurisdiction
over all matters pertaining to personnel, including appointments.
Further, the CA cited the CSC’s mandate under the 1987 Constitution to approve or disapprove
appointments and to determine whether an appointee possesses civil service eligibility. As
TIDCORP’s charter does not expressly or impliedly divest the CSC of administrative authority
over personnel concerns at TIDCORP, the latter is still covered by the existing civil service laws
on compensation, position classification and qualification standards. Its appointment of De
Guzman as Financial Management Specialist IV should have complied with these rules.
The CA thus concluded that the CSC was well-within its authority when it invalidated De
Guzman’s appointment. It held that an appointee’s title to the office does not permanently vest
until the appointee complies with the legal requirements of his appointment. The requirements
include the submission of the appointment to the CSC for the determination of whether the
appointee qualifies to the position and whether the procedure for appointment has been
properly followed. Until these requirements are complied with, his appointment may still be
recalled or withdrawn by the appointing authority. 20
TIDCORP moved for reconsideration21 but the CA denied the motion in a resolution 22 dated
March 17, 2008.
The Present Petition
In its present petition for review on certiorari, 23 TIDCORP argued that the CSC’s interpretation
of the last sentence of Section 7 of RA 8494 (which mandates it to endeavor to make the
system conform as closely as possible with the principles provided in RA 6758) is misplaced.
This provision does not bar TIDCORP from adopting a position classification system and
qualification standards different from those prescribed by the CSC. TIDCORP asserts that it is
not also duty bound to comply with civil service rules on compensation and position
classification, as it is exempt from all these rules. Instead, TIDCORP is only required to furnish
the CSC with its compensation and position classification system and qualification standards
so that the CSC can be properly guided in processing TIDCORP’s appointments, promotion
and personnel action.
Insisting on its exemption from RA 6758 and CSC Memorandum Circular No. 40, s. 1998,
TIDCORP emphasizes that the provisions of RA 6758, which the CSC applied to TIDCORP, is
a general law, while TIDCORP’s charter, RA 8494, is a special law. In interpreting conflicting
provisions of a general law and a special law, the provisions of the two laws should be
harmonized to give effect to both. But if these provisions cannot be reconciled, then the special
law should prevail because it is a qualification to the general rule.
Further, RA 8494 is a later expression of Congress’ intent as it was enacted nine years after
RA 6758 was approved, and should therefore be construed in this light in its relation with the
latter. A new statute should be interpreted in connection with those already existing in relation
to the same subject matter and all should be made to harmonize and stand together –
interpretare et concordare legibus est optimus interpretandi.
Under these principles, TIDCORP argued that Section 7 of RA 8494, the provision of a special
law, should be interpreted as an exemption to RA 6758. Thus, CSC Memorandum Circular No.
40, s. 1998, which was issued pursuant to RA 6758, should not have been applied to limit
TIDCORP’s staffing prerogatives.
In its comment,24 the CSC noted that CSC Memorandum Circular No. 40, series of 1998, as
amended by CSC Memorandum Circular No. 15, s. 1999, was issued in accordance with its
authority to prescribe rules and regulations to carry out the provisions of civil service laws and
other pertinent laws (Administrative Code), and not pursuant to RA 6758.
The CSC maintained that Section 2(1), Article IX-B of the Constitution includes government
and controlled corporations as part of the civil service. TIDCORP, a GOCC, is therefore
13 | C O N S T I 1
covered by the civil service rules and by the CSC. It should submit its Position Allocation List
to the DBM, regardless of its exemption under RA 6758.
Lastly, the CSC argued that RA 8494 should not prevail over RA 6758 because the latter also
applies to GOCCs like TIDCORP; RA 8494 even makes a reference to RA 6758.
Issues
The parties’ arguments, properly joined, present to us the following issues:
1) Whether the Constitution empowers the CSC to prescribe and enforce civil service
rules and regulations contrary to laws passed by Congress;
2) Whether the requirement in Section 1(c), Rule III of CSC Memorandum Circular No.
40, s. 1998, as amended by CSC Memorandum Circular No. 15, s. 1999, applies to
appointments in TIDCORP; and
3) Whether De Guzman’s appointment as Financial Management Specialist IV in
TIDCORP is valid.
The Court’s Ruling
We find the petition meritorious.
Directly at issue is the application of Section 1(c), Rule III of CSC Memorandum Circular No.
40, s. 1998, to appointments in TIDCORP. TIDCORP claims that its exemption, embodied in
Section 7 of its charter, precludes the application of this requirement. The CSC, on the other
hand, maintains its stance that appointments in a GOCC should follow the civil service laws on
appointments, regardless of its exemption from the civil service rules on compensation, position
classification and qualification standards.
While the CSC has authority over personnel actions in GOCCs, the rules it formulates pursuant
to this mandate should not contradict or amend the civil service laws it implements.
At the outset, we clarify that the CSC’s authority over personnel actions in TIDCORP is
uncontested. Both parties acknowledge this relationship in the pleadings they filed before the
Supreme Court.25 But while TIDCORP asserts that its charter exempts it from rules on
compensation, position classification and qualification standards, the CSC argues that this
exemption is irrelevant to the denial of De Guzman’s appointment because the CSC’s authority
over TIDCORP’s personnel actions requires it to comply with the CSC’s rules on appointments.
The parties’ arguments reveal an apparent clash between TIDCORP’s charter, enacted by
Congress, and the CSC rules, issued pursuant to the CSC’s rule-making power. Does the
CSC’s constitutional authority over the civil service divest the Legislature of the power to enact
laws providing exemptions to civil service rules?
We answer in the negative. The CSC’s rule-making power, albeit constitutionally granted, is
still limited to the implementation and interpretation of the laws it is tasked to enforce.
The 1987 Constitution created the CSC as the central personnel agency of the government
mandated to establish a career service and promote morale, efficiency, integrity,
responsiveness, progressiveness, and courtesy in the civil service. 26 It is a constitutionally
created administrative agency that possesses executive, quasi-judicial and quasi-legislative or
rule-making powers.
While not explicitly stated, the CSC’s rule-making power is subsumed under its designation as
the government’s "central personnel agency" in Section 3, Article IX-B of the 1987 Constitution.
The original draft of Section 3 empowered the CSC to "promulgate and enforce policies on
personnel actions, classify positions, prescribe conditions of employment except as to
compensation and other monetary benefits which shall be provided by law." This, however,
was deleted during the constitutional commission’s deliberations because it was redundant to
the CSC’s nature as an administrative agency:27
MR. REGALADO. This is more for clarification. The original Section 3 states, among others,
the functions of the Civil Service Commission — to promulgate and enforce policies on
personnel actions. Will Commissioner Aquino kindly indicate to us the corresponding provisions
and her proposed amendment which would encompass the powers to promulgate and enforce
policies on personnel actions?
MS. AQUINO. It is my submission that the same functions are already subsumed under the
concept of a central personnel agency.
MR. REGALADO. In other words, all those functions enumerated from line 35 on page 2 to line
1 of page 3, inclusive, are understood to be encompassed in the phrase "central personnel
agency of the government."
MS. AQUINO. Yes, Mr. Presiding Officer, except that on line 40 of page 2 and line 1 of the
subsequent page, it was only subjected to a little modification.
MR. REGALADO. May we, therefore, make it of record that the phrase ". . . promulgate and
enforce policies on personnel actions, classify positions, prescribe conditions of employment
except as to compensation and other monetary benefits which shall be provided by law" is
understood to be subsumed under and included in the concept of a central personnel agency.
28
MS. AQUINO. I would have no objection to that.
14 | C O N S T I 1
The 1987 Administrative Code then spelled out the CSC’s rule-making power in concrete terms
in Section 12, Book V, Title I-A, which empowered the CSC to implement the civil service law
and other pertinent laws, and to promulgate policies, standards and guidelines for the civil
service.29
The CSC’s rule-making power as a constitutional grant is an aspect of its independence as a
constitutional commission. It places the grant of this power outside the reach of Congress,
which cannot withdraw the power at any time. As we said in Gallardo v. Tabamo, Jr., 30 a case
which upheld the validity of a resolution issued by the Commission on Elections (COMELEC),
another constitutional commission:
Hence, the present Constitution upgraded to a constitutional status the aforesaid statutory
authority to grant the Commission broader and more flexible powers to effectively perform its
duties and to insulate it further from legislative intrusions. Doubtless, if its rule-making power is
made to depend on statutes, Congress may withdraw the same at any time. Indeed, the present
Constitution envisions a truly independent Commission on Elections committed to ensure free,
orderly, honest, peaceful and credible elections, and to serve as the guardian of the people's
sacred right of suffrage — the citizenry's vital weapon in effecting a peaceful change of
government and in achieving and promoting political stability. [citation omitted]
But while the grant of the CSC’s rule-making power is untouchable by Congress, the laws that
the CSC interprets and enforces fall within the prerogative of Congress. As an administrative
agency, the CSC’s quasi-legislative power is subject to the same limitations applicable to other
administrative bodies. The rules that the CSC formulates must not override, but must be in
harmony with, the law it seeks to apply and implement. 31
For example, in Grego v. Commission on Elections, 32 we held that it was improper for the
COMELEC, a constitutional body bestowed with rule-making power by the Constitution, to use
the word "shall" in the rules it formulated, when the law it sought to implement uses the word
"may." While rules issued by administrative bodies are entitled to great respect, "the conclusive
effect of administrative construction is not absolute. The function of promulgating rules and
regulations may be legitimately exercised only for the purpose of carrying the provisions of the
law into effect. x x x Administrative regulations cannot extend the law nor amend a legislative
enactment; x x x administrative regulations must be in harmony with the provisions of the law,"
and in a conflict between the basic law and an implementing rule or regulation, the former must
prevail.33
CSC Memorandum Circular No. 40, s. 1998, and CSC Resolution No. 15, s. 1999, which were
issued pursuant to the CSC’s rule-making power, involve rules on position classification
Two questions logically follow our conclusion on the extent of the CSC’s rule-making power.
The first is whether Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998, was
issued pursuant to the CSC’s rule-making power; the second is whether this provision involves
compensation, position classification and/or qualification standards that TIDCORP claims to be
exempt from. We answer both questions in the affirmative.
We agree with the CSC’s position that CSC Memorandum Circular No. 40, s. 1998, and CSC
Resolution No. 15, s. 1999, were all issued pursuant to its rule-making power. No less than the
introductory clause of CSC Memorandum Circular No. 40, s. 1998, confirms this:
Pursuant to Paragraphs 2 and 3, Section 12, Book V of Administrative Code of 1987 otherwise
known as Executive Order No. 292, the Civil Service Commission hereby prescribes the
following rules to govern the preparation, submission of, and actions to be taken on
appointments and other personnel actions. 34
Both these memoranda govern appointments and personnel actions in the civil service. CSC
Memorandum Circular No. 40, s. 1998, or the "Revised Omnibus Rules on Appointments and
Other Personnel Actions," updated and consolidated the various issuances on appointments
and other personnel actions and simplified their processing. This was subsequently amended
by CSC Memorandum Circular No. 15, s. 1999.
The assailed provisions in those memorandum circulars, however, involve position
classification. Section 1(c), Rule III of CSC Memorandum Circular No. 40, 35 s. 1998, requires,
as a condition sine qua non for the approval of an appointment, that the position title indicated
therein conform with the approved Position Allocation List. The position title should also be
found in the Index of Occupational Service. According to National Compensation Circular No.
58, the Position Allocation List is a list prepared by the DBM which reflects the allocation of
existing positions to the new position titles in accordance with the Index of Occupational
Service, Position Titles and Salary Grades issued under National Compensation Circular No.
57.36 Both circulars were published by the DBM pursuant to its mandate from RA 6758 to
establish a position classification system in the government.37
Further, the CSC admitted in its comment that RA 6758 was the basis for the issuance of CSC
Memorandum Circular No. 40, s. 1998, as amended by CSC Memorandum Circular No. 15, s.
1999. The CSC said:
The abovecited Sections 4 and 6 of R.A. No. 6758 are the bases for respondent’s issuance of
CSC Memorandum Circular No. 40, series of 1998, as amended by CSC Memorandum Circular
No. 15, series of 1999. To reiterate, the Circulars mandate that appointments should conform
to the approved Position Allocation List (PAL) and at the same time be listed in the Index of
Occupational Service (IOS).38
Section 7 of TIDCORP’s charter exempts it from rules involving position classification
To comply with Section 1(c), Rule III of CSC Memorandum Circular No. 40, s. 1998, TIDCORP
must conform with the circulars on position classification issued by the DBM. Section 7 of its
charter, however, expressly exempts TIDCORP from existing laws on position classification,
among others.
In its comment, the CSC would want us to disregard TIDCORP’s exemption from laws involving
position classification because RA 6758 applies to all GOCCs. It also noted that Section 7 of
15 | C O N S T I 1
RA 8494, the provision TIDCORP invokes as the source of its exemption, also directs its Board
of Directors to "endeavor to make its system conform as closely as possible with the principles
[and modes provided in] Republic Act No. 6758." 39 This reference of RA 6758 in Section 7
means that TIDCORP cannot simply disregard RA 6758 but must take its principles into
account in providing for its own position classifications. This requirement, to be sure, does not
run counter to Section 2(1), Article IX-B of the Constitution which provides that "the civil service
embraces all branches, subdivisions, instrumentalities, and agencies of the Government,
including government-owned or controlled corporations with original charters." The CSC shall
still enforce position classifications at TIDCORP, but must do this under the terms that
TIDCORP has itself established, based on the principles of RA 6758.
To further expound on these points, the CSC’s authority over TIDCORP is
undisputed.1âwphi1 The rules that the CSC formulates should implement and be in harmony
with the law it seeks to enforce. In TIDCORP’s case, the CSC should also consider TIDCORP’s
charter in addition to other civil service laws. Having said this, there remains the issue of how
the CSC should apply the civil service law to TIDCORP, given the exemptions provided in the
latter’s charter. Does the wording of Section 7 of RA 8494 command TIDCORP to follow issued
requirements pursuant to RA 6758 despite its exemption from laws involving position
classification?
We answer in the negative. "Under the principles of statutory construction, if a statute is clear,
plain and free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation. This plain-meaning rule or verba legis is derived from the maxim index animi
sermo est (speech is the index of intention) and rests on the valid presumption that the words
employed by the legislature in a statute correctly express its intent and preclude the court from
construing it differently. The legislature is presumed to know the meaning of the words, to have
used words advisedly, and to have expressed its intent by the use of such words as are found
in the statute. Verba legis non est recedendum, or from the words of a statute there should be
no departure."40
The phrase "to endeavor" means to "to devote serious and sustained effort" and "to make an
effort to do." It is synonymous with the words to strive, to struggle and to seek. 41 The use of "to
endeavor" in the context of Section 7 of RA 8494 means that despite TIDCORP’s exemption
from laws involving compensation, position classification and qualification standards, it should
still strive to conform as closely as possible with the principles and modes provided in RA 6758.
The phrase "as closely as possible," which qualifies TIDCORP’s duty "to endeavor to conform,"
recognizes that the law allows TIDCORP to deviate from RA 6758, but it should still try to hew
closely with its principles and modes. Had the intent of Congress been to require TIDCORP to
fully, exactly and strictly comply with RA 6758, it would have so stated in unequivocal terms.
Instead, the mandate it gave TIDCORP was to endeavor to conform to the principles and
modes of RA 6758, and not to the entirety of this law.
These inter-relationships render it clear, as a plain reading of Section 7 of RA 8494 itself would
confirm, that TIDCORP is exempt from existing laws on compensation, position classification
and qualification standards, including compliance with Section 1(c), Rule III of CSC
Memorandum Circular No. 40, s. 1998.
De Guzman’s appointment as Financial Management Specialist IV is valid

With TIDCORP exempt from Section 1(c), Rule III of CSC Memorandum Circular No. 40, s.
1998, there remains the issue of whether De Guzman’s appointment as Financial Management
Specialist IV is valid. Since Section 1(c), Rule III of CSC Memorandum Circular No. 40, s.
1998,is the only requirement that De Guzman failed to follow, his appointment actually
complied with all the requisites for a valid appointment. The CSC, therefore, should have given
due course to De Guzman's appointment.

WHEREFORE, all premises considered, we hereby GRANT the petition, and REVERSE and
SET ASIDE the decision dated September 28, 2007 and the resolution dated March 17, 2008
of the Court of Appeals in CA-G.R. SP. No. 81058, as well 'as Resolution No. 030144 and
Resolution No. 031037 of the Civil Service Commission that the Court of Appeals rulings
affirmed. No costs.

16 | C O N S T I 1
G.R. Nos. L-8895 and L-9191 April 30, 1957
SALVADOR A. ARANETA, ETC., ET AL., petitioners,
vs.
THE HON. MAGNO S. GATMAITAN, ETC., ET AL., respondents.
EXEQUIEL SORIANO, ET AL., petitioners-appellees,
vs.
SALVADOR ARANETA, ETC., ET AL., respondents-appellants.
Office of the Solicitor General Ambrosio Padilla, Assistant Solicitor General Jose G. Bautista
and Solicitor Troadio T. Quiazon for petitioners.
San Juan, Africa and Benedicto for respondents.
FELIX, J.:
San Miguel Bay, located between the provinces of Camarines Norte and Camarines Sur, a part
of the National waters of the Philippines with an extension of about 250 square miles and an
average depth of approximately 6 fathoms (Otter trawl explorations in Philippine waters p. 21,
Exh. B), is considered as the most important fishing area in the Pacific side of the Bicol region.
Sometime in 1950, trawl 1 operators from Malabon, Navotas and other places migrated to this
region most of them settling at Sabang, Calabanga, Camarines Sur, for the purpose of using
this particular method of fishing in said bay. On account of the belief of sustenance fishermen
that the operation of this kind of gear caused the depletion of the marine resources of that area,
there arose a general clamor among the majority of the inhabitants of coastal towns to prohibit
the operation of trawls in San Miguel Bay. This move was manifested in the resolution of
December 18, 1953 (Exh. F), passed by the Municipal Mayors' League condemning the
operation of trawls as the cause of the wanton destruction of the shrimp specie and resolving
to petition the President of the Philippines to regulate fishing in San Miguel Bay by declaring it
closed for trawl fishing at a certain period of the year. In another resolution dated March 27,
1954, the same League of Municipal Mayor, prayed the President to protect them and the fish
resources of San Miguel Bay by banning the operation of trawls therein (Exh. 4). The Provincial
Governor also made proper presentations to this effect and petitions in behalf of the non-trawl
fishermen were likewise presented to the President by social and civic organizations as the
NAMFREL (National Movement for Free Elections) and the COMPADRE (Committee for
Philippine Action in Development, Reconstruction and Education), recommending the
cancellation of the licenses of trawl operators after investigation, if such inquiry would
substantiate the charges that the operation of said fishing method was detrimental to the
welfare of the majority of the inhabitants (Exh. 2).
In response to these pleas, the President issued on April 5, 1954, Executive Order No. 22 (50
Off. Gaz., 1421) prohibiting the use of trawls in San Miguel Bay, but said executive order was
amended by Executive Order No. 66, issued on September 23, 1954 (50 Off. Gaz., 4037),
apparently in answer to a resolution of the Provincial Board of Camarines Sur recommending
the allowance of trawl fishing during the typhoon season only. On November 2, 1954, however,
17 | C O N S T I 1
Executive Order No. 80 (50 Off. Gaz., 5198) was issued reviving Executive Order No. 22, to
take effect after December 31, 1954.
A group of Otter trawl operators took the matter to the court by filing a complaint for injunction
and/or declaratory relief with preliminary injunction with the Court of First Instance of Manila,
docketed as Civil Case No. 24867, praying that a writ of preliminary injunction be issued to
restrain the Secretary of Agriculture and Natural Resources and the Director of Fisheries from
enforcing said executive order; to declare the same null and void, and for such other relief as
may be just and equitable in the premises.
The Secretary of Agriculture and Natural Resources and the Director of Fisheries, represented
by the Legal Adviser of said Department and a Special Attorney of the Office of the Solicitor
General, answered the complaint alleging, among other things, that of the 18 plaintiff (Exequiel
Soriano, Teodora Donato, Felipe Concepcion, Venancio Correa, Santo Gaviana, Alfredo
General, Constancio Gutierrez, Arsenio de Guzman, Pedro Lazaro, Porfirio Lazaro, Deljie de
Leon, Jose Nepomuceno, Bayani Pingol, Claudio Salgado, Porfirio, San Juan, Luis Sioco,
Casimiro Villar and Enrique Voluntad), only 11 were issued license to operate fishing boats for
the year 1954 (Annex B, petition — L-8895); that the executive orders in question were issued
accordance with law; that the encouragement by the Bureau of Fisheries of the use of Otter
trawls should not be construed to mean that the general welfare of the public could be
disregarded, and set up the defenses that since plaintiffs question the validity of the executive
orders issued by the President, then the Secretary of Agriculture and Natural Resources and
the Director of Fisheries were not the real parties in interest; that said executive orders do not
constitute a deprivation of property without due process of law, and therefore prayed that the
complaint be dismissed (Exh. B, petition, L-8895).
During the trial of the case, the Governor of Camarines Sur appearing for the municipalities of
Siruma, Tinambac, Calabanga, Cabusao and Sipocot, in said province, called the attention of
the Court that the Solicitor General had not been notified of the proceeding. To this
manifestation, the Court ruled that in view of the circumstances of the case, and as the Solicitor
General would only be interested in maintaining the legality of the executive orders sought to
be impugned, section 4 of Rule 66 could be interpreted to mean that the trial could go on and
the Solicitor General could be notified before judgement is entered.
After the evidence for both parties was submitted and the Solicitor General was allowed to file
his memorandum, the Court rendered decision on February 2, 1955, the last part of which
reads as follows:
The power to close any definite area of the Philippine waters, from the fact that
Congress has seen fit to define under what conditions it may be done by the enactment
of the sections cited, in the mind of Congress must be of transcendental significance.
It is primarily within the fields of legislation not of execution: for it goes far and says
who can and who can not fish in definite territorial waters. The court can not accept
that Congress had intended to abdicate its inherent right to legislate on this matter of
national importance. To accept respondents' view would be to sanction the exercise of
 legislative power by executive decrees. If it is San Miguel Bay now, it may be Davao
Gulf tomorrow, and so on. That may be done only by Congress. This being the
conclusion, there is hardly need to go any further. Until the trawler is outlawed by
legislative enactment, it cannot be banned from San Miguel Bay by executive
proclamation. The remedy for respondents and population of the coastal towns of
Camarines Sur is to go to the Legislature. The result will be to issue the writ prayed
for, even though this be to strike at public clamor and to annul the orders of the
President issued in response therefor. This is a task unwelcome and unpleasant;
unfortunately, courts of justice use only one measure for both the rich and poor, and
are not bound by the more popular cause when they give judgments.
IN VIEW WHEREOF, granted; Executive Order Nos. 22, 66 and 80 are declared
invalid; the injunction prayed for is ordered to issue; no pronouncement as to costs.
Petitioners immediately filed an ex-parte motion for the issuance of a writ of injunction which
was opposed by the Solicitor General and after the parties had filed their respective
memoranda, the Court issued an order dated February 19, 1955, denying respondents' motion
to set aside judgement and ordering them to file a bond in the sum of P30,000 on or before
March 1, 1955, as a condition for the non-issuance of the injunction prayed for by petitioners
pending appeal. The Solicitor General filed a motion for reconsideration which was denied for
lack of merit, and the Court, acting upon the motion for new trial filed by respondents, issued
another order on March 3, 1965, denying said motion and granting the injunction prayed for by
petitioners upon the latter's filing a bond for P30,000 unless respondents could secure a writ of
preliminary injunction from the Supreme Court on or before March 15, 1955. Respondents,
therefore, brought the matter to this Court in a petition for prohibition and certiorariwith
preliminary injunction, docketed as G.R. No. L-8895, and on the same day filed a notice to
appeal from the order of the lower court dated February 2, 1955, which appeal was docketed
in this Court as G.R. No. L-9191.
In the petition for prohibition and certiorari, petitioners (respondents therein) contended among
other things, that the order of, the respondent Judge requiring petitioners Secretary of
Agriculture and Natural Resources and the Director of Fisheries to post a bond in the sum of
P30,000 on or before March 1, 1955, had been issued without jurisdiction or in excess thereof,
or at the very least with grave abuse of discretion, because by requiring the bond, the Republic
of the Philippines was in effect made a party defendant and therefore transformed the suit into
one against the Government which is beyond the jurisdiction of the respondent Judge to
entertain; that the failure to give the Solicitor General the opportunity to defend the validity of
the challenged executive orders resulted in the receipt of objectionable matters at the hearing;
that Rule 66 of the Rules of Court does not empower a court of law to pass upon the validity of
an executive order in a declaratory relief proceeding; that the respondent Judge did not have
the power to grant the injunction as Section 4 of Rule 39 does not apply to declaratory relief
proceedings but only to injunction, receivership and patent accounting proceedings; and
prayed that a writ of preliminary injunction be issued to enjoin the respondent Judge from
enforcing its order of March 3, 1955, and for such other relief as may be deem just and equitable
in the premises. This petition was given due course and the hearing on the merits was set by
this Court for April 12, 1955, but no writ of preliminary injunction was issued.
18 | C O N S T I 1
Meanwhile, the appeal (G.R. No. L-9191) was heard on October 3, 1956, wherein respondents-
appellants ascribed to the lower court the commission of the following errors:
1. In ruling that the President has no authority to issue Executive Orders Nos. 22, 66
and 80 banning the operation of trawls in San Miguel Bay;
2. In holding that the power to declare a closed area for fishing purposes has not been
delegated to the President of the Philippines under the Fisheries Act;
3. In not considering Executive Orders Nos. 22, 66 and 80 as declaring a closed
season pursuant to Section 7, Act 4003, as amended, otherwise known as the
Fisheries Act;
4. In holding that to uphold the validity of Executive Orders Nos. 22 and 80 would be
to sanction the exercise of legislative power by executive decrees;
5. In its suggestion that the only remedy for respondents and the people of the coastal
towns of Camarines Sur and Camarines Norte is to go to the Legislature; and
6. In declaring Executive Orders Nos. 22, 66 and 80 invalid and in ordering the
injunction prayed for to issue.
As Our decision in the prohibition and certiorari case (G.R. No. L-8895) would depend, in the
last analysis, on Our ruling in the appeal of the respondents in case G.R. No. L-9191, We shall
first proceed to dispose of the latter case.
It is indisputable that the President issued Executive Orders Nos. 22, 66 and 80 in response to
the clamor of the inhabitants of the municipalities along the coastline of San Miguel Bay. They
read as follows:
EXECUTIVE ORDER No. 22
PROHIBITING THE USE OF TRAWLS IN SAN MIGUEL BAY
In order to effectively protect the municipal fisheries of San Miguel Bay, Camarines
Norte and Camarines Sur, and to conserve fish and other aquatic resources of the
area, I, RAMON MAGSAYSAY, President of the Philippines, by virtue of the powers
vested in me by law, do hereby order that:
1. Fishing by means of trawls (utase, otter and/or perenzella) of any kind, in the waters
comprised within San Miguel Bay, is hereby prohibited.
2. Trawl shall mean, for the purpose of this Order, a fishing net made in the form of a
bag with the mouth kept open by a device, the whole affair being towed, dragged,
 trailed or trawled on the bottom of the sea to capture demersal, ground or bottom
species.
3. Violation of the provisions of this Order shall subject the offender to the penalty
provided under Section 83 of Act 4993, or more than six months, or both, in the
discretion of the Court.
Done in the City of Manila, this 5th day of April, nineteen hundred and fifty-four and of
the Independence of the Philippines, the eighth. (50 Off. Gaz. 1421)
EXECUTIVE ORDER No. 66
AMENDING EXECUTIVE ORDER No. 22, DATED APRIL 5, 1954, ENTITLED
"PROHIBITING THE USE OF TRAWLS IN SAN MIGUEL BAY"
By virtue of the powers voted in me by law, I, RAMON MAGSAYSAY, President of the
Philippines, do hereby amend Executive Order No. 22, dated April 5, 1954, so as to
allow fishing by means of trawls, as defined in said Executive Order, within that portion
of San Miguel Bay north of a straight line drawn from Tacubtacuban Hill in the
Municipality of Tinambac, Province of Camarines Sur. Fishing by means of trawls south
of said line shall still be absolutely prohibited.
Done in the City of Manila, this 23rd day of September, in the year of our Lord, nineteen
hundred and fifty-four, and of the Independence of the Philippines, the ninth." (50 Off.
Gaz. 4037).
EXECUTIVE ORDER No. 80.
FURTHER AMENDING EXECUTIVE ORDER No. 22, DATED APRIL 5, 1954, AS
AMENDED BY EXECUTIVE ORDER No. 66, DATED SEPTEMBER 23, 1954.
By virtue of the powers vested in me by law, I, RAMON MAGSAYSAY, President of
the Philippines, do hereby amend Executive Order No. 66 dated September 23, 1954,
so as to allow fishing by means of trawls, as defined in Executive Order No. 22, dated
April 5, 1954, within the portion of San Miguel Bay North of a straight line drawn from
Tacubtacuban Hill in the Municipality of Mercedes, Province of Camarines Norte to
Balocbaloc Point in the Municipality of Tinambac, Province of Camarines Sur, until
December 31, 1954, only.
Thereafter, the provisions of said Executive Order No. 22 absolutely prohibiting fishing
by means of trawls in all the waters comprised within the San Miguel Bay shall be
revived and given full force and effect as originally provided therein.
19 | C O N S T I 1
Done in the City of Manila, this 2nd day of November, in the year of Our Lord, nineteen
hundred and fifty-four and of the Independence of the Philippines, the ninth. (50 Off.
Gaz. 5198)
It is likewise admitted that petitioners assailed the validity of said executive orders in their
petition for a writ of injunction and/or declaratory relief filed with the Court of First Instance of
Manila, and that the lower court, upon declaring Executive Orders Nos. 22, 66 and 80 invalid,
issued an order requiring the Secretary of Agriculture and Natural Resources and the Director
of Fisheries to post a bond for P30,000 if the writ of injunction restraining them from enforcing
the executive orders in question must be stayed.
The Solicitor General avers that the constitutionality of an executive order cannot be ventilated
in a declaratory relief proceeding. We find this untenable, for this Court taking cognizance of
an appeal from the decision of the lower court in the case of Hilado vs. De la Costa, et al., 83
Phil., 471, which involves the constitutionality of another executive order presented in an action
for declaratory relief, in effect accepted the propriety of such action.
This question being eliminated, the main issues left for Our determination with respect to
defendants' appeal (G.R. No. L-9191), are:
(1) Whether the Secretary of an Executive Department and the Director of a Bureau, acting in
their capacities as such Government officials, could lawfully be required to post a bond in an
action against them;
(2) Whether the President of the Philippines has authority to issue Executive Orders Nos. 22,
66 and 80, banning the operation of trawls in San Miguel Bay, or, said in other words, whether
said Executive Orders Nos. 22, 66 and 80 were issued in accordance with law; and.
(3) Whether Executive Orders Nos. 22, 66 and 80 were valid, for the issuance thereof was not
in the exercise of legislative powers unduly delegated to the President.
Counsel for both parties presented commendable exhaustive defenses in support of their
respective stands. Certainly, these cases deserve such efforts, not only because the
constitutionality of an act of a coordinate branch in our tripartite system of Government is in
issue, but also because of the number of inhabitants, admittedly classified as "subsistence
fishermen", that may be affected by any ruling that We may promulgate herein.
I. As to the first proposition, it is an elementary rule of procedure that an appeal stays the
execution of a judgment. An exception is offered by section 4 of Rule 39 of the Rules of Court
which provides that:
SEC. 4. INJUNCTION, RECEIVERSHIP AND PATENT ACCOUNTING, NOT
STAYED. — Unless otherwise ordered by the court, a judgment in an action for
injunction or in a receivership action, or a judgment or order directing an accounting in
an action for infringement of letter patent, shall not be stayed after its rendition and
 before an appeal is taken or during the pendency of an appeal. The trial court, however,
in its discretion, when an appeal is taken from a judgement granting, dissolving or
denying an injunction, may make an order suspending, modifying, restoring, or
granting such injunction during the pendency of an appeal, upon such terms as to bond
or otherwise as it may consider proper for the security of the rights of the adverse party.
This provision was the basis of the order of the lower court dated February 19, 1955, requiring
the filing by the respondents of a bond for P30,000 as a condition for the non-issuance of the
injunction prayed for by plaintiffs therein, and which the Solicitor General charged to have been
issued in excess of jurisdiction. The State's counsel, however, alleges that while judgment
could be stayed in injunction, receivership and patent accounting cases and although the
complaint was styled "Injunction, and/or Declaratory Relief with Preliminary Injunction", the
case is necessarily one for declaratory relief, there being no allegation sufficient to convince
the Court that the plaintiffs intended it to be one for injunction. But aside from the title of the
complaint, We find that plaintiffs pray for the declaration of the nullity of Executive Order Nos.
22, 66 and 80; the issuance of a writ of preliminary injunction, and for such other relief as may
be deemed just and equitable. This Court has already held that there are only two requisites to
be satisfied if an injunction is to issue, namely, the existence of the right sought to be protected,
and that the acts against which the injunction is to be directed are violative of said right (North
Negros Sugar Co., Inc. vs.Serafin Hidalgo, 63 Phil., 664). There is no question that at least 11
of the complaining trawl operators were duly licensed to operate in any of the national waters
of the Philippines, and it is undeniable that the executive enactment's sought to be annulled
are detrimental to their interests. And considering further that the granting or refusal of an
injunction, whether temporary or permanent, rests in the sound discretion of the Court, taking
into account the circumstances and the facts of the particular case (Rodulfa vs. Alfonso, 76
Phil,, 225, 42 Off. Gaz., 2439), We find no abuse of discretion when the trial Court treated the
complaint as one for injunction and declaratory relief and executed the judgment pursuant to
the provisions of section 4 of Rule 39 of the Rules of Court.
On the other hand, it shall be remembered that the party defendants in Civil Case No. 24867
of the Court of First Instance of Manila are Salvador Araneta, as Secretary of Agriculture and
Natural Resources, and, Deogracias Villadolid, as Director of Fisheries, and were sued in such
capacities because they were the officers charged with duty of carrying out the statutes, orders
and regulations on fishing and fisheries. In its order of February 19, 1955, the trial court denied
defendants' motion to set aside judgment and they were required to file a bond for P30,000 to
answer for damages that plaintiffs were allegedly suffering at that time, as otherwise the
injunction prayed for by the latter would be issued.
Because of these facts, We agree with the Solicitor General when he says that the action,
being one against herein petitioners as such Government officials, is essentially one against
the Government, and to require these officials to file a bond would be indirectly a requirement
against the Government for as regards bonds or damages that may be proved, if any, the real
party in interest would be the Republic of the Philippines (L. S. Moon and Co. vs. Harrison, 43
Phi., 39; Salgado vs. Ramos, 64 Phil., 724-727, and others). The reason for this
pronouncement is understandable; the State undoubtedly is always solvent
(Tolentino vs. Carlos 66 Phil., 140; Government of the P. I. vs. Judge of the Court of First
20 | C O N S T I 1
Instance of Iloilo, 34 Phil., 167, cited in Joaquin Gutierrez et al. vs. Camus et al. * G.R. No. L-
6725, promulgated October 30, 1954). However, as the records show that herein petitioners
failed to put up the bond required by the lower court, allegedly due to difficulties encountered
with the Auditor General's Office (giving the impression that they were willing to put up said
bond but failed to do so for reasons beyond their control), and that the orders subjects of the
prohibition and certiorari proceedings in G.R. No. L-8895, were enforced, if at all,2 in
accordance with section 4 of Rule 39, which We hold to be applicable to the case at bar, the
issue as to the regularity or adequacy of requiring herein petitioners to post a bond, becomes
moot and academic.
II. Passing upon the question involved in the second proposition, the trial judge extending the
controversy to the determination of which between the Legislative, and Executive Departments
of the Government had "the power to close any definite area of the Philippine waters" instead
of limiting the same to the real issue raised by the enactment of Executive Orders No. 22, 26
and 80, especially the first and the last "absolutely prohibiting fishing by means trawls in all the
waters comprised within the San Miguel Bay", ruled in favor of Congress had not intended to
abdicate its power to legislate on the matter, he maintained as stated before, that "until the
trawler is outlawed by legislative enactment, it cannot be banned from San Miguel Bay by
executive proclamation", and that "the remedy for respondents and population of the coastal
towns of Camarines Sur is to go to Legislature," and thus declared said Executive Orders Nos.
22, 66 and 80 invalid".
The Solicitor General, on the contrary, asserts that the President is empowered by law to issue
the executive enactment's in question.
Sections 6, 13 and 75 of Act No. 4003, known as the Fisheries Law, the latter two sections as
amended by section 1 of Commonwealth Act No. 471, read as follows:
SEC. 6. WORDS AND PHRASES DEFINED. —Words and terms used in this Act shall
be construed as follows:
xxx xxx xxx
TAKE or TAKING includes pursuing, shooting, killing, capturing, trapping, snaring, and
netting fish and other aquatic animals, and all lesser acts, such as disturbing,
wounding, stupefying; or placing, setting, drawing, or using any net or other device
commonly used to take or collect fish and other aquatic animals, whether they result
in taking or not, and includes every attempt to take and every act of assistance to every
other person in taking or attempting to take or collect fish and other aquatic animals:
PROVIDED, That whenever taking is allowed by law, reference is had to taking by
lawful means and in lawful manner.
xxx xxx xxx
 SEC. 13. PROTECTION OF FRY OR FISH EGGS. — Except for scientific or
educational purpose or for propagation, it shall be unlawful to take or catch fry or fish
eggs and the small fish, not more than three (3) centimeters long, known as siliniasi,
in the territorial waters of the Philippines. Towards this end, the Secretary of Agriculture
and Commerce shall be authorized to provide by regulations such restrictions as may
be deemed necessary to be imposed on THE USE OF ANY FISHING NET OR
FISHING DEVICE FOR THE PROTECTION OF FRY OR FISH EGGS; Provided,
however, That the Secretary of Agriculture and Commerce shall permit the taking of
young of certain species of fish known as hipon under such restrictions as may be
deemed necessary.
SEC. 75. FISH REFUGEES AND SANCTUARIES. — Upon the recommendation of
the officer or chief of the bureau, office or service concerned, the Secretary of
Agriculture and Commerce may set aside and establish fishery reservation or fish
refuges and sanctuaries to be administered in the manner to be prescribed by him. All
streams, ponds and waters within the game refuge, birds, sanctuaries, national parks,
botanical gardens, communal forest and communal pastures are hereby declared
fishing refuges and sanctuaries. It shall be unlawful for any person, to take, destroy or
kill in any of the places aforementioned, or in any manner disturb or drive away or take
therefrom, any fish fry or fish eggs.
Act No. 4003 further provides as follows:
SEC. 83. OTHER VIOLATIONS. — Any other violation of the provisions of this Act or
any rules and regulations promulgated thereunder shall subject the offender to a fine
of not more than two hundred pesos, or imprisonment for not more than six months, or
both, in the discretion of the Court.
As may be seen from the just quoted provisions, the law declares unlawful and fixes the penalty
for the taking (except for scientific or educational purposes or for propagation), destroying or
killing of any fish fry or fish eggs, and the Secretary of Agriculture and Commerce (now the
Secretary of Agriculture and Natural Resources) is authorized to promulgate regulations
restricting the use of any fish net or fishing device (which includes the net used by trawl
fishermen) for the protection of fry or fish eggs, as well as to set aside and establish fishery
reservations or fish refuges and sanctuaries to be administered in the manner prescribed by
him, from which no person could lawfully take, destroy or kill in any of the places
aforementioned, or in any manner disturb or drive away or take therefrom any small or
immature fish, fry or fish eggs. It is true that said section 75 mentions certain streams, ponds
and waters within the game refuges, . . . communal forest, etc., which the law itself declares
fish refuges and sanctuaries, but this enumeration of places does not curtail the general and
unlimited power of the Secretary of Agriculture and Natural Resources in the first part of section
75, to set aside and establish fishery reservations or fish refuges and sanctuaries, which
naturally include seas or bays, like the San Miguel Bay in Camarines.
21 | C O N S T I 1
From the resolution passed at the Conference of Municipal Mayors held at Tinambac,
Camarines Sur, on December 18, 1953 (Exh. F), the following manifestation is made:
WHEREAS, the continuous operation of said trawls even during the close season as
specified in said Executive Order No. 20 caused the wanton destruction of the mother
shrimps laying their eggs and the millions of eggs laid and the inevitable extermination
of the shrimps specie; in order to save the shrimps specie from eventual extermination
and in order to conserve the shrimps specie for posterity;
In the brief submitted by the NAMFREL and addressed to the President of the Philippines (Exh.
2), in support of the petition of San Miguel Bay fishermen (allegedly 6, 175 in number), praying
that trawlers be banned from operating in San Miguel Bay, it is stated that:
The trawls ram and destroy the fish corrals. The heavy trawl nets dig deep into the
ocean bed. They destroy the fish foods which lies below the ocean floor. Their daytime
catches net millions of shrimps scooped up from the mud. In their nets they bring up
the life of the sea: algea, shell fish and star fish . . .
The absence of some species or the apparent decline in the catch of some fishermen
operating in the bay may be due to several factors, namely: the indiscriminate catching
of fry and immature sizes of fishes, the wide-spread use of explosives inside as well
as at the mouth and approaches of the bay, and the extensive operation of the trawls.
(p.9, Report of Santos B. Rasalan, Exh. A)
Extensive Operation of Trawls: — The strenuous effect of the operations of the
17 TRAWLS of the demersal fisheries of San Miguel Bay is better appreciated when
we consider the fact that out of its about 850 square kilometers area, only about 350
square kilometers of 5 fathoms up could be trawled. With their continuous operation,
is greatly strained. This is shown by the fact that in view of the non-observance of the
close season from May to October, each year, majority of their catch are immature. If
their operation would continue unrestricted, the supply would be greatly depleted. (p.
11), Report of Santos B. Rasalan, Exh. A)
San Miguel Bay — can sustain 3 to 4 small trawlers (Otter Trawl Explorations in
Philippine Waters, Research Report 25 of the Fish and Wildlife Service, United States
Department of the Interior, p. 9 Exhibit B).
According to Annex A of the complaint filed in the lower court in Civil Case No. 24867 — G.R.
No. L-9191 (Exh. D, p. 53 of the folder of Exhibits), the 18 plaintiffs-appellees operate 29
trawling boats, and their operation must be in a big scale considering the investments plaintiffs
have made therefore, amounting to P387,000 (Record on Appeal, p. 16-17).
In virtue of the aforementioned provisions of law and the manifestation just copied, We are of
the opinion that with or without said Executive Orders, the restriction and banning of trawl
fishing from all Philippine waters come, under the law, within the powers of the Secretary of
Agriculture and Natural Resources, who in compliance with his duties may even cause the
criminal prosecution of those who in violation of his instructions, regulations or orders are
caught fishing with trawls in the Philippine waters.
Now, if under the law the Secretary of Agriculture and Natural Resources has authority to
regulate or ban the fishing by trawl which, it is claimed, obnoxious for it carries away fish eggs
and fry's which should be preserved, can the President of the Philippines exercise that same
power and authority? Section 10(1), Article VII of the Constitution of the Philippines prescribes:
SEC. 10 (1). The President shall have control of all the executive departments,
bureaus or offices, exercises general supervision over all local governments as may
be provided by law, and take care that the laws be faithfully executed.
Section 63 of the Revised Administrative Code reads as follows:
SEC. 63. EXECUTIVE ORDERS AND EXECUTIVE PROCLAMATION. —
Administrative acts and commands of the President of the Philippines touching the
organization or mode of operation of the Government or rearranging or readjusting any
of the district, divisions, parts or ports of the Philippines, and all acts and
commands governing the general performance of duties by public employees or
disposing of issues of general concern shall be made in executive orders.
xxx xxx xxx
Regarding department organization Section 74 of the Revised Administrative Code also
provides that:
All executive functions of the government of the Republic of the Philippines shall be
directly under the Executive Departments subject to the supervision and control of the
President of the Philippines in matters of general policy. The Departments are
established for the proper distribution of the work of the Executive, for the performance
of the functions expressly assigned to them by law, and in order that each branch of
the administration may have a chief responsible for its direction and policy. Each
Department Secretary shall assume the burden of, and responsibility for, all activities
of the Government under his control and supervision.
For administrative purposes the President of the Philippines shall be considered the
Department Head of the Executive Office.
One of the executive departments is that of Agriculture and Natural Resources which by law is
placed under the direction and control of the Secretary, who exercises its functions subject to
the general supervision and control of the President of the Philippines (Sec. 75, R. A. C.).
Moreover, "executive orders, regulations, decrees and proclamations relative to matters under
the supervision or jurisdiction of a Department, the promulgation whereof is expressly assigned
by law to the President of the Philippines, shall as a general rule, be issued upon proposition
22 | C O N S T I 1
and recommendation of the respective Department" (Sec. 79-A, R.A.C.), and there can be no
doubt that the promulgation of the questioned Executive Orders was upon the proposition and
recommendation of the Secretary of Agriculture and Natural Resources and that is why said
Secretary, who was and is called upon to enforce said executive Orders, was made a party
defendant in one of the cases at bar (G.R. No. L-9191).
For the foregoing reasons We do hesitate to declare that Executive Orders Nos. 22, 66 and 80,
series of 1954, of the President, are valid and issued by authority of law.
III. But does the exercise of such authority by the President constitute and undue delegation of
the powers of Congress?
As already held by this Court, the true distinction between delegation of the power to legislate
and the conferring of authority or discretion as to the execution of law consists in that the former
necessary involves a discretion as to what the law shall be, wile in the latter the authority or
discretion as to its execution has to be exercised under and in pursuance of the law. The first
cannot be done; to the latter no valid objection can be made (Cruz vs. Youngberg, 56 Phil.,
234, 239. See also Rubi, et al. vs. The Provincial Board of Mindoro, 39 Phil., 660).
In the case of U. S. vs. Ang Tang Ho, 43 Phil. 1, We also held:
THE POWER TO DELEGATE. — The Legislature cannot delegate legislative power
to enact any law. If Act No. 2868 is a law unto itself, and it does nothing more than to
authorize the Governor-General to make rules and regulations to carry it into effect,
then the Legislature created the law. There is no delegation of power and it is valid. On
the other hand, if the act within itself does not define a crime and is not complete, and
some legislative act remains to be done to make it a law or a crime, the doing of which
is vested in the Governor-General, the act is delegation of legislative power, is
unconstitutional and void.
From the provisions of Act No. 4003 of the Legislature, as amended by Commonwealth Act
No. 471, which have been aforequoted, We find that Congress (a) declared it unlawful "to take
or catch fry or fish eggs in the territorial waters of the Philippines; (b) towards this end, it
authorized the Secretary of Agriculture and Natural Resources to provide by the regulations
such restrictions as may be deemed necessary to be imposed on the use of any fishing net or
fishing device for the protection of fish fry or fish eggs (Sec. 13); (c) it authorized the Secretary
of Agriculture and Natural Resources to set aside and establish fishery reservations or fish
refuges and sanctuaries to be administered in the manner to be prescribed by him and declared
it unlawful for any person to take, destroy or kill in any of said places, or, in any manner disturb
or drive away or take therefrom, any fish fry or fish eggs (See. 75); and (d) it penalizes the
execution of such acts declared unlawful and in violation of this Act (No. 4003) or of any rules
and regulations promulgated thereunder, making the offender subject to a fine of not more than
P200, or imprisonment for not more than 6 months, or both, in the discretion of the court (Sec.
83).
From the foregoing it may be seen that in so far as the protection of fish fry or fish egg is
concerned, the Fisheries Act is complete in itself, leaving to the Secretary of Agriculture and
Natural Resources the promulgation of rules and regulations to carry into effect the legislative
intent. It also appears from the exhibits on record in these cases that fishing with trawls causes
"a wanton destruction of the mother shrimps laying their eggs and the millions of eggs laid and
the inevitable extermination of the shrimps specie" (Exh. F), and that, "the trawls ram and
destroy the fish corrals. The heavy trawl nets dig deep into the ocean bed. They destroy the
fish food which lies below the ocean floor. Their daytime catches net millions of shrimps
scooped up from the mud. In their nets they bring up the life of the sea" (Exh- 2).

In the light of these facts it is clear to Our mind that for the protection of fry or fish eggs and
small and immature fishes, Congress intended with the promulgation of Act No. 4003, to
prohibit the use of any fish net or fishing device like trawl nets that could endanger and deplete
our supply of sea food, and to that end authorized the Secretary of Agriculture and Natural
Resources to provide by regulations such restrictions as he deemed necessary in order to
preserve the aquatic resources of the land. Consequently, when the President, in response to
the clamor of the people and authorities of Camarines Sur issued Executive Order No. 80
absolutely prohibiting fishing by means of trawls in all waters comprised within the San Miguel
Bay, he did nothing but show an anxious regard for the welfare of the inhabitants of said coastal
province and dispose of issues of general concern (Sec. 63, R.A.C.) which were in consonance
and strict conformity with the law.

Wherefore, and on the strength of the foregoing considerations We render judgement, as

follows:

(a) Declaring that the issues involved in case G.R. No. L-8895 have become moot, as no writ
of preliminary injunction has been issued by this Court the respondent Judge of the Court of
First Instance of Manila Branch XIV, from enforcing his order of March 3, 1955; and

(b) Reversing the decision appealed from in case G. R. No. L-9191; dissolving the writ of
injunction prayed for in the lower court by plaintiffs, if any has been actually issued by the
court a quo; and declaring Executive Orders Nos. 22, 66 and 80, series of 1954, valid for having
been issued by authority of the Constitution, the Revised Administrative Code and the Fisheries
Act.

Without pronouncement as to costs. It is so ordered.

23 | C O N S T I 1
G.R. No. 159796 July 17, 2007
ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST
CONSUMERS NETWORK, INC. (ECN), Petitioners,
vs.
DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC),
NATIONAL POWER CORPORATION (NPC), POWER SECTOR ASSETS AND
LIABILITIES MANAGEMENT GROUP (PSALM Corp.), STRATEGIC POWER UTILITIES
GROUP (SPUG), and PANAY ELECTRIC COMPANY INC. (PECO),Respondents.
DECISION
NACHURA, J.:
Petitioners Romeo P. Gerochi, Katulong Ng Bayan (KB), and Environmentalist Consumers
Network, Inc. (ECN) (petitioners), come before this Court in this original action praying that
Section 34 of Republic Act (RA) 9136, otherwise known as the "Electric Power Industry Reform
Act of 2001" (EPIRA), imposing the Universal Charge, 1and Rule 18 of the Rules and
Regulations (IRR)2 which seeks to implement the said imposition, be declared unconstitutional.
Petitioners also pray that the Universal Charge imposed upon the consumers be refunded and
that a preliminary injunction and/or temporary restraining order (TRO) be issued directing the
respondents to refrain from implementing, charging, and collecting the said charge. 3 The
assailed provision of law reads:
SECTION 34. Universal Charge. — Within one (1) year from the effectivity of this Act, a
universal charge to be determined, fixed and approved by the ERC, shall be imposed on all
electricity end-users for the following purposes:
(a) Payment for the stranded debts4 in excess of the amount assumed by the National
Government and stranded contract costs of NPC5 and as well as qualified stranded
contract costs of distribution utilities resulting from the restructuring of the industry;
(b) Missionary electrification;6
(c) The equalization of the taxes and royalties applied to indigenous or renewable
sources of energy vis-à-vis imported energy fuels;
(d) An environmental charge equivalent to one-fourth of one centavo per kilowatt-hour
(₱0.0025/kWh), which shall accrue to an environmental fund to be used solely for
watershed rehabilitation and management. Said fund shall be managed by NPC under
existing arrangements; and
(e) A charge to account for all forms of cross-subsidies for a period not exceeding three
(3) years.
24 | C O N S T I 1
The universal charge shall be a non-bypassable charge which shall be passed on and collected
from all end-users on a monthly basis by the distribution utilities. Collections by the distribution
utilities and the TRANSCO in any given month shall be remitted to the PSALM Corp. on or
before the fifteenth (15th) of the succeeding month, net of any amount due to the distribution
utility. Any end-user or self-generating entity not connected to a distribution utility shall remit its
corresponding universal charge directly to the TRANSCO. The PSALM Corp., as administrator
of the fund, shall create a Special Trust Fund which shall be disbursed only for the purposes
specified herein in an open and transparent manner. All amount collected for the universal
charge shall be distributed to the respective beneficiaries within a reasonable period to be
provided by the ERC.
The Facts
Congress enacted the EPIRA on June 8, 2001; on June 26, 2001, it took effect. 7
On April 5, 2002, respondent National Power Corporation-Strategic Power Utilities
Group8 (NPC-SPUG) filed with respondent Energy Regulatory Commission (ERC) a petition
for the availment from the Universal Charge of its share for Missionary Electrification, docketed
as ERC Case No. 2002-165.9
On May 7, 2002, NPC filed another petition with ERC, docketed as ERC Case No. 2002-194,
praying that the proposed share from the Universal Charge for the Environmental charge of
₱0.0025 per kilowatt-hour (/kWh), or a total of ₱119,488,847.59, be approved for withdrawal
from the Special Trust Fund (STF) managed by respondent Power Sector Assets and
Liabilities Management Group (PSALM)10 for the rehabilitation and management of watershed
areas.11
On December 20, 2002, the ERC issued an Order 12 in ERC Case No. 2002-165 provisionally
approving the computed amount of ₱0.0168/kWh as the share of the NPC-SPUG from the
Universal Charge for Missionary Electrification and authorizing the National Transmission
Corporation (TRANSCO) and Distribution Utilities to collect the same from its end-users on a
monthly basis.
On June 26, 2003, the ERC rendered its Decision 13 (for ERC Case No. 2002-165) modifying
its Order of December 20, 2002, thus:
WHEREFORE, the foregoing premises considered, the provisional authority granted to
petitioner National Power Corporation-Strategic Power Utilities Group (NPC-SPUG) in the
Order dated December 20, 2002 is hereby modified to the effect that an additional amount of
₱0.0205 per kilowatt-hour should be added to the ₱0.0168 per kilowatt-hour provisionally
authorized by the Commission in the said Order. Accordingly, a total amount of ₱0.0373 per
kilowatt-hour is hereby APPROVED for withdrawal from the Special Trust Fund managed by
PSALM as its share from the Universal Charge for Missionary Electrification (UC-ME) effective
on the following billing cycles:
 (a) June 26-July 25, 2003 for National Transmission Corporation (TRANSCO); and
(b) July 2003 for Distribution Utilities (Dus).
Relative thereto, TRANSCO and Dus are directed to collect the UC-ME in the amount of
₱0.0373 per kilowatt-hour and remit the same to PSALM on or before the 15th day of the
succeeding month.
In the meantime, NPC-SPUG is directed to submit, not later than April 30, 2004, a detailed
report to include Audited Financial Statements and physical status (percentage of completion)
of the projects using the prescribed format.1avvphi1
Let copies of this Order be furnished petitioner NPC-SPUG and all distribution utilities (Dus).
SO ORDERED.
On August 13, 2003, NPC-SPUG filed a Motion for Reconsideration asking the ERC, among
others,14 to set aside the above-mentioned Decision, which the ERC granted in its Order dated
October 7, 2003, disposing:
WHEREFORE, the foregoing premises considered, the "Motion for Reconsideration" filed by
petitioner National Power Corporation-Small Power Utilities Group (NPC-SPUG) is hereby
GRANTED. Accordingly, the Decision dated June 26, 2003 is hereby modified accordingly.
Relative thereto, NPC-SPUG is directed to submit a quarterly report on the following:
1. Projects for CY 2002 undertaken;
2. Location
3. Actual amount utilized to complete the project;
4. Period of completion;
5. Start of Operation; and
6. Explanation of the reallocation of UC-ME funds, if any.
SO ORDERED.15
Meanwhile, on April 2, 2003, ERC decided ERC Case No. 2002-194, authorizing the NPC to
draw up to ₱70,000,000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject
to the availability of funds for the Environmental Fund component of the Universal Charge. 16
25 | C O N S T I 1
On the basis of the said ERC decisions, respondent Panay Electric Company, Inc. (PECO)
charged petitioner Romeo P. Gerochi and all other end-users with the Universal Charge as
reflected in their respective electric bills starting from the month of July 2003. 17
Hence, this original action.
Petitioners submit that the assailed provision of law and its IRR which sought to implement the
same are unconstitutional on the following grounds:
1) The universal charge provided for under Sec. 34 of the EPIRA and sought to be
implemented under Sec. 2, Rule 18 of the IRR of the said law is a tax which is to be
collected from all electric end-users and self-generating entities. The power to tax is
strictly a legislative function and as such, the delegation of said power to any executive
or administrative agency like the ERC is unconstitutional, giving the same unlimited
authority. The assailed provision clearly provides that the Universal Charge is to be
determined, fixed and approved by the ERC, hence leaving to the latter complete
discretionary legislative authority.
2) The ERC is also empowered to approve and determine where the funds collected
should be used.
3) The imposition of the Universal Charge on all end-users is oppressive and
confiscatory and amounts to taxation without representation as the consumers were
not given a chance to be heard and represented.18
Petitioners contend that the Universal Charge has the characteristics of a tax and is collected
to fund the operations of the NPC. They argue that the cases19 invoked by the respondents
clearly show the regulatory purpose of the charges imposed therein, which is not so in the case
at bench. In said cases, the respective funds20 were created in order to balance and stabilize
the prices of oil and sugar, and to act as buffer to counteract the changes and adjustments in
prices, peso devaluation, and other variables which cannot be adequately and timely monitored
by the legislature. Thus, there was a need to delegate powers to administrative
bodies.21 Petitioners posit that the Universal Charge is imposed not for a similar purpose.
On the other hand, respondent PSALM through the Office of the Government Corporate
Counsel (OGCC) contends that unlike a tax which is imposed to provide income for public
purposes, such as support of the government, administration of the law, or payment of public
expenses, the assailed Universal Charge is levied for a specific regulatory purpose, which is
to ensure the viability of the country's electric power industry. Thus, it is exacted by the State
in the exercise of its inherent police power. On this premise, PSALM submits that there is no
undue delegation of legislative power to the ERC since the latter merely exercises a limited
authority or discretion as to the execution and implementation of the provisions of the EPIRA. 22
Respondents Department of Energy (DOE), ERC, and NPC, through the Office of the Solicitor
General (OSG), share the same view that the Universal Charge is not a tax because it is levied
for a specific regulatory purpose, which is to ensure the viability of the country's electric power
industry, and is, therefore, an exaction in the exercise of the State's police power. Respondents
further contend that said Universal Charge does not possess the essential characteristics of a
tax, that its imposition would redound to the benefit of the electric power industry and not to the
public, and that its rate is uniformly levied on electricity end-users, unlike a tax which is imposed
based on the individual taxpayer's ability to pay. Moreover, respondents deny that there is
undue delegation of legislative power to the ERC since the EPIRA sets forth sufficient
determinable standards which would guide the ERC in the exercise of the powers granted to
it. Lastly, respondents argue that the imposition of the Universal Charge is not oppressive and
confiscatory since it is an exercise of the police power of the State and it complies with the
requirements of due process.23
On its part, respondent PECO argues that it is duty-bound to collect and remit the amount
pertaining to the Missionary Electrification and Environmental Fund components of the
Universal Charge, pursuant to Sec. 34 of the EPIRA and the Decisions in ERC Case Nos.
2002-194 and 2002-165. Otherwise, PECO could be held liable under Sec. 46 24 of the EPIRA,
which imposes fines and penalties for any violation of its provisions or its IRR. 25
The Issues
The ultimate issues in the case at bar are:
1) Whether or not, the Universal Charge imposed under Sec. 34 of the EPIRA is a tax;
and
2) Whether or not there is undue delegation of legislative power to tax on the part of
the ERC.26
Before we discuss the issues, the Court shall first deal with an obvious procedural lapse.
Petitioners filed before us an original action particularly denominated as a Complaint assailing
the constitutionality of Sec. 34 of the EPIRA imposing the Universal Charge and Rule 18 of the
EPIRA's IRR. No doubt, petitioners havelocus standi. They impugn the constitutionality of Sec.
34 of the EPIRA because they sustained a direct injury as a result of the imposition of the
Universal Charge as reflected in their electric bills.
However, petitioners violated the doctrine of hierarchy of courts when they filed this "Complaint"
directly with us. Furthermore, the Complaint is bereft of any allegation of grave abuse of
discretion on the part of the ERC or any of the public respondents, in order for the Court to
consider it as a petition for certiorari or prohibition.
Article VIII, Section 5(1) and (2) of the 1987 Constitution27 categorically provides that:
SECTION 5. The Supreme Court shall have the following powers:
26 | C O N S T I 1
1. Exercise original jurisdiction over cases affecting ambassadors, other public
ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus.
2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the
rules of court may provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation
is in question.
But this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto,
and habeas corpus, while concurrent with that of the regional trial courts and the Court of
Appeals, does not give litigants unrestrained freedom of choice of forum from which to seek
such relief.28 It has long been established that this Court will not entertain direct resort to it
unless the redress desired cannot be obtained in the appropriate courts, or where exceptional
and compelling circumstances justify availment of a remedy within and call for the exercise of
our primary jurisdiction.29 This circumstance alone warrants the outright dismissal of the
present action.
This procedural infirmity notwithstanding, we opt to resolve the constitutional issue raised
herein. We are aware that if the constitutionality of Sec. 34 of the EPIRA is not resolved now,
the issue will certainly resurface in the near future, resulting in a repeat of this litigation, and
probably involving the same parties. In the public interest and to avoid unnecessary delay, this
Court renders its ruling now.
The instant complaint is bereft of merit.
The First Issue
To resolve the first issue, it is necessary to distinguish the State’s power of taxation from the
police power.
The power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in
its very nature no limits, so that security against its abuse is to be found only in the responsibility
of the legislature which imposes the tax on the constituency that is to pay it. 30 It is based on the
principle that taxes are the lifeblood of the government, and their prompt and certain availability
is an imperious need.31 Thus, the theory behind the exercise of the power to tax emanates from
necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare
and well-being of the people.32
On the other hand, police power is the power of the state to promote public welfare by
restraining and regulating the use of liberty and property. 33 It is the most pervasive, the least
limitable, and the most demanding of the three fundamental powers of the State. The
justification is found in the Latin maxims salus populi est suprema lex (the welfare of the people
is the supreme law) and sic utere tuo ut alienum non laedas (so use your property as not to
injure the property of others). As an inherent attribute of sovereignty which virtually extends to
all public needs, police power grants a wide panoply of instruments through which the State,
as parens patriae, gives effect to a host of its regulatory powers.34 We have held that the power
to "regulate" means the power to protect, foster, promote, preserve, and control, with due
regard for the interests, first and foremost, of the public, then of the utility and of its patrons. 35
The conservative and pivotal distinction between these two powers rests in the purpose for
which the charge is made. If generation of revenue is the primary purpose and regulation is
merely incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that
revenue is incidentally raised does not make the imposition a tax. 36
In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's police
power, particularly its regulatory dimension, is invoked. Such can be deduced from Sec. 34
which enumerates the purposes for which the Universal Charge is imposed 37 and which can
be amply discerned as regulatory in character. The EPIRA resonates such regulatory
purposes, thus:
SECTION 2. Declaration of Policy. — It is hereby declared the policy of the State:
(a) To ensure and accelerate the total electrification of the country;
(b) To ensure the quality, reliability, security and affordability of the supply of electric
power;
(c) To ensure transparent and reasonable prices of electricity in a regime of free and
fair competition and full public accountability to achieve greater operational and
economic efficiency and enhance the competitiveness of Philippine products in the
global market;
(d) To enhance the inflow of private capital and broaden the ownership base of the
power generation, transmission and distribution sectors;
(e) To ensure fair and non-discriminatory treatment of public and private sector entities
in the process of restructuring the electric power industry;
(f) To protect the public interest as it is affected by the rates and services of electric
utilities and other providers of electric power;
(g) To assure socially and environmentally compatible energy sources and
infrastructure;
(h) To promote the utilization of indigenous and new and renewable energy resources
in power generation in order to reduce dependence on imported energy;
27 | C O N S T I 1
(i) To provide for an orderly and transparent privatization of the assets and liabilities of
the National Power Corporation (NPC);
(j) To establish a strong and purely independent regulatory body and system to ensure
consumer protection and enhance the competitive operation of the electricity market;
and
(k) To encourage the efficient use of energy and other modalities of demand side
management.
From the aforementioned purposes, it can be gleaned that the assailed Universal Charge is
not a tax, but an exaction in the exercise of the State's police power. Public welfare is surely
promoted.
Moreover, it is a well-established doctrine that the taxing power may be used as an implement
of police power.38 In Valmonte v. Energy Regulatory Board, et al.39 and in Gaston v. Republic
Planters Bank,40 this Court held that the Oil Price Stabilization Fund (OPSF) and the Sugar
Stabilization Fund (SSF) were exactions made in the exercise of the police power. The doctrine
was reiterated in Osmeña v. Orbos41 with respect to the OPSF. Thus, we disagree with
petitioners that the instant case is different from the aforementioned cases. With the Universal
Charge, a Special Trust Fund (STF) is also created under the administration of PSALM. 42 The
STF has some notable characteristics similar to the OPSF and the SSF, viz.:
1) In the implementation of stranded cost recovery, the ERC shall conduct a review to
determine whether there is under-recovery or over recovery and adjust (true-up) the
level of the stranded cost recovery charge. In case of an over-recovery, the ERC shall
ensure that any excess amount shall be remitted to the STF. A separate account shall
be created for these amounts which shall be held in trust for any future claims of
distribution utilities for stranded cost recovery. At the end of the stranded cost recovery
period, any remaining amount in this account shall be used to reduce the electricity
rates to the end-users.43
2) With respect to the assailed Universal Charge, if the total amount collected for the
same is greater than the actual availments against it, the PSALM shall retain the
balance within the STF to pay for periods where a shortfall occurs.44
3) Upon expiration of the term of PSALM, the administration of the STF shall be
transferred to the DOF or any of the DOF attached agencies as designated by the DOF
Secretary.45
The OSG is in point when it asseverates:
Evidently, the establishment and maintenance of the Special Trust Fund, under the last
paragraph of Section 34, R.A. No. 9136, is well within the pervasive and non-waivable power
and responsibility of the government to secure the physical and economic survival and well-
being of the community, that comprehensive sovereign authority we designate as the police
power of the State.46
This feature of the Universal Charge further boosts the position that the same is an exaction
imposed primarily in pursuit of the State's police objectives. The STF reasonably serves and
assures the attainment and perpetuity of the purposes for which the Universal Charge is
imposed, i.e., to ensure the viability of the country's electric power industry.
The Second Issue
The principle of separation of powers ordains that each of the three branches of government
has exclusive cognizance of and is supreme in matters falling within its own constitutionally
allocated sphere. A logical corollary to the doctrine of separation of powers is the principle of
non-delegation of powers, as expressed in the Latin maxim potestas delegata non delegari
potest (what has been delegated cannot be delegated). This is based on the ethical principle
that such delegated power constitutes not only a right but a duty to be performed by the
delegate through the instrumentality of his own judgment and not through the intervening mind
of another. 47
In the face of the increasing complexity of modern life, delegation of legislative power to various
specialized administrative agencies is allowed as an exception to this principle. 48 Given the
volume and variety of interactions in today's society, it is doubtful if the legislature can
promulgate laws that will deal adequately with and respond promptly to the minutiae of
everyday life. Hence, the need to delegate to administrative bodies - the principal agencies
tasked to execute laws in their specialized fields - the authority to promulgate rules and
regulations to implement a given statute and effectuate its policies. All that is required for the
valid exercise of this power of subordinate legislation is that the regulation be germane to the
objects and purposes of the law and that the regulation be not in contradiction to, but in
conformity with, the standards prescribed by the law. These requirements are denominated as
the completeness test and the sufficient standard test.
Under the first test, the law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate, the only thing he will have to do is to enforce
it. The second test mandates adequate guidelines or limitations in the law to determine the
boundaries of the delegate's authority and prevent the delegation from running riot. 49
The Court finds that the EPIRA, read and appreciated in its entirety, in relation to Sec. 34
thereof, is complete in all its essential terms and conditions, and that it contains sufficient
standards.
Although Sec. 34 of the EPIRA merely provides that "within one (1) year from the effectivity
thereof, a Universal Charge to be determined, fixed and approved by the ERC, shall be
imposed on all electricity end-users," and therefore, does not state the specific amount to be
paid as Universal Charge, the amount nevertheless is made certain by the legislative
parameters provided in the law itself. For one, Sec. 43(b)(ii) of the EPIRA provides:
28 | C O N S T I 1
SECTION 43. Functions of the ERC. — The ERC shall promote competition, encourage market
development, ensure customer choice and penalize abuse of market power in the restructured
electricity industry. In appropriate cases, the ERC is authorized to issue cease and desist order
after due notice and hearing. Towards this end, it shall be responsible for the following key
functions in the restructured industry:
xxxx
(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in accordance
with law, a National Grid Code and a Distribution Code which shall include, but not limited to
the following:
xxxx
(ii) Financial capability standards for the generating companies, the TRANSCO, distribution
utilities and suppliers: Provided, That in the formulation of the financial capability standards,
the nature and function of the entity shall be considered: Provided, further, That such standards
are set to ensure that the electric power industry participants meet the minimum financial
standards to protect the public interest. Determine, fix, and approve, after due notice and public
hearings the universal charge, to be imposed on all electricity end-users pursuant to Section
34 hereof;
Moreover, contrary to the petitioners’ contention, the ERC does not enjoy a wide latitude of
discretion in the determination of the Universal Charge. Sec. 51(d) and (e) of the
EPIRA50 clearly provides:
SECTION 51. Powers. — The PSALM Corp. shall, in the performance of its functions and for
the attainment of its objective, have the following powers:
xxxx
(d) To calculate the amount of the stranded debts and stranded contract costs of NPC
which shall form the basis for ERC in the determination of the universal charge;
(e) To liquidate the NPC stranded contract costs, utilizing the proceeds from sales and
other property contributed to it, including the proceeds from the universal charge.
Thus, the law is complete and passes the first test for valid delegation of legislative power.
As to the second test, this Court had, in the past, accepted as sufficient standards the following:
"interest of law and order;"51 "adequate and efficient instruction;" 52 "public interest;"53 "justice
and equity;"54 "public convenience and welfare;"55 "simplicity, economy and
efficiency;"56 "standardization and regulation of medical education;" 57 and "fair and equitable
employment practices."58 Provisions of the EPIRA such as, among others, "to ensure the total
electrification of the country and the quality, reliability, security and affordability of the supply
of electric power"59 and "watershed rehabilitation and management" 60 meet the requirements
for valid delegation, as they provide the limitations on the ERC’s power to formulate the IRR.
These are sufficient standards.
It may be noted that this is not the first time that the ERC's conferred powers were challenged.
In Freedom from Debt Coalition v. Energy Regulatory Commission,61 the Court had occasion
to say:
In determining the extent of powers possessed by the ERC, the provisions of the EPIRA must
not be read in separate parts. Rather, the law must be read in its entirety, because a statute is
passed as a whole, and is animated by one general purpose and intent. Its meaning cannot to
be extracted from any single part thereof but from a general consideration of the statute as a
whole. Considering the intent of Congress in enacting the EPIRA and reading the statute in its
entirety, it is plain to see that the law has expanded the jurisdiction of the regulatory body, the
ERC in this case, to enable the latter to implement the reforms sought to be accomplished by
the EPIRA. When the legislators decided to broaden the jurisdiction of the ERC, they did not
intend to abolish or reduce the powers already conferred upon ERC's predecessors. To sustain
the view that the ERC possesses only the powers and functions listed under Section 43 of the
EPIRA is to frustrate the objectives of the law.
In his Concurring and Dissenting Opinion62 in the same case, then Associate Justice, now Chief
Justice, Reynato S. Puno described the immensity of police power in relation to the delegation
of powers to the ERC and its regulatory functions over electric power as a vital public utility, to
wit:
Over the years, however, the range of police power was no longer limited to the preservation
of public health, safety and morals, which used to be the primary social interests in earlier
times. Police power now requires the State to "assume an affirmative duty to eliminate the
excesses and injustices that are the concomitants of an unrestrained industrial economy."
Police power is now exerted "to further the public welfare — a concept as vast as the good of
society itself." Hence, "police power is but another name for the governmental authority to
further the welfare of society that is the basic end of all government." When police power is
delegated to administrative bodies with regulatory functions, its exercise should be given a
wide latitude. Police power takes on an even broader dimension in developing countries such
as ours, where the State must take a more active role in balancing the many conflicting interests
in society. The Questioned Order was issued by the ERC, acting as an agent of the State in
the exercise of police power. We should have exceptionally good grounds to curtail its exercise.
This approach is more compelling in the field of rate-regulation of electric power rates. Electric
power generation and distribution is a traditional instrument of economic growth that affects not
only a few but the entire nation. It is an important factor in encouraging investment and
promoting business. The engines of progress may come to a screeching halt if the delivery of
electric power is impaired. Billions of pesos would be lost as a result of power outages or
unreliable electric power services. The State thru the ERC should be able to exercise its police
power with great flexibility, when the need arises.
29 | C O N S T I 1
This was reiterated in National Association of Electricity Consumers for Reforms v. Energy
Regulatory Commission63 where the Court held that the ERC, as regulator, should have
sufficient power to respond in real time to changes wrought by multifarious factors affecting
public utilities.
From the foregoing disquisitions, we therefore hold that there is no undue delegation of
legislative power to the ERC.
Petitioners failed to pursue in their Memorandum the contention in the Complaint that the
imposition of the Universal Charge on all end-users is oppressive and confiscatory, and
amounts to taxation without representation. Hence, such contention is deemed waived or
abandoned per Resolution64 of August 3, 2004.65 Moreover, the determination of whether or
not a tax is excessive, oppressive or confiscatory is an issue which essentially involves
questions of fact, and thus, this Court is precluded from reviewing the same. 66
As a penultimate statement, it may be well to recall what this Court said of EPIRA:
One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It
established a new policy, legal structure and regulatory framework for the electric power
industry. The new thrust is to tap private capital for the expansion and improvement of the
industry as the large government debt and the highly capital-intensive character of the industry
itself have long been acknowledged as the critical constraints to the program. To attract private
investment, largely foreign, the jaded structure of the industry had to be addressed. While the
generation and transmission sectors were centralized and monopolistic, the distribution side
was fragmented with over 130 utilities, mostly small and uneconomic. The pervasive flaws have
caused a low utilization of existing generation capacity; extremely high and uncompetitive
power rates; poor quality of service to consumers; dismal to forgettable performance of the
government power sector; high system losses; and an inability to develop a clear strategy for
overcoming these shortcomings.
Thus, the EPIRA provides a framework for the restructuring of the industry, including the
privatization of the assets of the National Power Corporation (NPC), the transition to a
competitive structure, and the delineation of the roles of various government agencies and the
private entities. The law ordains the division of the industry into four (4) distinct sectors, namely:
generation, transmission, distribution and supply.
Corollarily, the NPC generating plants have to privatized and its transmission business spun
off and privatized thereafter.67inally, every law has in its favor the presumption of
constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of
the Constitution and not one that is doubtful, speculative, or argumentative.68Indubitably,
petitioners failed to overcome this presumption in favor of the EPIRA. We find no clear violation
of the Constitution which would warrant a pronouncement that Sec. 34 of the EPIRA and Rule
18 of its IRR are unconstitutional and void.
WHEREFORE, the instant case is hereby DISMISSED for lack of merit.
G.R. Nos. L-46076 and L-46077 June 12, 1939
THE PEOPLE OF THE PHILIPPINES, plaintifff-appellee,
vs.
JACOB ROSENTHAL and NICASIO OSMEÑA, defendants-appellants.
Claro M. Recto and Hilado, Lorenzo and Hilado for appellant Rosenthal.
Jose M. Casal for appellant Osmeña.
Office of the Solicitor-General Tuason for appellee.
LAUREL, J.:
Appellants, Jacob Rosenthal and Nicasio Osmeña, were charged in the Court of First Instance
of Manila with having violated Act No. 2581, commonly known as the Blue Sky Law, under the
following informations:
CASE NO. 52365
That in or about and during the period comprised between October 1, 1935 and
January 22, 1936, both dates inclusive, in the City of Manila, Philihelping each other,
willfully, unlawfully and feloniously trade in, negotiate and speculate with, their shares
aforesaid, by making personally or through brokers or agents repeated and successive
sales of the said shares at a price ranging from P100 to P300 per share, as follows:
The accused Nicasio Osmeña sold 163 shares to nine different parties, and the
accused Jacob Rosenthal sold 21 shares to seven others, without first obtaining the
corresponding written permit or license from the Insular Treasurer of the
Commonwealth of the Philippines, as by law required.
CASE NO. 52366
That in or about and during the period comprised between October 1, 1935, and
January 22, 1936, both dates inclusive, in the City of Manila, Philippine Islands, and
within the jurisdiction of this court, the said Nicasio Osmeña and Jacob Rosenthal, two
of the ten promoters, organizers, founders and incorporators of, the former being, in
addition, one of the members of the board of directors of, the South Cebu Oil Co., Inc.,
a domestic corporation organized under the laws of the Philippines and registered in
the mercantile registry of the Bureau of Commerce, with central office in the said city,
the main objects and purposes of which were "to mine, dig for, or otherwise obtain from
earth, petroleum, rock or carbon oils, natural gas, other volatile mineral substances
and salt, and to manufacture, refine, prepare for market, buy, sell and transport the
same in crude and refined condition", and the capital stock of which, as per agreement
of all the incorporators thereof in their articles of incorporation, the accused herein
included, consisting of 2,800 shares without par value, 200 shares of which having
been subscribed by the accused Nicasio Osmeña, and 100 shares of which having
30 | C O N S T I 1
been subscribed by the accused Jacob Rosenthal and paid by both at the price of only
P5 per share, according to the said agreement, which shares were speculative
securities, because the value thereof materially depended upon proposed promise of
future promotion and development of the oil business above mentioned rather than on
actual tangible assets and conditions thereof, did then and there, with deliberate intent
of evading the provisions of sections 2 and 5 of Act No. 2581, and conspiring and
confederating together and helping one another, willfully, unlawfully and feloniously
trade in, negotiate and speculate with, their shares aforesaid, by making personally or
through brokers or agents repeated and successive sales of the said shares at a price
ranging from P100 to P300 per share, as follows:
The accused Nicasio Osmeña sold 185 shares to nine different parties, and the
accused Jacob Rosenthal sold 12 shares to seven others, without first obtaining the
corresponding written permit or license form the Insular Treasurer of the
Commonwealth of the Philippines, as by law provided.
Upon motion of Jacob Rosenthal, the Court of First Instance of Manila granted him separate
trial although, when the cases were called for hearing, the court acceded to the motion of the
prosecution that the two cases be tried jointly inasmuch as the evidence to be adduced by the
government therein was the same, without prejudice to allowing the defendants to present their
proof separately. After trial, the lower court, on March 22, 1937, in separate decisions, found
the defendants guilty as charged in the informations. In case No. 52365 Jacob Rosenthal was
sentenced to pay a fine of P500, with subsidiary imprisonment in case of insolvency, and to
pay one-half of the costs; Nicasio Osmeña was sentenced to pay a fine of P1,000, with
subsidiary imprisonment in case of insolvency, and to pay one-half of the costs. In case No.
52366 Jacob Rosenthal was sentenced to pay a fine of P500, with subsidiary imprisonment in
case of insolvency, and to pay one-half of the costs; Nicasio Osmeña was sentenced to pay a
fine of P2,000, with subsidiary imprisonment in case of insolvency, and to pay one-half of the
costs. The defendants duly perfected their appeal from these judgments and the cases were
originally elevated to the Court of Appeals but, upon motion of the Solicitor-General, the same
were forwarded to this court in view of the fact that the constitutionality of Act No. 2581 has
been put in issue by appellants. Two separate briefs have been filed by Rosenthal and
Osmeña. In the brief for appellant Rosenthal the following "joint assignment of errors" is made:
1. In declaring that according to the report of the geologist contracted by the O.R. Oil
Co. and the South Cebu Oil Co. to explore the properties leased to said companies,
"no habia ninguna indicacion de que hubiese petroleo en aquellos terrenos", when in
truth what the report stated was that in so far as the O.R.O. Oil Co. land was concerned,
the territory covered by the lease if full of possibilities; and with respect to the South
Cebu Oil Co. lease, that no further investigations and expenses be made "unless
favorable test results are obtained on the northern lease."
2. In declaring that the exploration leases were, subsequent to the findings of the
geologist, cancelled by the government, implying thereby that as no oil was found in
said lands, the leases were cancelled; when in truth the cancellation was based on
 supposed violation of those provisions of the corporation law prohibiting the setting up
of interlocking directorates.
3. In declaring that the defendant, of his 200 shares of stock in the O.R.O. Oil Co., sold
twenty-one shares to different persons and on different dates, one share having been
sold directly to one E.F. Pimley; five, thru a firm of brokers known as Mackay &
McCormick, to Arthur Hoyer, Wm. Scheunig, and Modesto Bautista, in the proportion
of two, two and one, respectively; and fifteen shares directly to Henry J. Belden, R.T.
Fitzimmons and D.P. O'Brien, in the proportion of five shares to each of them — when
in truth only that to E.F. Pimley was sold to the latter by the defendant, while those
eventually transferred to Hoyer, Scheunig and Bautista were sold directly to the said
firm Mackay & McCormick, which bought them on its own risk and account, and the
remaining fifteen transferred to Belden, O'Brien, and Fitzimmons were loaned by
Rosenthal to Nicasio Osmeña, who was not until now either returned those shares or
paid their value.
4. In also declaring that of his 100 shares of stock in the South Cebu Oil Co., the
defendant sold twelve to various persons and on different dates, when in truth only one
of these shares was sold by the defendant to E.F. Pimley, and the remaining eleven,
two of which were transferred to Arthur Hoyer, two to William Scheunig, one to Jose
de la Fuente, one to Crispin Llamado, one to A.M. Opisso, and four to Ines Galano,
were sold and transferred, in one single transaction, to the said firm of brokers directly,
which firm bought said shares on its own risk and account.
5. In declaring that the shares sold to Mackay & McCormick were brought by the latter
on credit at P250 each, to be resold by it at P300 each, and that out of the proceeds
of the sale of these shares the defendant received the price agreed upon between him
and the said brokerage firm, or P250 per share, when in truth and in fact there was no
agreement between the parties as to whether the said firm was to sell said shares to
others or whether those shares were to be kept and retained by it on its own risk and
account.
6. In declaring that the corporations had not begun exploration work on the territory
covered by their leases, and that they had no tangible properties.
7. In declaring that while the defendant needed no permit to sell his own stock, the
corporations as issuer being the ones bound to obtain the permit required by the Blue
Sky Law, nevertheless he (the defendant) was guilty of a violation of said law because
the possession of the shares held and sold by him was not in good faith, in that his
acquisition thereof was not made in the ordinary and normal course of the business of
the corporations, but that said shares were purchased to indirectly promote the
enterprise for which the corporations were formed; the said defendant having paid in
full to the corporations the value of said shares of stock.
31 | C O N S T I 1
8. In holding as proven that the possession of the defendant of his own stock, which
he paid for in full, was not a possession in good faith, because he, as an incorporator
(fundador), should have known that no permit in writing had been issued the
corporations by the Insular Treasurer for the sale of said stock.
9. In overruling the objection to the admission of Exhibit 1-b, and in holding that a permit
had not been issued by the Insular Treasurer for the sale of the stocks of the
corporations.
10. In holding that there were repeated and successive sales made by the defendant
Rosenthal of his own shares of stock.
11. In holding that although the defendant was the absolute owner of the stock he sold,
his repeated and successive sales of such stock prove that this claim of ownership
(esta pretension de propriedad) was but a means employed by him to sell said stock
at prices very much higher than those he paid for them.
12. In holding that said stock was sold by the defendant without the required permit
having been first issued by the Insular Treasurer, and that the sale was effected as if
such permit had been actually issued (como si en realidad pudieran venderse por
haberse expedido tal permiso).
13. In holding that as a result of an investigation conducted by the City Fiscal, the
defendant refunded to Belden, O'Brien and Fitzimmons and others the amount they
paid for the stock they purchased.
14. In holding that the opinion given by the Chief of the Insurance Division of the Office
of the Insular Treasurer to the effect that the defendant could sell the said stock without
a permit as long as no false representations were made by the said defendant, can not
and does not exempt the latter from criminal responsibility even though no false
representations whatsoever were made by the aforesaid defendant.
15. In holding that the prima facie presumption in section 8 of the law to the effect that
the claim of ownership is not bona fide when repeated and successive sales of such
stock are effected, has been totally destroyed by the fact that said stock absolutely
belongs to the defendant, and in not further holding that because of such absolute
ownership the defendant could have legally disposed of such stock in as many sales
as he saw fit without any permit from the Insular Treasurer.
16. In not holding that the Blue Sky Law contravenes the constitutional provisions of
the Jones Act in so far as such law constitutes an undue delegation of legislative
powers to the Insular Treasurer, and in so far as it does not afford equal protection
before the law.
17. In not absolving the defendant.
In the brief for appellant Osmeña the following "relacion conjunta de errores" is in turn
submitted:
1. Al no sobreseer esta causa despues de promulgada la Ley No. 83 del
Commonwealth, no obstante haberse llamado su atencion al hecho de que esta Ley
derogaba la Ley No. 2581 de la Legislatura Filipina, bajo cuyas disposiciones ha sido
procesado el acusado.
2. Al condenar al acusado por infraccion de la "Blue Sky Law", no obstante
reconocerse en la decision que consta en las pruebas que el acusado Osmeña no ha
of recido en venta ninguna de aquellas acciones, ni ha hecho manifestaciones falsas
a nadie para poder venderlas, y que la mayor parte, si no todos los que las compraron,
estaban satisfechos de la inversion de su dinero en la adquisicion de tales acciones.
3. Al condenar al acusado por haber vendido acciones especulativas sin licencia,
cuando no se probo: (a) que las acciones de la O.R.O. Oil Co., Inc., y de la South
Cebu Oil Co., Inc., eran especulativas por su naturaleza, y (b) que el acusado Osmeña
carecia de licencia para venderlas.
4. Al declarar que la posesion por el acusado Osmeña de sus acciones de la O.R.O.
Oil Co., Inc., y de la South Cebu Oil Co., Inc., no era de buena fe y que no las habia
adquirido por su propia cuenta sino para la promocion indirecta de un provecto de
negocio o empresa especulativa.
5. Al no declarar que la "Blue Sky Law" es contraria a las normas constitucionales que
gozaba al tiempo de su promulgacion : (1) porque contiene en sus disposiciones una
delegacion indebida de facultades legislativas; (2) porque es vaga e incierte en sus
disposiciones y, por tanto, nula; y (3) porque infringe el derecho de igual proteccion
ante la ley, viola la libertad de contratacion y contraviene el derecho de adquirir, gozar
y disponer libremente de la propriedad privada, siendo su promulgacion, por tanto, un
acto de opresion y de verdadera tirania.
6. Al no absolveral acusado Nicasio Osmeña..
To meet the foregoing errors assigned by the appellants, plaintiff-appellee contends:
(a) That the enactment of Commonwealth Act No. 83 did not have the effect of relieving
appellants from criminal liability.
(b) That the appellants acted as promoters of the O.R.O. Oil Co. and the South Cebu
Oil Co.
(c) That the shares of the two corporations are speculative in nature.
32 | C O N S T I 1
(d) That the appellants sold their shares in said corporations without permit or knowing
that the latter did not have the permit required by law.
(e) That the appellants are not entitled to the exemption provided in section 8 of the
Blue Sky Law (Act No. 2581).
(f) That the Blue Sky Law is valid and constitutional.
Most of the errors assigned by the appellants deal with questions of fact. This is particularly
true with reference to errors one, two, three, four, five, six, seven, eight, nine, ten, eleven,
twelve and thirteen of appellant Jacob Rosenthal, and error four of appellant Nicasio Osmeña.
There is no material discrepancy regarding the facts, and we shall proceed to consider the
legal questions propounded, which are in the main set forth by the Solicitor-General in his brief.
It is contended by the appellants that Act No. 2581 is unconstitutional on three grounds. (1)
That it constitutes an undue delegation of legislative authority to the Insular Treasurer: (2) that
it does not afford equal protection before the law; and (3) that it is vague and ambiguous.
Under section 2 of Act No. 2581, every person, partnership, association, or corporation
attempting to offer to sell in the Philippines speculative securities of any kind or character
whatsoever, is under obligation to file previously with the Insular Treasurer the various
documents and papers enumerated therein and to pay the required tax of twenty pesos. Certain
securities listed in section 3 are exempted from the operation of the Act. Section 5 imposes
upon the Insular Treasurer the mandatory duty to examine the statements and documents thus
filed and the additional duty to make or cause to be made, if deemed advisable by him, a
detailed examination of the affairs of the applicant. Section 5 also provides that "whatever the
said Treasurer of the Philippine Islands is satisfied, either with or without the examination herein
provided, that any person, partnership, association or corporation is entitled to the right to offer
its securities as above defined and provided for sale in the Philippine Islands, he shall issue to
such person, partnership, association or corporation a certificate or permit reciting that such
person, partnership, association or corporation has complied with the provisions of this Act,
and that such person, partnership, association or corporation, its brokers or agents are entitled
to offer the securities named in said certificate or permit for sale"; that "said Treasurer shall
furthermore have authority, whenever in his judgment it is in the public interest, to cancel said
certificate or permit", and that "an appeal from the decision of the Insular Treasurer may be
had within the period of thirty days to the Secretary of Finance."
Appellants argue that, while Act No. 2581 empowers the Insular Treasurer to issue and cancel
certificates or permits for the sale of speculative securities, no standard or rule is fixed in the
Act which can guide said official in determining the cases in which a certificate or permit ought
to be issued, thereby making his opinion the sole criterion in the matter of its issuance, with the
result that, legislative powers being unduly delegated to the Insular Treasurer, Act No. 2581 is
unconstitutional. We are of the opinion that the Act furnishes a sufficient standard for the Insular
Treasurer to follow in reaching a decision regarding the issuance or cancellation of a certificate
or permit. The certificate or permit to be issued under the Act must recite that the person,
partnership, association or corporation applying therefor "has complied with the provisions of
this Act", and this requirement, construed in relation to the other provisions of the law, means
that a certificate or permit shall be issued by the Insular Treasurer when the provisions of Act
No. 2581 have been complied with. Upon the other hand, the authority of the Insular Treasurer
to cancel a certificate or permit is expressly conditioned upon a finding that such cancellation
"is in the public interest." In view of the intention and purpose of Act No. 2581 — to protect the
public against "speculative schemes which have no more basis than so many feet of blue sky"
and against the "sale of stock in fly-by-night concerns, visionary oil wells, distant gold mines,
and other like fraudulent exploitations", — we incline to hold that "public interest" in this case
is a sufficient standard to guide the Insular Treasurer in reaching a decision on a matter
pertaining to the issuance or cancellation of certificates or permits. As we observed in the case
of People vs. Fernandez and Trinidad (G.R. No. 45655, June 15, 1938), "siendo el objecto de
la ley el evitar especulaciones ruinosas, es claro que el interes publico, es, y debe ser la razon
en que el Tesorero Insular deba basar sus resoluciones." And the term "public interest" is not
without a settled meaning.
Appellant insists that the delegation of authority to the Commission is invalid because
the stated criterion is uncertain. That criterion is the public interest. It is a mistaken
assumption that this is a mere general reference to public welfare without any standard
to guide determinations. The purpose of the Act, the requirement it imposes, and the
context of the provision in question show the contrary. . . . (New York Central Securities
Corporation vs. U.S.A., 287 U.S., 12, 24, 25; 77 Law. ed., 138, 145, 146.) (See
also Schenchter Poultry Corporation vs. U.S., 295 U.S., 495; 540; 79 Law. ed., 1570,
1585; Ferrazzini vs. Gsell, 34 Phil., 697, 711, 712.)
In this connection, we cannot overlook the fact that the Act No. 2581 allows an appeal from the
decision of the Insular Treasurer to the Secretary of Finance. Hence, it cannot be contended
that the Insular Treasurer can act and decide without any restraining influence.
The theory of the separation of powers is designed by its originators to secure action and at
the same time to forestall over action which necessarily results from undue concentration of
powers, and thereby obtain efficiency and prevent despotism. Thereby, the "rule of law" was
established which narrows the range of governmental action and makes it subject to control by
certain legal devices. As a corollary, we find the rule prohibiting delegation of legislative
authority, and from the earliest time American legal authorities have proceeded on the theory
that legislative power must be exercised by the legislative alone. It is frankness, however, to
confess that as one delves into the mass of judicial pronouncements, he finds a great deal of
confusion. One thing, however, is apparent in the development of the principle of separation of
powers and that is that the maximum of delegatus non potest delegare or delegata potestas
non potest delegare, attributed to Bracton (De Legibus et Consuetudinious Angliae, edited by
G.E. Woodbine, Yale University Press [1922], vol. 2, p.167) but which is also recognized in
principle in the Roman Law (D.17.18.3), has been made to adapt itself to the complexities of
modern governments, giving rise to the adoption, within certain limits, of the principle of
"subordinate legislation", not only in the United States and England but in practically all modern
governments. The difficulty lies in the fixing of the limit and extent of the authority. While courts
have undertaken to lay down general principles, the safest is to decide each case according to
33 | C O N S T I 1
its peculiar environment, having in mind the wholesome legislative purpose intended to be
achieved.
Counsel for appellant Jacob Rosenthal also argues that the Insular Treasurer possesses "the
discretionary power to determine when a security is a speculative security and when it is not"
because "he is given the power to compel any corporation, association or partnership already
functioning, to surrender to him for examination its books and accounts enumerated in section
2, 'whenever he has reasonable ground to believe that the securities being sold or offered for
sale are of a speculative character.'" It should be observed, however, that section 1 of Act No.
2581 defines and enumerates what are "speculative securities" and all the other provisions of
the Act must be read and construed in conjunction and harmony with said section.
Laws of the different states of the American Union similar in nature to Act No. 2581 were
assailed on constitutional grounds somewhat analogous to those involved in the case at bar,
but the decisions of both the state courts and the Supreme Court of the United States have
upheld their constitutionality. In the case of Hall vs. Geiger-Jones Co. (242 U.S., 539), the
contention was made that the Blue Sky Law of Ohio, which requires the commissioner before
granting a license to "be satisfied of the good repute in business of such applicant and named
agents", and which empowers said commissioner to revoke the license or refuse to renew it
upon ascertaining that the licensee "is of bad business repute; has violated any provisions of
this act or has engaged, or is about to engage, under favor of such license, in illegitimate
business or in fraudulent transactions", is unconstitutional because the law has failed to give a
standard to guide or determine the decision of the commissioner leaves "room for the play and
action of purely personal and arbitrary power", but the Supreme Court of the United States
overruled the contention and held:
Besides it is certainly apparent that if the conditions are within the power of the State
to impose, they can only be ascertained by an executive officer. Reputation and
character are quite tangible attributes, but there can be no legislative definition of them
that can automatically attach to or identify individuals possessing them, and
necessarily the aid of some executive agency must be invoked. The contention of
appellees would take from government one of its most essential instrumentalities, of
which the various national and state commissions are instances. But the contention
may be answered by authority. In Gundling vs. Chicago (177 U.S., 183), an ordinance
of the City of Chicago was passed on which required a license of dealers in cigarettes
and as a condition of the license that the applicant, if a single individual, all of the
members of the firm, if a co-partnership, and any person or persons in charge of the
business, if a corporation, should be of good character and reputation, and the duty
was delegated to the mayor of the city to determine the existence of the conditions.
The ordinance was sustained. To this case may be added Red "C" Oil Manufacturing
Co. vs. North Carolina (222 U.S., 380, 394, and cases cited); Mutual Film
Corporation vs. Industrial Commission of Ohio (236 U.S., 230); Brazee vs. Michigan
(241 U.S., 340, 341). See also Reetz vs. Michigan, (188 U.S., 505);
Lieberman vs. Van de Carr (199 U. S., 552). (Pp. 553, 554.)
In the case of Leach vs. Daugherty (238 P., 160), where the contention was advanced that
section 6 of the Corporate Securities Act of California which authorized the corporation
commissioner to refuse to grant a broker's certificate, if he is not satisfied of the "good business
reputation of the applicant", is unconstitutional because "no rules, regulations, or specifications
are set forth in the said Corporate Securities Act defining what shall constitute 'good business
reputation,'" it was ruled that "Considering such objection, it would appear that the leading case
of Hall vs. Geiger-Jones Co. (242 U.S., 539; 37 Sup. Ct., 217; 61 Law. ed., 480; L.R.A., 1917F,
514; Ann. Cas. 1917C, 643), is so conclusively against the petitioner's contention that little
room is left for argument", and that "it is well-settled principle of law in this state that by
legislative act a commission or board may be empowered to ascertain the existence of facts,
upon the finding of which may depend the right to continue in the practice of a profession or a
regulated business."
In the case of G.F. Redmond & Co. vs. Michigan Securities Commission (222 Mich., 1; 192
N.W., 688), in which it was argued that the provision in section 11955 of the Compiled Laws of
1915 (Michigan Blue Sky Law), authorizing the commission to revoke a license for "good
cause" upon notice to the dealer and a hearing duly had, is unconstitutional because the term
"good cause" is so vague and indefinite that the law practically vested upon the commission
arbitrary powers, the court said:
The term "good cause" for revocation, as employed in the statute, relates so clearly to
the conduct of the licensed business, within the limits fixed by law, as to negative any
arbitrary official action, and is so comprehensive of unlawful, irregular, fraudulent,
unauthorized, and forbidden business management and transactions conducted as to
demand no more particular specification of its meaning and its application.
Must the law map out , for the guidance of the licensee, a code of ethics and post
danger signals against inhibited and dishonest practices? The defendant had no right
to have the conduct of its business charted by specifications of forbidden practices
involving revocation of the license. The general scope and expressed purpose of the
law, together with open and fair dealing, entered the license, and transgression thereof
constituted good cause for revocation thereof. (P. 689.)
In the case of State ex rel. Central Steam Heat & Power Co. vs. Gettle (Wis. [1928], 220 N.W.,
201), where it was argued that the requirement of the Wisconsin Blue Sky Law (St. 1925, sec.
184.09 [3]; Law 1927, c. 444) that the Railroad Commission shall find that the "financial
condition, plan of operation, and the proposed undertakings of the corporation are such as to
afford reasonable protection to the purchasers of the securities to be issued", is unconstitutional
for the reason that (1) the Legislature has no power to regulate the issuance of securities in
order to protect the investing public; (2) the Legislature does not provide a standard to control
the commission; (3) the statute is so indefinite and uncertain in its meaning as to be incapable
of administration; and (4) the statute delegates to the railroad commission legislative power,
the court said:
34 | C O N S T I 1
This is but a usual provision found in the many so-called Blue Sy Laws, the
constitutionality of which has been upheld by the courts generally. The constitutionality
of similar provisions has been so thoroughly considered by this court that further
discussion thereof is unnecessary. The following cases abundantly establish the
constitutionality of this provision. (State ex rel. Minneapolis, St. Paul & Sault Ste. Marie
Railway Company vs. Railroad Commission of Wisconsin, 137 Wis., 80; 117 N.W.,
846; Appleton Water Works Co. vs.Railroad Commission of Wisconsin, 154 Wis., 121;
142 N.E., 476; 47 L.R.A. [N.S.], 770; Ann. Cas. 1915B, 1160; State ex rel. City of
Milwaukee vs. Milwaukee Electric Railway & Light Co., 169 Wis., 183; 172 N.W., 230;
City of Milwaukee vs. Railroad Commission of Wisconsin, 183 Wis., 498; 196 N.W.,
853; Wisconsin Southern Ry. Co. vs. Railroad Commission of Wisconsin, 185 Wis.,
313; 201 N.W., 244; Kretuzer vs.Westfahl, 187 Wis., 463; 204 N.W., 595.)
Another ground relied upon by appellants in contending that Act No. 2581 is unconstitutional is
that it denies equal protection of the laws because the law discriminates between an owner
who sells his securities in a single transaction and one who disposes of them in repeated and
successive transactions. In disposing of this contention we need only refer to the case of
Hall vs. Geiger-Jones Co., supra, wherein the Supreme Court of the United States held:
"Discriminations are asserted against the statute which extend, it is contended, to
denying appellees the equal protection of the laws. Counsel enumerates them as
follows:
"Prominent among such discriminations are . . . between an owner who sells his
securities in a single transaction and one who disposes of them in successive
transactions; . . . "
We cannot give separate attention to the asserted discriminations. It is enough to say
that they are within the power of classification which a state has. A state "ay direct its
law against what it deems the evil as it actually exists without covering the whole field
of possible abuses, and it may do so none the less that the forbidden act does not
differ in kind from those that are allowed . . .. If a class is deemed to present a
conspicuous example of what the legislature seeks to prevent, the 14th Amendment
allows it to be dealt with although otherwise and merely logically not distinguishable
from others not embraced in the law.
Counsel for appellant Nicasio Osmeña further alleges that Act No. 2581 is unconstitutional on
the ground that it is vague and uncertain. A similar contention has already been overruled by
this court in the case of People vs. Fernandez and Trinidad, supra. An Act will be declared void
and inoperative on the ground of vagueness and uncertainty only upon a showing that the
defect is such that the courts are unable to determine, with any reasonable degree of certainty,
what the legislature intended. The circumstance that this court has no more than one occasion
given effect and application to Act. No. 2581 (Valhalla Hotel Construction Co. vs. Carmona, 44
Phil., 233; People vs.Nimrod McKinney, 47 Phil., 792; People vs. Fernandez and
Trinidad, supra) decisively argues against the position taken by appellant Osmeña. In this
connection we cannot pretermit reference to the rule that "legislation should not be held invalid
on the ground of uncertainty if susceptible of any reasonable construction that will support and
give it effect. An Act will not be declared inoperative and ineffectual on the ground that it
furnishes no adequate means to secure the purpose for which it is passed, if men of common
sense and reason can devise and provide the means, and all the instrumentalities necessary
for its execution are within the reach of those intrusted therewith." (25 R.C.L., pp. 810, 811.)
Reaffirming our view in People vs. Fernandez and Trinidad, supra, we hold that Act No. 2581
is valid and constitutional.
Taking up now the question raised with reference to the speculative nature of the shares of the
). O.R.O. Oil Co. and the South Cebu Oil Co., we find that section 1, paragraph (b) of Act No.
2581, in defining speculative securities, provides:
. . . The term "speculative securities" as used in this Act shall be deemed to mean and
include:
xxx xxx xxx
(b) All securities the value of which materially depend upon proposed or promised
future promotion or development rather than on present tangible assets and conditions.
At the beginning, and at the time of the issuance of the shares of the O.R.O. Oil Co. and the
South Cebu Oil Co., all that these companies had were their exploration leases. Beyond this,
there was nothing tangible. The value of those shares depended upon future development and
the uncertainty of "striking" oil. The shares issued under these circumstances are clearly
speculative because they depended upon proposed or promised future promotion or
development rather than on present tangible assets and conditions.
Appellants next contend that in view of the repeal of Act No. 2581 by Commonwealth Act. No.
83, they have been relieved of criminal responsibility. Assuming that the former Act has been
entirely and completely abrogated by the latter Act — a point we do not have to decide — this
fact does not relieve appellants from criminal responsibility. "It has been the holding, and it
must again be the holding, that where an Act of the Legislature which penalizes an offense
repeals a former Act which penalized the same offense, such repeal does not have the effect
of thereafter depriving the courts of jurisdiction to try, convict and sentence offenders charged
with violations of the old law." (People vs. Concepcion, 44 Phil., 126, 132; Ong Chang Wing
and Kwong Fok vs. U.S., 218 U.S., 272; 40 Phil., 1046; U.S. vs. Cuna, 12 Phil., 241;
U.S. vs. Aron, 12 Phil., 778; U.S. vs. Tonga, 15 Phil., 43; U.S. vs. Molina, 17 Phil., 582.)
Appellants further contend that they come under the exception provided in section 8 of Act No.
2581. This section provides:
This Act shall not apply to the holder of any speculative security who is not the issuer
thereof, nor to the person who has acquired the same for his own account in the usual
35 | C O N S T I 1
and ordinary course of business and not for the direct or indirect promotion of any
enterprise or scheme within the purview of this Act, unless such possession is in good
faith. Repeated and successive sales of any speculative securities shall be prima
facieevidence that the claim of ownership is not bona fide, but is a mere shift, device
or plot to evade the provisions of this Act. Such speculators shall incur the penalty
provided for in section seven of this Act.
Under this section, there are clearly two classes of persons to whom the law is not applicable:
(1) Persons who hold speculative securities but who are not the issuers thereof; and (2)
persons who have acquired the same for their own account in the usual and ordinary course
of business and not for the direct or indirect promotion of any enterprise or scheme within the
purview of this Act, provided (the law uses the term "unless") such possession is in good faith.
Passing upon the questions of fact necessarily involved in the application of section 8 of Act
No. 2581, the trial court in case No. 52365 makes the following findings with reference to
Nicasio Osmeña:
. . . El acusado Osmeña no ha adquirido por su propia cuenta en el curso ordinario y
corriente de los negocios en la O.R.O. Oil Co. Las acciones por el vendidas, pues las
adquirio mediante suscripcion como uno de los fundadores de dicha corporacion, pero
si para la promocion indirecta de un proyecto de negocio o empresa para el cual se
habia organizado le corporacion, habiendo pagado totalmente el importe de dichas
acciones a la misma corporacion; ni tampoco las poseia de buena fe, puesto que como
fundador y miembro de la junta directiva de dicha corporacion debia saber que no se
habia expedido por el Tesorero Insular ningun permiso por escrito a al corporacion
para la venta de dichas acciones. Y las ventas sucesivas y repetidas de esas acciones
que tenia en la misma corporacion, aunque tales acciones eran suyas por haberlas el
obtenido de la corporacion mediante suscripcion y pago del importe correspondiente
prueban que esta pretension de propiedad ha sido solamente un medio de que se ha
valido para vender tales acciones a precios mucho mayores que el importe por por
haberse expedido tal permiso.
The same findings, mutatis mutandis, are made in case No. 52366 against the same appellant,
and against Jacob Rosenthal in the two cases. Even if we could, we do not feel justified in
disturbing the findings of the trial court. The good faith set up by appellant Rosenthal for having
acted on the advice of one Garcia, an officer in the Insular Treasury, and the subsequent
devolution by him of amounts collected from some of the purchasers of the shares may be
considered as a circumstance in his favor in the imposition of the penalty prescribed by law but
does not exempt him from criminal responsibility. (People vs. McCalla, 63 Cal. App., 783; 220
Pac., 436; 367 U.S., 585; 69 Law. ed., 799; 45 Sup. Ct., 461; People vs. Fernandez and
Trinidad, supra.)The judgments of the lower court are affirmed, with the modification that the
fines are reduced as to accused Jacob Rosenthal from P500 to P200 in each case, and as to
accused Nicasio Osmeña, from P1,000 to P500 in case No. 52365 and from P2,000 to P1,000
in case No. 52366, with subsidiary imprisonment for both in case of insolvency, and costs. So
ordered.
G.R. No. 76633 October 18, 1988
EASTERN SHIPPING LINES, INC., petitioner,
vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF
LABOR AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D.
SACO, respondents.
Jimenea, Dala & Zaragoza Law Office for petitioner.
The Solicitor General for public respondent.
Dizon Law Office for respondent Kathleen D. Saco.
CRUZ, J.:
The private respondent in this case was awarded the sum of P192,000.00 by the Philippine
Overseas Employment Administration (POEA) for the death of her husband. The decision is
challenged by the petitioner on the principal ground that the POEA had no jurisdiction over the
case as the husband was not an overseas worker.
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident
in Tokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797
and Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued
that the complaint was cognizable not by the POEA but by the Social Security System and
should have been filed against the State Insurance Fund. The POEA nevertheless assumed
jurisdiction and after considering the position papers of the parties ruled in favor of the
complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial
expenses.
The petitioner immediately came to this Court, prompting the Solicitor General to move for
dismissal on the ground of non-exhaustion of administrative remedies.
Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations
Commission, on the theory inter alia that the agency should be given an opportunity to correct
the errors, if any, of its subordinates. This case comes under one of the exceptions, however,
as the questions the petitioner is raising are essentially questions of law. 1 Moreover, the
private respondent himself has not objected to the petitioner's direct resort to this Court,
observing that the usual procedure would delay the disposition of the case to her prejudice.
The Philippine Overseas Employment Administration was created under Executive Order No.
797, promulgated on May 1, 1982, to promote and monitor the overseas employment of
36 | C O N S T I 1
Filipinos and to protect their rights. It replaced the National Seamen Board created earlier under
Article 20 of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA
is vested with "original and exclusive jurisdiction over all cases, including money claims,
involving employee-employer relations arising out of or by virtue of any law or contract involving
Filipino contract workers, including seamen." These cases, according to the 1985 Rules and
Regulations on Overseas Employment issued by the POEA, include "claims for death, disability
and other benefits" arising out of such employment. 2
The petitioner does not contend that Saco was not its employee or that the claim of his widow
is not compensable. What it does urge is that he was not an overseas worker but a 'domestic
employee and consequently his widow's claim should have been filed with Social Security
System, subject to appeal to the Employees Compensation Commission.
We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an
overseas employee of the petitioner at the time he met with the fatal accident in Japan in 1985.
Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is
defined as "employment of a worker outside the Philippines, including employment on board
vessels plying international waters, covered by a valid contract. 3 A contract worker is described
as "any person working or who has worked overseas under a valid employment contract and
shall include seamen" 4 or "any person working overseas or who has been employed by
another which may be a local employer, foreign employer, principal or partner under a valid
employment contract and shall include seamen." 5 These definitions clearly apply to Vitaliano
Saco for it is not disputed that he died while under a contract of employment with the petitioner
and alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign
country. 6
It is worth observing that the petitioner performed at least two acts which constitute implied or
tacit recognition of the nature of Saco's employment at the time of his death in 1985. The first
is its submission of its shipping articles to the POEA for processing, formalization and approval
in the exercise of its regulatory power over overseas employment under Executive Order NO.
797. 7 The second is its payment 8 of the contributions mandated by law and regulations to the
Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 "for the purpose of
providing social and welfare services to Filipino overseas workers."
Significantly, the office administering this fund, in the receipt it prepared for the private
respondent's signature, described the subject of the burial benefits as "overseas contract
worker Vitaliano Saco." 9 While this receipt is certainly not controlling, it does indicate, in the
light of the petitioner's own previous acts, that the petitioner and the Fund to which it had made
contributions considered Saco to be an overseas employee.
The petitioner argues that the deceased employee should be likened to the employees of the
Philippine Air Lines who, although working abroad in its international flights, are not considered
overseas workers. If this be so, the petitioner should not have found it necessary to submit its
shipping articles to the POEA for processing, formalization and approval or to contribute to the
Welfare Fund which is available only to overseas workers. Moreover, the analogy is hardly
appropriate as the employees of the PAL cannot under the definitions given be considered
seamen nor are their appointments coursed through the POEA.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made
by the POEA pursuant to its Memorandum Circular No. 2, which became effective on February
1, 1984. This circular prescribed a standard contract to be adopted by both foreign and
domestic shipping companies in the hiring of Filipino seamen for overseas employment. A
similar contract had earlier been required by the National Seamen Board and had been
sustained in a number of cases by this Court. 10 The petitioner claims that it had never entered
into such a contract with the deceased Saco, but that is hardly a serious argument. In the first
place, it should have done so as required by the circular, which specifically declared that "all
parties to the employment of any Filipino seamen on board any ocean-going vessel are advised
to adopt and use this employment contract effective 01 February 1984 and to desist from using
any other format of employment contract effective that date." In the second place, even if it had
not done so, the provisions of the said circular are nevertheless deemed written into the
contract with Saco as a postulate of the police power of the State. 11
But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the
principle of non-delegation of legislative power. It contends that no authority had been given
the POEA to promulgate the said regulation; and even with such authorization, the regulation
represents an exercise of legislative discretion which, under the principle, is not subject to
delegation.
The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order
No. 797, reading as follows:
... The governing Board of the Administration (POEA), as hereunder provided
shall promulgate the necessary rules and regulations to govern the exercise
of the adjudicatory functions of the Administration (POEA).
Similar authorization had been granted the National Seamen Board, which, as earlier observed,
had itself prescribed a standard shipping contract substantially the same as the format adopted
by the POEA.
The second challenge is more serious as it is true that legislative discretion as to the
substantive contents of the law cannot be delegated. What can be delegated is the discretion
to determine how the law may be enforced, not whatthe law shall be. The ascertainment of the
latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or
surrendered by the legislature to the delegate. Thus, in Ynot v. Intermediate Apellate
Court 12 which annulled Executive Order No. 626, this Court held:
We also mark, on top of all this, the questionable manner of the disposition of
the confiscated property as prescribed in the questioned executive order. It is
there authorized that the seized property shall be distributed to charitable
37 | C O N S T I 1
institutions and other similar institutions as the Chairman of the National Meat
Inspection Commission may see fit, in the case of carabaos.' (Italics supplied.)
The phrase "may see fit" is an extremely generous and dangerous condition,
if condition it is. It is laden with perilous opportunities for partiality and abuse,
and even corruption. One searches in vain for the usual standard and the
reasonable guidelines, or better still, the limitations that the officers must
observe when they make their distribution. There is none. Their options are
apparently boundless. Who shall be the fortunate beneficiaries of their
generosity and by what criteria shall they be chosen? Only the officers named
can supply the answer, they and they alone may choose the grantee as they
see fit, and in their own exclusive discretion. Definitely, there is here a 'roving
commission a wide and sweeping authority that is not canalized within banks
that keep it from overflowing,' in short a clearly profligate and therefore invalid
delegation of legislative powers.
There are two accepted tests to determine whether or not there is a valid delegation of
legislative power, viz, the completeness test and the sufficient standard test. Under the first
test, the law must be complete in all its terms and conditions when it leaves the legislature such
that when it reaches the delegate the only thing he will have to do is enforce it. 13 Under the
sufficient standard test, there must be adequate guidelines or stations in the law to map out the
boundaries of the delegate's authority and prevent the delegation from running riot. 14
Both tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power essentially
legislative.
The principle of non-delegation of powers is applicable to all the three major powers of the
Government but is especially important in the case of the legislative power because of the
many instances when its delegation is permitted. The occasions are rare when executive or
judicial powers have to be delegated by the authorities to which they legally certain. In the case
of the legislative power, however, such occasions have become more and more frequent, if not
necessary. This had led to the observation that the delegation of legislative power has become
the rule and its non-delegation the exception.
The reason is the increasing complexity of the task of government and the growing inability of
the legislature to cope directly with the myriad problems demanding its attention. The growth
of society has ramified its activities and created peculiar and sophisticated problems that the
legislature cannot be expected reasonably to comprehend. Specialization even in legislation
has become necessary. To many of the problems attendant upon present-day undertakings,
the legislature may not have the competence to provide the required direct and efficacious, not
to say, specific solutions. These solutions may, however, be expected from its delegates, who
are supposed to be experts in the particular fields assigned to them.
The reasons given above for the delegation of legislative powers in general are particularly
applicable to administrative bodies. With the proliferation of specialized activities and their
attendant peculiar problems, the national legislature has found it more and more necessary to
entrust to administrative agencies the authority to issue rules to carry out the general provisions
of the statute. This is called the "power of subordinate legislation."
With this power, administrative bodies may implement the broad policies laid down in a statute
by "filling in' the details which the Congress may not have the opportunity or competence to
provide. This is effected by their promulgation of what are known as supplementary regulations,
such as the implementing rules issued by the Department of Labor on the new Labor Code.
These regulations have the force and effect of law.
Memorandum Circular No. 2 is one such administrative regulation. The model contract
prescribed thereby has been applied in a significant number of the cases without challenge by
the employer. The power of the POEA (and before it the National Seamen Board) in requiring
the model contract is not unlimited as there is a sufficient standard guiding the delegate in the
exercise of the said authority. That standard is discoverable in the executive order itself which,
in creating the Philippine Overseas Employment Administration, mandated it to protect the
rights of overseas Filipino workers to "fair and equitable employment practices."
Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public
interest" in People v. Rosenthal 15 "justice and equity" in Antamok Gold Fields v. CIR 16 "public
convenience and welfare" in Calalang v. Williams 17 and "simplicity, economy and efficiency"
in Cervantes v. Auditor General, 18 to mention only a few cases. In the United States, the
"sense and experience of men" was accepted in Mutual Film Corp. v. Industrial
Commission, 19 and "national security" in Hirabayashi v. United States. 20
It is not denied that the private respondent has been receiving a monthly death benefit pension
of P514.42 since March 1985 and that she was also paid a P1,000.00 funeral benefit by the
Social Security System. In addition, as already observed, she also received a P5,000.00 burial
gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude
allowance of the private respondent's claim against the petitioner because it is specifically
reserved in the standard contract of employment for Filipino seamen under Memorandum
Circular No. 2, Series of 1984, that—
Section C. Compensation and Benefits.—
1. In case of death of the seamen during the term of his Contract, the employer
shall pay his beneficiaries the amount of:
a. P220,000.00 for master and chief engineers
b. P180,000.00 for other officers, including radio operators
and master electrician
c. P 130,000.00 for ratings.
38 | C O N S T I 1
2. It is understood and agreed that the benefits mentioned above shall be
separate and distinct from, and will be in addition to whatever benefits which
the seaman is entitled to under Philippine laws. ...
3. ...
c. If the remains of the seaman is buried in the Philippines, the
owners shall pay the beneficiaries of the seaman an amount
not exceeding P18,000.00 for burial expenses.
The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the
National Seamen Board on July 12,1976, providing an follows:
Income Benefits under this Rule Shall be Considered Additional Benefits.—
All compensation benefits under Title II, Book Four of the Labor Code of the
Philippines (Employees Compensation and State Insurance Fund) shall be
granted, in addition to whatever benefits, gratuities or allowances that the
seaman or his beneficiaries may be entitled to under the employment contract
approved by the NSB. If applicable, all benefits under the Social Security Law
and the Philippine Medicare Law shall be enjoyed by the seaman or his
beneficiaries in accordance with such laws.
The above provisions are manifestations of the concern of the State for the working class,
consistently with the social justice policy and the specific provisions in the Constitution for the
protection of the working class and the promotion of its interest.
One last challenge of the petitioner must be dealt with to close t case. Its argument that it has
been denied due process because the same POEA that issued Memorandum Circular No. 2
has also sustained and applied it is an uninformed criticism of administrative law itself.
Administrative agencies are vested with two basic powers, the quasi-legislative and the quasi-
judicial. The first enables them to promulgate implementing rules and regulations, and the
second enables them to interpret and apply such regulations. Examples abound: the Bureau
of Internal Revenue adjudicates on its own revenue regulations, the Central Bank on its own
circulars, the Securities and Exchange Commission on its own rules, as so too do the Philippine
Patent Office and the Videogram Regulatory Board and the Civil Aeronautics Administration
and the Department of Natural Resources and so on ad infinitum on their respective
administrative regulations. Such an arrangement has been accepted as a fact of life of modern
governments and cannot be considered violative of due process as long as the cardinal rights
laid down by Justice Laurel in the landmark case of Ang Tibay v. Court of Industrial
Relations 21 are observed.
Whatever doubts may still remain regarding the rights of the parties in this case are resolved
in favor of the private respondent, in line with the express mandate of the Labor Code and the
principle that those with less in life should have more in law.
When the conflicting interests of labor and capital are weighed on the scales of social justice,
the heavier influence of the latter must be counter-balanced by the sympathy and compassion
the law must accord the underprivileged worker. This is only fair if he is to be given the
opportunity and the right to assert and defend his cause not as a subordinate but as a peer of
management, with which he can negotiate on even plane. Labor is not a mere employee of
capital but its active and equal partner.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary
restraining order dated December 10, 1986 is hereby LIFTED. It is so ordered.

39 | C O N S T I 1
G.R. No. 78164 July 31, 1987
TERESITA TABLARIN, MA, LUZ CIRIACO, MA NIMFA B. ROVIRA, EVANGELINA S.
LABAO, in their behalf and in behalf of applicants for admission into the Medical
Colleges during the school year 1987-88 and future years who have not taken or
successfully hurdled tile National Medical Admission Test (NMAT).petitioners,
vs.
THE HONORABLE JUDGE ANGELINA S. GUTIERREZ, Presiding Judge of Branch
XXXVII of the Regional Trial Court of the National Capital Judicial Region with seat at
Manila, THE HONORABLE SECRETARY LOURDES QUISUMBING, in her capacity as
Chairman of the BOARD OF MEDICAL EDUCATION, and THE CENTER FOR
EDUCATIONAL MEASUREMENT (CEM), respondents.
FELICIANO, J.:
The petitioners sought admission into colleges or schools of medicine for the school year 1987-
1988. However, the petitioners either did not take or did not successfully take the National
Medical Admission Test (NMAT) required by the Board of Medical Education, one of the public
respondents, and administered by the private respondent, the Center for Educational
Measurement (CEM).
On 5 March 1987, the petitioners filed with the Regional Trial Court, National Capital Judicial
Region, a Petition for Declaratory Judgment and Prohibition with a prayer for Temporary
Restraining Order and Preliminary Injunction. The petitioners sought to enjoin the Secretary of
Education, Culture and Sports, the Board of Medical Education and the Center for Educational
Measurement from enforcing Section 5 (a) and (f) of Republic Act No. 2382, as amended, and
MECS Order No. 52, series of 1985, dated 23 August 1985 and from requiring the taking and
passing of the NMAT as a condition for securing certificates of eligibility for admission, from
proceeding with accepting applications for taking the NMAT and from administering the NMAT
as scheduled on 26 April 1987 and in the future. After hearing on the petition for issuance of
preliminary injunction, the trial court denied said petition on 20 April 1987. The NMAT was
conducted and administered as previously scheduled.
Petitioners accordingly filed this Special Civil Action for certiorari with this Court to set aside
the Order of the respondent judge denying the petition for issuance of a writ of preliminary
injunction.
Republic Act 2382, as amended by Republic Acts Nos. 4224 and 5946, known as the "Medical
Act of 1959" defines its basic objectives in the following manner:
Section 1. Objectives. — This Act provides for and shall govern (a) the standardization
and regulation of medical education (b) the examination for registration of physicians;
and (c) the supervision, control and regulation of the practice of medicine in the
Philippines. (Underscoring supplied)
40 | C O N S T I 1
The statute, among other things, created a Board of Medical Education which is composed of
(a) the Secretary of Education, Culture and Sports or his duly authorized representative, as
Chairman; (b) the Secretary of Health or his duly authorized representative; (c) the Director of
Higher Education or his duly authorized representative; (d) the Chairman of the Medical Board
or his duly authorized representative; (e) a representative of the Philippine Medical Association;
(f) the Dean of the College of Medicine, University of the Philippines; (g) a representative of the
Council of Deans of Philippine Medical Schools; and (h) a representative of the Association of
Philippine Medical Colleges, as members. The functions of the Board of Medical Education
specified in Section 5 of the statute include the following:
(a) To determine and prescribe equirements for admission into a recognized college of
medicine;
(b) To determine and prescribe requirements for minimum physical facilities of colleges
of medicine, to wit: buildings, including hospitals, equipment and supplies, apparatus,
instruments, appliances, laboratories, bed capacity for instruction purposes, operating
and delivery rooms, facilities for outpatient services, and others, used for didactic and
practical instruction in accordance with modern trends;
(c) To determine and prescribe the minimum number and minimum qualifications of
teaching personnel, including student-teachers ratio;
(d) To determine and prescribe the minimum required curriculum leading to the degree
of Doctor of Medicine;
(e) To authorize the implementation of experimental medical curriculum in a medical
school that has exceptional faculty and instrumental facilities. Such an experimental
curriculum may prescribe admission and graduation requirements other than those
prescribed in this Act; Provided, That only exceptional students shall be enrolled in the
experimental curriculum;
(f) To accept applications for certification for admission to a medical school and keep
a register of those issued said certificate; and to collect from said applicants the amount
of twenty-five pesos each which shall accrue to the operating fund of the Board of
Medical Education;
(g) To select, determine and approve hospitals or some departments of the hospitals
for training which comply with the minimum specific physical facilities as provided in
subparagraph (b) hereof; and
(h) To promulgate and prescribe and enforce the necessary rules and regulations for
the proper implementation of the foregoing functions. (Emphasis supplied)
Section 7 prescribes certain minimum requirements for applicants to medical schools:
 Admission requirements. — The medical college may admit any student who has not
been convicted by any court of competent jurisdiction of any offense involving moral
turpitude and who presents (a) a record of completion of a bachelor's degree in science
or arts; (b) a certificate of eligibility for entrance to a medical school from the Board of
Medical Education; (c) a certificate of good moral character issued by two former
professors in the college of liberal arts; and (d) birth certificate. Nothing in this act shall
be construed to inhibit any college of medicine from establishing, in addition to the
preceding, other entrance requirements that may be deemed admissible.
xxx xxx x x x (Emphasis supplied)
MECS Order No. 52, s. 1985, issued by the then Minister of Education, Culture and Sports and
dated 23 August 1985, established a uniform admission test called the National Medical
Admission Test (NMAT) as an additional requirement for issuance of a certificate of eligibility
for admission into medical schools of the Philippines, beginning with the school year 1986-
1987. This Order goes on to state that:
2. The NMAT, an aptitude test, is considered as an instrument toward upgrading the
selection of applicants for admission into the medical schools and its calculated to
improve the quality of medical education in the country. The cutoff score for the
successful applicants, based on the scores on the NMAT, shall be determined every
year by the Board of Medical Education after consultation with the Association of
Philippine Medical Colleges. The NMAT rating of each applicant, together with the
other admission requirements as presently called for under existing rules, shall serve
as a basis for the issuance of the prescribed certificate of elegibility for admission into
the medical colleges.
3. Subject to the prior approval of the Board of Medical Education, each medical
college may give other tests for applicants who have been issued a corresponding
certificate of eligibility for admission that will yield information on other aspects of the
applicant's personality to complement the information derived from the NMAT.
xxx xxx xxx
8. No applicant shall be issued the requisite Certificate of Eligibility for Admission
(CEA), or admitted for enrollment as first year student in any medical college, beginning
the school year, 1986-87, without the required NMAT qualification as called for under
this Order. (Underscoring supplied)
Pursuant to MECS Order No. 52, s. 1985, the private respondent Center conducted NMATs
for entrance to medical colleges during the school year 1986-1987. In December 1986 and in
April 1987, respondent Center conducted the NMATs for admission to medical colleges during
the school year 1987.1988.1avvphi1
41 | C O N S T I 1
Petitioners raise the question of whether or not a writ of preliminary injunction may be issued
to enjoin the enforcement of Section 5 (a) and (f) of Republic Act No. 2382, as amended, and
MECS Order No. 52, s. 1985, pending resolution of the issue of constitutionality of the assailed
statute and administrative order. We regard this issue as entirely peripheral in nature. It
scarcely needs documentation that a court would issue a writ of preliminary injunction only
when the petitioner assailing a statute or administrative order has made out a case of
unconstitutionality strong enough to overcome, in the mind of the judge, the presumption of
constitutionality, aside from showing a clear legal right to the remedy sought. The fundamental
issue is of course the constitutionality of the statute or order assailed.
1. The petitioners invoke a number of provisions of the 1987 Constitution which are, in their
assertion, violated by the continued implementation of Section 5 (a) and (f) of Republic Act
2381, as amended, and MECS Order No. 52, s. 1985. The provisions invoked read as follows:
(a) Article 11, Section 11: "The state values the dignity of every human person and
guarantees full respect of human rights. "
(b) ArticleII, Section l3: "The State recognizes the vital role of the youth in nation
building and shall promote and protect their physical, moral, spiritual, intellectual and
social well being. It shall inculcate in the youth patriotism and nationalism, and
encourage their involvement in public and civic affairs."
(c) Article II, Section 17: "The State shall give priority to education, science and
technology, arts, culture and sports to foster patriotism and nationalism, accelerate
social progress and to promote total human liberation and development. "
(d) Article XIV, Section l: "The State shall protect and promote the right of all citizens
to quality education at all levels and take appropriate steps to make such education
accessible to all. "
(e) Article XIV, Section 5 (3): "Every citizen has a right to select a profession or course
of study, subject to fair, reasonable and equitable admission and academic
requirements."
Article II of the 1987 Constitution sets forth in its second half certain "State policies" which the
government is enjoined to pursue and promote. The petitioners here have not seriously
undertaken to demonstrate to what extent or in what manner the statute and the administrative
order they assail collide with the State policies embodied in Sections 11, 13 and 17. They have
not, in other words, discharged the burden of proof which lies upon them. This burden is heavy
enough where the constitutional provision invoked is relatively specific, rather than abstract, in
character and cast in behavioral or operational terms. That burden of proof becomes of
necessity heavier where the constitutional provision invoked is cast, as the second portion of
Article II is cast, in language descriptive of basic policies, or more precisely, of basic objectives
of State policy and therefore highly generalized in tenor. The petitioners have not made their
case, even a prima facie case, and we are not compelled to speculate and to imagine how the
legislation and regulation impugned as unconstitutional could possibly offend the constitutional
provisions pointed to by the petitioners.
Turning to Article XIV, Section 1, of the 1987 Constitution, we note that once more petitioners
have failed to demonstrate that the statute and regulation they assail in fact clash with that
provision. On the contrary we may note-in anticipation of discussion infra — that the statute
and the regulation which petitioners attack are in fact designed to promote "quality education"
at the level of professional schools. When one reads Section 1 in relation to Section 5 (3) of
Article XIV as one must one cannot but note that the latter phrase of Section 1 is not to be read
with absolute literalness. The State is not really enjoined to take appropriate steps to make
quality education " accessible to all who might for any number of reasons wish to enroll in a
professional school but rather merely to make such education accessible to all who qualify
under "fair, reasonable and equitable admission and academic requirements. "
2. In the trial court, petitioners had made the argument that Section 5 (a) and (f) of Republic
Act No. 2382, as amended, offend against the constitutional principle which forbids the undue
delegation of legislative power, by failing to establish the necessary standard to be followed by
the delegate, the Board of Medical Education. The general principle of non-delegation of
legislative power, which both flows from the reinforces the more fundamental rule of the
separation and allocation of powers among the three great departments of government, 1 must
be applied with circumspection in respect of statutes which like the Medical Act of 1959, deal
with subjects as obviously complex and technical as medical education and the practice of
medicine in our present day world. Mr. Justice Laurel stressed this point 47 years ago
in Pangasinan Transportation Co., Inc. vs. The Public Service Commission:2
One thing, however, is apparent in the development of the principle of separation of
powers and that is that the maxim of delegatus non potest delegare or delegate
potestas non potest delegare, adopted this practice (Delegibus et Consuetudiniis
Anglia edited by G.E. Woodbine, Yale University Press, 1922, Vol. 2, p. 167) but which
is also recognized in principle in the Roman Law (d. 17.18.3) has been made to adapt
itself to the complexities of modern government, giving rise to the adoption, within
certain limits of the principle of "subordinate legislation," not only in the United States
and England but in practically all modern governments. (People vs. Rosenthal and
Osmena [68 Phil. 318, 1939]. Accordingly, with the growing complexity of modern life,
the multiplication of the subjects of governmental regulation and the increased difficulty
of administering the laws, there is a constantly growing tendency toward the delegation
of greater power by the legislature, and toward the approval of the practice by the
courts." 3
The standards set for subordinate legislation in the exercise of rule making authority by an
administrative agency like the Board of Medical Education are necessarily broad and highly
abstract. As explained by then Mr. Justice Fernando in Edu v. Ericta4 —
The standard may be either expressed or implied. If the former, the non-delegation
objection is easily met. The standard though does not have to be spelled out
42 | C O N S T I 1
specifically. It could be implied from the policy and purpose of the act considered as a
whole. In the Reflector Law, clearly the legislative objective is public safety. What is
sought to be attained as in Calalang v. Williams is "safe transit upon the roads. 5
We believe and so hold that the necessary standards are set forth in Section 1 of the 1959
Medical Act: "the standardization and regulation of medical education" and in Section 5 (a) and
7 of the same Act, the body of the statute itself, and that these considered together are sufficient
compliance with the requirements of the non-delegation principle.
3. The petitioners also urge that the NMAT prescribed in MECS Order No. 52, s. 1985, is an
"unfair, unreasonable and inequitable requirement," which results in a denial of due process.
Again, petitioners have failed to specify just what factors or features of the NMAT render it
"unfair" and "unreasonable" or "inequitable." They appear to suggest that passing the NMAT is
an unnecessary requirement when added on top of the admission requirements set out in
Section 7 of the Medical Act of 1959, and other admission requirements established by internal
regulations of the various medical schools, public or private. Petitioners arguments thus appear
to relate to utility and wisdom or desirability of the NMAT requirement. But constitutionality is
essentially a question of power or authority: this Court has neither commission or competence
to pass upon questions of the desirability or wisdom or utility of legislation or administrative
regulation. Those questions must be address to the political departments of the government
not to the courts.
There is another reason why the petitioners' arguments must fail: the legislative and
administrative provisions impugned by them constitute, to the mind of the Court, a valid
exercise of the police power of the state. The police power, it is commonplace learning, is the
pervasive and non-waivable power and authority of the sovereign to secure and promote an
the important interests and needs — in a word, the public order — of the general
community.6 An important component of that public order is the health and physical safety and
well being of the population, the securing of which no one can deny is a legitimate objective of
governmental effort and regulation.7
Perhaps the only issue that needs some consideration is whether there is some reasonable
relation between the prescribing of passing the NMAT as a condition for admission to medical
school on the one hand, and the securing of the health and safety of the general community,
on the other hand. This question is perhaps most usefully approached by recalling that
the regulation of the practice of medicine in all its branches has long been recognized as a
reasonable method of protecting the health and safety of the public. 8 That the power to regulate
and control the practice of medicine includes the power to regulate admission to the ranks of
those authorized to practice medicine, is also well recognized. thus, legislation and
administrative regulations requiring those who wish to practice medicine first to take and pass
medical board examinations have long ago been recognized as valid exercises of
governmental power.9 Similarly, the establishment of minimum medical educational
requirements — i.e., the completion of prescribed courses in a recognized medical school
— for admission to the medical profession, has also been sustained as a legitimate exercise
of the regulatory authority of the state.10 What we have before us in the instant case is closely
related: the regulation of access to medical schools. MECS Order No. 52, s. 1985, as noted
earlier, articulates the rationale of regulation of this type: the improvement of the professional We conclude that prescribing the NMAT and requiring certain minimum scores therein as a
and technical quality of the graduates of medical schools, by upgrading the quality of those condition for admission to medical schools in the Philippines, do not constitute an
admitted to the student body of the medical schools. That upgrading is sought by selectivity in unconstitutional imposition.
the process of admission, selectivity consisting, among other things, of limiting admission to
those who exhibit in the required degree the aptitude for medical studies and eventually for WHEREFORE, the Petition for certiorari is DISMISSED and the Order of the respondent trial
medical practice. The need to maintain, and the difficulties of maintaining, high standards in court denying the petition for a writ of preliminary injunction is AFFIRMED. Costs against
our professional schools in general, and medical schools in particular, in the current stage of petitioners.
our social and economic development, are widely known.
SO ORDERED.
We believe that the government is entitled to prescribe an admission test like the NMAT as a
means for achieving its stated objective of "upgrading the selection of applicants into [our]
medical schools" and of "improv[ing] the quality of medical education in the country." Given the
widespread use today of such admission tests in, for instance, medical schools in the United
States of America (the Medical College Admission Test [MCAT] 11 and quite probably in other
countries with far more developed educational resources than our own, and taking into account
the failure or inability of the petitioners to even attempt to prove otherwise, we are entitled to
hold that the NMAT is reasonably related to the securing of the ultimate end of legislation and
regulation in this area. That end, it is useful to recall, is the protection of the public from the
potentially deadly effects of incompetence and ignorance in those who would undertake to treat
our bodies and minds for disease or trauma.

4. Petitioners have contended, finally, that MECS Order No. 52, s. 1985, is in conflict with the
equal protection clause of the Constitution. More specifically, petitioners assert that that portion
of the MECS Order which provides that

the cutoff score for the successful applicants, based on the scores on the NMAT, shall
be determined every-year by the Board of Medical 11 Education after consultation with
the Association of Philippine Medical Colleges. (Emphasis supplied)

infringes the requirements of equal protection. They assert, in other words, that students
seeking admission during a given school year, e.g., 1987-1988, when subjected to a different
cutoff score than that established for an, e.g., earlier school year, are discriminated against and
that this renders the MECS Order "arbitrary and capricious." The force of this argument is more
apparent than real. Different cutoff scores for different school years may be dictated by differing
conditions obtaining during those years. Thus, the appropriate cutoff score for a given year
may be a function of such factors as the number of students who have reached the cutoff score
established the preceding year; the number of places available in medical schools during the
current year; the average score attained during the current year; the level of difficulty of the test
given during the current year, and so forth. To establish a permanent and immutable cutoff
score regardless of changes in circumstances from year to year, may wen result in an
unreasonable rigidity. The above language in MECS Order No. 52, far from being arbitrary or
capricious, leaves the Board of Medical Education with the measure of flexibility needed to
meet circumstances as they change.

43 | C O N S T I 1
G.R. No. 116418 March 7, 1995
SALVADOR C. FERNANDEZ and ANICIA M. DE LIMA, petitioners,
vs.
HON. PATRICIA A. STO. TOMAS, Chairman, and HON. RAMON B. ERENETA,
Commissioner, Civil Service Commission, respondents.
FELICIANO, J.:
In this Petition for Certiorari, Prohibition and Mandamus with Prayer for a Temporary
Restraining Order, petitioners Salvador C. Fernandez and Anicia M. de Lima assail the validity
of Resolution No. 94-3710 of the Civil Service Commission ("Commission") and the authority
of the Commission to issue the same.
Petitioner Fernandez was serving as Director of the Office of Personnel Inspection and Audit
("OPIA") while petitioner de Lima was serving as Director of the Office of the Personnel
Relations ("OPR"), both at the Central Office of the Civil Service Commission in Quezon City,
Metropolitan Manila. While petitioners were so serving, Resolution No. 94-3710 signed by
public respondents Patricia A.. Sto. Tomas and Ramon Ereneta, Jr., Chairman and
Commissioner, respectively, of the Commission, was issued on 7 June 1994. 1 Resolution No.
94-3710 needs to be quoted in full:
RESOLUTION NO. 94-3710
WHEREAS, Section 17 of Book V of Executive Order 292 provides that ". . .
as an independent constitutional body, the Commission may effect changes in
the organization as the need arises;"
WHEREAS, the Commission finds it imperative to effect changes in the
organization to streamline its operations and improve delivery of public
service;
WHEREAS, the Commission finds it necessary to immediately effect changes
in the organization of the Central Offices in view of the need to implement new
programs in lieu of those functions which were transferred to the Regional
Offices;
WHEREFORE, foregoing premises considered, the Commission hereby
RESOLVES to effect the following changes in its organization, specifically in
the Central Offices:
44 | C O N S T I 1
1. The OCSS [Office of Career Systems and Standards], OPIA [Office of
Personnel Inspection and Audit] and OPR [Office of Personnel Relations] are
merged to form the Research and Development Office (RDO).
2. The Office for Human Resource Development (OHRD) is renamed Human
Resource Development Office (HRDO).
3. The following functions and the personnel assigned to the unit performing
said functions are hereby transferred to HRDO:
a. Administration of the Honor and Awards program under
OCSS;
b. Registration and Accreditation of Unions under OPR; and
c. Accreditation of Agencies to take final action on
appointments under OPIA.
4. The Office for Central Personnel Records (OCPR) is renamed Management
Information Office (MIO).
5. The Information technology functions of OPM and the personnel assigned
to the unit are transferred to MIO.
6. The following functions of OPM and the personnel assigned to the unit
performing said functions are hereby transferred to the Office of the Executive
Director:
a. Financial Audit and Evaluation;
b. Internal Management and Improvement;
c. Research and Statistics; and
d. Planning and Programming.
7. The library service and its personnel under OCPR are transferred to the
Central Administrative Office.
8. The budget allocated for the various functions shall be transferred to the
Offices where the functions are transferred. Records, fixtures and equipment
that go with the functions shall be moved to where the functions are
transferred.
 Annex A contains the manning list for all the offices, except the OCES.
The changes in the organization and in operations shall take place before end
of July 1994.
Done in Quezon City, July 07, 1994.
Systems and Standards], the OPIA [Office of Personnel Inspection and Audit]
and the OPR [Office of Personnel Relations], to form the RDO [Research and
Development Office]; and
(2) Whether or not Resolution No. 94-3710 violated petitioners' constitutional
right to security of tenure.

(Signed) I.
Patricia A. Sto. Tomas
Chairman The Revised Administrative Code of 1987 (Executive Order No. 292 dated 25 July 1987) sets
out, in Book V, Title I, Subtitle A, Chapter 3, the internal structure and organization of the
(Signed) Did not participate Commission in the following terms:
Ramon P. Ereneta, Jr., Thelma P. Gaminde
Commissioner Commissioner Sec. 16. Offices in the Commission — The Commission shall have the
following offices:
Attested by:
(Signed) (1) The Office of the Executive Director — . . .
Carmencita Giselle B. Dayson
Board Secretary V 2 (2) The Merit System Protection Board — . . .

During the general assembly of officers and employees of the Commission held in the morning (3) The Office of Legal Affairs — . . .
of 28 July 1994, Chairman Sto. Tomas, when apprised of objections of petitioners, expressed
the determination of the Commission to implement Resolution No. 94-3710 unless restrained (4) The Office of Planning and Management — . . .
by higher authority.
(5) The Central Administrative Office — . . .
Petitioners then instituted this Petition. In a Resolution dated 23 August 1994, the Court
required public respondents to file a Comment on the Petition. On 21 September 1994,
petitioners filed an Urgent Motion for Issuance of a Temporary Restraining Order, alleging that (6) The Office of Central Personnel Records — . . .
petitioners had received Office Orders from the Commission assigning petitioner Fernandez to
Region V at Legaspi City and petitioner de Lima to Region III in San Fernando, Pampanga and (7) The Office of Position Classification and
praying that public respondents be restrained from enforcing these Office Orders. The Court, Compensation — . . .
in a Resolution dated 27 September 1994, granted this Motion and issued the Temporary
Restraining Order prayed for by petitioners. (8) The Office of Recruitment, Examination and
Placement — . . .
The Commission filed its own Comment, dated 12 September 1994, on the Petition and then
moved to lift the Temporary Restraining Order. The Office of the Solicitor General filed a (9) The Office of Career Systems and Standards shall provide leadership and
separate Comment dated 28 November 1994, defending the validity of Resolution No. 94-3710 assistance in the formulation and evaluation of personnel systems and
and urging dismissal of the Petition. Petitioners filed separate Replies to these Comments. The standards relative to performance appraisal, merit promotion and employee
Commission in turn filed a Rejoinder (denominated "Comment [on] the Reply"). incentive benefits and awards.

The principal issues raised in this Petition are the following: (10) The Office of Human Resource Development — . . .

(1) Whether or not the Civil Service Commission had legal authority to issue (11) The Office of Personnel Inspection and Audit shall develop policies,
Resolution No. 94-3710 to the extent it merged the OCSS [Office of Career standards, rules and regulations for the effective conduct of inspection and

45 | C O N S T I 1
 audit of personnel and personnel management programs and the exercise of
delegated authority; provide technical and advisory services to Civil Service
Regional Offices and government agencies in the implementation of their
personnel programs and evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and assistance
in the development and implementation of policies, standards, rules and
regulations governing corporate officials and employees in the areas of
recruitment, examination, placement, career development, merit and awards
systems, position classification and compensation, performance appraisal,
employee welfare and benefits, discipline and other aspects of personnel
management on the basis of comparable industry practices.
(13) The Office of the Corporate Affairs — . . .
(14) The Office of Retirement Administration — . . .
(15) The Regional and Field Offices. — . . . (Emphases in the original)
Immediately after the foregoing listing of offices of the Commission and their respective
functions, the 1987 Revised Administrative Code goes on to provide as follows:
Sec. 17. Organizational Structure. — Each office of the Commission shall be
headed by a Director with at least one (1) Assistant Director, and may have
such divisions as are necessary to carry out their respective functions. As an
independent constitutional body, the Commission may effect chances in the
organization as the need arises.
xxx xxx xxx 3
(Emphasis supplied)
Examination of the foregoing statutory provisions reveals that the OCSS, OPIA and OPR, and
as well each of the other Offices listed in Section 16 above, consist of aggregations of Divisions,
each of which Divisions is in turn a grouping of Sections. Each Section, Division and Office
comprises a group of positions within the agency called the Civil Service Commission, each
group being entrusted with a more or less definable function or functions. These functions are
related to one another, each of them being embraced by a common or general subject matter.
Clearly, each Office is an internal department or organizational unit within the Commission and
that accordingly, the OCSS, OPIA and OPR, as well as all the other Offices within the
Commission constitute administrative subdivisions of the CSC. Put a little differently, these
offices relate to the internal structure of the Commission.
46 | C O N S T I 1
What did Resolution No. 94-3710 of the Commission do? Examination of Resolution No. 94-
3710 shows that thereby the Commission re-arranged some of the administrative units (i.e.,
Offices) within the Commission and, among other things, merged three (3) of them (OCSS,
OPIA and OPR) to form a new grouping called the "Research and Development Office (RDO)."
The same Resolution renamed some of the Offices of the Commission, e.g., the Office for
Human Resource Development (OHRD) was renamed Human Resource Development Office
(HRDO); the Office for Central Personnel Records (OCPR) was renamed Management
Information Office (MIO). The Commission also re-allocated certain functions moving some
functions from one Office to another; e.g., the information technology function of OPM (Office
of Planning and Management) was transferred to the newly named Management Information
Office (MIO). This re-allocation or re-assignment of some functions carried with it the transfer
of the budget earmarked for such function to the Office where the function was transferred.
Moreover, the personnel, records, fixtures and equipment that were devoted to the carrying out
of such functions were moved to the Offices to where the functions were transferred.
The objectives sought by the Commission in enacting Resolution No. 94-3710 were described
in that Resolution in broad terms as "effect[ing] changes in the organization to streamline [the
Commission's] operations and improve delivery of service." These changes in internal
organization were rendered necessary by, on the one hand, the decentralization and devolution
of the Commission's functions effected by the creation of fourteen (14) Regional Offices and
ninety-five (95) Field Offices of the Commission throughout the country, to the end that the
Commission and its staff may be brought closer physically to the government employees that
they are mandated to serve. In the past, its functions had been centralized in the Head Office
of the Commission in Metropolitan Manila and Civil Service employees all over the country
were compelled to come to Manila for the carrying out of personnel transactions. Upon the
other hand, the dispersal of the functions of the Commission to the Regional Offices and the
Field Offices attached to various governmental agencies throughout the country makes
possible the implementation of new programs of the Commission at its Central Office in
Metropolitan Manila.
The Commission's Office Order assigning petitioner de Lima to the CSC Regional Office No. 3
was precipitated by the incumbent Regional Director filing an application for retirement, thus
generating a need to find a replacement for him. Petitioner de Lima was being assigned to that
Regional Office while the incumbent Regional Director was still there to facilitate her take over
of the duties and functions of the incumbent Director. Petitioner de Lima's prior experience as
a labor lawyer was also a factor in her assignment to Regional Office No. 3 where public sector
unions have been very active. Petitioner Fernandez's assignment to the CSC Regional Office
No. 5 had, upon the other hand, been necessitated by the fact that the then incumbent Director
in Region V was under investigation and needed to be transferred immediately to the Central
Office. Petitioner Fernandez was deemed the most likely designee for Director of Regional
Office No. 5 considering that the functions previously assigned to him had been substantially
devolved to the Regional Offices such that his reassignment to a Regional Office would result
in the least disruption of the operations of the Central Office. 4
It thus appears to the Court that the Commission was moved by quite legitimate considerations
of administrative efficiency and convenience in promulgating and implementing its Resolution
No. 94-3710 and in assigning petitioner Salvador C. Fernandez to the Regional Office of the
Commission in Region V in Legaspi City and petitioner Anicia M. de Lima to the Commission's
Regional Office in Region III in San Fernando, Pampanga. It is also clear to
the Court that the changes introduced and formalized through Resolution No. 94-3710 — re-
naming of existing Offices; re-arrangement of the groupings of Divisions and Sections
composing particular Offices; re-allocation of existing functions (and related personnel; budget,
etc.) among the re-arranged Offices — are precisely the kind of internal changes which are
referred to in Section 17 (Book V, Title I, Subtitle A, Chapter 3) of the 1987 Revised
Administrative Code), quoted above, as "chances in the organization" of the Commission.
Petitioners argue that Resolution No. 94-3710 effected the "abolition" of public offices,
something which may be done only by the same legislative authority which had created those
public offices in the first place.
The Court is unable, in the circumstances of this case, to accept this argument. The term "public
office" is frequently used to refer to the right, authority and duty, created and conferred by law,
by which, for a given period either fixed by law or enduring at the pleasure of the creating
power, an individual is invested with some portion of the sovereign functions of government, to
be exercised by that individual for the benefit of the public. 5 We consider that Resolution No.
94-3710 has not abolished any public office as that term is used in the law of public officers. 6 It
is essential to note that none of the "changes in organization" introduced by Resolution No. 94-
3710 carried with it or necessarily involved the termination of the relationship of public
employment between the Commission and any of its officers and employees. We find it very
difficult to suppose that the 1987 Revised Administrative Code having mentioned fourteen (14)
different "Offices" of the Civil Service Commission, meant to freeze those Offices and to cast
in concrete, as it were, the internal organization of the commission until it might please
Congress to change such internal organization regardless of the ever changing needs of the
Civil Service as a whole. To the contrary, the legislative authority had expressly authorized the
Commission to carry out "changes in the organization," as the need [for such changes]
arises." 7 Assuming, for purposes of argument merely, that legislative authority was necessary
to carry out the kinds off changes contemplated in Resolution No. 94-3710 (and the Court
is not saying that such authority is necessary), such legislative authority was validly delegated
to the Commission by Section 17 earlier quoted. The legislative standards to be observed and
respected in the exercise of such delegated authority are set out not only in Section 17 itself
(i.e., "as the need arises"), but also in the Declaration of Policies found in Book V, Title I, Subtitle
A, Section 1 of the 1987 Revised Administrative Code which required the Civil Service
Commission
as the central personnel agency of the Government [to] establish a
career service, adopt measures to promote — efficiency —
[and] responsiveness . . . in the civil service . . . and that personnel functions
shall be decentralized, delegating the corresponding authority to
the departments, offices and agencies where such functions can be effectively
performed. (Emphasis supplied)
II.
47 | C O N S T I 1
We turn to the second claim of petitioners that their right to security of tenure was breached by
the respondents in promulgating Resolution No. 94-3710 and ordering petitioners' assignment
to the Commission's Regional Offices in Regions III and V. Section 2(3) of Article IX(B) of the
1987 Constitution declared that "no officer or employee of the Civil Service shall be removed
or suspended except for cause provided by law." Petitioners in effect contend that they were
unlawfully removed from their positions in the OPIA and OPR by the implementation of
Resolution No. 94-3710 and that they cannot, without their consent, be moved out to the
Regional Offices of the Commission.
We note, firstly, that appointments to the staff of the Commission are not appointments to a
specified public office but rather appointments to particular positions or ranks. Thus, a person
may be appointed to the position of Director III or Director IV; or to the position of Attorney IV
or Attorney V; or to the position of Records Officer I or Records Officer II; and so forth. In the
instant case, petitioners were each appointed to the position of Director IV, without specification
of any particular office or station. The same is true with respect to the other persons holding
the same position or rank of Director IV of the Commission.
Section 26(7), Book V, Title I, Subtitle A of the 1987 Revised Administrative Code recognizes
reassignment as a management prerogative vested in the Commission and, for that matter, in
any department or agency of government embraced in the civil service:
Sec. 26. Personnel Actions. — . . .
xxx xxx xxx
As used in this Title, any action denoting the movement or progress of
personnel in the civil service shall be known as personnel action. Such action
shall include appointment through certification, promotion, transfer, re-
instatement, re-employment, detail, reassignment, demotion, and
separation. All personnel actions shall be in accordance with such rules,
standards, and regulations as may be promulgated by the Commission.
xxx xxx xxx
(7) Reassignment. An employee may be re-assigned from one organizational
unit to another in the same agency, Provided, That such re-assignment
shall not involve a reduction in rank status and salary. (Emphasis supplied)
It follows that the reassignment of petitioners Fernandez and de Lima from their previous
positions in OPIA and OPR, respectively, to the Research and Development Office (RDO) in
the Central Office of the Commission in Metropolitan Manila and their subsequent assignment
from the RDO to the Commission's Regional Offices in Regions V and III had been effected
with express statutory authority and did not constitute removals without lawful cause. It also
follows that such re-assignment did not involve any violation of the constitutional right of
petitioners to security of tenure considering that they retained their positions of Director IV and
would continue to enjoy the same rank, status and salary at their new assigned stations which upon the nature of the appointment (Hojilla
they had enjoyed at the Head Office of the Commission in Metropolitan Manila. Petitioners had vs. Marino, 121 Phil. 280 [1965].) Such
not, in other words, acquired a vested right to serve at the Commission's Head Office. that the rule which proscribes transfers
without consent as anathema to the security
Secondly, the above conclusion is compelled not only by the statutory provisions relevant in of tenure is predicated upon the theory that
the instant case, but also by a long line of cases decided by this Court in respect of different the officer involved is appointed — not
agencies or offices of government. merely assigned — to a particular
station(Miclat v. Ganaden, et al., 108 Phil.
439 [1960]; Jaro v. Hon. Valencia, et al., 118
In one of the more recent of these cases, Department of Education Culture and Sports, etc., et
Phil. 728 [1963]). [Brillantes v. Guevarra, 27
al. v. Court of Appeals, et al.,8 this Court held that a person who had been appointed as
SCRA 138 (1969)]
"Secondary School Principal II" in the Division of City Schools, District II, Quezon City, National
Capital Region, and who had been stationed as High School Principal in the Carlos Albert High
School in Quezon for a number of years, could lawfully be reassigned or transferred to the The appointment of Navarro as principal does not refer to any particular station
Manuel Roxas High School, also in Quezon City, without demotion in rank or diminution of or school. As such, she could be assigned to any station and she is not entitled
salry. This Court held: to stay permanently at any specific school. (Bongbong v. Parado, 57 SCRA
623) When she was assigned to the Carlos Albert High School, it could not
have been with the intention to let her stay in said school permanently.
The aforequoted provision of Republic Act No. 4670 particularly Section 6
Otherwise, her appointment would have so stated. Consequently, she may be
thereof which provides that except for cause and in the exigencies of the
assigned to any station or school in Quezon City as the exigencies of public
service no teacher shall be transferred without his consent from one station to
service require even without consent. As this Court ruled in Brillantes
another, finds no application in the case at bar as this is predicated upon the
v. Guevarra, 27 SCRA 138,
theory that the teacher concerned is appointed — not merely assigned — to a
143 —
particular station. Thus:

Plaintiff's confident stride falters. She took too loose a view of

The rule pursued by plaintiff only goes so far as
the applicable jurisprudence. Her refuge behind the mantle of
the appointed indicates a specification. Otherwise, the
security of tenure guaranteed by the Constitution is not
constitutionally ordained security of tenure cannot shield her.
impenetrable. She proceeds upon the assumption that she
In appointments of this nature, this Court has consistently
occupies her station in Sinalang Elementary School by
rejected the officer's demand to remain — even as public
service dictates that a transfer be made — in a particular appointment. But her first appointment as Principal merely
station. Judicial attitude toward transfers of this nature is reads thus: "You are hereby appointed a Principal
(Elementary School) in the Bureau of Public Schools,
expressed in the following statement in Ibañez, et
Department of Education", without mentioning her station.
al. vs. Commission on Elections, et al. (G.R. No.
L-26558, April 27, 1967; 19 SCRA 1002 [1967]); She cannot therefore claim security of tenure as Principal of
Sinalang Elementary School or any particular station. She
may be assigned to any station as exigency of public service
That security of tenure is an essential and requires, even without her consent. She thus has no right of
constitutionally guaranteed feature of our choice.9 (Emphasis supplied; citation omitted)
Civil Service System, is not open to debate.
The mantle of its protection extends not only
In the very recent case of Fernando, et al. v. Hon. Sto. Tomas, etc., et
against removals without cause but also
a1., 10 the Court addressed appointments of petitioners as "Mediators-Arbiters in the National
against unconsented transfer which, as
Capital Region" in dismissing a challenge on certiorari to resolutions of the CSC and orders of
repeatedly enunciatEd, are tantamount to
the Secretary of Labor. The Court said:
removals which are within the ambit of the
fundamental guarantee. However, the
availability of that security of tenure Petitioners were appointed as Mediator Arbiters in the National Capital
necessarily depends, in the first instance, Region. They were not, however, appointed to a specific station or particular
unit of the Department of Labor in the National Capital Region (DOLE-NCR).
48 | C O N S T I 1
 Consequently, they can always be reassigned from one organizational unit to
another of the same agency where, in the opinion of respondent Secretary,
their services may be used more effectively. As such they can neither claim a
vested right to the station to which they were assigned nor to security of tenure
thereat. As correctly observed by the Solicitor General, petitioners'
reassignment is not a transfer for they were not removed from their position as
med-arbiters. They were not given new appointments to new positions. It
indubitably follows, therefore, that Memorandum Order No. 4 ordering their
reassignment in the interest of the service is legally in order. 11 (Emphases
supplied)
In Quisumbing v. Gumban, 12 the Court, dealing with an appointment in the Bureau of
Public Schools of the Department of Education, Culture and Sports, ruled as follows:
After a careful scrutiny of the records, it is to be underscored that the
appointment of private respondent Yap is simply that of a District Supervisor
of the Bureau of Public Schools which does not indicate a specific
station (Rollo, p. 13). A such, she could be assigned to any station and she is
no entitled to stay permanently at any specific station (Bongbong v. Parado,
57 SCRA 623 [1974]; Department of Education, Culture and Sports v. Court of
Appeals [G.R. 81032, March 22, 1990] citing Brillantes v. Guevarra [27 SCRA
138 [1969]). 13
Again, in Ibañez v. Commission on Elections, 14 the Court had before it petitioners'
appointments as "Election Registrars in the Commission of Elections," without any intimation
to what city, municipality or municipal district they had been appointed as such. 15 The Court
held that since petitioners "were not appointed to, and consequently not entitled to any security
of tenure or permanence in, any specific station," "on general principles, they [could] be
transferred as the exigencies of the service required," and that they had no right to complain
against any change in assignment. The Court further held that assignment to a particular station
after issuance of the appointment was not necessary to complete such appointment:
. . . . We cannot subscribe to the theory that an assignment to a particular
station, in the light of the terms of the appointments in question, was necessary
to complete the said appointments. The approval thereof by the Commissioner
of Civil Service gave those appointments the stamp of finality.With the view
that the respondent Commission then took of its power in the premises and
the demand of the mission it set out to accomplish with the appointments it
extended, said appointments were definitely meant to be complete as then
issued. The subsequent assignment of the appointees thereunder that the
said respondent Commission held in reserve to be exercised as the needs of
each locality justified did not in any way detract from the perfection attained by
the appointments beforehand. And the respective appointees were entitled
only to such security of tenure as the appointment papers concerned actually
conferred — not in that of any place to which they may have been
subsequently assigned. . . . As things stand, in default of any particular station
49 | C O N S T I 1
stated in their respective appointments, no security of tenure can be asserted
by the petitioners on the basis of the mere assignments which were given to
them. A contrary rule will erase altogether the demarcation line we have
repeatedly drawn between appointment and assignment as two distinct
concepts in the law of public officers. 16 (Emphases supplied)
The petitioner, in Miclat v. Ganaden, 17 had been appointed as a "Welfare Office Incharge,
Division of Urban, Rural and Community Administration, Social Welfare Administration." She
was assigned as Social Welfare Incharge of the Mountain Province, by an office order of the
Administrator, Social Welfare Administration. After a little more than a year; petitioner was
assigned elsewhere and respondent Ganaden transferred to petitioner's first station in Baguio
City. The Court ruled that petitioner was not entitled to remain in her first station, In Jaro
v. Hon. Valencia, et al., 18petitioner Dr. Jaro had been appointed "Physician in the Municipal
Maternity and Charity Clinics, Bureau of Hospitals." He was first assigned to the Municipal
Maternity and Charity Clinics in Batulati, Davao, and later to the corresponding clinic in Saug,
Davao and then to Catil, Davao. He was later assigned to the Municipality of Padada, also of
Davao Province. He resisted his last assignment and brought mandamus against the Secretary
of Health to compel the latter to return him to his station in Catil, Davao as Municipal Health
Officer thereof. The Court, applying Miclat v. Ganaden dismissed this Petition holding that his
appointment not being to any specific station but as a physician in the Municipal Maternity and
Charity Clinics, Bureau of Hospitals, he could be transferred or assigned to any station where,
in the opinion of the Secretary of Health, his services may be utilized more effectively. 19
Also noteworthy is Sta. Maria v. Lopez 20 which involved the appointment of petitioner Sta.
Maria as "Dean, College of Education, University of the Philippines." Dean Sta. Maria was
transferred by the President of the University of the Philippines to the Office of the President,
U.P., without demotion in rank or salary, thereby acceding to the demands of student activists
who were boycotting their classes in the U.P. College of Education. Dean Sta. Maria assailed
his transfer as an illegal and unconstitutional removal from office. In upholding Dean Sta.
Maria's claim, the Court, speaking through Mr. Justice Sanchez, laid down the applicable
doctrine in the following terms:
4. Concededly, transfers there are which do not amount to removal. Some
such transfer can be effected without the need for charges being preferred,
without trial or hering, and even without the consent of the employee.
The clue to such transfers may be found in the "nature of the
appointment." Where the appointment does not indicate a specific station, an
employee may be transferred or reassigned provided the transfer affects no
substantial change in title, rank and salary. Thus one who is appointed
"principal in the Bureau of Public Schools" and is designated to head a pilot
school may be transferred to the post of principal of another school.
And the rule that outlaws unconsented transfers as anathema to security of
tenure applies only to an officer who is appointed — not merely assigned — to
 a particular station. Such a rule does not prescribe a transfer carried out under
a specific statute that empowers the head of an agency to periodically reassign
the employees and officers in order to improve the service of the agency. The
use of approved techniques or methods in personnel management to harness
the abilities of employees to promote optimum public service cannot-be
objected to. . . .

5. The next point of inquiry is whether or not Administrative Order 77 would

stand the test of validity vis-a-vis the principles just enunciated.

xxx xxx xxx

To be stressed at this point, however, is that the appointment of Sta. Maria is

that of "Dean, College of Education, University of the Philippines." He is not
merely a dean "in the university." His appointment is to a specific position; and,
more importantly, to a specific station. 21 (Citations omitted; emphases
supplied)

For all the foregoing we conclude that the reassignment of petitioners Fernandez and de Lima
from their stations in the OPIA and OPR, respectively, to the Research Development Office
(RDO) and from the RDO to the Commissions Regional Offices in Regions V and III,
respectively, without their consent, did not constitute a violation of their constitutional right to
security of tenure.

WHEREFORE, the Petition for Certiorari, Prohibition and Mandamus with Prayer for Writ of
Preliminary Injunction or Temporary Restraining Order is hereby DISMISSED. The Temporary
Restraining Order issued by this Court on 27 September 1994 is hereby LIFTED. Costs against
petitioners.

SO ORDERED.

50 | C O N S T I 1
G.R. No. 96754 June 22, 1995
CONGRESSMAN JAMES L. CHIONGBIAN (Third District, South Cotobato) ADELBERT
W. ANTONINO (First District, South Cotobato), WILFREDO G. CAINGLET (Third
District, Zamboanga del Norte), HILARION RAMIRO, JR. (Second Division, Misamis
Occidental), ERNESTO S. AMATONG (Second District, Zamboanga del Norte), ALVIN
G. DANS (Lone District, Basilan), ABDULLAH M. DIMAPORO (Second District, Lanao
del Norte), and CONGRESSWOMAN MARIA CLARA A. LOBREGAT (Lone District,
Zamboanga City) petitioners,
vs.
HON. OSCAR M. ORBOS, Executive Secretary; COMMITTEE CHAIRMAN SEC. FIDEL V.
RAMOS, CABINET OFFICERS FOR REGIONAL DEVELOPMENT FOR REGIONS X AND
XII, CHAIRMAN OF THE REGIONAL DEVELOPMENT COUNCIL FOR REGION X,
CHAIRMAN JESUS V. AYALA, CABINET OFFICERS FOR REGIONAL DEVELOPMENT
FOR REGIONS XI and XII, DEPARTMENT OF LOCAL GOVERNMENT, NATIONAL
ECONOMIC AND DEVELOPMENT AUTHORITY SECRETARIAT, PRESIDENTIAL
MANAGEMENT STAFF, HON. GUILLERMO CARAGUE, Secretary of the DEPARTMENT
OF BUDGET and MANAGEMENT; and HON. ROSALINA S. CAJUCUM, OIC National
Treasurer, respondents.
IMMANUEL JALDON, petitioner,
vs.
HON. EXECUTIVE SECRETARY OSCAR M. ORBOS, HON. FIDEL RAMOS, HON.
SECRETARY LUIS SANTOS, AND HON. NATIONAL TREASURER ROSALINA
CAJUCOM, respondents.
MENDOZA, J.:
These suits challenge the validity of a provision of the Organic Act for the Autonomous Region
in Muslim Mindanao (R.A. No. 6734), authorizing the President of the Philippines to "merge"
by administrative determination the regions remaining after the establishment of the
Autonomous Region, and the Executive Order issued by the President pursuant to such
authority, "Providing for the Reorganization of Administrative Regions in Mindanao." A
temporary restraining order prayed for by the petitioners was issued by this Court on January
29, 1991, enjoining the respondents from enforcing the Executive Order and statute in
question.
The facts are as follows:
Pursuant to Art. X, §18 of the 1987 Constitution, Congress passed R.A. No. 6734, the Organic
Act for the Autonomous Region in Muslim Mindanao, calling for a plebiscite to be held in the
provinces of Basilan, Cotobato, Davao del Sur, Lanao del Norte, Lanao del Sur, Maguindanao,
Palawan, South Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte, and
51 | C O N S T I 1
Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General Santos, Iligan,
Marawi, Pagadian, Puerto Princesa and Zamboanga. In the ensuing plebiscite held on
November 16, 1989, four provinces voted in favor of creating an autonomous region. These
are the provinces of Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi. In accordance with the
constitutional provision, these provinces became the Autonomous Region in Muslim Mindanao.
On the other hand, with respect to provinces and cities not voting in favor of the Autonomous
Region, Art. XIX, § 13 of R.A. No. 6734 provides,
That only the provinces and cities voting favorably in such plebiscites shall be
included in the Autonomous Region in Muslim Mindanao. The provinces and
cities which in the plebiscite do not vote for inclusion in the Autonomous
Region shall remain in the existing administrative regions. Provided, however,
that the President may, by administrative determination, merge the existing
regions.
Pursuant to the authority granted by this provision, then President Corazon C. Aquino issued
on October 12, 1990 Executive Order No. 429, "providing for the Reorganization of the
Administrative Regions in Mindanao." Under this Order, as amended by E.O. No. 439 —
(1) Misamis Occidental, at present part of Region X, will become part of Region
IX.
(2) Oroquieta City, Tangub City and Ozamiz City, at present parts of Region X
will become parts of Region IX.
(3) South Cotobato, at present a part of Region XI, will become part of Region
XII.
(4) General Santos City, at present part of Region XI, will become part of
Region XII.
(5) Lanao del Norte, at present part of Region XII, will become part of Region
IX.
(6) Iligan City and Marawi City, at present part of Region XII, will become part
of Region IX.
Petitioners in G.R. No. 96754 are, or at least at the time of the filing of their petition, members
of Congress representing various legislative districts in South Cotobato, Zamboanga del Norte,
Basilan, Lanao del Norte and Zamboanga City. On November 12, 1990, they wrote then
President Aquino protesting E.O. No. 429. They contended that
 There is no law which authorizes the President to pick certain provinces and
cities within the existing regions — some of which did not even take part in the
plebiscite as in the case of the province of Misamis Occidental and the cities
of Oroquieta, Tangub and Ozamiz — and restructure them to new
administrative regions. On the other hand, the law (Sec. 13, Art. XIX, R.A.
6734) is specific to the point, that is, that "the provinces and cities which in the
plebiscite do not vote for inclusion in the Autonomous Region shall remain in
the existing administrative regions."
The transfer of the provinces of Misamis Occidental from Region X to Region
IX; Lanao del Norte from Region XII to Region IX, and South Cotobato from
Region XI to Region XII are alterations of the existing structures of
governmental units, in other words, reorganization. This can be gleaned from
Executive Order No. 429, thus
Whereas, there is an urgent need to reorganize the
administrative regions in Mindanao to guarantee the effective
delivery of field services of government agencies taking into
consideration the formation of the Autonomous Region in
Muslim Mindanao.
With due respect to Her Excellency, we submit that while the authority
necessarily includes the authority to merge, the authority to merge does not
include the authority to reorganize. Therefore, the President's authority under
RA 6734 to "merge existing regions" cannot be construed to include the
authority to reorganize them. To do so will violate the rules of statutory
construction.
The transfer of regional centers under Executive Order 429 is actually a
restructuring (reorganization) of administrative regions. While this
reorganization, as in Executive Order 429, does not affect the apportionment
of congressional representatives, the same is not valid under the penultimate
paragraph of Sec. 13, Art. XIX of R.A. 6734 and Ordinance appended to the
1986 Constitution apportioning the seats of the House of Representatives of
Congress of the Philippines to the different legislative districts in provinces and
cities.1
As their protest went unheeded, while Inauguration Ceremonies of the New Administrative
Region IX were scheduled on January 26, 1991, petitioners brought this suit for certiorari and
prohibition.
On the other hand, the petitioner in G.R. No. 96673, Immanuel Jaldon, is a resident of
Zamboanga City, who is suing in the capacity of taxpayer and citizen of the Republic of the
Philippines.
52 | C O N S T I 1
Petitioners in both cases contend that Art. XIX, §13 of R.A. No. 6734 is unconstitutional
because (1) it unduly delegates legislative power to the President by authorizing him to "merge
[by administrative determination] the existing regions" or at any rate provides no standard for
the exercise of the power delegated and (2) the power granted is not expressed in the title of
the law.
In addition, petitioner in G.R. No. 96673 challenges the validity of E.O. No. 429 on the ground
that the power granted by Art. XIX, §13 to the President is only to "merge regions IX and XII"
but not to reorganize the entire administrative regions in Mindanao and certainly not to transfer
the regional center of Region IX from Zamboanga City to Pagadian City.
The Solicitor General defends the reorganization of regions in Mindanao by E.O. No. 429 as
merely the exercise of a power "traditionally lodged in the President," as held in Abbas
v. Comelec,2 and as a mere incident of his power of general supervision over local
governments and control of executive departments, bureaus and offices under Art. X, §16 and
Art. VII, §17, respectively, of the Constitution.
He contends that there is no undue delegation of legislative power but only a grant of the power
to "fill up" or provide the details of legislation because Congress did not have the facility to
provide for them. He cites by analogy the case of Municipality of Cardona v. Municipality of
Binangonan,3 in which the power of the Governor-General to fix municipal boundaries was
sustained on the ground that —
[such power] is simply a transference of certain details with respect to
provinces, municipalities, and townships, many of them newly created, and all
of them subject to a more or less rapid change both in development and
centers of population, the proper regulation of which might require not only
prompt action but action of such a detailed character as not to permit the
legislative body, as such, to take it efficiently.
The Solicitor General justifies the grant to the President of the power "to merge the existing
regions" as something fairly embraced in the title of R.A. No. 6734, to wit, "An Act Providing for
an Organic Act for the Autonomous Region in Muslim Mindanao," because it is germane to it.
He argues that the power is not limited to the merger of those regions in which the provinces
and cities which took part in the plebiscite are located but that it extends to all regions in
Mindanao as necessitated by the establishment of the autonomous region.
Finally, he invokes P.D. No. 1416, as amended by P.D. No. 1772 which provides:
1. The President of the Philippines shall have the continuing authority to
reorganize the National Government. In exercising this authority, the President
shall be guided by generally acceptable principles of good government and
responsive national government, including but not limited to the following
 guidelines for a more efficient, effective, economical and development-
oriented governmental framework:
(a) More effective planning implementation, and review
functions;
(b) Greater decentralization and responsiveness in decision-
making process;
(c) Further minimization, if not, elimination, of duplication or
overlapping of purposes, functions, activities, and programs;
(d) Further development of as standardized as possible
ministerial, sub-ministerial and corporate organizational
structures;
(e) Further development of the regionalization process; and
(f) Further rationalization of the functions of and administrative
relationships among government entities.
For purposes of this Decree, the coverage of the continuing
authority of the President to reorganize shall be interpreted to
encompass all agencies, entities, instrumentalities, and units
of the National Government, including all government owned
or controlled corporations as well as the entire range of the
powers, functions, authorities, administrative relationships,
acid related aspects pertaining to these agencies, entities,
instrumentalities, and units.
2. [T]he President may, at his discretion, take the following actions:
xxx xxx xxx
f. Create, abolish, group, consolidate, merge, or integrate
entities, agencies, instrumentalities, and units of the National
Government, as well as expand, amend, change, or otherwise
modify their powers, functions and authorities, including, with
respect to government-owned or controlled corporations, their
corporate life, capitalization, and other relevant aspects of
their charters.
g. Take such other related actions as may be necessary to
carry out the purposes and objectives of this Decree.
53 | C O N S T I 1
Considering the arguments of the parties, the issues are:
(1) whether the power to "merge" administrative regions is legislative in character, as
petitioners contend, or whether it is executive in character, as respondents claim it is, and, in
any event, whether Art. XIX, §13 is invalid because it contains no standard to guide the
President's discretion;
(2) whether the power given is fairly expressed in the title of the statute; and
(3) whether the power granted authorizes the reorganization even of regions the provinces and
cities in which either did not take part in the plebiscite on the creation of the Autonomous
Region or did not vote in favor of it; and
(4) whether the power granted to the President includes the power to transfer the regional
center of Region IX from Zamboanga City to Pagadian City.
It will be useful to recall first the nature of administrative regions and the basis and purpose for
their creation. On September 9, 1968, R.A. No. 5435 was passed "authorizing the President of
the Philippines, with the help of a Commission on Reorganization, to reorganize the different
executive departments, bureaus, offices, agencies and instrumentalities of the government,
including banking or financial institutions and corporations owned or controlled by it." The
purpose was to promote "simplicity, economy and efficiency in the government."4 The
Commission on Reorganization created under the law was required to submit an integrated
reorganization plan not later than December 31, 1969 to the President who was in turn required
to submit the plan to Congress within forty days after the opening of its next regular session.
The law provided that any reorganization plan submitted would become effective only upon the
approval of Congress.5
Accordingly, the Reorganization Commission prepared an Integrated Reorganization Plan
which divided the country into eleven administrative regions. 6 By P.D. No. 1, the Plan was
approved and made part of the law of the land on September 24, 1972. P.D. No. 1 was twice
amended in 1975, first by P.D. No. 742 which "restructur[ed] the regional organization of
Mindanao, Basilan, Sulu and Tawi-Tawi" and later by P.D. No. 773 which further "restructur[ed]
the regional organization of Mindanao and divid[ed] Region IX into two sub-regions." In 1978,
P.D. No. 1555 transferred the regional center of Region IX from Jolo to Zamboanga City.
Thus the creation and subsequent reorganization of administrative regions have been by the
President pursuant to authority granted to him by law. In conferring on the President the power
"to merge [by administrative determination] the existing regions" following the establishment of
the Autonomous Region in Muslim Mindanao, Congress merely followed the pattern set in
previous legislation dating back to the initial organization of administrative regions in 1972. The
choice of the President as delegate is logical because the division of the country into regions
is intended to facilitate not only the administration of local governments but also the direction
of executive departments which the law requires should have regional offices. As this Court
observed in Abbas, "while the power to merge administrative regions is not expressly provided
for in the Constitution, it is a power which has traditionally been lodged with the President to
facilitate the exercise of the power of general supervision over local governments [seeArt. X,
§4 of the Constitution]." The regions themselves are not territorial and political divisions like
provinces, cities, municipalities and barangays but are "mere groupings of contiguous
provinces for administrative purposes."7 The power conferred on the President is similar to the
power to adjust municipal boundaries8 which has been described in Pelaez v. Auditor
General9 or as "administrative in nature."
There is, therefore, no abdication by Congress of its legislative power in conferring on the
President the power to merge administrative regions. The question is whether Congress has
provided a sufficient standard by which the President is to be guided in the exercise of the
power granted and whether in any event the grant of power to him is included in the subject
expressed in the title of the law.
First, the question of standard. A legislative standard need not be expressed. It may simply be
gathered or implied. 10 Nor need it be found in the law challenged because it may be embodied
in other statutes on the same subject as that of the challenged legislation. 11
With respect to the power to merge existing administrative regions, the standard is to be found
in the same policy underlying the grant to the President in R.A. No. 5435 of the power to
reorganize the Executive Department, to wit: "to promote simplicity, economy and efficiency in
the government to enable it to pursue programs consistent with national goals for accelerated
social and economic development and to improve the service in the transaction of the public
business."12 Indeed, as the original eleven administrative regions were established in
accordance with this policy, it is logical to suppose that in authorizing the President to "merge
[by administrative determination] the existing regions" in view of the withdrawal from some of
those regions of the provinces now constituting the Autonomous Region, the purpose of
Congress was to reconstitute the original basis for the organization of administrative regions.
Nor is Art. XIX, §13 susceptible to charge that its subject is not embraced in the title of R.A.
No. 6734. The constitutional requirement that "every bill passed by the Congress shall embrace
only one subject which shall be expressed in the title thereof" 13 has always been given a
practical rather than a technical construction. The title is not required to be an index of the
content of the bill. It is a sufficient compliance with the constitutional requirement if the title
expresses the general subject and all provisions of the statute are germane to that
subject. 14 Certainly the reorganization of the remaining administrative regions is germane to
the general subject of R.A. No. 6734, which is the establishment of the Autonomous Region in
Muslim Mindanao.
Finally, it is contended that the power granted to the President is limited to the reorganization
of administrative regions in which some of the provinces and cities which voted in favor of
regional autonomy are found, because Art. XIX, §13 provides that those which did not vote for
autonomy "shall remain in the existing administrative regions." More specifically, petitioner in
G.R. No. 96673 claims:
54 | C O N S T I 1
The questioned Executive Order No. 429 distorted and, in fact, contravened
the clear intent of this provision by moving out or transferring certain political
subdivisions (provinces/cities) out of their legally designated regions.
Aggravating this unacceptable or untenable situation is EO No. 429's effecting
certain movements on areas which did not even participate in the November
19, 1989 plebiscite. The unauthorized action of the President, as effected by
and under the questioned EO No. 429, is shown by the following dispositions:
(1) Misamis Occidental, formerly of Region X and which did not even
participate in the plebiscite, was moved from said Region X to Region IX; (2)
the cities of Ozamis, Oroquieta, and Tangub, all formerly belonging to Region
X, which likewise did not participate in the said plebiscite, were transferred to
Region IX; (3) South Cotobato, from Region XI to Region XII; (4) General
Santos City: from Region XI to Region XII; (5) Lanao del Norte, from Region
XII to Region IX; and (6) the cities of Marawi and Iligan from Region XII to
Region IX. All of the said provinces and cities voted "NO", and thereby rejected
their entry into the Autonomous Region in Muslim Mindanao, as provided
under RA No. 6734. 15
The contention has no merit. While Art. XIX, §13 provides that "The provinces and cities which
do not vote for inclusion in the Autonomous Region shall remain in the existing administrative
regions," this provision is subject to the qualification that "the President may by administrative
determination merge the existing regions." This means that while non-assenting provinces and
cities are to remain in the regions as designated upon the creation of the Autonomous Region,
they may nevertheless be regrouped with contiguous provinces forming other regions as the
exigency of administration may require.
The regrouping is done only on paper. It involves no more than are definition or redrawing of
the lines separating administrative regions for the purpose of facilitating the administrative
supervision of local government units by the President and insuring the efficient delivery of
essential services. There will be no "transfer" of local governments from one region to another
except as they may thus be regrouped so that a province like Lanao del Norte, which is at
present part of Region XII, will become part of Region IX.
The regrouping of contiguous provinces is not even analogous to a redistricting or to the
division or merger of local governments, which all have political consequences on the right of
people residing in those political units to vote and to be voted for. It cannot be overemphasized
that administrative regions are mere groupings of contiguous provinces for administrative
purposes, not for political representation.
Petitioners nonetheless insist that only those regions, in which the provinces and cities which
voted for inclusion in the Autonomous Region are located, can be "merged" by the President.
To be fundamental reason Art. XIX, §13 is not so limited. But the more fundamental reason is
that the President's power cannot be so limited without neglecting the necessities of
administration. It is noteworthy that the petitioners do not claim that the reorganization of the
regions in E.O. No. 429 is irrational. The fact is that, as they themselves admit, the
reorganization of administrative regions in E.O. No. 429 is based on relevant criteria, to wit: (1)
contiguity and geographical features; (2) transportation and communication facilities; (3)
cultural and language groupings; (4) land area and population; (5) existing regional centers
adopted by several agencies; (6) socio-economic development programs in the regions and
(7) number of provinces and cities.

What has been said above applies to the change of the regional center from Zamboanga City
to Pagadian City. Petitioners contend that the determination of provincial capitals has always
been by act of Congress. But as, this Court said in Abbas, 16 administrative regions are mere
"groupings of contiguous provinces for administrative purposes, . . . [They] are not territorial
and political subdivisions like provinces, cities, municipalities and barangays." There is,
therefore, no basis for contending that only Congress can change or determine regional
centers. To the contrary, the examples of P.D. Nos. 1, 742, 773 and 1555 suggest that the
power to reorganize administrative regions carries with it the power to determine the regional
center.

It may be that the transfer of the regional center in Region IX from Zamboanga City to Pagadian
City may entail the expenditure of large sums of money for the construction of buildings and
other infrastructure to house regional offices. That contention is addressed to the wisdom of
the transfer rather than to its legality and it is settled that courts are not the arbiters of the
wisdom or expediency of legislation. In any event this is a question that we will consider only if
fully briefed and upon a more adequate record than that presented by petitioners.

WHEREFORE, the petitions for certiorari and prohibition are DISMISSED for lack of merit.

SO ORDERED.

55 | C O N S T I 1
G.R. No. L-32166 October 18, 1977
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
HON. MAXIMO A. MACEREN CFI, Sta. Cruz, Laguna, JOSE BUENAVENTURA,
GODOFREDO REYES, BENJAMIN REYES, NAZARIO AQUINO and CARLO DEL
ROSARIO, accused-appellees.
Office of the Solicitor General for appellant.
Rustics F. de los Reyes, Jr. for appellees.
AQUINO, J.:têñ.£îhqwâ£
This is a case involving the validity of a 1967 regulation, penalizing electro fishing in fresh water
fisheries, promulgated by the Secretary of Agriculture and Natural Resources and the
Commissioner of Fisheries under the old Fisheries Law and the law creating the Fisheries
Commission.
On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino
and Carlito del Rosario were charged by a Constabulary investigator in the municipal court of
Sta. Cruz, Laguna with having violated Fisheries Administrative Order No. 84-1.
It was alleged in the complaint that the five accused in the morning of March 1, 1969 resorted
to electro fishing in the waters of Barrio San Pablo Norte, Sta. Cruz by "using their own motor
banca, equipped with motor; with a generator colored green with attached dynamo colored
gray or somewhat white; and electrocuting device locally known as sensored with a somewhat
webbed copper wire on the tip or other end of a bamboo pole with electric wire attachment
which was attached to the dynamo direct and with the use of these devices or equipments
catches fish thru electric current, which destroy any aquatic animals within its cuffed reach, to
the detriment and prejudice of the populace" (Criminal Case No. 5429).
Upon motion of the accused, the municipal court quashed the complaint. The prosecution
appealed. The Court of First Instance of Laguna affirmed the order of dismissal (Civil Case No.
SC-36). The case is now before this Court on appeal by the prosecution under Republic Act
No. 5440.
The lower court held that electro fishing cannot be penalize because electric current is not an
obnoxious or poisonous substance as contemplated in section I I of the Fisheries Law and that
it is not a substance at all but a form of energy conducted or transmitted by substances. The
lower court further held that, since the law does not clearly prohibit electro fishing, the executive
and judicial departments cannot consider it unlawful.
56 | C O N S T I 1
As legal background, it should be stated that section 11 of the Fisheries Law prohibits "the use
of any obnoxious or poisonous substance" in fishing.
Section 76 of the same law punishes any person who uses an obnoxious or poisonous
substance in fishing with a fine of not more than five hundred pesos nor more than five
thousand, and by imprisonment for not less than six months nor more than five years.
It is noteworthy that the Fisheries Law does not expressly punish .electro fishing."
Notwithstanding the silence of the law, the Secretary of Agriculture and Natural Resources,
upon the recommendation of the Commissioner of Fisheries, promulgated Fisheries
Administrative Order No. 84 (62 O.G. 1224), prohibiting electro fishing in all Philippine waters.
The order is quoted below: ñé+.£ªwph!1
SUBJECT: PROHIBITING ELECTRO FISHING IN ALL
WATERS ñé+.£ªwph!1
OF THE PHILIPPINES.
Pursuant to Section 4 of Act No. 4003, as amended, and Section 4 of R.A. No. 3512, the
following rules and regulations regarding the prohibition of electro fishing in all waters of the
Philippines are promulgated for the information and guidance of all concerned.ñé+.£ªwph!1
SECTION 1. — Definition. — Words and terms used in this Order 11 construed
as follows:
(a) Philippine waters or territorial waters of the Philippines' includes all waters
of the Philippine Archipelago, as defined in the t between the United States
and Spain, dated respectively the tenth of December, eighteen hundred ninety
eight and the seventh of November, nineteen hundred. For the purpose of this
order, rivers, lakes and other bodies of fresh waters are included.
(b) Electro Fishing. — Electro fishing is the catching of fish with the use of
electric current. The equipment used are of many electrical devices which may
be battery or generator-operated and from and available source of electric
current.
(c) 'Persons' includes firm, corporation, association, agent or employee.
(d) 'Fish' includes other aquatic products.
SEC. 2. — Prohibition. — It shall be unlawful for any person to engage in
electro fishing or to catch fish by the use of electric current in any portion of
the Philippine waters except for research, educational and scientific purposes
 which must be covered by a permit issued by the Secretary of Agriculture and
Natural Resources which shall be carried at all times.
SEC. 3. — Penalty. — Any violation of the provisions of this Administrative
Order shall subject the offender to a fine of not exceeding five hundred pesos
(P500.00) or imprisonment of not extending six (6) months or both at the
discretion of the Court.
SEC. 4. — Repealing Provisions. — All administrative orders or parts thereof
inconsistent with the provisions of this Administrative Order are hereby
revoked.
SEC. 5. — Effectivity. — This Administrative Order shall take effect six (60)
days after its publication in the Office Gazette.
On June 28, 1967 the Secretary of Agriculture and Natural Resources, upon the
recommendation of the Fisheries Commission, issued Fisheries Administrative Order No. 84-
1, amending section 2 of Administrative Order No. 84, by restricting the ban against electro
fishing to fresh water fisheries (63 O.G. 9963).
Thus, the phrase "in any portion of the Philippine waters" found in section 2, was changed by
the amendatory order to read as follows: "in fresh water fisheries in the Philippines, such as
rivers, lakes, swamps, dams, irrigation canals and other bodies of fresh water."
The Court of First Instance and the prosecution (p. 11 of brief) assumed that electro fishing is
punishable under section 83 of the Fisheries Law (not under section 76 thereof), which provides
that any other violation of that law "or of any rules and regulations promulgated thereunder
shall subject the offender to a fine of not more than two hundred pesos (P200), or in t for not
more than six months, or both, in the discretion of the court."
That assumption is incorrect because 3 of the aforequoted Administrative Order No. 84
imposes a fm of not exceeding P500 on a person engaged in electro fishing, which amount the
83. It seems that the Department of Fisheries prescribed their own penalty for swift fishing
which penalty is less than the severe penalty imposed in section 76 and which is not Identified
to the at penalty imposed in section 83.
Had Administrative Order No. 84 adopted the fighter penalty prescribed in on 83, then the crime
of electro fishing would be within the exclusive original jurisdiction of the inferior court (Sec. 44
[f], Judiciary Law; People vs. Ragasi, L-28663, September 22,
We have discussed this pre point, not raised in the briefs, because it is obvious that the crime
of electro fishing which is punishable with a sum up to P500, falls within the concurrent original
jurisdiction of the inferior courts and the Court of First instance (People vs. Nazareno, L-40037,
April 30, 1976, 70 SCRA 531 and the cases cited therein).
57 | C O N S T I 1
And since the instant case was filed in the municipal court of Sta. Cruz, Laguna, a provincial
capital, the order of d rendered by that municipal court was directly appealable to the Court,
not to the Court of First Instance of Laguna (Sec. 45 and last par. of section 87 of the Judiciary
Law; Esperat vs. Avila, L-25992, June 30, 1967, 20 SCRA 596).
It results that the Court of First Instance of Laguna had no appellate jurisdiction over the case.
Its order affirming the municipal court's order of dismissal is void for lack of motion. This appeal
shall be treated as a direct appeal from the municipal court to this Court. (See People vs. Del
Rosario, 97 Phil. 67).
In this appeal, the prosecution argues that Administrative Orders Nos. 84 and 84-1 were not
issued under section 11 of the Fisheries Law which, as indicated above, punishes fishing by
means of an obnoxious or poisonous substance. This contention is not well-taken because, as
already stated, the Penal provision of Administrative Order No. 84 implies that electro fishing
is penalized as a form of fishing by means of an obnoxious or poisonous substance under
section 11.
The prosecution cites as the legal sanctions for the prohibition against electro fishing in fresh
water fisheries (1) the rule-making power of the Department Secretary under section 4 of the
Fisheries Law; (2) the function of the Commissioner of Fisheries to enforce the provisions of
the Fisheries Law and the regulations Promulgated thereunder and to execute the rules and
regulations consistent with the purpose for the creation of the Fisheries Commission and for
the development of fisheries (Sec. 4[c] and [h] Republic Act No. 3512; (3) the declared national
policy to encourage, Promote and conserve our fishing resources (Sec. 1, Republic Act No.
3512), and (4) section 83 of the Fisheries Law which provides that "any other violation of" the
Fisheries Law or of any rules and regulations promulgated thereunder "shall subject the
offender to a fine of not more than two hundred pesos, or imprisonment for not more than six
months, or both, in the discretion of the court."
As already pointed out above, the prosecution's reference to section 83 is out of place because
the penalty for electro fishing under Administrative order No. 84 is not the same as the penalty
fixed in section 83.
We are of the opinion that the Secretary of Agriculture and Natural Resources and the
Commissioner of Fisheries exceeded their authority in issuing Fisheries Administrative Orders
Nos. 84 and 84-1 and that those orders are not warranted under the Fisheries Commission,
Republic Act No. 3512.
The reason is that the Fisheries Law does not expressly prohibit electro fishing. As electro
fishing is not banned under that law, the Secretary of Agriculture and Natural Resources and
the Commissioner of Fisheries are powerless to penalize it. In other words, Administrative
Orders Nos. 84 and 84-1, in penalizing electro fishing, are devoid of any legal basis.
Had the lawmaking body intended to punish electro fishing, a penal provision to that effect
could have been easily embodied in the old Fisheries Law.
That law punishes (1) the use of obnoxious or poisonous substance, or explosive in fishing; (2)
unlawful fishing in deepsea fisheries; (3) unlawful taking of marine molusca, (4) illegal taking
of sponges; (5) failure of licensed fishermen to report the kind and quantity of fish caught, and
(6) other violations.
Nowhere in that law is electro fishing specifically punished. Administrative Order No. 84, in
punishing electro fishing, does not contemplate that such an offense fails within the category
of "other violations" because, as already shown, the penalty for electro fishing is the penalty
next lower to the penalty for fishing with the use of obnoxious or poisonous substances, fixed
in section 76, and is not the same as the penalty for "other violations" of the law and regulations
fixed in section 83 of the Fisheries Law.
The lawmaking body cannot delegate to an executive official the power to declare what acts
should constitute an offense. It can authorize the issuance of regulations and the imposition of
the penalty provided for in the law itself. (People vs. Exconde 101 Phil. 11 25, citing 11 Am.
Jur. 965 on p. 11 32).
Originally, Administrative Order No. 84 punished electro fishing in all waters. Later, the ban
against electro fishing was confined to fresh water fisheries. The amendment created the
impression that electro fishing is not condemnable per se. It could be tolerated in marine
waters. That circumstances strengthens the view that the old law does not eschew all forms of
electro fishing.
However, at present, there is no more doubt that electro fishing is punishable under the
Fisheries Law and that it cannot be penalized merely by executive revolution because
Presidential Decree No. 704, which is a revision and consolidation of all laws and decrees
affecting fishing and fisheries and which was promulgated on May 16, 1975 (71 O.G. 4269),
expressly punishes electro fishing in fresh water and salt water areas.
That decree provides: ñé+.£ªwph!1
SEC. 33. — Illegal fishing, dealing in illegally caught fish or fishery/aquatic
products. — It shall he unlawful for any person to catch, take or gather or cause
to be caught, taken or gathered fish or fishery/aquatic products in Philippine
waters with the use of explosives, obnoxious or poisonous substance, or by
the use of electricity as defined in paragraphs (1), (m) and (d), respectively, of
Section 3 hereof: ...
The decree Act No. 4003, as amended, Republic Acts Nos. 428, 3048, 3512 and 3586,
Presidential Decrees Nos. 43, 534 and 553, and all , Acts, Executive Orders, rules and
regulations or parts thereof inconsistent with it (Sec. 49, P. D. No. 704).
The inclusion in that decree of provisions defining and penalizing electro fishing is a clear
recognition of the deficiency or silence on that point of the old Fisheries Law. It is an admission
that a mere executive regulation is not legally adequate to penalize electro fishing.
58 | C O N S T I 1
Note that the definition of electro fishing, which is found in section 1 (c) of Fisheries
Administrative Order No. 84 and which is not provided for the old Fisheries Law, is now found
in section 3(d) of the decree. Note further that the decree penalty electro fishing by
"imprisonment from two (2) to four (4) years", a punishment which is more severe than the
penalty of a time of not excluding P500 or imprisonment of not more than six months or both
fixed in section 3 of Fisheries Administrative Order No. 84.
An examination of the rule-making power of executive officials and administrative agencies
and, in particular, of the Secretary of Agriculture and Natural Resources (now Secretary of
Natural Resources) under the Fisheries Law sustains the view that he ex his authority in
penalizing electro fishing by means of an administrative order.
Administrative agent are clothed with rule-making powers because the lawmaking body finds
it impracticable, if not impossible, to anticipate and provide for the multifarious and complex
situations that may be encountered in enforcing the law. All that is required is that the regulation
should be germane to the defects and purposes of the law and that it should conform to the
standards that the law prescribes (People vs. Exconde 101 Phil. 1125; Director of Forestry vs.
Muñ;oz, L-24796, June 28, 1968, 23 SCRA 1183, 1198; Geukeko vs. Araneta, 102 Phil. 706,
712).
The lawmaking body cannot possibly provide for all the details in the enforcement of a particular
statute (U.S. vs. Tupasi Molina, 29 Phil. 119, 125, citing U.S. vs. Grimaud 220 U.S. 506;
Interprovincial Autobus Co., Inc. vs. Coll. of Internal Revenue, 98 Phil. 290, 295-6).
The grant of the rule-making power to administrative agencies is a relaxation of the principle of
separation of powers and is an exception to the nondeleption of legislative, powers.
Administrative regulations or "subordinate legislation calculated to promote the public interest
are necessary because of "the growing complexity of modem life, the multiplication of the
subjects of governmental regulations, and the increased difficulty of administering the law"
Calalang vs. Williams, 70 Phil. 726; People vs. Rosenthal and Osmeñ;a, 68 Phil. 328).
Administrative regulations adopted under legislative authority by a particular department must
be in harmony with the provisions of the law, and should be for the sole purpose of carrying
into effect its general provisions. By such regulations, of course, the law itself cannot be
extended. (U.S. vs. Tupasi Molina, supra). An administrative agency cannot amend an act of
Congress (Santos vs. Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the d of
Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-
28952, December 29, 1971, 42 SCRA 660; Deluao vs. Casteel, L-21906, August 29, 1969, 29
SCRA 350).
The rule-making power must be confined to details for regulating the mode or proceeding to
carry into effect the law as it his been enacted. The power cannot be extended to amending or
expanding the statutory requirements or to embrace matters not covered by the statute. Rules
that subvert the statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax A
93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations, see of Internal Revenue vs.
Villaflor 69 Phil. 319, Wise & Co. vs. Meer, 78 Phil. 655, 676; Del March vs. Phil. Veterans
Administrative, L-27299, June 27, 1973, 51 SCRA 340, 349).
There is no question that the Secretary of Agriculture and Natural Resources has rule-making
powers. Section 4 of the Fisheries law provides that the Secretary "shall from time to time issue
instructions, orders, and regulations consistent" with that law, "as may be and proper to carry
into effect the provisions thereof." That power is now vested in the Secretary of Natural
Resources by on 7 of the Revised Fisheries law, Presidential December No. 704.
Section 4(h) of Republic Act No. 3512 empower the Co of Fisheries "to prepare and execute
upon the approval of the Secretary of Agriculture and Natural Resources, forms instructions,
rules and regulations consistent with the purpose" of that enactment "and for the development
of fisheries."
Section 79(B) of the Revised Administrative Code provides that "the Department Head shall
have the power to promulgate, whenever he may see fit do so, all rules, regulates, orders,
memorandums, and other instructions, not contrary to law, to regulate the proper working and
harmonious and efficient administration of each and all of the offices and dependencies of his
Department, and for the strict enforcement and proper execution of the laws relative to matters
under the jurisdiction of said Department; but none of said rules or orders shall prescribe
penalties for the violation thereof, except as expressly authorized by law."
Administrative regulations issued by a Department Head in conformity with law have the force
of law (Valerie vs. Secretary of culture and Natural Resources, 117 Phil. 729, 733; Antique
Sawmills, Inc. vs. Zayco, L- 20051, May 30, 1966, 17 SCRA 316). As he exercises the rule-
making power by delegation of the lawmaking body, it is a requisite that he should not
transcend the bound demarcated by the statute for the exercise of that power; otherwise, he
would be improperly exercising legislative power in his own right and not as a surrogate of the
lawmaking body.
Article 7 of the Civil Code embodies the basic principle that administrative or executive acts,
orders and regulations shall be valid only when they are not contrary to the laws or the
Constitution."
As noted by Justice Fernando, "except for constitutional officials who can trace their
competence to act to the fundamental law itself, a public office must be in the statute relied
upon a grant of power before he can exercise it." "department zeal may not be permitted to
outrun the authority conferred by statute." (Radio Communications of the Philippines, Inc. vs.
Santiago, L-29236, August 21, 1974, 58 SCRA 493, 496-8).
"Rules and regulations when promulgated in pursuance of the procedure or authority conferred
upon the administrative agency by law, partake of the nature of a statute, and compliance
therewith may be enforced by a penal sanction provided in the law. This is so because statutes
are usually couched in general terms, after expressing the policy, purposes, objectives,
remedies and sanctions intended by the legislature. The details and the manner of carrying out
59 | C O N S T I 1
the law are oftentimes left to the administrative agency entrusted with its enforcement. In this
sense, it has been said that rules and regulations are the product of a delegated power to
create new or additional legal provisions that have the effect of law." The rule or regulation
should be within the scope of the statutory authority granted by the legislature to the
administrative agency. (Davis, Administrative Law, p. 194, 197, cited in Victories Milling Co.,
Inc. vs. Social Security Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or regulation issued to implement said
law, the basic law prevails because said rule or regulation cannot go beyond the terms and
provisions of the basic law (People vs. Lim, 108 Phil. 1091).
This Court in its decision in the Lim case, supra, promulgated on July 26, 1960, called the
attention of technical men in the executive departments, who draft rules and regulations, to the
importance and necessity of closely following the legal provisions which they intend to
implement so as to avoid any possible misunderstanding or confusion.
The rule is that the violation of a regulation prescribed by an executive officer of the government
in conformity with and based upon a statute authorizing such regulation constitutes an offense
and renders the offender liable to punishment in accordance with the provisions of the law (U.S.
vs. Tupasi Molina, 29 Phil. 119, 124).
In other words, a violation or infringement of a rule or regulation validly issued can constitute a
crime punishable as provided in the authorizing statute and by virtue of the latter (People vs.
Exconde 101 Phil. 1125, 1132).
It has been held that "to declare what shall constitute a crime and how it shall be punished is a
power vested exclusively in the legislature, and it may not be delegated to any other body or
agency" (1 Am. Jur. 2nd, sec. 127, p. 938; Texas Co. vs. Montgomery, 73 F. Supp. 527).
In the instant case the regulation penalizing electro fishing is not strictly in accordance with the
Fisheries Law, under which the regulation was issued, because the law itself does not
expressly punish electro fishing.
The instant case is similar to People vs. Santos, 63 Phil. 300. The Santos case involves section
28 of Fish and Game Administrative Order No. 2 issued by the Secretary of Agriculture and
Natural Resources pursuant to the aforementioned section 4 of the Fisheries Law.
Section 28 contains the proviso that a fishing boat not licensed under the Fisheries Law and
under the said administrative order may fish within three kilometers of the shoreline of islands
and reservations over which jurisdiction is exercised by naval and military reservations
authorities of the United States only upon receiving written permission therefor, which
permission may be granted by the Secretary upon recommendation of the military or naval
authorities concerned. A violation of the proviso may be proceeded against under section 45
of the Federal Penal Code.
Augusto A. Santos was prosecuted under that provision in the Court of First Instance of Cavite
for having caused his two fishing boats to fish, loiter and anchor without permission from the
Secretary within three kilometers from the shoreline of Corrigidor Island.
This Court held that the Fisheries Law does not prohibit boats not subject to license from fishing
within three kilometers of the shoreline of islands and reservations over which jurisdiction is
exercised by naval and military authorities of the United States, without permission from the
Secretary of Agriculture and Natural Resources upon recommendation of the military and naval
authorities concerned.
As the said law does not penalize the act mentioned in section 28 of the administrative order,
the promulgation of that provision by the Secretary "is equivalent to legislating on the matter, a
power which has not been and cannot be delegated to him, it being expressly reserved" to the
lawmaking body. "Such an act constitutes not only an excess of the regulatory power conferred
upon the Secretary but also an exercise of a legislative power which he does not have, and
therefore" the said provision "is null and void and without effect". Hence, the charge against
Santos was dismiss.
animals. For that act, he was charged with a violation of the rule Promulgated by the State
Game Commission.
It was held that there was no statute penalizing the display of game. What the statute penalized
was the taking of game. If the lawmaking body desired to prohibit the display of game, it could
have readily said so. It was not lawful for the administrative board to extend or modify the
statute. Hence, the indictment against Miles was quashed. The Miles case is similar to this
case.
WHEREFORE, the lower court's decision of June 9, 1970 is set aside for lack of appellate
jurisdiction and the order of dismissal rendered by the municipal court of Sta. Cruz, Laguna in
Criminal Case No. 5429 is affirmed. Costs de oficio.
SO ORDERED.

A penal statute is strictly construed. While an administrative agency has the right to make ranks
and regulations to carry into effect a law already enacted, that power should not be confused
with the power to enact a criminal statute. An administrative agency can have only the
administrative or policing powers expressly or by necessary implication conferred upon it.
(Glustrom vs. State, 206 Ga. 734, 58 Second 2d 534; See 2 Am. Jr. 2nd 129-130).

Where the legislature has delegated to executive or administrative officers and boards authority
to promulgate rules to carry out an express legislative purpose, the rules of administrative
officers and boards, which have the effect of extending, or which conflict with the authority
granting statute, do not represent a valid precise of the rule-making power but constitute an
attempt by an administrative body to legislate (State vs. Miles, Wash. 2nd 322, 105 Pac. 2nd
51).

In a prosecution for a violation of an administrative order, it must clearly appear that the order
is one which falls within the scope of the authority conferred upon the administrative body, and
the order will be scrutinized with special care. (State vs. Miles supra).

The Miles case involved a statute which authorized the State Game Commission "to adopt,
promulgate, amend and/or repeal, and enforce reasonable rules and regulations governing
and/or prohibiting the taking of the various classes of game.

Under that statute, the Game Commission promulgated a rule that "it shall be unlawful to offer,
pay or receive any reward, prize or compensation for the hunting, pursuing, taking, killing
or displaying of any game animal, game bird or game fish or any part thereof."

Beryl S. Miles, the owner of a sporting goods store, regularly offered a ten-down cash prize to
the person displaying the largest deer in his store during the open for hunting such game
60 | C O N S T I 1
G.R. No. 82849 August 2, 1989
CEBU OXYGEN & ACETYLENE CO., INC. (COACO) petitioner,
vs.
SECRETARY FRANKLIN M. DRILON OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, ASSISTANT REGIONAL DIRECTOR CANDIDO CUMBA OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7 AND CEBU
OXYGEN-ACETYLENE & CENTRAL VISAYAS EMPLOYEES ASSOCIATION
(COACVEA) respondents.
Michael L. Rama for petitioner.
Armando M. Alforque for private respondent.
GANCAYCO, J.;
The principal issue raised in this petition is whether or not an Implementing Order of the
Secretary of Labor and Employment (DOLE) can provide for a prohibition not contemplated by
the law it seeks to implement.
The undisputed facts are as follows:
Petitioner and the union of its rank and file employees, Cebu Oxygen, Acetylene and Central
Visayas Employees Association (COAVEA) entered into a collective bargaining agreement
(CBA) covering the years 1986 to 1988. Pursuant thereto, the management gave salary
increases as follows:
ARTICLE IV — SALARIES/RICE RATION
Section 1. The COMPANY agrees that for and during the three (3) year
effectivity of this AGREEMENT, it will grant to all regular covered employees
the following salary increases:
Salaries:
1) For the first year which will be paid on January 14, 1986 — P200 to each
covered employee.
IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY
INCREASE SHALL BE CREDITED AS PAYMENT TO ANY MANDATED
GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES
61 | C O N S T I 1
WHICH MAY BE ISSUED BY WAY OF LEGISLATION, DECREE OR
PRESIDENT
2) For the second year which will be paid on January 16, 1987-P 200 to each
covered employee.
IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY
INCREASE SHALL BE CREDITED AS PAYMENT TO ANY DATED
GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES
WHICH MAY BE ISSUED BY WAY OF LEGISLATION, DECREE OR
PRESIDENTIAL EDICT COUNTED FROM THE ABOVE DATE TO THE NEXT
INCREASE.
3) For the third year which will be paid on January 16, 1988 — P300 to each
covered employee.
IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY
INCREASE SHALL BE CREDITED AS PAYMENT TO ANY MANDATED
GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES
WHICH MAY BE ISSUED BY WAY OF LEGISLATION, DECREE OR
PRESIDENTIAL EDICT COUNTED FROM THE ABOVE DATE TO THE NEXT
INCREASE.
IF THE WAGE ADJUSTMENT OF ALLOWANCE INCREASES DECREED BY
LAW, LEGISLATION OR PRESIDENTIAL qqqEDICT IN ANY PARTICULAR
YEAR SHALL BE HIGHER THAN THE FOREGOING INCREASES IN THAT
PARTICULAR YEAR, THEN THE COMPANY SHALL PAY THE
DIFFERENCE.
On December 14, 1987, Republic Act No. 6640 was passed increasing the minimum wage, as
follows:
Sec. 2. The statutory minimum wage rates of workers and employees in the
private sector, whether agricultural or non-agricultural, shall be increased by
ten pesos (P10.00) per day, except non-agricultural workers and employees
outside Metro Manila who shall receive an increase of eleven pesos (P11.00)
per day: Provided, that those already receiving above the minimum wage up
to one hundred pesos (Pl 00.00 shall receive an increase of ten pesos (Pl 0.00)
per day. Excepted from the provisions of this Act are domestic helpers and
persons employed in the personal service of another.
The Secretary of Labor issued the pertinent rules implementing the provisions of Republic Act
No. 6640. Section 8 thereof provides:
 Section 8. Wage Increase Under Individual/Collective Agreements. — No
wage increase shall be credited as compliance with the increase prescribed
herein unless expressly provided under valid individual written/collective
agreements; and, provided further, that such wage increase was granted in
anticipation of the legislated wage increase under the act. Such increases shall
not include anniversary wage increases provided on collective agreements.
In sum, Section 8 of the implementing rules prohibits the employer from crediting anniversary
wage increases negotiated under a collective bargaining agreement against such wage
increases mandated by Republic Act No. 6640.
Accordingly, petitioner credited the first year increase of P200.00 under the CBA and added
the difference of P61.66 (rounded to P62.00) and P31.00 to the monthly salary and the 13th
month pay, respectively, of its employees from the effectivity of Republic Act No. 6640 on
December 14,1987 to February 15, 1988.
On February 22, 1988, a Labor and Employment Development Officer, pursuant to Inspection
Authority No. 058-88, commenced a routine inspection of petitioner's establishment. Upon
completion of the inspection on March 10, 1988, and based on payrolls and other records, he
found that petitioner committed violations of the law as follows:
1. Under payment of Basic Wage per R.A. No. 6640 covering the period of two
(2) months representing 208 employees who are not receiving wages above
P100/day prior to the effectivity of R.A. No. 6640 in the aggregate amount of
EIGHTY THREE THOUSAND AND TWO HUNDRED PESOS (P83,200.00);
and
2. Under payment of 13th month pay for the year 1987, representing 208
employees who are not receiving wages above P 100/day prior to the
effectivity of R.A. No. 6640 in the aggregate amount of FORTY EIGHT
THOUSAND AND FORTY EIGHT PESOS (P48,048.00).
On April 7, 1988, respondent Assistant Regional Director, issued an Order instructing petitioner
to pay its 208 employees the aggregate amount of P 131,248.00, computed as follows:
Computation sheet of differentials due to COACO-Cebu Workers.
Salary Differentials:
a) From December 14/87 to February 15/88
= P200.00/mo x 2 months
= P400.00
62 | C O N S T I 1
= P400 x 208 employees (who are not receiving above P100/day as wages
before the effectivity of R.A. No. 6640)
=P 83,200.00
b) 13th month pay differentials of the year 1987:
= P231.00 x 208 employees (who are not receiving above P100/day as wages
before the effectivity of RA. No. 6640)
=P48,048.00
Total = P131,248.00
In sum, the Assistant Regional Director ordered petitioner to pay the deficiency of P200.00 in
the monthly salary and P 231.00 in the 13th month pay of its employees for the period stated.
Petitioner protested the Order of the Regional Director on the ground that the anniversary wage
increases under the CBA can be credited against the wage increase mandated by Republic
Act No. 6640. Hence, petitioner contended that inasmuch as it had credited the first year
increase negotiated under the CBA, it was liable only for a salary differential of P 62.00 and a
13th month pay differential of P31.00. Petitioner argued that the payment of the differentials
constitutes full compliance with Republic Act No. 6640. Apparently, the protest was not
entertained. Petitioner brought the case immediately to this Court without appealing the matter
to the Secretary of Labor and Employment. On May 9,1988, this Court issued a temporary
restraining order enjoining the Assistant Regional Director from enforcing his Order dated April
7, 1988.1The thrust of the argument of petitioner is that Section 8 of the rules implementing the
provisions of Republic Act No. 6640 particularly the provision excluding anniversary wage
increases from being credited to the wage increase provided by said law is null and void on the
ground that the same unduly expands the provisions of the said law.
This petition is impressed with merit.
Public respondents aver that petitioner should have first appealed to the Secretary of Labor
before going to court. It is fundamental that in a case where only pure questions of law are
raised, the doctrine of exhaustion of administrative remedies cannot apply because issues of
law cannot be resolved with finality by the administrative officer. Appeal to the administrative
officer of orders involving questions of law would be an exercise in futility since administrative
officers cannot decide such issues with finality. 2 The questions raised in this petition are
questions of law. Hence, the failure to exhaust administrative remedies cannot be considered
fatal to this petition.
As to the issue of the validity of Section 8 of the rules implementing Republic Act No. 6640,
which prohibits the employer from crediting the anniversary wage increases provided in
collective bargaining agreements, it is a fundamental rule that implementing rules cannot add
or detract from the provisions of law it is designed to implement. The provisions of Republic
Act No. 6640, do not prohibit the crediting of CBA anniversary wage increases for purposes of
compliance with Republic Act No. 6640. The implementing rules cannot provide for such a
prohibition not contemplated by the law. Administrative regulations adopted under legislative
authority by a particular department must be in harmony with the provisions of the law, and
should be for the sole purpose of carrying into effect its general provisions. The law itself cannot
be expanded by such regulations. An administrative agency cannot amend an act of
Congress. 3 Thus petitioner's contention that the salary increases granted by it pursuant to the
existing CBA including anniversary wage increases should be considered in determining
compliance with the wage increase mandated by Republic Act No. 6640, is correct. However,
the amount that should only be credited to petitioner is the wage increase for 1987 under the
CBA when the law took effect. The wage increase for 1986 had already accrued in favor of the
employees even before the said law was enacted.

Petitioner therefor correctly credited its employees P62.00 for the differential of two (2) months
increase and P31.00 each for the differential in 13th month pay, after deducting the P200.00
anniversary wage increase for 1987 under the CBA. Indeed, it is stipulated in the CBA that in
case any wage adjustment or allowance increase decreed by law, legislation or presidential
edict in any particular year shall be higher than the foregoing increase in that particular year,
then the company (petitioner) shall pay the difference.

WHEREFORE, the petition is hereby GRANTED. The Order of the respondent Assistant
Regional Director dated April 7, 1988 is modified in that petitioner is directed to pay its 208
employees so entitled the amount of P62.00 each as salary differential for two (2) months and
P31.00 as 13th month pay differential in full compliance with the provisions of Republic Act No.
6640. Section 8 of the rules implementing Republic 6640, is hereby declared null and void in
so far as it excludes the anniversary wage increases negotiated under collective bargaining
agreements from being credited to the wage increase provided for under Republic Act No.
6440. This decision is immediately executory.

SO ORDERED.

63 | C O N S T I 1
G.R. Nos. 177857-58 January 24, 2012 The original complaint, CC No. 0033, as later amended to make the allegations more specific,
is described in Republic v. Sandiganbayan2 (one of several ill-gotten suits of the same title
PHILIPPINE COCONUT, PRODUCERS FEDERATION, INC. (COCOFED), MANUEL V. DEL disposed of by the Court) as revolving around the provisional take over by the PCGG of
ROSARIO, DOMINGO P. ESPINA, SALVADOR P. BALLARES, JOSELITO A. MORALEDA, COCOFED, Cocomark, and Coconut Investment Company and their assets and the
PAZ M. YASON, VICENTE A. CADIZ, CESARIA DE LUNA TITULAR, and RAYMUNDO C. sequestration of shares of stock in United Coconut Planters Bank (UCPB) allegedly owned by,
DE VILLA, Petitioners, among others, over a million coconut farmers, and the six (6) Coconut Industry Investment
vs. Fund (CIIF) corporations,3 referred to in some pleadings as CIIF oil mills and the fourteen (14)
REPUBLIC OF THE PHILIPPINES, Respondent, CIIF holding companies4(hereafter collectively called "CIIF companies"), so-called for having
WIGBERTO E. TAÑADA, OSCAR F. SANTOS, SURIGAO DEL SUR FEDERATION OF been either organized, acquired and/or funded as UCPB subsidiaries with the use of the CIIF
AGRICULTURAL COOPERATIVES (SUFAC) and MORO FARMERS ASSOCIATION OF levy. The basic complaint also contained allegations about the alleged misuse of the coconut
ZAMBOANGA DEL SUR (MOFAZS), represented by ROMEO C. levy funds to buy out the majority of the outstanding shares of stock of San Miguel Corporation
ROYANDOYAN, Intervenors. (SMC).

x - - - - - - - - - - - - - - - - - - - - - - -x More particularly, in G.R. Nos. 177857-58, class action petitioners COCOFED and a group of
purported coconut farmers and COCOFED members (hereinafter "COCOFED et al."
G.R. No. 178193 collectively)5 seek the reversal of the following judgments and resolutions of the anti-graft court
insofar as these issuances are adverse to their interests:
DANILO S. URSUA, Petitioner,
1) Partial Summary Judgment6 dated July 11, 2003, as reiterated in a resolution 7 of
vs.
December 28, 2004, denying COCOFED’s motion for reconsideration, and the May
REPUBLIC OF THE PHILIPPINES, Respondent,
11, 2007 resolution denying COCOFED’s motion to set case for trial and declaring the
partial summary judgment final and appealable, 8 all issued in Civil Case No. 0033-A;
DECISION and

VELASCO, JR., J.:
The Case
Cast against a similar backdrop, these consolidated petitions for review under Rule 45 of the
Rules of Court assail and seek to annul certain issuances of the Sandiganbayan in its Civil
Case No. 0033-A entitled, "Republic of the Philippines, Plaintiff, v. Eduardo M. Cojuangco, Jr.,
et al., Defendants, COCOFED, et al., BALLARES, et al., Class Action Movants," and Civil Case
No. 0033-F entitled, "Republic of the Philippines, Plaintiff, v. Eduardo M. Cojuangco, Jr., et al.,
Defendants." Civil Case (CC) Nos. 0033-A and 0033-F are the results of the splitting into eight
(8) amended complaints of CC No. 0033 entitled, "Republic of the Philippines v. Eduardo
Cojuangco, Jr., et al.," a suit for recovery of ill-gotten wealth commenced by the Presidential
Commission on Good Government (PCGG), for the Republic of the Philippines (Republic),
against Ferdinand E. Marcos and several individuals, among them, Ma. Clara Lobregat
(Lobregat) and petitioner Danilo S. Ursua (Ursua). Lobregat and Ursua occupied, at one time
or another, directorial or top management positions in either the Philippine Coconut Producers
Federation, Inc. (COCOFED) or the Philippine Coconut Authority (PCA), or both. 1 Each of the
eight (8) subdivided complaints correspondingly impleaded as defendants only the alleged
participants in the transaction/s subject of the suit, or who are averred as owner/s of the assets
involved.
2) Partial Summary Judgment9 dated May 7, 2004, as also reiterated in a resolution 10 of
December 28, 2004, and the May 11, 2007 resolution11 issued in Civil Case No. 0033-
F. The December 28, 2004 resolution denied COCOFED’s Class Action Omnibus
Motion therein praying to dismiss CC Case No. 0033-F on jurisdictional ground and
alternatively, reconsideration and to set case for trial. The May 11, 2007 resolution
declared the judgment final and appealable.
For convenience, the partial summary judgment (PSJ) rendered on July 11, 2003 in CC No.
0033-A shall hereinafter be referred to as PSJ-A, and that issued on May 7, 2004 in CC 0033-
F, as PSJ-F. PSJ-A and PSJ-F basically granted the Republic’s separate motions for summary
judgment.
On June 5, 2007, the court a quo issued a Resolution in CC No. 0033-A, which modified PSJ-
A by ruling that no further trial is needed on the issue of ownership of the subject properties.
Likewise, on May 11, 2007, the said court issued a Resolution in CC No. 0033-F amending
PSJ-F in like manner.
On the other hand, petitioner Ursua, in G.R. No. 178193, limits his petition for review on PSJ-
A to the extent that it negates his claims over shares of stock in UCPB.

Tañada, et al. have intervened12 in G.R. Nos. 177857-58 in support of the government’s case.
64 | C O N S T I 1
Another petition was filed and docketed as G.R. No. 180705. It involves questions relating to
Eduardo M. Cojuangco, Jr.’s (Cojuangco, Jr.’s) ownership of the UCPB shares, which he
allegedly received as option shares, and which is one of the issues raised in PSJ-A.13 G.R. No.
180705 was consolidated with G.R. Nos. 177857-58 and 178193. On September 28, 2011,
respondent Republic filed a Motion to Resolve G.R. Nos. 177857-58 and 178193.14 On January
17, 2012, the Court issued a Resolution deconsolidating G.R. Nos. 177857-58 and 178193
from G.R. No. 180705. This Decision is therefore separate and distinct from the decision to be
rendered in G.R. No. 180705.
The Facts
The relevant facts, as culled from the records and as gathered from Decisions of the Court in
a batch of coco levy and illegal wealth cases, are:
In 1971, Republic Act No. (R.A.) 6260 was enacted creating the Coconut Investment Company
(CIC) to administer the Coconut Investment Fund (CIF), which, under Section 8 15 thereof, was
to be sourced from a PhP 0.55 levy on the sale of every 100 kg. of copra. Of the PhP 0.55 levy
of which the copra seller was, or ought to be, issued COCOFUND receipts, PhP 0.02 was
placed at the disposition of COCOFED, the national association of coconut producers declared
by the Philippine Coconut Administration (PHILCOA, now PCA16 ) as having the largest
membership.17
The declaration of martial law in September 1972 saw the issuance of several presidential
decrees ("P.Ds.") purportedly designed to improve the coconut industry through the collection
and use of the coconut levy fund. While coming generally from impositions on the first sale of
copra, the coconut levy fund came under various names, the different establishing laws and
the stated ostensible purpose for the exaction explaining the differing denominations. Charged
with the duty of collecting and administering the Fund was PCA. 18 Like COCOFED with which
it had a legal linkage,19 the PCA, by statutory provisions scattered in different coco levy
decrees, had its share of the coco levy.20
The following were some of the issuances on the coco levy, its collection and utilization, how
the proceeds of the levy will be managed and by whom, and the purpose it was supposed to
serve:
1. P.D. No. 276 established the Coconut Consumers Stabilization Fund (CCSF) and
declared the proceeds of the CCSF levy as trust fund, 21 to be utilized to subsidize the
sale of coconut-based products, thus stabilizing the price of edible oil. 22
2. P.D. No. 582 created the Coconut Industry Development Fund (CIDF) to finance the
operation of a hybrid coconut seed farm.
3. Then came P.D. No. 755 providing under its Section 1 the following:
65 | C O N S T I 1
It is hereby declared that the policy of the State is to provide readily available
credit facilities to the coconut farmers at a preferential rates; that this policy
can be expeditiously and efficiently realized by the implementation of the
"Agreement for the Acquisition of a Commercial Bank for the benefit of
Coconut Farmers" executed by the [PCA]…; and that the [PCA] is hereby
authorized to distribute, for free, the shares of stock of the bank it acquired to
the coconut farmers….
Towards achieving the policy thus declared, P.D. No. 755, under its Section 2,
authorized PCA to utilize the CCSF and the CIDF collections to acquire a
commercial bank and deposit the CCSF levy collections in said bank,
interest free, the deposit withdrawable only when the bank has attained a
certain level of sufficiency in its equity capital. The same section also decreed
that all levies PCA is authorized to collect shall not be considered as special
and/or fiduciary funds or form part of the general funds of the government
within the contemplation of P.D. No. 711.23
4. P.D. No. 961 codified the various laws relating to the development of coconut/palm
oil industries.
5. The relevant provisions of P.D. No. 961, as later amended by P.D. No. 1468
(Revised Coconut Industry Code), read:
ARTICLE III
Levies
Section 1. Coconut Consumers Stabilization Fund Levy. — The [PCA] is hereby empowered
to impose and collect … the Coconut Consumers Stabilization Fund Levy ….
….
Section 5. Exemption. — The [CCSF] and the [CIDF] as well as all disbursements as herein
authorized, shall not be construed … as special and/or fiduciary funds, or as part of the
general funds of the national government within the contemplation of PD 711; … the
intention being that said Fund and the disbursements thereof as herein authorized for
the benefit of the coconut farmers shall be owned by them in their private capacities: ….
(Emphasis supplied.)
6. Letter of Instructions No. (LOI) 926, Series of 1979, made reference to the creation, out of
other coco levy funds, of the Coconut Industry Investment Fund (CIIF) in P.D. No. 1468 and
entrusted a portion of the CIIF levy to UCPB for investment, on behalf of coconut farmers, in
oil mills and other private corporations, with the following equity ownership structure: 24
Section 2. Organization of the Cooperative Endeavor. – The [UCPB], in its capacity as the
investment arm of the coconut farmers thru the [CIIF] … is hereby directed to invest, on behalf
of the coconut farmers, such portion of the CIIF … in private corporations … under the following
guidelines:
a) The coconut farmers shall own or control at least … (50%) of the outstanding voting capital
stock of the private corporation [acquired] thru the CIIF and/or corporation owned or controlled
by the farmers thru the CIIF …. (Words in bracket added.)
Through the years, a part of the coconut levy funds went directly or indirectly to various projects
and/or was converted into different assets or investments.25 Of particular relevance to this case
was their use to acquire the First United Bank (FUB), later renamed UCPB, and the
acquisition by UCPB, through the CIIF companies, of a large block of SMC shares. 26
Apropos the intended acquisition of a commercial bank for the purpose stated earlier, it would
appear that FUB was the bank of choice which the Pedro Cojuangco group (collectively, "Pedro
Cojuangco") had control of. The plan, then, was for PCA to buy all of Pedro Cojuangco’s shares
in FUB. However, as later events unfolded, a simple direct sale from the seller (Pedro) to PCA
did not ensue as it was made to appear that Cojuangco, Jr. had the exclusive option to acquire
the former’s FUB controlling interests. Emerging from this elaborate, circuitous arrangement
were two deeds; the first, simply denominated as Agreement,27 dated May 1975,28 entered into
by and between Cojuangco, Jr., for and in his behalf and in behalf of "certain other buyers,"
and Pedro Cojuangco, purportedly accorded Cojuangco, Jr. the option to buy 72.2% of FUB’s
outstanding capital stock, or 137,866 shares (the "option shares," for brevity), at PhP 200 per
share.
The second but related contract, dated May 25, 1975, was denominated as Agreement for the
Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers of the Philippines. 29 It
had PCA,30 for itself and for the benefit of the coconut farmers, purchase from Cojuangco, Jr.
the shares of stock subject of the First Agreement for PhP 200 per share. As additional
consideration for PCA’s buy-out of what Cojuangco, Jr. would later claim to be his exclusive
and personal option,31 it was stipulated that, from PCA, Cojuangco, Jr. shall receive equity in
FUB amounting to 10%, or 7.22%, of the 72.2%, or fully paid shares.
Apart from the aforementioned 72.2%, PCA purchased from other FUB shareholders 6,534
shares.
While the 64.98% portion of the option shares (72.2% – 7.22% = 64.98%) ostensibly pertained
to the farmers, the corresponding stock certificates supposedly representing the farmers’ equity
were in the name of and delivered to PCA.32 There were, however, shares forming part of the
aforesaid 64.98% portion, which ended up in the hands of non-farmers.33 The remaining 27.8%
of the FUB capital stock were not covered by any of the agreements.
Under paragraph 8 of the second agreement, PCA agreed to expeditiously distribute the FUB
shares purchased to such "coconut farmers holding registered COCOFUND receipts" on
equitable basis.
66 | C O N S T I 1
As found by the Sandiganbayan, the PCA appropriated, out of its own fund, an amount for the
purchase of the said 72.2% equity, albeit it would later reimburse itself from the coconut levy
fund.34
As of June 30, 1975, the list of FUB stockholders shows PCA with 129,955 shares. 35
Shortly after the execution of the PCA – Cojuangco, Jr. Agreement, President Marcos issued,
on July 29, 1975, P.D. No. 755 directing, as earlier narrated, PCA to use the CCSF and CIDF
to acquire a commercial bank to provide coco farmers with "readily available credit facilities at
preferential rate," and PCA "to distribute, for free," the bank shares to coconut farmers.
Then came the 1986 EDSA event. One of the priorities of then President Corazon C. Aquino’s
revolutionary government was the recovery of ill-gotten wealth reportedly amassed by the
Marcos family and close relatives, their nominees and associates. Apropos thereto, she issued
Executive Order Nos. (E.Os.) 1, 2 and 14, as amended by E.O. 14-A, all Series of 1986. E.O.
1 created the PCGG and provided it with the tools and processes it may avail of in the recovery
efforts;36 E.O. No. 2 asserted that the ill-gotten assets and properties come in the form of shares
of stocks, etc.; while E.O. No. 14 conferred on the Sandiganbayan exclusive and original
jurisdiction over ill-gotten wealth cases, with the proviso that "technical rules of procedure and
evidence shall not be applied strictly" to the civil cases filed under the E.O. Pursuant to these
issuances, the PCGG issued numerous orders of sequestration, among which were those
handed out, as earlier mentioned, against shares of stock in UCPB purportedly owned by or
registered in the names of (a) more than a million coconut farmers and (b) the CIIF companies,
including the SMC shares held by the CIIF companies. On July 31, 1987, the PCGG instituted
before the Sandiganbayan a recovery suit docketed thereat as CC No. 0033.
After the filing and subsequent amendments of the complaint in CC 0033, Lobregat, COCOFED
et al., and Ballares et al., purportedly representing over a million coconut farmers, sought and
were allowed to intervene.37 Meanwhile, the following incidents/events transpired:
1. On the postulate, inter alia, that its coco-farmer members own at least 51% of the
outstanding capital stock of UCPB, the CIIF companies, etc., COCOFED et al., on
November 29, 1989, filed Class Action Omnibus Motion praying for the lifting of the
orders of sequestration referred to above and for a chance to present evidence to prove
the coconut farmers’ ownership of the UCPB and CIIF shares. The plea to present
evidence was denied;
2. Later, the Republic moved for and secured approval of a motion for separate trial
which paved the way for the subdivision of the causes of action in CC 0033, each
detailing how the assets subject thereof were acquired and the key roles the principal
played;
3. Civil Case 0033, pursuant to an order of the Sandiganbayan would be subdivided
into eight complaints, docketed as CC 0033-A to CC 0033-H.38
 Lobregat, Ballares et al., COCOFED, et al., on the strength of their authority
to intervene in CC 0033, continued to participate in CC 0033-A where one of
the issues raised was the misuse of the names/identities of the over a million
coconut farmers;39
4. On February 23, 2001, Lobregat, COCOFED, Ballares et al., filed a Class Action
Omnibus Motion to enjoin the PCGG from voting the sequestered UCPB shares and
the SMC shares registered in the names of the CIIF companies. The Sandiganbayan,
by Order of February 28, 2001, granted the motion, sending the Republic to come to
this Court on certiorari, docketed as G.R. Nos. 147062-64, to annul said order; and
5. By Decision of December 14, 2001, in G.R. Nos. 147062-64 (Republic v.
COCOFED), 40 the Court declared the coco levy funds as prima facie public funds. And
purchased as the sequestered UCPB shares were by such funds, beneficial ownership
thereon and the corollary voting rights prima facie pertain, according to the Court, to
the government.
The instant proceedings revolve around CC 0033-A (Re: Anomalous Purchase and Use of
[FUB] now [UCPB])41 and CC 0033-F (Re: Acquisition of San Miguel Corporation Shares of
Stock), the first case pivoting mainly on the series of transactions culminating in the alleged
anomalous purchase of 72.2% of FUB’s outstanding capital stock and the transfer by PCA of
a portion thereof to private individuals. COCOFED, et al. and Ballares, et al. participated in CC
No. 0033-A as class action movants.
Petitioners COCOFED et al.42 and Ursua43 narrate in their petitions how the farmers’ UCPB
shares in question ended up in the possession of those as hereunder indicated:
1) The farmers’ UCPB shares were originally registered in the name of PCA for the
eventual free distribution thereof to and registration in the individual names of the
coconut farmers in accordance with PD 755 and the IRR that PCA shall issue;
2) Pursuant to the stock distribution procedures set out in PCA Administrative Order
No. 1, s. of 1975, (PCA AO 1),44 farmers who had paid to the CIF under RA 6260 and
registered their COCOFUND (CIF) receipts with PCA were given their corresponding
UCPB stock certificates. As of June 1976, the cut-off date for the extended registration,
only 16 million worth of COCOFUND receipts were registered, leaving over 50 million
shares undistributed;
3) PCA would later pass Res. 074-78, s. of 1978, to allocate the 50 million undistributed
shares to (a) farmers who were already recipients thereof and (b) qualified farmers to
be identified by COCOFED after a national census.
4) As of May 1981, some 15.6 million shares were still held by and registered in the
name of COCOFED "in behalf of coconut farmers" for distribution immediately after the
67 | C O N S T I 1
completion of the national census, to all those determined by the PCA to
be bonafide coconut farmers, but who have not received the bank shares; 45 and
5) Prior to June 1986, a large number of coconut farmers opted to sell all/part of their
UCPB shares below their par value. This prompted the UCPB Board to authorize the
CIIF companies to buy these shares. Some 40.34 million common voting shares of
UCPB ended up with these CIIF companies albeit initially registered in the name of
UCPB.
On the other hand, the subject of CC 0033-F are two (2) blocks of SMC shares of stock, the
first referring to shares purchased through and registered in the name of the CIIF holding
companies. The purported ownership of the second block of SMC shares is for the nonce
irrelevant to the disposition of this case. During the time material, the CIIF block of SMC shares
represented 27% of the outstanding capital stock of SMC.
Civil Case No. 0033-A
After the pre-trial, but before the Republic, as plaintiff a quo, could present, as it committed to,
a list of UCPB stockholders as of February 25, 1986, 46 among other evidence, COCOFED, et
al., on the premise that the sequestered farmers’ UCPB shares are not unlawfully acquired
assets, filed in April 2001 their Class Action Motion for a Separate Summary Judgment. In it,
they prayed for a judgment dismissing the complaint in CC 0033-A, for the reason that the over
than a million unimpleaded coconut farmers own the UCPB shares. In March 2002, they
filed Class Action Motion for Partial Separate Trial on the issue of whether said UCPB shares
have legitimately become the private property of the million coconut farmers.
Correlatively, the Republic, on the strength of the December 14, 2001 ruling in Republic v.
COCOFED47 and on the argument, among others, that the claim of COCOFED and Ballares et
al. over the subject UCPB shares is based solely on the supposed COCOFUND receipts issued
for payment of the R.A. 6260 CIF levy, filed a Motion for Partial Summary Judgment [RE:
COCOFED, et al. and Ballares, et al.] dated April 22, 2002, praying that a summary judgment
be rendered declaring:
a. That Section 2 of [PD] 755, Section 5, Article III of P.D. 961 and Section 5, Article III
of P.D. No. 1468 are unconstitutional;
b. That … (CIF) payments under … (R.A.) No. 6260 are not valid and legal bases for
ownership claims over UCPB shares; and
c. That COCOFED, et al., and Ballares, et al. have not legally and validly obtained title
over the subject UCPB shares.
After an exchange of pleadings, the Republic filed its sur-rejoinder praying that it be
conclusively held to be the true and absolute owner of the coconut levy funds and the UCPB
shares acquired therefrom.48
A joint hearing on the separate motions for summary judgment to determine what material facts
exist with or without controversy followed.49 By Order50 of March 11, 2003, the Sandiganbayan
detailed, based on this Court’s ruling in related cases, the parties’ manifestations made in open
court and the pleadings and evidence on record, the facts it found to be without substantial
controversy, together with the admissions and/or extent of the admission made by the parties
respecting relevant facts, as follows:
As culled from the exhaustive discussions and manifestations of the parties in open court of
their respective pleadings and evidence on record, the facts which exist without any substantial
controversy are set forth hereunder, together with the admissions and/or the extent or scope
of the admissions made by the parties relating to the relevant facts:
1. The late President Ferdinand E. Marcos was President … for two terms . . . and,
during the second term, … declared Martial Law through Proclamation No. 1081 dated
September 21, 1972.
2. On January 17, 1973, [he] issued Proclamation No. 1102 announcing the ratification
of the 1973 Constitution.
3. From January 17, 1973 to April 7, 1981, [he] . . .exercised the powers and
prerogative of President under the 1935 Constitution and the powers and prerogative
of President . . . the 1973 Constitution.
[He] …promulgated various [P.D.s], among which were P.D. No. 232, P.D. No.
276, P.D. No. 414, P.D. No. 755, P.D. No. 961 and P.D. No. 1468.
4. On April 17, 1981, amendments to the 1973 Constitution were effected and, on June
30, 1981, [he], after being elected President, "reassumed the title and exercised the
powers of the President until 25 February 1986."
5. Defendants Maria Clara Lobregat and Jose R. Eleazar, Jr. were [PCA] Directors …
during the period 1970 to 1986….
6. Plaintiff admits the existence of the following agreements which are attached as
Annexes "A" and "B" to the Opposition dated October 10, 2002 of defendant Eduardo
M. Cojuangco, Jr. to the above-cited Motion for Partial Summary Judgment:
a) "Agreement made and entered into this ______ day of May, 1975 at Makati,
Rizal, Philippines, by and between:
PEDRO COJUANGCO, Filipino, x x x, for and in his own behalf and in behalf
of certain other stockholders of First United Bank listed in Annex "A" attached
hereto (hereinafter collectively called the SELLERS);
68 | C O N S T I 1
– and –
EDUARDO COJUANGCO, JR., Filipino, x x x, represented in this act by his
duly authorized attorney-in-fact, EDGARDO J. ANGARA, for and in his own
behalf and in behalf of certain other buyers, (hereinafter collectively called the
BUYERS)";
WITNESSETH: That
WHEREAS, the SELLERS own of record and beneficially a total of 137,866
shares of stock, with a par value of P100.00 each, of the common stock of the
First United Bank (the "Bank"), a commercial banking corporation existing
under the laws of the Philippines;
WHEREAS, the BUYERS desire to purchase, and the SELLERS are willing to
sell, the aforementioned shares of stock totaling 137,866 shares (hereinafter
called the "Contract Shares") owned by the SELLERS due to their special
relationship to EDUARDO COJUANGCO, JR.;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Sale and Purchase of Contract Shares
Subject to the terms and conditions of this Agreement, the SELLERS
hereby sell, assign, transfer and convey unto the BUYERS, and the
BUYERS hereby purchase and acquire, the Contract Shares free and
clear of all liens and encumbrances thereon.
2. Contract Price
The purchase price per share of the Contract Shares payable by the
BUYERS is P200.00 or an aggregate price of P27,573,200.00 (the
"Contract Price").
3. Delivery of, and payment for, stock certificates
Upon the execution of this Agreement, (i) the SELLERS shall deliver
to the BUYERS the stock certificates representing the Contract
Shares, free and clear of all liens, encumbrances, obligations,
liabilities and other burdens in favor of the Bank or third parties, duly
endorsed in blank or with stock powers sufficient to transfer the shares
to bearer; and (ii) BUYERS shall deliver to the SELLERS
P27,511,295.50 representing the Contract Price less the amount of
 stock transfer taxes payable by the SELLERS, which the BUYERS behalf of the other Sellers of the other Buyers)
undertake to remit to the appropriate authorities. (Emphasis added.) listed in Annex "A" hereof) (BUYERS)
(SELLERS)
4. Representation and Warranties of Sellers
By:
The SELLERS respectively and independently of each other represent
and warrant that: EDGARDO J. ANGARA
Attorney-in-Fact
(a) The SELLERS are the lawful owners of, with good
marketable title to, the Contract Shares and that (i) the xxx xxx xxx
certificates to be delivered pursuant thereto have been validly
issued and are fully paid and no-assessable; (ii) the Contract
Shares are free and clear of all liens, encumbrances, b) "Agreement for the Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers
obligations, liabilities and other burdens in favor of the Bank of the Philippines, made and entered into this 25th day of May 1975 at Makati, Rizal,
or third parties… Philippines, by and between:

This representation shall survive the execution and delivery of EDUARDO M. COJUANGCO, JR., x x x, hereinafter referred to as the SELLER;
this Agreement and the consummation or transfer hereby
contemplated. – and –

(b) The execution, delivery and performance of this
Agreement by the SELLERS does not conflict with or
constitute any breach of any provision in any agreement to
which they are a party or by which they may be bound.
(c) They have complied with the condition set forth in Article
X of the Amended Articles of Incorporation of the Bank.
5. Representation of BUYERS ….
6. Implementation
The parties hereto hereby agree to execute or cause to be executed
such documents and instruments as may be required in order to carry
out the intent and purpose of this Agreement.
7. Notices ….
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands at
the place and on the date first above written.
PEDRO COJUANGCO EDUARDO COJUANGCO, JR.
(on his own behalf and in (on his own behalf and in behalf
PHILIPPINE COCONUT AUTHORITY, a public corporation created by Presidential Decree No.
232, as amended, for itself and for the benefit of the coconut farmers of the Philippines,
(hereinafter called the BUYER)"
WITNESSETH: That
WHEREAS, on May 17, 1975, the Philippine Coconut Producers Federation ("PCPF"), through
its Board of Directors, expressed the desire of the coconut farmers to own a commercial bank
which will be an effective instrument to solve the perennial credit problems and, for that
purpose, passed a resolution requesting the PCA to negotiate with the SELLER for the transfer
to the coconut farmers of the SELLER’s option to buy the First United Bank (the "Bank") under
such terms and conditions as BUYER may deem to be in the best interest of the coconut
farmers and instructed Mrs. Maria Clara Lobregat to convey such request to the BUYER;
WHEREAS, the PCPF further instructed Mrs. Maria Clara Lobregat to make representations
with the BUYER to utilize its funds to finance the purchase of the Bank;
WHEREAS, the SELLER has the exclusive and personal option to buy 144,400 shares (the
"Option Shares") of the Bank, constituting 72.2% of the present outstanding shares of stock of
the Bank, at the price of P200.00 per share, which option only the SELLER can validly exercise;
WHEREAS, in response to the representations made by the coconut farmers, the BUYER has
requested the SELLER to exercise his personal option for the benefit of the coconut farmers;

69 | C O N S T I 1
WHEREAS, the SELLER is willing to transfer the Option Shares to the BUYER at a price equal
to his option price of P200 per share;
WHEREAS, recognizing that ownership by the coconut farmers of a commercial bank is a
permanent solution to their perennial credit problems, that it will accelerate the growth and
development of the coconut industry and that the policy of the state which the BUYER is
required to implement is to achieve vertical integration thereof so that coconut farmers will
become participants in, and beneficiaries of, the request of PCPF that it acquire a commercial
bank to be owned by the coconut farmers and, appropriated, for that purpose, the sum of P150
Million to enable the farmers to buy the Bank and capitalize the Bank to such an extension as
to be in a position to adopt a credit policy for the coconut farmers at preferential rates;
WHEREAS, x x x the BUYER is willing to subscribe to additional shares ("Subscribed Shares")
and place the Bank in a more favorable financial position to extend loans and credit facilities to
coconut farmers at preferential rates;
NOW, THEREFORE, for and in consideration of the foregoing premises and the other terms
and conditions hereinafter contained, the parties hereby declare and affirm that their principal
contractual intent is (1) to ensure that the coconut farmers own at least 60% of the outstanding
capital stock of the Bank; and (2) that the SELLER shall receive compensation for exercising
his personal and exclusive option to acquire the Option Shares, for transferring such shares to
the coconut farmers at the option price of P200 per share, and for performing the management
services required of him hereunder.
1. To ensure that the transfer to the coconut farmers of the Option Shares is
effected with the least possible delay and to provide for the faithful
performance of the obligations of the parties hereunder, the parties hereby
appoint the Philippine National Bank as their escrow agent (the "Escrow
Agent").
Upon execution of this Agreement, the BUYER shall deposit with the Escrow
Agent such amount as may be necessary to implement the terms of this
Agreement….
2. As promptly as practicable after execution of this Agreement, the SELLER
shall exercise his option to acquire the Option Share and SELLER shall
immediately thereafter deliver and turn over to the Escrow Agent such stock
certificates as are herein provided to be received from the existing
stockholders of the Bank by virtue of the exercise on the aforementioned
option….
3. To ensure the stability of the Bank and continuity of management and credit
policies to be adopted for the benefit of the coconut farmers, the parties
undertake to cause the stockholders and the Board of Directors of the Bank to
70 | C O N S T I 1
authorize and approve a management contract between the Bank and the
SELLER under the following terms:
(a) The management contract shall be for a period of five (5) years,
renewable for another five (5) years by mutual agreement of the
SELLER and the Bank;
(b) The SELLER shall be elected President and shall hold office at the
pleasure of the Board of Directors. While serving in such capacity, he
shall be entitled to such salaries and emoluments as the Board of
Directors may determine;
(c) The SELLER shall recruit and develop a professional management
team to manage and operate the Bank under the control and
supervision of the Board of Directors of the Bank;
(d) The BUYER undertakes to cause three (3) persons designated by
the SELLER to be elected to the Board of Directors of the Bank;
(e) The SELLER shall receive no compensation for managing the
Bank, other than such salaries or emoluments to which he may be
entitled by virtue of the discharge of his function and duties as
President, provided … and
(f) The management contract may be assigned to a management
company owned and controlled by the SELLER.
4. As compensation for exercising his personal and exclusive option to acquire
the Option Shares and for transferring such shares to the coconut farmers, as
well as for performing the management services required of him, SELLER shall
receive equity in the Bank amounting, in the aggregate, to 95,304 fully paid
shares in accordance with the procedure set forth in paragraph 6 below;
5. In order to comply with the Central Bank program for increased capitalization
of banks and to ensure that the Bank will be in a more favorable financial
position to attain its objective to extend to the coconut farmers loans and credit
facilities, the BUYER undertakes to subscribe to shares with an aggregate par
value of P80,864,000 (the "Subscribed Shares"). The obligation of the BUYER
with respect to the Subscribed Shares shall be as follows:
(a) The BUYER undertakes to subscribe, for the benefit of the coconut
farmers, to shares with an aggregate par value of P15,884,000 from
the present authorized but unissued shares of the Bank; and
 (b) The BUYER undertakes to subscribe, for the benefit of the coconut
farmers, to shares with an aggregate par value of P64,980,000 from
the increased capital stock of the Bank, which subscriptions shall be
deemed made upon the approval by the stockholders of the increase
of the authorized capital stock of the Bank from P50 Million to P140
Million.
The parties undertake to declare stock dividends of P8 Million out of
the present authorized but unissued capital stock of P30 Million.
6. To carry into effect the agreement of the parties that the SELLER shall
receive as his compensation 95,304 shares:
(a) ….
(b) With respect to the Subscribed Shares, the BUYER undertakes, in
order to prevent the dilution of SELLER’s equity position, that it shall
cede over to the SELLER 64,980 fully-paid shares out of the
Subscribed Shares. Such undertaking shall be complied with in the
following manner: ….
7. The parties further undertake that the Board of Directors and management
of the Bank shall establish and implement a loan policy for the Bank of making
available for loans at preferential rates of interest to the coconut farmers ….
8. The BUYER shall expeditiously distribute from time to time the shares of the
Bank, that shall be held by it for the benefit of the coconut farmers of the
Philippines under the provisions of this Agreement, to such, coconut farmers
holding registered COCOFUND receipts on such equitable basis as may be
determine by the BUYER in its sound discretion.
9. ….
10. To ensure that not only existing but future coconut farmers shall be
participants in and beneficiaries of the credit policies, and shall be entitled to
the benefit of loans and credit facilities to be extended by the Bank to coconut
farmers at preferential rates, the shares held by the coconut farmers shall not
be entitled to pre-emptive rights with respect to the unissued portion of the
authorized capital stock or any increase thereof.
11. After the parties shall have acquired two-thirds (2/3) of the outstanding
shares of the Bank, the parties shall call a special stockholders’ meeting of the
Bank:
71 | C O N S T I 1
(a) To classify the present authorized capital stock of P50,000,000
divided into 500,000 shares, with a par value of P100.00 per share
into: 361,000 Class A shares, with an aggregate par value of
P36,100,000 and 139,000 Class B shares, with an aggregate par
value of P13,900,000. All of the Option Shares constituting 72.2% of
the outstanding shares, shall be classified as Class A shares and the
balance of the outstanding shares, constituting 27.8% of the
outstanding shares, as Class B shares;
(b) To amend the articles of incorporation of the Bank to effect the
following changes:
(i) change of corporate name to First United Coconut Bank;
(ii) replace the present provision restricting the transferability
of the shares with a limitation on ownership by any individual
or entity to not more than 10% of the outstanding shares of
the Bank;
(iii) provide that the holders of Class A shares shall not be
entitled to pre-emptive rights with respect to the unissued
portion of the authorized capital stock or any increase thereof;
and
(iv) provide that the holders of Class B shares shall be
absolutely entitled to pre-emptive rights, with respect to the
unissued portion of Class B shares comprising part of the
authorized capital stock or any increase thereof, to subscribe
to Class B shares in proportion t the subscriptions of Class A
shares, and to pay for their subscriptions to Class B shares
within a period of five (5) years from the call of the Board of
Directors.
(c) To increase the authorized capital stock of the Bank from P50
Million to P140 Million….;
(d) To declare a stock dividend of P8 Million payable to the SELLER,
the BUYER and other stockholders of the Bank out of the present
authorized but unissued capital stock of P30 Million;
(e) To amend the by-laws of the Bank accordingly; and
(f) To authorize and approve the management contract provided in
paragraph 2 above.
 The parties agree that they shall vote their shares and take all the
necessary corporate action in order to carry into effect the foregoing
provisions of this paragraph 11 ….
12. It is the contemplation of the parties that the Bank shall achieve a financial
and equity position to be able to lend to the coconut farmers at preferential
rates.
In order to achieve such objective, the parties shall cause the Bank to adopt a
policy of reinvestment, by way of stock dividends, of such percentage of the
profits of the Bank as may be necessary.
13. The parties agree to execute or cause to be executed such documents and
instruments as may be required in order to carry out the intent and purpose of
this Agreement.
10. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. admit that the
Agreement, described in Section 1 of Presidential Decree (P.D.) No. 755 dated July 29, 1975
as the "Agreement for the Acquisition of a Commercial Bank for the Benefit of Coconut
Farmers" executed by the Philippine Coconut Authority" and incorporated in Section 1 of P.D.
No. 755 by reference, refers to the "AGREEMENT FOR THE ACQUISITION OF A
COMMERCIAL BANK FOR THE BENEFIT OF THE COCONUT FARMERS OF THE
PHILIPPINES" dated May 25, 1975 between defendant Eduardo M. Cojuangco, Jr. and the
[PCA] (Annex "B" for defendant Cojuangco’s OPPOSITION TO PLAINTIFF’S MOTION FOR
PARTIAL SUMMARY JUDGMENT [RE: EDUARDO M. COJUANGCO, JR.] dated September
18, 2002).
Plaintiff refused to make the same admission.
11. … the Court takes judicial notice that P.D. No. 755 was published [in] … volume 71 of the
Official Gazette but the text of the agreement … was not so published with P.D. No. 755.

IN WITNESS WHEREOF, … 12. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. admit that the PCA
used public funds, … in the total amount of P150 million, to purchase the FUB shares
amounting to 72.2% of the authorized capital stock of the FUB, although the PCA was later
PHILIPPINE COCONUT AUTHORITY
reimbursed from the coconut levy funds and that the PCA subscription in the increased
(BUYER)
capitalization of the FUB, which was later renamed the … (UCPB), came from the said coconut
levy funds….
By:
13. Pursuant to the May 25, 1975 Agreement, out of the 72.2% shares of the authorized and
EDUARDO COJUANGCO, JR. MARIA CLARA L. LOBREGAT the increased capital stock of the FUB (later UCPB), entirely paid for by PCA, 64.98% of the
(SELLER) shares were placed in the name of the "PCA for the benefit of the coconut farmers" and 7,22%
were given to defendant Cojuangco. The remaining 27.8% shares of stock in the FUB which
xxx xxx xxx later became the UCPB were not covered by the two (2) agreements referred to in item no. 6,
par. (a) and (b) above.
7. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. admit that the … (PCA)
was the "other buyers" represented by …. Cojuangco, Jr. in the May 1975 Agreement entered "There were shares forming part of the aforementioned 64.98% which were later sold or
into between Pedro Cojuangco (on his own behalf and in behalf of other sellers listed in Annex transferred to non-coconut farmers.
"A" of the agreement) and … Cojuangco, Jr. (on his own behalf and in behalf of the other
buyers). Defendant Cojuangco insists he was the "only buyer" under the aforesaid Agreement. 14. Under the May 27, 1975 Agreement, defendant Cojuangco’s equity in the FUB (now UCPB)
was ten percent (10%) of the shares of stock acquired by the PCA for the benefit of the coconut
8. ….. farmers.

9. Defendants Lobregat, et al., and COCOFED, et al., and Ballares, et al. admit that in addition
to the 137,866 FUB shares of Pedro Cojuangco, et al. covered by the Agreement, other FUB
stockholders sold their shares to PCA such that the total number of FUB shares purchased by
PCA … increased from 137,866 shares to 144,400 shares, the OPTION SHARES referred to
in the Agreement of May 25, 1975. Defendant Cojuangco did not make said admission as to
the said 6,534 shares in excess of the 137,866 shares covered by the Agreement with Pedro
Cojuangco.
15. That the fully paid 95.304 shares of the FUB, later the UCPB, acquired by defendant …
Cojuangco, Jr. pursuant to the May 25, 1975 Agreement were paid for by the PCA in
accordance with the terms and conditions provided in the said Agreement.
16. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. admit that the
affidavits of the coconut farmers (specifically, Exhibit "1-Farmer" to "70-Farmer") uniformly state
that:

72 | C O N S T I 1
 a. they are coconut farmers who sold coconut products;
b. in the sale thereof, they received COCOFUND receipts pursuant to R.A. No.
6260;
c. they registered the said COCOFUND receipts; and
d. by virtue thereof, and under R.A. No. 6260, P.D. Nos. 755, 961 and 1468,
they are allegedly entitled to the subject UCPB shares.
but subject to the following qualifications:
a. there were other coconut farmers who received UCPB shares although they
did not present said COCOFUND receipt because the PCA distributed the
unclaimed UCPB shares not only to those who already received their UCPB
shares in exchange for their COCOFUND receipts but also to the coconut
farmers determined by a national census conducted pursuant to PCA
administrative issuances;
b. [t]here were other affidavits executed by Lobregat, Eleazar, Ballares and
Aldeguer relative to the said distribution of the unclaimed UCPB shares; and
c. the coconut farmers claim the UCPB shares by virtue of their compliance
not only with the laws mentioned in item (d) above but also with the relevant
issuances of the PCA such as, PCA Administrative Order No. 1, dated August
20, 1975 (Exh. "298-Farmer"); PCA Resolution No. 033-78 dated February 16,
1978….
The plaintiff did not make any admission as to the foregoing qualifications.
17. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. claim that the UCPB
shares in question have legitimately become the private properties of the 1,405,366 coconut
farmers solely on the basis of their having acquired said shares in compliance with R.A. No.
6260, P.D. Nos. 755, 961 and 1468 and the administrative issuances of the PCA cited above.
18. …..
On July 11, 2003, the Sandiganbayan issued the assailed PSJ-A finding for the Republic, the
judgment accentuated by (a) the observation that COCOFED has all along manifested as
representing over a million coconut farmers and (b) a declaration on the issue of ownership of
UCPB shares and the unconstitutionality of certain provisions of P.D. No. 755 and its
implementing regulations. On the matter of ownership in particular, the anti-graft court declared
that the 64.98% sequestered "Farmers’ UCPB shares," plus other shares paid by PCA are
73 | C O N S T I 1
"conclusively" owned by the Republic. In its pertinent parts, PSJ-A, resolving the separate
motions for summary judgment in seriatim with separate dispositive portions for each, reads:
WHEREFORE, in view of the foregoing, we rule as follows:
xxx xxx xxx
A. Re: CLASS ACTION MOTION FOR A SEPARATE SUMMARY JUDGMENT dated
April 11, 2001 filed by Defendant Maria Clara L. Lobregat, COCOFED, et al., and
Ballares, et al.
The Class Action Motion for Separate Summary Judgment dated April 11, 2001 filed
by defendant Maria Clara L. Lobregat, COCOFED, et al. and Ballares, et al., is hereby
DENIED for lack of merit.
B. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: COCOFED, ET AL.
AND BALLARES, ET AL.) dated April 22, 2002 filed by Plaintiff.
1. a. Section 1 of P.D. No. 755, taken in relation to Section 2 of the same P.D.,
is unconstitutional: (i) for having allowed the use of the CCSF to benefit directly
private interest by the outright and unconditional grant of absolute ownership
of the FUB/UCPB shares paid for by PCA entirely with the CCSF to the
undefined "coconut farmers", which negated or circumvented the national
policy or public purpose declared by P.D. No. 755 to accelerate the growth and
development of the coconut industry and achieve its vertical integration; and
(ii) for having unduly delegated legislative power to the PCA.
b. The implementing regulations issued by PCA, namely,
Administrative Order No. 1, Series of 1975 and Resolution No. 074-78
are likewise invalid for their failure to see to it that the distribution of
shares serve exclusively or at least primarily or directly the
aforementioned public purpose or national policy declared by P.D. No.
755.
2. Section 2 of P.D. No. 755 which mandated that the coconut levy funds shall
not be considered special and/or fiduciary funds nor part of the general funds
of the national government and similar provisions of Sec. 5, Art. III, P.D. No.
961 and Sec. 5, Art. III, P.D. No. 1468 contravene the provisions of the
Constitution, particularly, Art. IX (D), Sec. 2; and Article VI, Sec. 29 (3).
3. Lobregat, COCOFED, et al. and Ballares, et al. have not legally and validly
obtained title of ownership over the subject UCPB shares by virtue of P.D. No.
755, the Agreement dated May 25, 1975 between the PCA and defendant
Cojuangco, and PCA implementing rules, namely, Adm. Order No. 1, s. 1975
and Resolution No. 074-78.
 4. The so-called "Farmers’ UCPB shares" covered by 64.98% of the UCPB
shares of stock, which formed part of the 72.2% of the shares of stock of the
former FUB and now of the UCPB, the entire consideration of which was
charged by PCA to the CCSF, are hereby declared conclusively owned by, the
Plaintiff Republic of the Philippines.
C. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: EDUARDO M.
COJUANGCO, JR.) dated September 18, 2002 filed by Plaintiff.
1. Sec. 1 of P.D. No. 755 did not validate the Agreement between PCA and
defendant Eduardo M. Cojuangco, Jr. dated May 25, 1975 nor did it give the
Agreement the binding force of a law because of the non-publication of the
said Agreement.
2. Regarding the questioned transfer of the shares of stock of FUB (later
UCPB) by PCA to defendant Cojuangco or the so-called "Cojuangco UCPB
shares" which cost the PCA more than Ten Million Pesos in CCSF in 1975, we
declare, that the transfer of the following FUB/UCPB shares to defendant
Eduardo M. Cojuangco, Jr. was not supported by valuable consideration, and
therefore null and void:
a. The 14,400 shares from the "Option Shares";
b. Additional Bank Shares Subscribed and Paid by PCA, consisting of:
1. Fifteen Thousand Eight Hundred Eighty-Four (15,884)
shares out of the authorized but unissued shares of the bank,
subscribed and paid by PCA;
2. Sixty Four Thousand Nine Hundred Eighty (64,980) shares
of the increased capital stock subscribed and paid by PCA;
and
3. Stock dividends declared pursuant to paragraph 5 and
paragraph 11 (iv) (d) of the Agreement.
3. The above-mentioned shares of stock of the FUB/UCPB transferred to
defendant Cojuangco are hereby declared conclusively owned by the Republic
of the Philippines.
4. The UCPB shares of stock of the alleged fronts, nominees and dummies of
defendant Eduardo M. Cojuangco, Jr. which form part of the 72.2% shares of
the FUB/UCPB paid for by the PCA with public funds later charged to the
74 | C O N S T I 1
coconut levy funds, particularly the CCSF, belong to the plaintiff Republic of
the Philippines as their true and beneficial owner.
Let trial of this Civil Case proceed with respect to the issues which have not been
disposed of in this Partial Summary Judgment. For this purpose, the plaintiff’s Motion
Ad Cautelam to Present Additional Evidence dated March 28, 2001 is hereby
GRANTED.
From PSJ-A, Lobregat moved for reconsideration which COCOFED, et al. and
Ballares, et al. adopted. All these motions were denied in the extended assailed
Resolution51 of December 28, 2004.
Civil Case No. 0033-F
Here, the Republic, after filing its pre-trial brief, interposed a Motion for Judgment on the
Pleadings and/or for [PSJ] (Re: Defendants CIIF Companies, 14 Holding Companies and
COCOFED, et al.) praying that, in light of the parties’ submissions and the supervening ruling
in Republic v. COCOFED52 which left certain facts beyond question, a judgment issue:
1) Declaring Section 5 of Article III of P.D. No. 961 (Coconut Industry Code) and
Section 5 of Article III of P.D. No. 1468 (Revised Coconut Industry Code) to be
unconstitutional;
2) Declaring that CIF payments under RA No. 6260 are not valid and legal bases for
ownership claims over the CIIF companies and, ultimately, the CIIF block of SMC
shares; and
3) Ordering the reconveyance of the CIIF companies, the 14 holding companies, and
the 27% CIIF block of San Miguel Corporation shares of stocks in favor of the
government and declaring the ownership thereof to belong to the government in trust
for all the coconut farmers.
At this juncture, it may be stated that, vis-à-vis CC 0033-F, Gabay Foundation, Inc. sought but
was denied leave to intervene. But petitioners COCOFED, et al. moved and were allowed to
intervene53 on the basis of their claim that COCOFED members beneficially own the block of
SMC shares held by the CIIF companies, at least 51% of whose capitol stock such members
own. The claim, as the OSG explained, arose from the interplay of the following: (a) COCOFED
et al.’s alleged majority ownership of the CIIF companies under Sections 9 54 and 1055 of P.D.
No. 1468, and (b) their alleged entitlement to shares in the CIIF companies by virtue of their
supposed registration of COCOFUND receipts allegedly issued to COCOFED members upon
payment of the R.A. 6260 CIF levy.56
Just as in CC No. 0033-A, the Sandiganbayan also conducted a hearing in CC No. 0033-F to
determine facts that appeared without substantial controversy as culled from the records and,
by Order57 of February 23, 2004, outlined those facts.
On May 7, 2004, the Sandiganbayan, in light of its ruling in CC No. 0033-A and disposing of 10. Anglo Ventures, Inc.;
the issue on ownership of the CIIF oil and holding companies and their entire block of subject
SMC shares, issued the assailed PSJ-F also finding for the Republic, the fallo of which 11. Randy Allied Ventures, Inc.;
pertinently reading:
12. Rock Steel Resources, Inc.;
WHEREFORE, in view of the foregoing, we hold that:
13. Valhalla Properties Ltd., Inc.; and
The Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding
Companies and Cocofed et al.) filed by Plaintiff is hereby GRANTED. ACCORDINGLY, THE 14. First Meridian Development, Inc.
CIIF COMPANIES, namely:
AND THE CIIF BLOCK OF SAN MIGUEL CORPORATION (SMC) SHARES OF STOCK
1. Southern Luzon Coconut Oil Mills (SOLCOM); TOTALLING 33,133,266 SHARES AS OF 1983 … ARE DECLARED OWNED BY THE
GOVERNMENT IN TRUST FOR ALL THE COCONUT FARMERS GOVERNMENT AND
2. Cagayan de Oro Oil Co., Inc. (CAGOIL); ORDERDED RECONVEYED TO THE GOVERNMENT.58 (Emphasis and capitalization in the
original; underscoring added.)
3. Iligan Coconut Industries, Inc. (ILICOCO);
Let the trial of this Civil Case proceed with respect to the issues which have not been disposed
4. San Pablo Manufacturing Corp. (SPMC); of in this Partial Summary Judgment, including the determination of whether the CIIF Block of
SMC Shares adjudged to be owned by the Government represents 27% of the issued and
5. Granexport Manufacturing Corp. (GRANEX); and outstanding capital stock of SMC according to plaintiff or to 31.3% of said capital stock
according to COCOFED, et al and Ballares, et al.
6. Legaspi Oil Co., Inc. (LEGOIL),
SO ORDERED.
AS WELL AS THE 14 HOLDING COMPANIES, NAMELY:
Expressly covered by the declaration and the reconveyance directive are "all dividends
declared, paid and issued thereon as well as any increments thereto arising from, but not
1. Soriano Shares, Inc.;
limited to, exercise of pre-emptive rights."
2. ACS Investors, Inc.;
On May 26, 2004, COCOFED et al., filed an omnibus motion (to dismiss for lack of subject
matter jurisdiction or alternatively for reconsideration and to set case for trial), but this motion
3. Roxas Shares, Inc.; was denied per the Sandiganbayan’s Resolution 59 of December 28, 2004.

4. Arc Investors, Inc.; On May 11, 2007, in CC 0033-A, the Sandiganbayan issued a Resolution60 denying Lobregat’s
and COCOFED’s separate motions to set the case for trial/hearing, noting that there is no
5. Toda Holdings, Inc.; longer any point in proceeding to trial when the issue of their claim of ownership of the
sequestered UCPB shares and related sub-issues have already been resolved in PSJ-A.
6. AP Holdings, Inc.;
For ease of reference, PSJ-A and PSJ-F each originally decreed trial or further hearing on
7. Fernandez Holdings, Inc.; issues yet to be disposed of. However, the Resolution 61 issued on June 5, 2007 in CC 0033-A
and the Resolution62 of May 11, 2007 rendered in CC 0033-F effectively modified the underlying
8. SMC Officers Corps, Inc.; partial summary judgments by deleting that portions on the necessity of further trial on the issue
of ownership of (1) the sequestered UCPB shares, (2) the CIIF block of SMC shares and (3)
the CIIF companies. As the anti-graft court stressed in both resolutions, the said issue of
9. Te Deum Resources, Inc.;
ownership has been finally resolved in the corresponding PSJs. 63

75 | C O N S T I 1
Hence, the instant petitions.
The Issues
COCOFED et al., in G.R. Nos. 177857-58, impute reversible error on the Sandiganbayan for
(a) assuming jurisdiction over CC Nos. 0033-A and 0033-F despite the Republic’s failure to
establish below the jurisdictional facts, i.e., that the sequestered assets sought to be recovered
are ill-gotten in the context of E.O. Nos. 1, 2, 14 and 14-A; (b) declaring certain provisions of
coco levy issuances unconstitutional; and (c) denying the petitioners’ plea to prove that the
sequestered assets belong to coconut farmers. Specifically, petitioners aver:
I. The Sandiganbayan gravely erred … when it refused to acknowledge that it did not have
subject matter jurisdiction over the ill-gotten wealth cases because the respondent Republic
failed to prove, and did not even attempt to prove, the jurisdictional fact that the sequestered
assets constitute ill-gotten wealth of former President Marcos and Cojuangco. Being without
subject matter jurisdiction over the ill-gotten wealth cases, a defect previously pointed out and
repeatedly assailed by COCOFED, et al., the assailed PSJs and the assailed Resolutions are
all null and void.
A. Insofar as the ill-gotten wealth cases are concerned, the Sandiganbayan’s
subject matter jurisdiction is limited to the recovery of "ill-gotten wealth" as
defined in Eos 1, 2, 14 and 14-A. Consistent with that jurisdiction, the
subdivided complaints in the ill-gotten wealth cases expressly alleged that the
sequestered assets constitutes "ill-gotten wealth" of former President Marcos
and Cojuangco, having been filed pursuant to, and in connection with, Eos 1,
2, 14 and 14-A, the Sandiganbayan gravely erred, if not exceeded its
jurisdiction, when it refused to require the respondent Republic to prove the
aforesaid jurisdictional fact.
B. …. Having no evidence on record to prove the said jurisdictional fact, the
Sandiganbayan gravely erred, if not grossly exceeded its statutory jurisdiction,
when it rendered the assailed PSJs instead of dismissing the ill-gotten wealth
cases….
C. Under Section 1 of Rule 9 of the Rules of Court, lack of jurisdiction over the
subject matter may be raised at any stage of the proceedings…. In any event,
in pursuing its intervention in the ill-gotten wealth cases, COCOFED, et al
precisely questioned the Sandiganbayan’s subject matter jurisdiction,
asserted that the jurisdictional fact does not exist, moved to dismiss the ill-
gotten wealth cases and even prayed that the writs of sequestration over the
sequestered assets be lifted. In concluding that those actions constitute an
"invocation" of its jurisdiction, the Sandiganbayan clearly acted whimsically,
capriciously and in grave abuse of its discretion.
76 | C O N S T I 1
II. Through the assailed PSJs and the assailed Resolutions, the Sandiganbayan declared
certain provisions of the coconut levy laws as well as certain administrative issuances of the
PCA as unconstitutional. In doing so, the Sandiganbayan erroneously employed, if not grossly
abused, its power of judicial review….
A. … the Sandiganbayan gravely erred, if not brazenly exceeded its statutory
jurisdiction and abused the judicial powers, when it concluded that the public
purpose of certain coconut levy laws was not evident, when it thereupon
formulated its own public policies and purposes for the coconut levy laws and
at the same time disregarded the national policies specifically prescribed
therein.
B. In ruling that "it is not clear or evident how the means employed by the
[coconut levy] laws" would "serve the avowed purpose of the law" or "can serve
a public purpose", the Sandiganbayan erroneously examined, determined and
evaluated the wisdom of such laws, a constitutional power within the exclusive
province of the legislative department.
C. The Sandiganbayan gravely erred in declaring Section 1 of PD 755, PCA
[AO] 1 and PCA Resolution No. 074-78 constitutionally infirm by reason of
alleged but unproven and unsubstantiated flaws in their implementation.
D. The Sandiganbayan gravely erred in concluding that Section 1 of PD 755
constitutes an undue delegation of legislative power insofar as it authorizes
the PCA to promulgate rules and regulations governing the distribution of the
UCPB shares to the coconut farmers. Rather, taken in their proper context,
Section 1 of PD 755 was complete in itself, [and] prescribed sufficient
standards that circumscribed the discretion of the PCA….
More importantly, this Honorable Court has, on three (3) separate occasions, rejected
respondent Republic’s motion to declare the coconut levy laws unconstitutional. The
Sandiganbayan gravely erred, if not acted in excess of its jurisdiction, when it ignored the
settled doctrines of law of the case and/or stare decisis and granted respondent Republic’s
fourth attempt to declare the coconut levy laws unconstitutional, despite fact that such
declaration of unconstitutionality was not necessary to resolve the ultimate issue of ownership
involved in the ill-gotten wealth cases.
III. In rendering the assailed PSJs and thereafter refusing to proceed to trial on the merits, on
the mere say-so of the respondent Republic, the Sandiganbayan committed gross and
irreversible error, gravely abused its judicial discretion and flagrantly exceeded its jurisdiction
as it effectively sanctioned the taking of COCOFED, et al.’s property by the respondent
Republic without due process of law and through retroactive application of the declaration of
unconstitutionality of the coconut levy laws, an act that is not only illegal and violative of the
settled Operative Fact Doctrine but, more importantly, inequitable to the coconut farmers
whose only possible mistake, offense or misfortune was to follow the law.
 A. ….
1. In the course of the almost twenty (20) years that the ill-gotten
wealth cases were pending, COCOFED, et al. repeatedly asked to be
allowed to present evidence to prove that the true, actual and
beneficial owners of the sequestered assets are the coconut farmers
and not Cojuangco, an alleged "crony" of former President Marcos.
The Sandiganbayan grievously erred and clearly abused its judicial
discretion when it repeatedly and continuously denied COCOFED, et
al. the opportunity to present their evidence to disprove the baseless
allegations of the Ill-Gotten Wealth Cases that the sequestered assets
constitute ill-gotten wealth of Cojuangco and of former President
Marcos, an error that undeniably and illegally deprived COCOFED, et
al of their constitutional right to be heard.
2. The Sandiganbayan erroneously concluded that the Assailed PSJs
and Assailed Resolutions settled the ultimate issue of ownership of
the Sequestered Assets and, more importantly, resolved all factual
and legal issues involved in the ill-gotten wealth cases. Rather, as
there are triable issues still to be resolved, it was incumbent upon the
Sandiganbayan to receive evidence thereon and conduct trial on the
merits.
3. Having expressly ordered the parties to proceed to trial and
thereafter decreeing that trial is unnecessary as the Assailed PSJs
were "final" and "appealable" judgments, the Sandiganbayan acted
whimsically, capriciously and contrary to the Rules of Court, treated
the parties in the ill-gotten wealth cases unfairly, disobeyed the dictate
of this Honorable Court and, worse, violated COCOFED, et al’s right
to due process and equal protection of the laws.
B. The Sandiganbayan gravely erred if not grossly abused its discretion when
it repeatedly disregarded, and outrightly refused to recognize, the operative
facts that existed as well as the rights that vested from the time the coconut
levy laws were enacted until their declaration of unconstitutionality in the
assailed PSJs. As a result, the assailed PSJs constitute a proscribed
retroactive application of the declaration of unconstitutionality, a taking of
private property, and an impairment of vested rights of ownership, all without
due process of law.64 Otherwise stated, the assailed PSJs and the assailed
Resolutions effectively penalized the coconut farmers whose only possible
mistake, offense or misfortune was to follow the laws that were then legal, valid
and constitutional.
IV. The voluminous records of these ill-gotten wealth cases readily reveal the various dilatory
tactics respondent Republic resorted to…. As a result, despite the lapse of almost twenty (20)
77 | C O N S T I 1
years of litigation, the respondent Republic has not been required to, and has not even
attempted to prove, the bases of its perjurious claim that the sequestered assets constitute ill-
gotten wealth of former President Marcos and his crony, Cojuangco. In tolerating respondent
Republic’s antics for almost twenty (20) years…, the Sandiganbayan so glaringly departed from
procedure and thereby flagrantly violated COCOFED, et al.’s right to speedy trial.
In G.R. No. 178193, petitioner Ursua virtually imputes to the Sandiganbayan the same errors
attributed to it by petitioners in G.R. Nos. 177857-58.65 He replicates as follows:
I
The Sandiganbayan decided in a manner not in accord with the Rules of Court and settled
jurisprudence in rendering the questioned PSJ as final and appealable thereafter taking the
sequestered assets from their owners or record without presentation of any evidence, thus, the
questioned PSJ and the questioned Resolutions are all null and void.
A. The Sandiganbayan’s jurisdiction insofar as the ill-gotten wealth cases are
concerned, is limited to the recovery of "ill-gotten wealth" as defined in Executive
Orders No. 1, 2, 14 and 14-A.
B. The Sandiganbayan should have decided to dismiss the case or continue to receive
evidence instead of ruling against the constitutionality of some coconut levy laws and
PCA issuances because it could decide on other grounds available to it.
II
The Sandiganbayan gravely erred when it declared PD. 755, Section 1 and 2, Section 5, Article
1 of PD 961, and Section 5 of Art. III of PD 1468 as well as administrative issuances of the
PCA as unconstitutional in effect, it abused it power of judicial review….
A. The Sandiganbayan gravely erred in concluding that the purpose of PD 755 Section
1 and 2, Section 5, Article 1 of PD 961, and Section 5 of Art. III of PD 1468 is not
evident. It then proceeded to formulated its own purpose thereby intruding into the
wisdom of the legislature in enacting [t]he law.
B. The Sandiganbayan gravely erred in declaring Section 1 of PD 755, PCA [AO] No.
1 and PCA Resolution No. 074-78 unconstitutional due to alleged flaws in their
implementation.
C. The Sandiganbayan gravely erred in concluding that Section 1 of PD No. 755
constitutes an undue delegation of legislative power insofar as it authorizes the PCA
to promulgate rules and regulations governing the distribution of the UCPB shares to
the coconut farmers. Section 1 of PD 755 was complete in itself, prescribed sufficient
 standards that circumscribed the discretion of the PCA and merely authorized the PCA
to fill matters of detail an execution through promulgated rules and regulations.
III
The coconut levy laws, insofar as they allowed the PCA to promulgate rules and regulations
governing the distribution of the UCPB to the coconut farmers, do not constitute an undue
delegation of legislative power as they were complete in themselves and prescribed sufficient
standards that circumscribed the discretion of the PCA.
IV
Assuming ex-gratia argumenti that the coconut levy laws are unconstitutional, still, the owners
thereof cannot be deprived of their property without due process of law considering that they
have in good faith acquired vested rights over the sequestered assets.
In sum, the instant petitions seek to question the decisions of the Sandiganbayan in both CC
Nos. 0033-A and 0033-F, along with the preliminary issues of objection. We shall address at
the outset, (1) the common preliminary questions, including jurisdictional issue, followed by (2)
the common primary contentious issues (i.e. constitutional questions), and (3) the issues
particular to each case.
The Court’s Ruling
I
The Sandiganbayan has jurisdiction over the subject
matter ofthe subdivided amended complaints.
The primary issue, as petitioners COCOFED, et al. and Ursua put forward, boils down to the
Sandiganbayan’s alleged lack of jurisdiction over the subject matter of the amended
complaints. Petitioners maintain that the jurisdictional facts necessary to acquire jurisdiction
over the subject matter in CC No. 0033-A have yet to be established. In fine, the Republic, so
petitioners claim, has failed to prove the ill-gotten nature of the sequestered coconut farmers’
UCPB shares. Accordingly, the controversy is removed from the subject matter jurisdiction of
the Sandiganbayan and necessarily any decision rendered on the merits, such as PSJ-A and
PSJ-F, is void.
To petitioners, it behooves the Republic to prove the jurisdictional facts warranting the
Sandiganbayan’s continued exercise of jurisdiction over ill-gotten wealth cases. Citing Manila
Electric Company [Meralco] v. Ortañez,66petitioners argue that the jurisdiction of an
adjudicatory tribunal exercising limited jurisdiction, like the Sandiganbayan, "depends upon the
facts of the case as proved at the trial and not merely upon the allegation in the
complaint."67 Cited too is PCGG v. Nepumuceno,68 where the Court held:
78 | C O N S T I 1
The determinations made by the PCGG at the time of issuing sequestration … orders cannot
be considered as final determinations; that the properties or entities sequestered or taken-over
in fact constitute "ill-gotten wealth" according to [E.O.] No. 1 is a question which can be finally
determined only by a court – the Sandiganbayan. The PCGG has the burden of proving before
the Sandiganbayan that the assets it has sequestered or business entity it has provisionally
taken-over constitutes "ill-gotten wealth" within the meaning of [E.O.] No. 1 and Article No. XVIII
(26) of the 1987 Constitution.
Petitioners’ above posture is without merit.
Justice Florenz D. Regalado explicates subject matter jurisdiction:
16. Basic … is the doctrine that the jurisdiction of a court over the subject-matter of an action
is conferred only by the Constitution or the law and that the Rules of Court yield to substantive
law, in this case, the Judiciary Act and B.P. Blg. 129, both as amended, and of which jurisdiction
is only a part. Jurisdiction … cannot be acquired through, or waived, enlarged or diminished
by, any act or omission of the parties; neither can it be conferred by the acquiescence of the
court…. Jurisdiction must exist as a matter of law…. Consequently, questions of jurisdiction
may be raised for the first time on appeal even if such issue was not raised in the lower court….
17. Nevertheless, in some case, the principle of estoppel by laches has been availed … to bar
attacks on jurisdiction….69
It is, therefore, clear that jurisdiction over the subject matter is conferred by law. In turn, the
question on whether a given suit comes within the pale of a statutory conferment is determined
by the allegations in the complaint, regardless of whether or not the plaintiff will be entitled at
the end to recover upon all or some of the claims asserted therein. 70 We said as much in Magay
v. Estiandan:71
[J]urisdiction over the subject matter is determined by the allegations of the complaint,
irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims
asserted therein-a matter that can be resolved only after and as a result of the trial. Nor may
the jurisdiction of the court be made to depend upon the defenses set up in the answer or upon
the motion to dismiss, for, were we to be governed by such rule, the question of jurisdiction
could depend almost entirely upon the defendant.
Of the same tenor was what the Court wrote in Allied Domecq Philippines, Inc. v. Villon: 72
Jurisdiction over the subject matter is the power to hear and determine the general class to
which the proceedings in question belong. Jurisdiction over the subject matter is conferred by
law and not by the consent or acquiescence of any or all of the parties or by erroneous belief
of the court that it exists. Basic is the rule that jurisdiction over the subject matter is determined
by the cause or causes of action as alleged in the complaint.
The material averments in subdivided CC No. 0033-A and CC No. 0033-F included the
following:
12. Defendant Eduardo Cojuangco, Jr served as a public officer during the Marcos
administration….
13. Defendant Eduardo Cojuangco, Jr., taking advantage of his association, influence and
connection, acting in unlawful concert with the [Marcoses] and the individual defendants,
embarked upon devices, schemes and stratagems, including the use of defendant corporations
as fronts, to unjustly enrich themselves as the expense of the Plaintiff and the Filipino people,
such as when he –
a) manipulated, beginning the year 1975 with the active collaboration of Defendants
…, Marai Clara Lobregat, Danilo Ursua [etc.], the purchase by the … (PCA) of 72.2%
of the outstanding capital stock of the … (FUB) which was subsequently converted into
a universal bank named … (UCPB) through the use of … (CCSF) … in a manner
contrary to law and to the specific purposes for which said coconut levy funds were
imposed and collected under P.D. 276 and under anomalous and sinister designs and
circumstances, to wit:
(i) Defendant Eduardo Cojuangco, Jr. coveted the coconut levy funds as a
cheap, lucrative and risk-free source of funds with which to exercise his private
option to buy the controlling interest in FUB….
(ii) to legitimize a posteriori his highly anomalous and irregular use and
diversion of government funds to advance his own private and commercial
interests … Defendant Eduardo Cojuangco, Jr. caused the issuance … of PD
755 (a) declaring that the coconut levy funds shall not be considered special
and fiduciary and trust funds … conveniently repealing for that purpose a
series of previous decrees … establishing the character of the coconut levy
funds as special, fiduciary, trust and governments; (b) confirming the
agreement between …Cojuangco and PCA on the purchase of FUB by
incorporating by reference said private commercial agreement in PD 755;
(iii) ….
(iv) To perpetuate his opportunity … to build his economic empire, …
Cojuangco caused the issuance of an unconstitutional decree (PD 1468)
requiring the deposit of all coconut levy funds with UCPB interest free to the
prejudice of the government and finally
(v) Having fully established himself as the undisputed "coconut king" with
unlimited powers to deal with the coconut levy funds, the stage was now set
for Defendant Eduardo Cojuangco, Jr. to launch his predatory forays into
almost all aspects of Philippine activity namely …. oil mills.
79 | C O N S T I 1
(vi) In gross violation of their fiduciary positions and in contravention of the
goal to create a bank for coconut farmers of the country, the capital stock of
UCPB as of February 25, 1986 was actually held by the defendants, their
lawyers, factotum and business associates, thereby finally gaining control of
the UCPB by misusing the names and identities of the so-called "more than
one million coconut farmers."
(b) created and/or funded with the use of coconut levy funds various corporations, such
as … (COCOFED) … with the active collaboration and participation of Defendants
Juan Ponce Enrile, Maria Clara Lobregat … most of whom comprised the interlocking
officers and directors of said companies; dissipated, misused and/or misappropriated
a substantial part of said coco levy funds … FINALLY GAIN OWNERSHIP AND
CONTROL OF THE UNITED COCONUT PLANTERS BANK BY MISUSING THE
NAMES AND/OR IDENTIFIES OF THE SO-CALLLED "MORE THAN ONE MILLION
COCONUT FARNMERS;
(c) misappropriated, misused and dissipated P840 million of the … (CIDF) levy funds
deposited with the National Development Corporation (NIDC) as administrator –trustee
of said funds and later with UCPB, of which Defendant Eduardo Cojuangco, Jr. was
the Chief Executive Officer….
(d) established and caused to be funded with coconut levy fundfs, with the active
collaboration of Defendants Ferdinand E. Marcos through the issuance of LOI 926 and
of [other] defendants … the United Coconut Oil Mills, Inc., a corporation controlled by
Defendant Eduardo Cojuangco, Jr. and bought sixteen (16) certain competing oil mills
at exorbitant prices … then mothballed them….
xxx xxx xxx
(i) misused coconut levy funds to buy majority of the outstanding shares of stock of
San Miguel Corporation….
xxx xxx xxx
14. Defendants Eduardo Cojuangco, Jr. … of the Angara Concepcion Cruz Regala and Abello
law offices (ACCRA) plotted, devised, schemed, conspired and confederated with each other
in setting up, through the use of the coconut levy funds the financial and corporate structures
that led to the establishment of UCPB UNICOM [etc.] and more than twenty other coconut levy
funded corporations including the acquisition of [SMC] shares and its institutionalization
through presidential directives of the coconut monopoly….
xxx xxx xxx
16. The acts of Defendants, singly or collectively, and /or in unlawful concert with one another,
constitute gross abuse of official position and authority, flagrant breach of public trust and
fiduciary obligations, brazen abuse of right and power, unjust enrichment, violation of the
Constitution and laws … to the grave and irreparable damage of the Plaintiff and the Filipino
people.
CC No. 0033-F
12. Defendant Eduardo Cojuangco, Jr., served as a public officer during the Marcos
administration….
13. Having fully established himself as the undisputed "coconut king" with unlimited powers to
deal with the coconut levy funds, the stage was now set for … Cojuangco, Jr. to launch his
predatory forays into almost all aspects of Philippine economic activity namely … oil mills ….
14. Defendant Eduardo Cojuangco, Jr., taking undue advantage of his association, influence,
and connection, acting in unlawful concert with Defendants Ferdinand E. Marcos and Imelda
R. Marcos, and the individual defendants, embarked upon devices, schemes and stratagems,
including the use of defendant corporations as fronts, to unjustly enrich themselves at the
expense of Plaintiff and the Filipino people….
(a) Having control over the coconut levy, Defendant Eduardo M. Cojuangco invested
the funds in diverse activities, such as the various businesses SMC was engaged in….;
xxx xxx xxx
(c) Later that year [1983], Cojuangco also acquired the Soriano stocks through a series
of complicated and secret agreements, a key feature of which was a "voting trust
agreement" that stipulated that Andres, Jr. or his heir would proxy over the vote of the
shares owned by Soriano and Cojuangco….
xxx xxx xxx
(g) All together, Cojuangco purchased 33 million shares of the SMC through the … 14
holding companies
xxx xxx xxx
3.1. The same fourteen companies were in turn owned by the … six (6) so-called CIIF
Companies….
(h) Defendant Corporations are but "shell" corporations owned by interlocking
shareholders who have previously admitted that they are just "nominee stockholders"
who do not have any proprietary interest over the shares in their names…. [L]awyers
of the Angara Abello Concepcion Regala & Cruz (ACCRA) Law offices, the previous
80 | C O N S T I 1
counsel who incorporated said corporations, prove that they were merely nominee
stockholders thereof.
(l) These companies, which ACCRA Law Offices organized for Defendant Cojuangco
to be able to control more than 60% of SMC shares, were funded by institutions which
depended upon the coconut levy such as the UCPB, UNICOM, … (COCOLIFE),
among others. Cojuangco and his ACCRA lawyers used the funds from 6 large coconut
oil mills and 10 copra trading companies to borrow money from the UCPB and
purchase these holding companies and the SMC stocks. Cojuangco used $ 150 million
from the coconut levy, broken down as follows:
Amount Source Purpose
(in million)
$ 22.26 Oil Mills equity in holding
Companies
$ 65.6 Oil Mills loan to holding
Companies
$ 61.2 UCPB loan to holding
Companies [164]
The entire amount, therefore, came from the coconut levy, some passing through the
Unicom Oil mills, others directly from the UCPB.
(m) With his entry into the said Company, it began to get favors from the Marcos
government, significantly the lowering of the excise taxes … on beer, one of the main
products of SMC.
15. Defendants … plotted, devised, schemed, conspired and confederated with each other in
setting up, through the use of coconut levy funds, the financial and corporate framework and
structures that led to the establishment of UCPB, [etc.], and more than twenty other coconut
levy-funded corporations, including the acquisition of [SMC] shares and its institutionalization
through presidential directives of the coconut monopoly….
16. The acts of Defendants, singly or collectively, and/or in unlawful concert with one another,
constitute gross abuse of official position and authority, flagrant breach of public trust and
fiduciary obligations, brazen abuse of right and power, unjust enrichment, violation of the
constitution and laws of the Republic of the Philippines, to the grave and irreparable damage
of Plaintiff and the Filipino people.73
Judging from the allegations of the defendants’ illegal acts thereat made, it is fairly obvious that
both CC Nos. 0033-A and CC 0033-F partake, in the context of EO Nos. 1, 2 and 14, series of
1986, the nature of ill-gotten wealth suits. Both deal with the recovery of sequestered shares,
property or business enterprises claimed, as alleged in the corresponding basic complaints, to
be ill-gotten assets of President Marcos, his cronies and nominees and acquired by taking
undue advantage of relationships or influence and/or through or as a result of improper use,
conversion or diversion of government funds or property. Recovery of these assets––
determined as shall hereinafter be discussed as prima facie ill-gotten––falls within the
unquestionable jurisdiction of the Sandiganbayan. 74
P.D. No. 1606, as amended by R.A. 7975 and E.O. No. 14, Series of 1986, vests the
Sandiganbayan with, among others, original jurisdiction over civil and criminal cases instituted
pursuant to and in connection with E.O. Nos. 1, 2, 14 and 14-A. Correlatively, the PCGG Rules
and Regulations defines the term "Ill-Gotten Wealth" as "any asset, property, business
enterprise or material possession of persons within the purview of [E.O.] Nos. 1 and 2, acquired
by them directly, or indirectly thru dummies, nominees, agents, subordinates and/or business
associates by any of the following means or similar schemes":
(1) Through misappropriation, conversion, misuse or malversation of public funds or
raids on the public treasury;
(2) ….;
(3) By the illegal or fraudulent conveyance or disposition of assets belonging to the
government or any of its subdivisions, agencies or instrumentalities or government-
owned or controlled corporations;
(4) By obtaining, receiving or accepting directly or indirectly any shares of stock, equity
or any other form of interest or participation in any business enterprise or undertaking;
(5) Through the establishment of agricultural, industrial or commercial monopolies or
other combination and/or by the issuance, promulgation and/or implementation of
decrees and orders intended to benefit particular persons or special interests; and
(6) By taking undue advantage of official position, authority, relationship or influence
for personal gain or benefit.75 (Emphasis supplied)
Section 2(a) of E.O. No. 1 charged the PCGG with the task of assisting the President in "[T]he
recovery of all ill-gotten wealth accumulated by former … [President] Marcos, his immediate
family, relatives, subordinates and close associates … including the takeover or sequestration
of all business enterprises and entities owned or controlled by them, during his administration,
directly or through nominees, by taking undue advantage of their public office and/or using
81 | C O N S T I 1
their powers, authority, influence, connections or relationship." Complementing the aforesaid
Section 2(a) is Section 1 of E.O. No. 2 decreeing the freezing of all assets "in which the
[Marcoses] their close relatives, subordinates, business associates, dummies, agents or
nominees have any interest or participation."
The Republic’s averments in the amended complaints, particularly those detailing the alleged
wrongful acts of the defendants, sufficiently reveal that the subject matter thereof comprises
the recovery by the Government of ill-gotten wealth acquired by then President Marcos, his
cronies or their associates and dummies through the unlawful, improper utilization or diversion
of coconut levy funds aided by P.D. No. 755 and other sister decrees. President Marcos himself
issued these decrees in a brazen bid to legalize what amounts to private taking of the said
public funds.
Petitioners COCOFED et al. and Ursua, however, would insist that the Republic has failed to
prove the jurisdiction facts: that the sequestered assets indeed constitute ill-gotten wealth as
averred in the amended subdivided complaints.
This contention is incorrect.
There was no actual need for Republic, as plaintiff a quo, to adduce evidence to show that the
Sandiganbayan has jurisdiction over the subject matter of the complaints as it leaned on the
averments in the initiatory pleadings to make visible the jurisdiction of the Sandiganbayan over
the ill-gotten wealth complaints. As previously discussed, a perusal of the allegations easily
reveals the sufficiency of the statement of matters disclosing the claim of the government
against the coco levy funds and the assets acquired directly or indirectly through said funds as
ill-gotten wealth. Moreover, the Court finds no rule that directs the plaintiff to first prove the
subject matter jurisdiction of the court before which the complaint is filed. Rather, such burden
falls on the shoulders of defendant in the hearing of a motion to dismiss anchored on said
ground or a preliminary hearing thereon when such ground is alleged in the answer.
COCOFED et al. and Ursua’s reliance on Manila Electric Company [Meralco] v. Ortanez 76 is
misplaced, there being a total factual dissimilarity between that and the case at bar. Meralco
involved a labor dispute before the Court of Industrial Relations (CIR) requiring the
interpretation of a collective bargaining agreement to determine which between a regular court
and CIR has jurisdiction. There, it was held that in case of doubt, the case may not be dismissed
for failure to state a cause of action as jurisdiction of CIR is not merely based on the allegations
of the complaint but must be proved during the trial of the case. The factual milieu of Meralco
shows that the said procedural holding is peculiar to the CIR. Thus, it is not and could not be a
precedent to the cases at bar.
Even PCGG v. Nepomuceno77 is not on all fours with the cases at bench, the issue therein
being whether the regional trial court has jurisdiction over the PCGG and sequestered
properties, vis-à-vis the present cases, which involve an issue concerning the Sandiganbayan’s
jurisdiction. Like in Meralco, the holding in Nepomuceno is not determinative of the outcome of
the cases at bar.
While the 1964 Meralco and the Nepomuceno cases are inapplicable, the Court’s ruling in
Tijam v. Sibonhonoy78 is the leading case on estoppel relating to jurisdiction. In Tijam, the Court
expressed displeasure on "the undesirable practice of a party submitting his case for decision
and then accepting judgment, only if favorable, and then attacking it for lack of jurisdiction,
when adverse."
Considering the antecedents of CC Nos. 0033-A and 0033-F, COCOFED, Lobregat, Ballares,
et al. and Ursua are already precluded from assailing the jurisdiction of the Sandiganbayan.
Remember that the COCOFED and the Lobregat group were not originally impleaded as
defendants in CC No. 0033. They later asked and were allowed by the Sandiganbayan to
intervene. If they really believe then that the Sandiganbayan is without jurisdiction over the
subject matter of the complaint in question, then why intervene in the first place? They could
have sat idly by and let the proceedings continue and would not have been affected by the
outcome of the case as they can challenge the jurisdiction of the Sandiganbayan when the time
for implementation of the flawed decision comes. More importantly, the decision in the case
will have no effect on them since they were not impleaded as indispensable parties. After all,
the joinder of all indispensable parties to a suit is not only mandatory, but jurisdictional as
well.79 By their intervention, which the Sandiganbayan allowed per its resolution dated
September 30, 1991, COCOFED and Ursua have clearly manifested their desire to submit to
the jurisdiction of the Sandiganbayan and seek relief from said court. Thereafter, they filed
numerous pleadings in the subdivided complaints seeking relief and actively participated in
numerous proceedings. Among the pleadings thus filed are the Oppositions to the Motion for
Intervention interposed by the Pambansang Koalisyon ng mga Samahang Magsasaka at
Manggagawa sa Niyogan and Gabay ng Mundo sa Kaunlaran Foundation, Inc., a Class Action
Omnibus Motion to enjoin the PCGG from voting the SMC shares dated February 23, 2001
(granted by Sandiganbayan) and the Class Action Motion for a Separate Summary Judgment
dated April 11, 2001. By these acts, COCOFED et al. are now legally estopped from asserting
the Sandiganbayn’s want of jurisdiction, if that be the case, over the subject matter of the
complaint as they have voluntarily yielded to the jurisdiction of the Sandiganbayan. Estoppel
has now barred the challenge on Sandiganbayan’s jurisdiction.
The ensuing excerpts from Macahilig v. Heirs of Magalit 80 are instructive:
We cannot allow her to attack its jurisdiction simply because it rendered a Decision prejudicial
to her position. Participation in all stages of a case before a trial court effectively estops a party
from challenging its jurisdiction. One cannot belatedly reject or repudiate its decision after
voluntarily submitting to its jurisdiction, just to secure affirmative relief against one’s opponent
or after failing to obtain such relief. If, by deed or conduct, a party has induced another to act
in a particular manner, estoppel effectively bars the former from adopting an inconsistent
position, attitude or course of conduct that thereby causes loss or injury to the latter.
Lest it be overlooked, this Court has already decided that the sequestered shares are prima
facie ill-gotten wealth rendering the issue of the validity of their sequestration and of the
jurisdiction of the Sandiganbayan over the case beyond doubt. In the case of COCOFED v.
PCGG,81 We stated that:
82 | C O N S T I 1
It is of course not for this Court to pass upon the factual issues thus raised. That function
pertains to the Sandiganbayan in the first instance. For purposes of this proceeding, all that the
Court needs to determine is whether or not there is prima facie justification for the sequestration
ordered by the PCGG. The Court is satisfied that there is. The cited incidents, given the public
character of the coconut levy funds, place petitioners COCOFED and its leaders and officials,
at least prima facie, squarely within the purview of Executive Orders Nos. 1, 2 and 14, as
construed and applied in BASECO, to wit:
"1. that ill-gotten properties (were) amassed by the leaders and supporters of the previous
regime;
"a. more particularly, that ‘(i)ll-gotten wealth was accumulated by … Marcos, his immediate
family, relatives, subordinates and close associates, …. (and) business enterprises and entities
(came to be) owned or controlled by them, during … (the Marcos) administration, directly or
through nominees, by taking undue advantage of their public office and using their powers,
authority, influence, connections or relationships’;
"b. otherwise stated, that ‘there are assets and properties purportedly pertaining to [the
Marcoses], their close relatives, subordinates, business associates, dummies, agents or
nominees which had been or were acquired by them directly or indirectly, through or as a result
of the improper or illegal use of funds or properties owned by the Government …or any of its
branches, instrumentalities, enterprises, banks or financial institutions, or by taking undue
advantage of their office, authority, influence, connections or relationship, resulting in their
unjust enrichment ….;
xxx xxx xxx
2. The petitioners’ claim that the assets acquired with the coconut levy funds are privately
owned by the coconut farmers is founded on certain provisions of law, to wit [Sec. 7, RA 6260
and Sec. 5, Art. III, PD 1468]… (Words in bracket added; italics in the original).
In their attempt to dismiss the amended complaints in question, petitioners asseverate that (1)
the coconut farmers cannot be considered as "subordinates, close and/or business associates,
dummies, agents and nominees" of Cojuangco, Jr. or the Marcoses, and (2) the sequestered
shares were not illegally acquired nor acquired "through or as result of improper or illegal use
or conversion of funds belonging to the Government." While not saying so explicitly, petitioners
are doubtless conveying the idea that wealth, however acquired, would not be considered "ill-
gotten" in the context of EO 1, 2 and 14, s. of 1986, absent proof that the recipient or end
possessor thereof is outside the Marcos’ circle of friends, associates, cronies or nominees.
We are not convinced.
As may be noted, E.O. 1 and 2 advert to President Marcos, or his associates’ nominees. In its
most common signification, the term "nominee" refers to one who is designated to act for
another usually in a limited way; 82 a person in whose name a stock or bond certificate is
registered but who is not the actual owner thereof is considered a nominee." 83 Corpus Juris
Secundum describes a nominee as one:
… designated to act for another as his representative in a rather limited sense. It has no
connotation, however, other than that of acting for another, in representation of another or as
the grantee of another. In its commonly accepted meaning the term connoted the delegation
of authority to the nominee in a representative or nominal capacity only, and does not connote
the transfer or assignment to the nominee of any property in, or ownership of, the rights of the
person nominating him.84
So, the next question that comes to the fore is: would the term "nominee" include the more
than one million coconut farmers alleged to be the recipients of the UCPB shares?
Guided by the foregoing definitions, the query must be answered in the affirmative if only to
give life to those executive issuances aimed at ensuring the recovery of ill-gotten wealth. It is
basic, almost elementary, that:
Laws must receive a sensible interpretation to promote the ends for which they are enacted.
They should be so given reasonable and practical construction as will give life to them, if it can
be done without doing violence to reason. Conversely, a law should not be so construed as to
allow the doing of an act which is prohibited by law, not so interpreted as to afford an opportunity
to defeat compliance with its terms, create an inconsistency, or contravene the plain words of
the law. Interpretatio fienda est ut res magis valeat quam pereat or that interpretation as will
give the thing efficacy is to be adopted.85
E.O. 1, 2, 14 and 14-A, it bears to stress, were issued precisely to effect the recovery of ill-
gotten assets amassed by the Marcoses, their associates, subordinates and cronies, or
through their nominees. Be that as it may, it stands to reason that persons listed as associated
with the Marcoses86 refer to those in possession of such ill-gotten wealth but holding the same
in behalf of the actual, albeit undisclosed owner, to prevent discovery and consequently
recovery. Certainly, it is well-nigh inconceivable that ill-gotten assets would be distributed to
and left in the hands of individuals or entities with obvious traceable connections to Mr. Marcos
and his cronies. The Court can take, as it has in fact taken, judicial notice of schemes and
machinations that have been put in place to keep ill-gotten assets under wraps. These would
include the setting up of layers after layers of shell or dummy, but controlled, corporations 87 or
manipulated instruments calculated to confuse if not altogether mislead would-be investigators
from recovering wealth deceitfully amassed at the expense of the people or simply the fruits
thereof. Transferring the illegal assets to third parties not readily perceived as Marcos cronies
would be another. So it was that in PCGG v. Pena, the Court, describing the rule of Marcos as
a "well entrenched plundering regime of twenty years," noted the magnitude of the past
regime’s organized pillage and the ingenuity of the plunderers and pillagers with the assistance
of experts and the best legal minds in the market. 88
Hence, to give full effect to E.O. 1, 2 and 14, s. of 1986, the term "nominee," as used in the
above issuances, must be taken to mean to include any person or group of persons, natural or
83 | C O N S T I 1
juridical, in whose name government funds or assets were transferred to by Pres. Marcos, his
cronies or his associates. To this characterization must include what the Sandiganbayan
considered the "unidentified" coconut farmers, more than a million of faceless and nameless
coconut farmers, the alleged beneficiaries of the distributed UCPB shares, who, under the
terms of Sec. 10 of PCA A.O. No. 1, s. of 1975, were required, upon the delivery of their
respective stock certificates, to execute an irrevocable proxy in favor of the Bank’s manager.
There is thus ample truth to the observations - "[That] the PCA provided this condition only
indicates that the PCA had no intention to constitute the coconut farmer UCPB stockholder as
a bona fide stockholder;" that the 1.5 million registered farmer-stockholders were "mere
nominal stockholders."89
From the foregoing, the challenge on the Sandiganbayan’s subject matter jurisdiction at bar
must fail.
II
Petitioners COCOFED et al. were not
deprived of their right to be heard.
As a procedural issue, COCOFED, et al. and Ursua next contend that in the course of almost
20 years that the cases have been with the anti-graft court, they have repeatedly sought leave
to adduce evidence (prior to respondent’s complete presentation of evidence) to prove the coco
farmers’ actual and beneficial ownership of the sequestered shares. The Sandiganbayan,
however, had repeatedly and continuously disallowed such requests, thus depriving them of
their constitutional right to be heard.
This contention is untenable, their demand to adduce evidence being disallowable on the
ground of prematurity.
The records reveal that the Republic, after adducing its evidence in CC No. 0033-A,
subsequently filed a Motion Ad Cautelam for Leave to Present Additional Evidence dated
March 28, 2001. This motion remained unresolved at the time the Republic interposed its
Motion for Partial Summary Judgment. The Sandiganbayan granted the later motion and
accordingly rendered the Partial Summary Judgment, effectively preempting the presentation
of evidence by the defendants in said case (herein petitioners COCOFED and Ursua).
Section 5, Rule 30 the Rules of Court clearly sets out the order of presenting evidence:
SEC. 5. Order of trial.—Subject to the provisions of section 2 of Rule 31, and unless the court
for special reasons otherwise directs, the trial shall be limited to the issues stated in the pre-
trial order and shall proceed as follows:
(a) The plaintiff shall adduce evidence in support of his complaint;
(b) The defendant shall then adduce evidence in support of his defense, counterclaim,
cross-claim and third-party complaint;
 xxx xxx xxx
(g) Upon admission of the evidence, the case shall be deemed submitted for decision,
unless the court directs the parties to argue or to submit their respective memoranda
or any further pleadings.
If several defendants or third-party defendants, and so forth. having separate defenses appear
by different counsel, the court shall determine the relative order of presentation of their
evidence. (Emphasis supplied.)
Evidently, for the orderly administration of justice, the plaintiff shall first adduce evidence in
support of his complaint and after the formal offer of evidence and the ruling thereon, then
comes the turn of defendant under Section 3 (b) to adduce evidence in support of his defense,
counterclaim, cross-claim and third party complaint, if any. Deviation from such order of trial is
purely discretionary upon the trial court, in this case, the Sandiganbayan, which cannot be
questioned by the parties unless the vitiating element of grave abuse of discretion supervenes.
Thus, the right of COCOFED to present evidence on the main case had not yet ripened. And
the rendition of the partial summary judgments overtook their right to present evidence on their
defenses.
It cannot be stressed enough that the Republic as well as herein petitioners were well within
their rights to move, as they in fact separately did, for a partial summary judgment. Summary
judgment may be allowed where, save for the amount of damages, there is, as shown by
affidavits and like evidentiary documents, no genuine issue as to any material fact and the
moving party is entitled to a judgment as a matter of law. A "genuine issue", as distinguished
from one that is fictitious, contrived and set up in bad faith, means an issue of fact that calls for
the presentation of evidence.90 Summary or accelerated judgment, therefore, is a procedural
technique aimed at weeding out sham claims or defenses at an early stage of the
litigation.91 Sections 1, 2 and 4 of Rule 35 of the Rules of Court on Summary Judgment,
respectively provide:
SECTION 1. Summary judgment for claimant.—A party seeking to recover upon a claim,
counterclaim, or cross-claim … may, at any time after the pleading in answer thereto has been
served, move with supporting affidavits, depositions or admissions for a summary judgment in
his favor upon all or any part thereof.
SEC. 2. Summary judgment for defending party.—A party against whom a claim, counterclaim
or cross-claim is asserted … is sought may, at any time, move with supporting affidavits,
depositions or admissions for a summary judgment in his favor as to all or any part thereof.
SEC. 4. Case not fully adjudicated on motion.—If on motion under this Rule, judgment is not
rendered upon the whole case or for all the reliefs sought and a trial is necessary, the court at
the hearing of the motion, by examining the pleadings and the evidence before it and by
interrogating counsel shall ascertain what material facts exist without substantial controversy
and what are actually and in good faith controverted. It shall thereupon make an order
84 | C O N S T I 1
specifying the facts that appear without substantial controversy, including the extent to which
the amount of damages or other relief is not in controversy, and directing such further
proceedings in the action as are just. The facts so specified shall be deemed established, and
the trial shall be conducted on the controverted facts accordingly.
Clearly, petitioner COCOFED’s right to be heard had not been violated by the mere issuance
of PSJ-A and PSJ-F before they can adduce their evidence.
As it were, petitioners COCOFED et al. were able to present documentary evidence in
conjunction with its "Class Action Omnibus Motion" dated February 23, 2001 where they
appended around four hundred (400) documents including affidavits of alleged farmers. These
petitioners manifested that said documents comprise their evidence to prove the farmers’
ownership of the UCPB shares, which were distributed in accordance with valid and existing
laws.92
Lastly, COCOFED et al. even filed their own Motion for Separate Summary Judgment, an event
reflective of their admission that there are no more factual issues left to be determined at the
level of the Sandiganbayan. This act of filing a motion for summary judgment is a judicial
admission against COCOFED under Section 26, Rule 130 which declares that the "act,
declaration or omission of a party as to a relevant fact may be given in evidence against him."
Viewed in this light, the Court has to reject petitioners’ self-serving allegations about being
deprived the right to adduce evidence.
III
The right to speedy trial was not violated.
This brings to the fore the alleged violation of petitioners’ right to a speedy trial and speedy
disposition of the case. In support of their contention, petitioners cite Licaros v.
Sandiganbayan,93 where the Court dismissed the case pending before the Sandiganbayan for
violation of the accused’s right to a speedy trial.
It must be clarified right off that the right to a speedy disposition of case and the accused’s right
to a speedy trial are distinct, albeit kindred, guarantees, the most obvious difference being that
a speedy disposition of cases, as provided in Article III, Section 16 of the Constitution, obtains
regardless of the nature of the case:
Section 16. All persons shall have the right to a speedy disposition of their cases before all
judicial, quasi-judicial, or administrative bodies.
In fine, the right to a speedy trial is available only to an accused and is a peculiarly criminal law
concept, while the broader right to a speedy disposition of cases may be tapped in any
proceedings conducted by state agencies. Thus, in Licaros the Court dismissed the criminal
case against the accused due to the palpable transgression of his right to a speedy trial.
In the instant case, the appropriate right involved is the right to a speedy disposition of cases,
the recovery of ill-gotten wealth being a civil suit.
Nonetheless, the Court has had the occasion to dismiss several cases owing to the
infringement of a party’s right to a speedy disposition of cases. 94 Dismissal of the case for
violation of this right is the general rule. Bernat v. The Honorable Sandiganbayan (5th
Division)95 expounds on the extent of the right to a speedy disposition of cases as follows:
Section 16 of Article III of the Constitution guarantees the right of all persons to a "speedy
disposition of their cases." Nevertheless, this right is deemed violated only when the
proceedings are attended by vexatious, capricious and oppressive delays. Moreover, the
determination of whether the delays are of said nature is relative and cannot be based on a
mere mathematical reckoning of time. Particular regard must be taken of the facts and
circumstances peculiar to each case. As a guideline, the Court in Dela Peña v. Sandiganbayan
mentioned certain factors that should be considered and balanced, namely: 1) length of delay;
2) reasons for the delay; 3) assertion or failure to assert such right by the accused; and 4)
prejudice caused by the delay.
xxx xxx xxx
While this Court recognizes the right to speedy disposition quite distinctly from the right to a
speedy trial, and although this Court has always zealously espoused protection from
oppressive and vexatious delays not attributable to the party involved, at the same time, we
hold that a party’s individual rights should not work against and preclude the people’s equally
important right to public justice. In the instant case, three people died as a result of the crash
of the airplane that the accused was flying. It appears to us that the delay in the disposition of
the case prejudiced not just the accused but the people as well. Since the accused has
completely failed to assert his right seasonably and inasmuch as the respondent judge was not
in a position to dispose of the case on the merits… we hold it proper and equitable to give the
parties fair opportunity to obtain … substantial justice in the premises.
96
The more recent case of Tello v. People laid stress to the restrictive dimension to the right to
speedy disposition of cases, i.e., it is lost unless seasonably invoked:
In Bernat …, the Court denied petitioner’s claim of denial of his right to a speedy disposition of
cases considering that [he] … chose to remain silent for eight years before complaining of the
delay in the disposition of his case. The Court ruled that petitioner failed to seasonably assert
his right and he merely sat and waited from the time his case was submitted for resolution. In
this case, petitioner similarly failed to assert his right to a speedy disposition of his case…. He
only invoked his right to a speedy disposition of cases after [his conviction]…. Petitioner’s
silence may be considered as a waiver of his right.
An examination of the petitioners’ arguments and the cited indicia of delay would reveal the
absence of any allegation that petitioners moved before the Sandiganbayan for the dismissal
of the case on account of vexatious, capricious and oppressive delays that attended the
85 | C O N S T I 1
proceedings. Following Tello, petitioners are deemed to have waived their right to a speedy
disposition of the case. Moreover, delays, if any, prejudiced the Republic as well. What is more,
the alleged breach of the right in question was not raised below. As a matter of settled
jurisprudence, but subject to equally settled exception, an issue not raised before the trial court
cannot be raised for the first time on appeal.97 The sporting idea forbidding one from pulling
surprises underpins this rule. For these reasons, the instant case cannot be dismissed for the
alleged violation of petitioners’ right to a speedy disposition of the case.
IV
Sections 1 and 2 of P.D. No. 755, Article III, Section 5 of P.D. No. 961 and Article III, Section
5 of P.D. No. 1468, are unconstitutional.
The Court may pass upon the constitutionality of P.D. Nos. 755, 961 and 1468.
Petitioners COCOFED et al. and Ursua uniformly scored the Sandiganbayan for abusing its
power of judicial review and wrongly encroaching into the exclusive domain of Congress when
it declared certain provisions of the coconut levy laws and PCA administrative issuances as
unconstitutional.
We are not persuaded.
It is basic that courts will not delve into matters of constitutionality unless unavoidable, when
the question of constitutionality is the very lis mota of the case, meaning, that the case cannot
be legally resolved unless the constitutional issue raised is determined. This rule finds
anchorage on the presumptive constitutionality of every enactment. Withal, to justify the
nullification of a statute, there must be a clear and unequivocal breach of the Constitution. A
doubtful or speculative infringement would simply not suffice.98
Just as basic is the precept that lower courts are not precluded from resolving, whenever
warranted, constitutional questions, subject only to review by this Court.
To Us, the present controversy cannot be peremptorily resolved without going into the
constitutionality of P.D. Nos. 755, 961 and 1468 in particular. For petitioners COCOFED et al.
and Ballares et al. predicate their claim over the sequestered shares and necessarily their
cause on laws and martial law issuances assailed by the Republic on constitutional grounds.
Indeed, as aptly observed by the Solicitor General, this case is for the recovery of shares
grounded on the invalidity of certain enactments, which in turn is rooted in the shares being
public in character, purchased as they were by funds raised by the taxing and/or a mix of taxing
and police powers of the state.99 As may be recalled, P.D. No. 755, under the policy-declaring
provision, authorized the distribution of UCPB shares of stock free to coconut farmers. On the
other hand, Section 2 of P.D. No. 755, hereunder quoted below, effectively authorized the PCA
to utilize portions of the CCSF to pay the financial commitment of the farmers to acquire UCPB
and to deposit portions of the CCSF levies with UCPB interest free. And as there also provided,
the CCSF, CIDF and like levies that PCA is authorized to collect shall be considered as non-
special or fiduciary funds to be transferred to the general fund of the Government, meaning
they shall be deemed private funds.
Section 2 of P.D. No. 755 reads:
Section 2. Financial Assistance. — To enable the coconut farmers to comply with their
contractual obligations under the aforesaid Agreement, the [PCA] is hereby directed to draw
and utilize the collections under the [CCSF] authorized to be levied by [PD] No. 232, as
amended, to pay for the financial commitments of the coconut farmers under the said
agreement and, except for [PCA’s] budgetary requirements …, all collections under the [CCSF]
Levy and (50%) of the collections under the [CIDF] shall be deposited, interest free, with the
said bank of the coconut farmers and such deposits shall not be withdrawn until the … the bank
has sufficient equity capital …; and since the operations, and activities of the [PCA] are all in
accord with the present social economic plans and programs of the Government, all collections
and levies which the [PCA] is authorized to levy and collect such as but not limited to the [CCS
Levy] and the [CIDF] … shall not be considered or construed, under any law or regulation,
special and/or fiduciary funds and do not form part of the general funds of the national
government within the contemplation of [P.D.] No. 711. (Emphasis supplied)
A similar provision can also be found in Article III, Section 5 of P.D. No. 961 and Article III,
Section 5 of P.D. No. 1468, which We shall later discuss in turn:
P.D. No. 961
Section 5. Exemptions. The Coconut Consumers Stabilization Fund and the Coconut Industry
Development Fund as well as all disbursements of said funds for the benefit of the coconut
farmers as herein authorized shall not be construed or interpreted, under any law or regulation,
as special and/or fiduciary funds, or as part of the general funds of the national government
within the contemplation of P.D. No. 711; nor as a subsidy, donation, levy, government funded
investment, or government share within the contemplation of P.D. 898, the intention being that
said Fund and the disbursements thereof as herein authorized for the benefit of the coconut
farmers shall be owned by them in their own private capacities.100 (Emphasis Ours)
P.D. No. 1468
Section 5. Exemptions. The [CCSF] and the [CIDF] as well as all disbursement as herein
authorized, shall not be construed or interpreted, under nay law or regulation, as special and/or
fiduciary funds, or as part of the general funds of the national government within the
contemplation of PD 711; nor as subsidy, donation, levy government funded investment, or
government share within the contemplation of PD 898, the intention being that said Fund and
the disbursements thereof as herein authorized for the benefit of the coconut farmers shall be
owned by them in their private capacities….101 (Emphasis Ours.)
In other words, the relevant provisions of P.D. Nos. 755, as well as those of P.D. Nos. 961 and
1468, could have been the only plausible means by which close to a purported million and a
86 | C O N S T I 1
half coconut farmers could have acquired the said shares of stock. It has, therefore, become
necessary to determine the validity of the authorizing law, which made the stock transfer and
acquisitions possible.
To reiterate, it is of crucial importance to determine the validity of P.D. Nos. 755, 961 and 1468
in light of the constitutional proscription against the use of special funds save for the purpose
it was established. Otherwise, petitioners’ claim of legitimate private ownership over UCPB
shares and indirectly over SMC shares held by UCPB’s subsidiaries will have no leg to stand
on, P.D. No. 755 being the only law authorizing the distribution of the SMC and UCPB shares
of stock to coconut farmers, and with the aforementioned provisions actually stating and holding
that the coco levy fund shall not be considered as a special – not even general – fund, but shall
be owned by the farmers in their private capacities. 102
The Sandiganbayan’s ensuing ratiocination on the need to pass upon constitutional issues the
Republic raised below commends itself for concurrence:
This Court is convinced of the imperative need to pass upon the issues of constitutionality
raised by Plaintiff. The issue of constitutionality of the provisions of P.D. No. 755 and the laws
related thereto goes to the very core of Plaintiff’s causes of action and defenses thereto. It will
serve the best interest of justice to define this early the legal framework within which this case
shall be heard and tried, taking into account the admission of the parties and the established
facts, particularly those relating to the main substance of the defense of Lobregat, COCOFED,
et al. and Ballares, et al., which is anchored on the laws being assailed by Plaintiff on
constitutional grounds.
xxx xxx xxx
The Court is also mindful that lower courts are admonished to observe a becoming modesty in
examining constitutional questions, but that they are nonetheless not prevented from resolving
the same whenever warranted, subject only to review by the highest tribunal (Ynot v.
Intermediate Appellate Court).
xxx xxx xxx
It is true that, as a general rule, the question of constitutionality must be raised at the earliest
opportunity. The Honorable Supreme Court … has clearly stated that the general rule admits
of exceptions, thus:
xxx xxx xxx
‘For courts will pass upon a constitutional question 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…. It has been held that the determination of a
constitutional question is necessary whenever it is essential to the decision of the case … as
where the right of a party is founded solely on a statute, the validity of which is attacked.’
In the case now before us, the allegations of the Subdivided Complaint are consistent with
those in the subject Motion, and they sufficiently raise the issue of constitutionality of the
provisions of laws in question. The Third Amended Complaint (Subdivided) states:
‘(ii) to legitimize a posteriori his highly anomalous and irregular use and diversion of
government funds to advance his own private and commercial interests, … Cojuangco, Jr.
caused the issuance … of PD 755 (a) declaring that the coconut levy funds shall not be
considered special and fiduciary and trusts funds and do not form part of the general funds of
the National Government, conveniently repealing for that purpose a series of coconut levy
funds as special, fiduciary, trust and government funds….
xxx xxx xxx
‘(iv) To perpetuate his opportunity to deal with and make use the coconut levy funds to build
his economic empire, Cojuangco, Jr. caused the issuance by Defendant Ferdinand E. Marcos
of an unconstitutional decree (PD 1468) requiring the deposit of all coconut levy funds with
UCPB, interest free, to the prejudice of the government.’
The above-quoted allegations in the Third Amended Complaint (Subdivided) already question
the "legitimacy" of the exercise by former President Marcos of his legislative authority when he
issued P.D. Nos. 755 and 1468. The provision of Sec. 5, Art. III of P.D. 961 is substantially
similar to the provisions of the aforesaid two [PDs]. P.D. No. 755 allegedly legitimized the
"highly anomalous and irregular use and diversion of government funds to advance his
[defendant Cojuangco’s] own private and commercial interest." The issuance of the said [PD]
which has the force and effect of a law can only be assailed on constitutional grounds. The
merits of the grounds adverted to in the allegations of the Third Amended Complaint
(Subdivided) can only be resolved by this Court by testing the questioned [PDs], which are
considered part of the laws of the land….
As early as June 20, 1989, this Court in its Resolution expressed this Court’s understanding of
the import of the allegations of the complaint, as follows:
"It is likewise alleged in the Complaint that in order to legitimize the diversion of funds,
defendant Ferdinand E. Marcos issued the Presidential Decrees referred to by the movants.
This is then the core of Plaintiff’s complaint: that, insofar as the coconut levy is concerned,
these decrees had been enacted as tools for the acquisition of ill-gotten wealth for specific
favored individuals.
"Even if Plaintiff may not have said so effectively, the complaint in fact disputes the legitimacy,
and, if one pleases, the constitutionality of such enactments….
"The issue is validly raised on the face of the complaint and defendants must respond to it."
Since … the question of constitutionality … may be raised even on appeal if the determination
of such a question is essential to the decision of the case, we find more reason to resolve this
87 | C O N S T I 1
constitutional question at this stage of the proceedings, where the defense is grounded solely
on the very laws the constitutionality of which are being questioned and where the evidence of
the defendants would seek mainly to prove their faithful and good faith compliance with the
said laws and their implementing rules and regulations.103 (Emphasis added.)
The Court’s rulings in COCOFED v. PCGG and Republic v. Sandiganbayan, as law of the
case, are speciously invoked.
To thwart the ruling on the constitutionality of P.D. Nos. 755, 961 and 1468, petitioners would
sneak in the argument that the Court has, in three separate instances, upheld the validity, and
thumbed down the Republic’s challenge to the constitutionality, of said laws imposing the
different coconut levies and prescribing the uses of the fund collected. The separate actions of
the Court, petitioners add, would conclude the Sandiganbayan on the issue of constitutionality
of said issuances, following the law-of-the-case principle. Petitioners allege:
Otherwise stated, the decision of this Honorable Court in the COCOFED Case overruling the
strict public fund theory espoused by the Respondent Republic, upholding the propriety of the
laws imposing the collections of the different Coconut Levies and expressly allowing
COCOFED, et al., to prove that the Sequestered Assets have legitimately become their private
properties had become final and immutable. 104
Petitioners are mistaken.
Yu v. Yu,105 as effectively reiterated in Vios v. Pantangco, 106 defines and explains the
ramifications of the law of the case principle as follows:
Law of the case has been defined as the opinion delivered on a former appeal. It is a term
applied to an established rule that when an appellate court passes on a question and remands
the case to the lower court for further proceedings, the question there settled becomes the law
of the case upon subsequent appeal. It means that whatever is once irrevocably established
as the controlling legal rule or decision between the same parties in the same case continues
to be the law of the case, … so long as the facts on which such decision was predicated
continue to be the facts of the case before the court.
Otherwise put, the principle means that questions of law that have been previously raised and
disposed of in the proceedings shall be controlling in succeeding instances where the same
legal question is raised, provided that the facts on which the legal issue was predicated
continue to be the facts of the case before the court. Guided by this definition, the law of the
case principle cannot provide petitioners any comfort. We shall explain why.
In the first instance, petitioners cite COCOFED v. PCGG. 107 There, respondent PCGG
questioned the validity of the coconut levy laws based on the limits of the state’s taxing and
police power, as may be deduced from the ensuing observations of the Court:
…. Indeed, the Solicitor General suggests quite strongly that the laws operating or purporting
to convert the coconut levy funds into private funds, are a transgression of the basic limitations
for the licit exercise of the state's taxing and police powers, and that certain provisions of said
laws are merely clever stratagems to keep away government audit in order to facilitate
misappropriation of the funds in question.
The utilization and proper management of the coconut levy funds, [to acquire shares of stocks
for coconut farmers and workers] raised as they were by the State’s police and taxing power
are certainly the concern of the Government…. The coconut levy funds are clearly affected
with public interest. Until it is demonstrated satisfactorily that they have legitimately become
private funds, they must prima facie be accounted subject to measures prescribed in EO Nos.
1, 2, and 14 to prevent their concealment, dissipation, etc…. 108 [Words in bracket added.]
The issue, therefore, in COCOFED v. PCGG turns on the legality of the transfer of the shares
of stock bought with the coconut levy funds to coconut farmers. This must be distinguished with
the issues in the instant case of whether P.D. No. 755 violated Section 29, paragraph 3 of
Article VI of the 1987 Constitution as well as to whether P.D. No. 755 constitutes undue
delegation of legislative power. Clearly, the issues in both sets of cases are so different as to
preclude the application of the law of the case rule.
The second and third instances that petitioners draw attention to refer to the rulings in Republic
v. Sandiganbayan, where the Court by Resolution of December 13, 1994, as reiterated in
another resolution dated March 26, 1996, resolved to deny the separate motions of the
Republic to resolve legal questions on the character of the coconut levy funds, more particularly
to declare as unconstitutional (a) coconut levies collected pursuant to various issuances as
public funds and (b) Article III, Section 5 of P.D. No. 1468.
Prescinding from the foregoing considerations, petitioners would state: "Having filed at least
three (3) motions … seeking, among others, to declare certain provisions of the Coconut Levy
Laws unconstitutional and having been rebuffed all three times by this Court," the Republic -
and necessarily Sandiganbayan – "should have followed as [they were] legally bound by this
… Court’s prior determination" on that above issue of constitutionality under the doctrine of
Law of the Case.
Petitioners are wrong. The Court merely declined to pass upon the constitutionality of the
coconut levy laws or some of their provisions. It did not declare that the UCPB shares acquired
with the use of coconut levy funds have legitimately become private.
The coconut levy funds are in the nature of taxes and can only be used for public purpose.
Consequently, they cannot be used to purchase shares of stocks to be given for free to private
individuals.
Indeed, We have hitherto discussed, the coconut levy was imposed in the exercise of the
State’s inherent power of taxation. As We wrote in Republic v. COCOFED: 109
88 | C O N S T I 1
Indeed, coconut levy funds partake of the nature of taxes, which, in general, are enforced
proportional contributions from persons and properties, exacted by the State by virtue of its
sovereignty for the support of government and for all public needs.
Based on its definition, a tax has three elements, namely: a) it is an enforced proportional
contribution from persons and properties; b) it is imposed by the State by virtue of its
sovereignty; and c) it is levied for the support of the government. The coconut levy funds fall
squarely into these elements for the following reasons:
(a) They were generated by virtue of statutory enactments imposed on the coconut farmers
requiring the payment of prescribed amounts. Thus, PD No. 276, which created the Coconut
Consumer[s] Stabilization Fund (CCSF), mandated the following:
"a. A levy, initially, of P15.00 per 100 kilograms of copra resecada or its equivalent in other
coconut products, shall be imposed on every first sale, in accordance with the mechanics
established under RA 6260, effective at the start of business hours on August 10, 1973.
"The proceeds from the levy shall be deposited with the Philippine National Bank or any other
government bank to the account of the Coconut Consumers Stabilization Fund, as a separate
trust fund which shall not form part of the general fund of the government."
The coco levies were further clarified in amendatory laws, specifically PD No. 961 and PD No.
1468 – in this wise:
"The Authority (PCA) is hereby empowered to impose and collect a levy, to be known as the
Coconut Consumers Stabilization Fund Levy, on every one hundred kilos of copra resecada,
or its equivalent … delivered to, and/or purchased by, copra exporters, oil millers, desiccators
and other end-users of copra or its equivalent in other coconut products. The levy shall be paid
by such copra exporters, oil millers, desiccators and other end-users of copra or its equivalent
in other coconut products under such rules and regulations as the Authority may prescribe.
Until otherwise prescribed by the Authority, the current levy being collected shall be continued."
Like other tax measures, they were not voluntary payments or donations by the people. They
were enforced contributions exacted on pain of penal sanctions, as provided under PD No.
276:
"3. Any person or firm who violates any provision of this Decree or the rules and regulations
promulgated thereunder, shall, in addition to penalties already prescribed under existing
administrative and special law, pay a fine of not less than P2,500 or more than P10,000, or
suffer cancellation of licenses to operate, or both, at the discretion of the Court."
Such penalties were later amended thus: ….
(b) The coconut levies were imposed pursuant to the laws enacted by the proper legislative
authorities of the State. Indeed, the CCSF was collected under PD No. 276…."
(c) They were clearly imposed for a public purpose. There is absolutely no question that they
were collected to advance the government’s avowed policy of protecting the coconut industry.
This Court takes judicial notice of the fact that the coconut industry is one of the great economic
pillars of our nation, and coconuts and their byproducts occupy a leading position among the
country’s export products….
Taxation is done not merely to raise revenues to support the government, but also to provide
means for the rehabilitation and the stabilization of a threatened industry, which is so affected
with public interest as to be within the police power of the State….
Even if the money is allocated for a special purpose and raised by special means, it is still
public in character…. In Cocofed v. PCGG, the Court observed that certain agencies or
enterprises "were organized and financed with revenues derived from coconut levies imposed
under a succession of law of the late dictatorship … with deposed Ferdinand Marcos and his
cronies as the suspected authors and chief beneficiaries of the resulting coconut industry
monopoly." The Court continued: "…. It cannot be denied that the coconut industry is one of
the major industries supporting the national economy. It is, therefore, the State’s concern to
make it a strong and secure source not only of the livelihood of a significant segment of the
population, but also of export earnings the sustained growth of which is one of the imperatives
of economic stability.110 (Emphasis Ours)
We have ruled time and again that taxes are imposed only for a public purpose.111 "They cannot
be used for purely private purposes or for the exclusive benefit of private persons." 112 When a
law imposes taxes or levies from the public, with the intent to give undue benefit or advantage
to private persons, or the promotion of private enterprises, that law cannot be said to satisfy
the requirement of public purpose.113 In Gaston v. Republic Planters Bank, the petitioning sugar
producers, sugarcane planters and millers sought the distribution of the shares of stock of the
Republic Planters Bank, alleging that they are the true beneficial owners thereof. 114 In that case,
the investment, i.e., the purchase of the said bank, was funded by the deduction of PhP 1.00
per picul from the sugar proceeds of the sugar producers pursuant to P.D. No. 388. 115 In ruling
against the petitioners, the Court held that to rule in their favor would contravene the general
principle that revenues received from the imposition of taxes or levies "cannot be used for
purely private purposes or for the exclusive benefit of private persons."116 The Court amply
reasoned that the Stabilization Fund must "be utilized for the benefit of the entire sugar industry,
and all its components, stabilization of the domestic market including foreign market, the
industry being of vital importance to the country’s economy and to national interest." 117
Similarly in this case, the coconut levy funds were sourced from forced exactions decreed
under P.D. Nos. 232, 276 and 582, among others, 118 with the end-goal of developing the entire
coconut industry.119 Clearly, to hold therefore, even by law, that the revenues received from the
imposition of the coconut levies be used purely for private purposes to be owned by private
89 | C O N S T I 1
individuals in their private capacity and for their benefit, would contravene the rationale behind
the imposition of taxes or levies.
Needless to stress, courts do not, as they cannot, allow by judicial fiat the conversion of special
funds into a private fund for the benefit of private individuals. In the same vein, We cannot
subscribe to the idea of what appears to be an indirect – if not exactly direct – conversion of
special funds into private funds, i.e., by using special funds to purchase shares of stocks, which
in turn would be distributed for free to private individuals. Even if these private individuals
belong to, or are a part of the coconut industry, the free distribution of shares of stocks
purchased with special public funds to them, nevertheless cannot be justified. The ratio in
Gaston,120 as expressed below, applies mutatis mutandis to this case:
The stabilization fees in question are levied by the State … for a special purpose – that of
"financing the growth and development of the sugar industry and all its components,
stabilization of the domestic market including the foreign market." The fact that the State has
taken possession of moneys pursuant to law is sufficient to constitute them as state funds even
though they are held for a special purpose….
That the fees were collected from sugar producers,[etc.], and that the funds were channeled to
the purchase of shares of stock in respondent Bank do not convert the funds into a trust fund
for their benefit nor make them the beneficial owners of the shares so purchased. It is but
rational that the fees be collected from them since it is also they who are benefited from the
expenditure of the funds derived from it. ….121 (Emphasis Ours.)
In this case, the coconut levy funds were being exacted from copra exporters, oil millers,
desiccators and other end-users of copra or its equivalent in other coconut
products.122 Likewise so, the funds here were channeled to the purchase of the shares of stock
in UCPB. Drawing a clear parallelism between Gaston and this case, the fact that the coconut
levy funds were collected from the persons or entities in the coconut industry, among others,
does not and cannot entitle them to be beneficial owners of the subject funds – or more bluntly,
owners thereof in their private capacity. Parenthetically, the said private individuals cannot own
the UCPB shares of stocks so purchased using the said special funds of the government. 123
Coconut levy funds are special public funds of the government.
Plainly enough, the coconut levy funds are public funds. We have ruled in Republic v.
COCOFED that the coconut levy funds are not only affected with public interest; they are prima
facie public funds.124 In fact, this pronouncement that the levies are government funds was
admitted and recognized by respondents, COCOFED, et al., in G.R. No. 147062-64.125 And
more importantly, in the same decision, We clearly explained exactly what kind of government
fund the coconut levies are. We were categorical in saying that coconut levies are treated as
special funds by the very laws which created them:
Finally and tellingly, the very laws governing the coconut levies recognize their public character.
Thus, the third Whereas clause of PD No. 276 treats them as special funds for a specific public
purpose. Furthermore, PD No. 711 transferred to the general funds of the State all existing
special and fiduciary funds including the CCSF. On the other hand, PD No. 1234 specifically
declared the CCSF as a special fund for a special purpose, which should be treated as
a special account in the National Treasury.126 (Emphasis Ours.)
If only to stress the point, P.D. No. 1234 expressly stated that coconut levies are special funds
to be remitted to the Treasury in the General Fund of the State, but treated as Special Accounts:
Section 1. All income and collections for Special or Fiduciary Funds authorized by law shall be
remitted to the Treasury and treated as Special Accounts in the General Fund, including the
following:
(a) [PCA] Development Fund, including all income derived therefrom under Sections 13 and
14 of [RA] No. 1145; Coconut Investments Fund under Section 8 of [RA] No. 6260, including
earnings, profits, proceeds and interests derived therefrom; Coconut Consumers Stabilization
Funds under Section 3-A of PD No. 232, as inserted by Section 3 of P.D. No. 232, as inserted
by Section 2 of P.D. No. 583; and all other fees accruing to the [PCA] under the provisions of
Section 19 of [RA] No. 1365, in accordance with Section 2 of P.D. No. 755 and all other income
accruing to the [PCA] under existing laws.127 (Emphasis Ours)
Moreover, the Court, in Gaston, stated the observation that the character of a stabilization fund
as a special fund "is emphasized by the fact that the funds are deposited in the Philippine
National Bank [PNB] and not in the Philippine Treasury, moneys from which may be paid out
only in pursuance of an appropriation made by law." 128 Similarly in this case, Sec.1 (a) of P.D.
No. 276 states that the proceeds from the coconut levy shall be deposited with the PNB, then
a government bank, or any other government bank under the account of the CCSF, as a
separate trust fund, which shall not form part of the government’s general fund. 129 And even
assuming arguendo that the coconut levy funds were transferred to the general fund pursuant
to P.D. No. 1234, it was with the specific directive that the same be treated as special accounts
in the general fund.130
The coconut levy funds can only be used for the special purpose and the balance thereof
should revert back to the general fund. Consequently, their subsequent reclassification as a
private fund to be owned by private individuals in their private capacities under P.D. Nos. 755,
961 and 1468 are unconstitutional.
To recapitulate, Article VI, Section 29 (3) of the 1987 Constitution, restating a general principle
on taxation, enjoins the disbursement of a special fund in accordance with the special purpose
for which it was collected, the balance, if there be any, after the purpose has been fulfilled or is
no longer forthcoming, to be transferred to the general funds of the government, thus:
Section 29(3)….
(3) All money collected on any tax levied for a special purpose shall be treated as a special
fund and paid out for such purpose only. If the purpose for which a special fund was created
90 | C O N S T I 1
has been fulfilled or abandoned, the balance, if any, shall be transferred to the general funds
of the Government. (Emphasis Ours)
Correlatively, Section 2 of P.D. No. 755 clearly states that:
Section 2. Financial Assistance. To enable the coconut farmers to comply with their contractual
obligations under the aforesaid Agreement, the [PCA] is hereby directed to draw and utilize the
collections under the Coconut Consumers Stabilization Fund [CCSF] authorized to be levied
by [P.D.] 232, as amended, to pay for the financial commitments of the coconut farmers under
the said agreement…. and the Coconut Industry Development Fund as prescribed by
Presidential Decree No. 582 shall not be considered or construed, under any law or regulation,
special and/or fiduciary funds and do not form part of the general funds of the national
government within the contemplation of Presidential Decree No. 711. (Emphasis Ours)
Likewise, as discussed supra, Article III, Section 5 of both P.D. Nos. 961 and 1468 provides
that the CCSF shall not be construed by any law as a special and/or trust fund, the stated
intention being that actual ownership of the said fund shall pertain to coconut farmers in their
private capacities.131 Thus, in order to determine whether the relevant provisions of P.D. Nos.
755, 961 and 1468 complied with Article VI, Section 29 (3) of the 1987 Constitution, a look at
the public policy or the purpose for which the CCSF levy was imposed is necessary.
The CCSF was established by virtue of P.D. No. 276 wherein it is stated that:
WHEREAS, an escalating crisis brought about by an abnormal situation in the world market for
fats and oils has resulted in supply and price dislocations in the domestic market for coconut-
based goods, and has created hardships for consumers thereof;
WHEREAS, the representatives of the coconut industry … have proposed the implementation
of an industry-financed stabilization scheme which will permit socialized pricing of coconut-
based commodities;
WHEREAS, it is the policy of the State to promote the welfare and economic well-being of the
consuming public;
….
1. In addition to its powers granted under [P.D.] No. 232, the [PCA] is hereby authorized to
formulate and immediately implement a stabilization scheme for coconut-based consumer
goods, along the following general guidelines:
(a) ….The proceeds of the levy shall be deposited with the Philippine National Bank or any
other government bank to the account of the CCSF as a separate trust fund….
(b) The Fund shall be utilized to subsidize the sale of coconut-based products at prices set by
the Price Control Council….:
….
As couched, P.D. No. 276 created and exacted the CCSF "to advance the government’s
avowed policy of protecting the coconut industry." 132 Evidently, the CCSF was originally set up
as a special fund to support consumer purchases of coconut products. To put it a bit differently,
the protection of the entire coconut industry, and even more importantly, for the consuming
public provides the rationale for the creation of the coconut levy fund. There can be no quibbling
then that the foregoing provisions of P.D. No. 276 intended the fund created and set up therein
not especially for the coconut farmers but for the entire coconut industry, albeit the
improvement of the industry would doubtless redound to the benefit of the farmers. Upon the
foregoing perspective, the following provisions of P.D. Nos. 755, 961 and 1468 insofar as they
declared, as the case may be, that: "[the coconut levy] fund and the disbursements thereof
[shall be] authorized for the benefit of the coconut farmers and shall be owned by them in their
private capacities;"133 or the coconut levy fund shall not be construed by any law to be a special
and/or fiduciary fund, and do not therefore form part of the general fund of the national
government later on;134 or the UCPB shares acquired using the coconut levy fund shall be
distributed to the coconut farmers for free, 135 violated the special public purpose for which the
CCSF was established.
In sum, not only were the challenged presidential issuances unconstitutional for decreeing the
distribution of the shares of stock for free to the coconut farmers and, therefore, negating the
public purpose declared by P.D. No. 276, i.e., to stabilize the price of edible oil 136 and to protect
the coconut industry.137 They likewise reclassified, nay treated, the coconut levy fund as private
fund to be disbursed and/or invested for the benefit of private individuals in their private
capacities, contrary to the original purpose for which the fund was created. To compound the
situation, the offending provisions effectively removed the coconut levy fund away from the
cavil of public funds which normally can be paid out only pursuant to an appropriation made by
law.138 The conversion of public funds into private assets was illegally allowed, in fact
mandated, by these provisions. Clearly therefore, the pertinent provisions of P.D. Nos. 755,
961 and 1468 are unconstitutional for violating Article VI, Section 29 (3) of the Constitution. In
this context, the distribution by PCA of the UCPB shares purchased by means of the coconut
levy fund – a special fund of the government – to the coconut farmers, is therefore void.
We quote with approval the Sandiganbayan’s reasons for declaring the provisions of P.D. Nos.
755, 961 and 1468 as unconstitutional:
It is now settled, in view of the ruling in Republic v. COCOFED, et al., supra, that "Coconut levy
funds are raised with the use of the police and taxing powers of the State;" that "they are levies
imposed by the State for the benefit of the coconut industry and its farmers" and that "they were
clearly imposed for a public purpose." This public purpose is explained in the said case, as
follows:
91 | C O N S T I 1
…. c) They were clearly imposed for a public purpose. There is absolutely no question that they
were colleted to advance the government’s avowed policy of protecting the coconut industry….
"Taxation is done not merely to raise revenues to support the government, but also to provide
means for the rehabilitation and the stabilization of a threatened industry, which is so affected
with public interest as to be within the police power of the State, as held in Caltex Philippines
v. COA and Osmeña v. Orbos.
xxx xxx xxx
The avowed public purpose for the disbursement of the CCSF is contained in the
perambulatory clauses and Section 1 of P.D. No. 755. The imperativeness of enunciating the
public purpose of the expenditure of funds raised through taxation is underscored in the case
of Pascual v. The Secretary of Public Works and Communications, et al, supra, which held:
"As regards the legal feasibility of appropriating public funds for a private purpose the principle
according to Ruling Case Law, is this:
‘It is a general rule that the legislature is without power to appropriate public revenue for
anything but a public purpose … it is the essential character of the direct object of the
expenditure which must determine its validity as justifying a tax, and not the magnitude of the
interests to be affected nor the degree to which the general advantage of the community, and
thus the public welfare may be ultimately benefited by their promotion. Incidental advantage to
the public or to the state, which results from the promotion of private interests and the prosperity
of private enterprises or business, does not justify their aid by the use of public money.’ 25
R.L.C. pp. 398-400)
"The rule is set forth in Corpus Juris Secundum in the following language:
xxx xxx xxx
‘The test of the constitutionality of a statute requiring the use of public funds is whether the
statute is designed to promote the public interests, as opposed to the furtherance of the
advantage of individuals, although each advantage to individuals might incidentally serve the
public….’ (81 C.J.S. p. 1147)
"Needless to say, this Court is fully in accord with the foregoing views…. Besides, reflecting as
they do, the established jurisprudence in the United States, after whose constitutional system
ours has been patterned, said views and jurisprudence are, likewise, part and parcel of our
own constitutional law."
The gift of funds raised by the exercise of the taxing powers of the State which were converted
into shares of stock in a private corporation, slated for free distribution to the coconut farmers,
can only be accorded constitutional sanction if it will directly serve the public purpose declared
by law….139
Section 1 of P.D. No. 755, as well as PCA Administrative Order No. 1, Series of 1975 (PCA
AO 1), and Resolution No. 074-75, are invalid delegations of legislative power.
Petitioners argue that the anti-graft court erred in declaring Section 1 of PD 755, PCA
Administrative Order No. 1 and PCA Resolution No. 074-78 constitutionally infirm by reason of
alleged but unproven and unsubstantiated flaws in their implementation. Additionally, they
explain that said court erred in concluding that Section 1 of PD No. 755 constitutes an undue
delegation of legislative power insofar as it authorizes the PCA to promulgate rules and
regulations governing the distribution of the UCPB shares to the farmers.
These propositions are meritless.
The assailed PSJ-A noted the operational distribution nightmare faced by PCA and the mode
of distribution of UCPB shares set in motion by that agency left much room for diversion. Wrote
the Sandiganbayan:
The actual distribution of the bank shares was admittedly an enormous operational problem
which resulted in the failure of the intended beneficiaries to receive their shares of stocks in the
bank, as shown by the rules and regulations, issued by the PCA, without adequate guidelines
being provided to it by P.D. No. 755. PCA Administrative Order No. 1, Series of 1975 (August
20, 1975), "Rules and Regulations Governing the Distribution of Shares of Stock of the Bank
Authorized to be Acquired Pursuant to PCA Board Resolution No. 246-75", quoted hereunder
discloses how the undistributed shares of stocks due to anonymous coconut farmers or payors
of the coconut levy fees were authorized to be distributed to existing shareholders of the Bank:
"Section 9. Fractional and Undistributed Shares – Fractional shares and shares which remain
undistributed … shall be distributed to all the coconut farmers who have qualified and received
equity in the Bank and shall be apportioned among them, as far as practicable, in proportion to
their equity in relation to the number of undistributed equity and such further rules and
regulations as may hereafter be promulgated.’
The foregoing PCA issuance was further amended by Resolution No. 074-78, still citing the
same problem of distribution of the bank shares….:
xxx xxx xxx
Thus, when 51,200,806 shares in the bank remained undistributed, the PCA deemed it proper
to give a "bonanza" to coconut farmers who already got their bank shares, by giving them an
additional share for each share owned by them and by converting their fractional shares into
full shares. The rest of the shares were then transferred to a private organization, the
COCOFED, for distribution to those determined to be "bona fide coconut farmers" who had "not
received shares of stock of the Bank." ….
92 | C O N S T I 1
The PCA thus assumed, due to lack of adequate guidelines set by P.D. No. 755, that it had
complete authority to define who are the coconut farmers and to decide as to who among the
coconut farmers shall be given the gift of bank shares; how many shares shall be given to them,
and what basis it shall use to determine the amount of shares to be distributed for free to the
coconut farmers. In other words, P.D. No. 755 fails the completeness test which renders it
constitutionally infirm.
Regarding the second requisite of standard, it is settled that legislative standard need not be
expressed….
We observed, however, that the PCA [AO] No. 1, Series of 1975 and PCA Rules and
Regulations 074-78, did not take into consideration the accomplishment of the public purpose
or the national standard/policy of P.D. No. 755 which is directly to accelerate the development
and growth of the coconut industry and as a consequence thereof, to make the coconut farmers
"participants in and beneficiaries" of such growth and development. The said PCA issuances
did nothing more than provide guidelines as to whom the UCPB shares were to be distributed
and how many bank shares shall be allotted to the beneficiaries. There was no mention of how
the distributed shares shall be used to achieve exclusively or at least directly or primarily the
aim or public purpose enunciated by P.D. No. 755. The numerical or quantitative distribution of
shares contemplated by the PCA regulations which is a condition for the validly of said
administrative issuances. There was a reversal of priorities. The narrow private interests
prevailed over the laudable objectives of the law…. However, under the May 25, 1975
agreement implemented by the PCA issuances, the PCA acquired only 64.98% of the shares
of the bank and even the shares covering the said 64.98% were later on transferred to non-
coconut farmers."
The distribution for free of the shares of stock of the CIIF Companies is tainted with the above-
mentioned constitutional infirmities of the PCA administrative issuances. In view of the
foregoing, we cannot consider the provision of P.D. No. 961 and P.D. No. 1468 and the
implementing regulations issued by the PCA as valid legal basis to hold that assets acquired
with public funds have legitimately become private properties." 140 (Emphasis added.)
P.D. No. 755 involves an invalid delegation of legislative power, a concept discussed in Soriano
v. Laguardia,141citing the following excerpts from Edu v. Ericta:
It is a fundamental … that Congress may not delegate its legislative power…. What cannot be
delegated is the authority … to make laws and to alter and repeal them; the test is the
completeness of the statute in all its term and provisions when it leaves the hands of the
legislature. To determine whether or not there is an undue delegation of legislative power, the
inquiry must be directed to the scope and definiteness of the measure enacted. The legislature
does not abdicate its functions when it describes what job must be done, who is to do it, and
what is the scope of his authority….
To avoid the taint of unlawful delegation, there must be a standard, which implies at the very
least that the legislature itself determines matters of principle and lays down fundamental
policy. Otherwise, the charge of complete abdication may be hard to repel. A standard thus
defines legislative policy, marks its limits, maps out its boundaries and specifies the public
agency to apply it. It indicates the circumstances under which the legislative command is to be
effected. It is the criterion by which legislative purpose may be carried out. Thereafter, the
executive or administrative office designated may in pursuance of the above guidelines
promulgate supplemental rules and regulations.142 (Emphasis supplied)
Jurisprudence is consistent as regards the two tests, which must be complied with to determine
the existence of a valid delegation of legislative power. In Abakada Guro Party List, et al. v.
Purisima,143 We reiterated the discussion, to wit:
Two tests determine the validity of delegation of legislative power: (1) the completeness test
and (2) the sufficient standard test. A law is complete when it sets forth therein the policy to be
executed, carried out or implemented by the delegate. It lays down a sufficient standard when
it provides adequate guidelines or limitations in the law to map out the boundaries of the
delegate’s authority and prevent the delegation from running riot. To be sufficient, the standard
must specify the limits of the delegate’s authority, announce the legislative policy and identify
the conditions under which it is to be implemented.
In the instant case, the requisite standards or criteria are absent in P.D. No. 755. As may be
noted, the decree authorizes the PCA to distribute to coconut farmers, for free, the shares of
stocks of UCPB and to pay from the CCSF levy the financial commitments of the coconut
farmers under the Agreement for the acquisition of such bank. Yet, the decree does not even
state who are to be considered as coconut farmers. Would, say, one who plants a single
coconut tree be already considered a coconut farmer and, therefore, entitled to own UCPB
shares? If so, how many shares shall be given to him? The definition of a coconut farmer and
the basis as to the number of shares a farmer is entitled to receive for free are important
variables to be determined by law and cannot be left to the discretion of the implementing
agency.
Moreover, P.D. No. 755 did not identify or delineate any clear condition as to how the
disposition of the UCPB shares or their conversion into private ownership will redound to the
advancement of the national policy declared under it. To recall, P.D. No. 755 seeks to
"accelerate the growth and development of the coconut industry and achieve a vertical
integration thereof so that coconut farmers will become participants in, and beneficiaries of,
such growth and development."144 The Sandiganbayan is correct in its observation and ruling
that the said law gratuitously gave away public funds to private individuals, and converted them
exclusively into private property without any restriction as to its use that would reflect the
avowed national policy or public purpose. Conversely, the private individuals to whom the
UCPB shares were transferred are free to dispose of them by sale or any other mode from the
moment of their acquisition. In fact and true enough, the Sandiganbayan categorically stated
in its Order dated March 11, 2003,145 that out of the 72.2% shares and increased capital stock
of the FUB (later UCPB) allegedly covered by the May 25, 1975 Agreement, 146 entirely paid for
by PCA, 7.22% were given to Cojuangco and the remaining 64.98%, which were originally held
by PCA for the benefit of the coconut farmers, were later sold or transferred to non-coconut
farmers.147 Even the proposed rewording of the factual allegations of Lobregat, COCOFED, et
93 | C O N S T I 1
al. and Ballares, et al., reveals that indeed, P.D. No. 755 did not provide for any guideline,
standard, condition or restriction by which the said shares shall be distributed to the coconut
farmers that would ensure that the same will be undertaken to accelerate the growth and
development of the coconut industry pursuant to its national policy. The proposed rewording of
admissions reads:
There were shares forming part of the aforementioned 64.98% which were, after their
distribution, for free, to the coconut farmers as required by P.D. No. 755, sold or
transferred respectively by individual coconut farmers who were then the registered
stockholders of those UCPB shares to non-coconut farmers.148
Clearly, P.D. No. 755, insofar as it grants PCA a veritable carte blanche to distribute to coconut
farmers UCPB shares at the level it may determine, as well as the full disposition of such shares
to private individuals in their private capacity without any conditions or restrictions that would
advance the law’s national policy or public purpose, present a case of undue delegation of
legislative power. As such, there is even no need to discuss the validity of the administrative
orders and resolutions of PCA implementing P.D. No. 755. Water cannot rise higher than its
source.
Even so, PCA AO 1 and PCA Resolution No. 078-74, are in themselves, infirm under the undue
delegation of legislative powers. Particularly, Section 9 of PCA AO I provides:
SECTION 9. Fractional and Undistributed Shares – Fractional shares and shares which remain
undistributed as a consequence of the failure of the coconut farmers to register their
COCOFUND receipts or the destruction of the COCOFUND receipts or the registration of
COCOFUND receipts in the name of an unqualified individual, after the final distribution is made
on the basis of the consolidated IBM registration Report as of March 31, 1976 shall be
distributed to all the coconut farmers who have qualified and received equity in the Bank and
shall be appointed among them, as far as practicable, in proportion to their equity in relation to
the number of undistributed equity and such further rules and regulations as may hereafter be
promulgated.
The foregoing provision directs and authorizes the distribution of fractional and undistributed
shares as a consequence of the failure of the coconut farmers with Coco Fund receipts to
register them, even without a clear mandate or instruction on the same in any pertinent existing
law. PCA Resolution No. 078-74 had a similar provision, albeit providing more detailed
information. The said Resolution identified 51,200,806 shares of the bank that remained
undistributed and PCA devised its own rules as to how these undistributed and fractional
shares shall be disposed of, notwithstanding the dearth as to the standards or parameters in
the laws which it sought to implement.
Eventually, what happened was that, as correctly pointed out by the Sandiganbayan, the PCA
gave a "bonanza" to supposed coconut farmers who already got their bank shares, by giving
them extra shares according to the rules established – on its own – by the PCA under PCA AO
1 and Resolution No. 078-74. Because of the lack of adequate guidelines under P.D. No. 755
as to how the shares were supposed to be distributed to the coconut farmers, the PCA thus
assumed that it could decide for itself how these shares will be distributed. This obviously paved
the way to playing favorites, if not allowing outright shenanigans. In this regard, this poser
raised in the Court’s February 16, 1993 Resolution in G.R. No. 96073 is as relevant then as it
is now: "How is it that shares of stocks in such entities which was organized and financed by
revenues derived from coconut levy funds which were imbued with public interest ended up in
private hands who are not farmers or beneficiaries; and whether or not the holders of said
stock, who in one way or another had had some part in the collection, administration,
disbursement or other disposition of the coconut levy funds were qualified to acquire stock in
the corporations formed and operated from these funds." 149
Likewise, the said PCA issuances did not take note of the national policy or public purpose for
which the coconut levy funds were imposed under P.D. No. 755, i.e. the acceleration of the
growth and development of the entire coconut industry, and the achievement of a vertical
integration thereof that could make the coconut farmers participants in, and beneficiaries of,
such growth and development.150 Instead, the PCA prioritized the coconut farmers themselves
by fully disposing of the bank shares, totally disregarding the national policy for which the funds
were created. This is clearly an undue delegation of legislative powers.
With this pronouncement, there is hardly any need to establish that the sequestered assets are
ill-gotten wealth. The documentary evidence, the P.D.s and Agreements, prove that the transfer
of the shares to the more than one million of supposed coconut farmers was tainted with
illegality.
Article III, Section 5 of P.D. No. 961 and Article III, Section 5 of P.D. No. 1468 violate Article IX
(D) (2) of the 1987 Constitution.
Article III, Section 5 of P.D. No. 961 explicitly takes away the coconut levy funds from the coffer
of the public funds, or, to be precise, privatized revenues derived from the coco levy.
Particularly, the aforesaid Section 5 provides:
Section 5. Exemptions. The Coconut Consumers Stabilization Fund and the Coconut Industry
Development fund as well as all disbursements of said funds for the benefit of the coconut
farmers as herein authorized shall not be construed or interpreted, under any law or regulation,
as special and/or fiduciary funds, or as part of the general funds of the national government
within the contemplation of P.D. No. 711; nor as a subsidy, donation, levy, government funded
investment, or government share within the contemplation of P.D. 898 the intention being that
said Fund and the disbursements thereof as herein authorized for the benefit of the coconut
farmers shall be owned in their own private capacity. 151 (Emphasis Ours)
The same provision is carried over in Article III, Section 5 of P.D. No. 1468, the Revised
Coconut Industry Code:
94 | C O N S T I 1
These identical provisions of P.D. Nos. 961 and 1468 likewise violate Article IX (D), Section
2(1) of the Constitution, defining the powers and functions of the Commission on Audit ("COA")
as a constitutional commission:
Sec. 2. (1) The Commission on Audit shall have the power, authority, and duty to examine,
audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or
uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any
of its subdivisions, agencies, or instrumentalities, including government-owned and controlled
corporations with original charters, and on a post-audit basis: (a) constitutional bodies,
commissions and offices that have been granted fiscal autonomy under this Constitution; (b)
autonomous state colleges and universities; (c) other government-owned or controlled
corporations and their subsidiaries;.152(Emphasis Ours)
A similar provision was likewise previously found in Article XII (D), Section 2 (1) of the 1973
Constitution, thus:
Section 2. The Commission on Audit shall have the following powers and functions:
(1) Examine, audit, and settle, in accordance with law and regulations, all accounts pertaining
to the revenues and receipts of, and expenditures or uses of funds and property, owned or held
in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned and controlled corporations; keep the general
accounts of the government and, for such period as may be provided by law, preserve the
vouchers pertaining thereto; and promulgate accounting and auditing rules and regulations
including those for the prevention of irregular, unnecessary, excessive, or extravagant
expenditures or use of funds and property. 153 (Emphasis Ours)
The Constitution, by express provision, vests the COA with the responsibility for State
audit.154 As an independent supreme State auditor, its audit jurisdiction cannot be undermined
by any law. Indeed, under Article IX (D), Section 3 of the 1987 Constitution, "[n]o law shall be
passed exempting any entity of the Government or its subsidiary in any guise whatever, or any
investment of public funds, from the jurisdiction of the Commission on Audit."155 Following the
mandate of the COA and the parameters set forth by the foregoing provisions, it is clear that it
has jurisdiction over the coconut levy funds, being special public funds. Conversely, the COA
has the power, authority and duty to examine, audit and settle all accounts pertaining to the
coconut levy funds and, consequently, to the UCPB shares purchased using the said funds.
However, declaring the said funds as partaking the nature of private funds, ergo subject to
private appropriation, removes them from the coffer of the public funds of the government, and
consequently renders them impervious to the COA audit jurisdiction. Clearly, the pertinent
provisions of P.D. Nos. 961 and 1468 divest the COA of its constitutionally-mandated function
and undermine its constitutional independence.
The assailed purchase of UCPB shares of stocks using the coconut levy funds presents a
classic example of an investment of public funds. The conversion of these special public funds
into private funds by allowing private individuals to own them in their private capacities is
something else. It effectively deprives the COA of its constitutionally-invested power to audit
and settle such accounts. The conversion of the said shares purchased using special public
funds into pure and exclusive private ownership has taken, or will completely take away the
said funds from the boundaries with which the COA has jurisdiction. Obviously, the COA is
without audit jurisdiction over the receipt or disbursement of private property. Accordingly,
Article III, Section 5 of both P.D. Nos. 961 and 1468 must be struck down for being
unconstitutional, be they assayed against Section 2(1), Article XII (D) of the 1973 Constitution
or its counterpart provision in the 1987 Constitution.
The Court, however, takes note of the dispositive portion of PSJ-A, which states that:156
xxx xxx xxx
2. Section 2 of P.D. No. 755 which mandated that the coconut levy funds shall not be
considered special and/or fiduciary funds nor part of the general funds of the national
government and similar provisions of Sec. 3, Art. III, P.D. 961 and Sec. 5, Art. III, P.D. 1468
contravene the provisions of the Constitution, particularly, Art. IX (D), Sec. 2; and Article VI,
Sec. 29 (3). (Emphasis Ours)
xxx xxx xxx
However, a careful reading of the discussion in PSJ-A reveals that it is Section 5 of Article III
of P.D. No. 961 and not Section 3 of said decree, which is at issue, and which was therefore
held to be contrary to the Constitution. The dispositive portion of the said PSJ should therefore
be corrected to reflect the proper provision that was declared as unconstitutional, which is
Section 5 of Article III of P.D. No. 961 and not Section 3 thereof.
V which is one of the major industries that promotes sustained economic stability, and not merely
The CIIF Companies and the CIIF Block
of SMC shares are public funds/assets
From the foregoing discussions, it is fairly established that the coconut levy funds are special
public funds. Consequently, any property purchased by means of the coconut levy funds should
likewise be treated as public funds or public property, subject to burdens and restrictions
attached by law to such property.
In this case, the 6 CIIF Oil Mills were acquired by the UCPB using coconut levy funds. 157 On
the other hand, the 14 CIIF holding companies are wholly owned subsidiaries of the CIIF Oil
Mills.158 Conversely, these companies were acquired using or whose capitalization comes from
the coconut levy funds. However, as in the case of UCPB, UCPB itself distributed a part of its
investments in the CIIF oil mills to coconut farmers, and retained a part thereof as
administrator.159 The portion distributed to the supposed coconut farmers followed the
95 | C O N S T I 1
procedure outlined in PCA Resolution No. 033-78.160 And as the administrator of the CIIF
holding companies, the UCPB authorized the acquisition of the SMC shares. 161 In fact, these
companies were formed or organized solely for the purpose of holding the SMC shares. 162 As
found by the Sandiganbayan, the 14 CIIF holding companies used borrowed funds from the
UCPB to acquire the SMC shares in the aggregate amount of P1.656 Billion. 163
Since the CIIF companies and the CIIF block of SMC shares were acquired using coconut levy
funds – funds, which have been established to be public in character – it goes without saying
that these acquired corporations and assets ought to be regarded and treated as government
assets. Being government properties, they are accordingly owned by the Government, for the
coconut industry pursuant to currently existing laws. 164
It may be conceded hypothetically, as COCOFED et al. urge, that the 14 CIIF holding
companies acquired the SMC shares in question using advances from the CIIF companies and
from UCPB loans. But there can be no gainsaying that the same advances and UCPB loans
are public in character, constituting as they do assets of the 14 holding companies, which in
turn are wholly-owned subsidiaries of the 6 CIIF Oil Mills. And these oil mills were organized,
capitalized and/or financed using coconut levy funds. In net effect, the CIIF block of SMC
shares are simply the fruits of the coconut levy funds acquired at the expense of the coconut
industry. In Republic v. COCOFED,165 the en banc Court, speaking through Justice (later Chief
Justice) Artemio Panganiban, stated: "Because the subject UCPB shares were acquired with
government funds, the government becomes their prima facie beneficial and true owner." By
parity of reasoning, the adverted block of SMC shares, acquired as they were with government
funds, belong to the government as, at the very least, their beneficial and true owner.
We thus affirm the decision of the Sandiganbayan on this point. But as We have earlier
discussed, reiterating our holding in Republic v. COCOFED, the State’s avowed policy or
purpose in creating the coconut levy fund is for the development of the entire coconut industry,
the livelihood of a significant segment of the population. 166 Accordingly, We sustain the ruling
of the Sandiganbayan in CC No. 0033-F that the CIIF companies and the CIIF block of SMC
shares are public funds necessary owned by the Government. We, however, modify the same
in the following wise: These shares shall belong to the Government, which shall be used only
for the benefit of the coconut farmers and for the development of the coconut industry.
Sandiganbayan did not err in ruling that
PCA (AO) No. 1, Series of 1975 and
PCA rules and regulations 074-78 did
not comply with the national standard
or policy of P.D. No. 755.
According to the petitioners, the Sandiganbayan has identified the national policy sought to be
enhanced by and expressed under Section 1 in relation to Section 2 of P.D. No. 755. Yet, so
petitioners argue, that court, with grave abuse of discretion, disregarded such policy and
thereafter, ruled that Section 1 in relation to Section 2 of P.D. No. 755 is unconstitutional as the
decree failed to promote the purpose for which it was enacted in the first place.
We are not persuaded. The relevant assailed portion of PSJ-A states:
We observe, however, that the PCA [AO] No. 1, Series of 1975 and PCA Rules and Regulations
074-78, did not take into consideration the accomplishment of the public purpose or the national
standard/policy of P.D. No. 755 which is directly to accelerate the development and growth of
the coconut industry and as a consequence thereof, to make the coconut farmers "participants
in and beneficiaries" of such growth and development.…
It is a basic legal precept that courts do not look into the wisdom of the laws passed. The
principle of separation of powers demands this hands-off attitude from the judiciary. Saguiguit
v. People167 teaches why:
… [W]hat the petitioner asks is for the Court to delve into the policy behind or wisdom of a
statute, … which, under the doctrine of separation of powers, it cannot do,…. Even with the
best of motives, the Court can only interpret and apply the law and cannot, despite doubts
about its wisdom, amend or repeal it. Courts of justice have no right to encroach on the
prerogatives of lawmakers, as long as it has not been shown that they have acted with grave
abuse of discretion. And while the judiciary may interpret laws and evaluate them for
constitutional soundness and to strike them down if they are proven to be infirm, this solemn
power and duty do not include the discretion to correct by reading into the law what is not
written therein.
We reproduce the policy-declaring provision of P.D. No. 755, thus:
Section 1. Declaration of National Policy. — It is hereby declared that the policy of the State is
to provide readily available credit facilities to the coconut farmers at preferential rates; that this
policy can be … efficiently realized by the implementation of the "Agreement for the Acquisition
of a Commercial Bank for the benefit of the Coconut Farmers" executed by the [PCA], the terms
of which "Agreement" are hereby incorporated by reference; and that the [PCA] is hereby
authorized to distribute, for free, the shares of stock of the bank it acquired to the coconut
farmers under such rules and regulations it may promulgate.
P.D. No. 755 having stated in no uncertain terms that the national policy of providing cheap
credit facilities to coconut farmers shall be achieved with the acquisition of a commercial bank,
the Court is without discretion to rule on the wisdom of such an undertaking. It is abundantly
clear, however, that the Sandiganbayan did not look into the policy behind, or the wisdom of,
P.D. No. 755. In context, it did no more than to inquire whether the purpose defined in P.D. No.
755 and for which the coco levy fund was established would be carried out, obviously having
96 | C O N S T I 1
in mind the (a) dictum that the power to tax should only be exercised for a public purpose and
(b) command of Section 29, paragraph 3 of Article VI of the 1987 Constitution that:
(3) All money collected on any tax levied for a special purpose shall be treated as a special
fund and paid out for such purpose only. If the purpose for which a special fund was created
has been fulfilled or abandoned, the balance, if any, shall be transferred to the general funds
of the Government. (Emphasis supplied)
For the above reason, the above-assailed action of the Sandiganbayan was well within the
scope of its sound discretion and mandate.
Moreover, petitioners impute on the anti-graft court the commission of grave abuse of discretion
for going into the validity of and in declaring the coco levy laws as unconstitutional, when there
were still factual issues to be resolved in a full blown trial as directed by this Court. 168
Petitioners COCOFED and the farmer representatives miss the point. They acknowledged that
their alleged ownership of the sequestered shares in UCPB and SMC is predicated on the coco
levy decrees. Thus, the legality and propriety of their ownership of these valuable assets are
directly related to and must be assayed against the constitutionality of those presidential
decrees. This is a primordial issue, which must be determined to address the validity of the rest
of petitioners’ claims of ownership. Verily, the Sandiganbayan did not commit grave abuse of
discretion, a phrase which, in the abstract, denotes the idea of capricious or whimsical exercise
of judgment or the exercise of power in an arbitrary or despotic manner by reason of passion
or personal hostility as to be equivalent to having acted without jurisdiction.169
The Operative Fact Doctrine does not apply
Petitioners assert that the Sandiganbayan’s refusal to recognize the vested rights purportedly
created under the coconut levy laws constitutes taking of private property without due process
of law. They reason out that to accord retroactive application to a declaration of
unconstitutionality would be unfair inasmuch as such approach would penalize the farmers who
merely obeyed then valid laws.
This contention is specious.
In Yap v. Thenamaris Ship’s Management, 170 the Operative Fact Doctrine was discussed in
that:
As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no duties;
it affords no protection; it creates no office; it is inoperative as if it has not been passed at all.
The general rule is supported by Article 7 of the Civil Code, which provides:
Art. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall
not be excused by disuse or custom or practice to the contrary.
The doctrine of operative fact serves as an exception to the aforementioned general rule. In
Planters Products, Inc. v. Fertiphil Corporation, we held:
The doctrine of operative fact, as an exception to the general rule, only applies as a matter of
equity and fair play. It nullifies the effects of an unconstitutional law by recognizing that the
existence of a statute prior to a determination of unconstitutionality is an operative fact and may
have consequences which cannot always be ignored. The past cannot always be erased by a
new judicial declaration.
The doctrine is applicable when a declaration of unconstitutionality will impose an undue
burden on those who have relied on the invalid law. Thus, it was applied to a criminal case
when a declaration of unconstitutionality would put the accused in double jeopardy or would
put in limbo the acts done by a municipality in reliance upon a law creating it. 171
In that case, this Court further held that the Operative Fact Doctrine will not be applied as an
exception when to rule otherwise would be iniquitous and would send a wrong signal that an
act may be justified when based on an unconstitutional provision of law. 172
The Court had the following disquisition on the concept of the Operative Fact Doctrine in the
case of Chavez v. National Housing Authority:173
The "operative fact" doctrine is embodied in De Agbayani v. Court of Appeals, wherein it is
stated that a legislative or executive act, prior to its being declared as unconstitutional by the
courts, is valid and must be complied with, thus:
As the new Civil Code puts it: "When the courts declare a law to be inconsistent with the
Constitution, the former shall be void and the latter shall govern. Administrative or executive
acts, orders and regulations shall be valid only when they are not contrary to the laws of the
Constitution." It is understandable why it should be so, the Constitution being supreme and
paramount. Any legislative or executive act contrary to its terms cannot survive.
Such a view has support in logic and possesses the merit of simplicity. It may not however be
sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force and had to be complied with.
This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled
to obedience and respect. Parties may have acted under it and may have changed their
positions. What could be more fitting than that in a subsequent litigation regard be had to what
has been done while such legislative or executive act was in operation and presumed to be
valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence
as a fact must be reckoned with. This is merely to reflect awareness that precisely because the
judiciary is the governmental organ which has the final say on whether or not a legislative or
executive measure is valid, a period of time may have elapsed before it can exercise the power
of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its
quality of fairness and justice then, if there be no recognition of what had transpired prior to
such adjudication.
97 | C O N S T I 1
In the language of an American Supreme Court decision: "The actual existence of a statute,
prior to such a determination [of unconstitutionality], 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 relations, individual and corporate, and
particular conduct, private and official." This language has been quoted with approval in a
resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores. An even more
recent instance is the opinion of Justice Zaldivar speaking for the Court in Fernandez v. Cuerva
and Co. (Emphasis supplied.)
The principle was further explicated in the case of Rieta v. People of the Philippines, thus:
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 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…. 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 [the determination of its
invalidity], 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.
Moreover, the Court ruled in Chavez that:
Furthermore, when petitioner filed the instant case against respondents on August 5, 2004, the
JVAs were already terminated by virtue of the MOA between the NHA and RBI. The
respondents had no reason to think that their agreements were unconstitutional or even
questionable, as in fact, the concurrent acts of the executive department lent validity to the
implementation of the Project. The SMDRP agreements have produced vested rights in favor
of the slum dwellers, the buyers of reclaimed land who were issued titles over said land, and
the agencies and investors who made investments in the project or who bought SMPPCs.
These properties and rights cannot be disturbed or questioned after the passage of around ten
(10) years from the start of the SMDRP implementation. Evidently, the "operative fact" principle
has set in. The titles to the lands in the hands of the buyers can no longer be invalidated. 174
In the case at bar, the Court rules that the dictates of justice, fairness and equity do not support
the claim of the alleged farmer-owners that their ownership of the UCPB shares should be
respected. Our reasons:
1. Said farmers or alleged claimants do not have any legal right to own the UCPB shares
distributed to them. It was not successfully refuted that said claimants were issued receipts
under R.A. 6260 for the payment of the levy that went into the Coconut Investment Fund (CIF)
upon which shares in the "Coconut Investment Company" will be issued. The Court upholds
the finding of the Sandiganbayan that said investment company is a different corporate entity
from the United Coconut Planters Bank. This was in fact admitted by petitioners during the April
17, 2001 oral arguments in G.R. Nos. 147062-64.175
The payments under R.A. 6260 cannot be equated with the payments under P.D. No. 276, the
first having been made as contributions to the Coconut Investment Fund while the payments
under P.D. No. 276 constituted the Coconut Consumers Stabilization Fund ("CCSF"). R.A.
6260 reads:
Section 2. Declaration of Policy. It is hereby declared to be the national policy to accelerate the
development of the coconut industry through the provision of adequate medium and long-term
financing for capital investment in the industry, by instituting a Coconut Investment fund
capitalized and administered by coconut farmers through a Coconut Investment Company.176
P.D. No. 276 provides:
1. In addition to its powers granted under Presidential Decree No. 232, the Philippine Coconut
Authority is hereby authorized to formulate and immediately implement a stabilization scheme
for coconut-based consumer goods, along the following general guidelines:
(a) ….
The proceeds from the levy shall be deposited with the Philippine National Bank or any other
government bank to the account of the Coconut Consumers Stabilization Fund, as a separate
trust fund which shall not form part of the general fund of the government.
(b) The Fund shall be utilized to subsidize the sale of coconut-based products at prices set by
the Price Control Council, under rules and regulations to be promulgated by the Philippine
Consumers Stabilization Committee….177
The PCA, via Resolution No. 045-75 dated May 21, 1975, clarified the distinction between the
CIF levy payments under R.A. 6260 and the CCSF levy paid pursuant to P.D. 276, thusly:
It must be remembered that the receipts issued under R.A. No. 6260 were to be registered in
exchange for shares of stock in the Coconut Investment Company (CIC), which obviously is a
98 | C O N S T I 1
different corporate entity from UCPB. This fact was admitted by petitioners during the April 17,
2001 oral arguments in G.R. Nos. 147062-64.
In fact, while the CIF levy payments claimed to have been paid by petitioners were meant for
the CIC, the distribution of UCPB stock certificates to the coconut farmers, if at all, were meant
for the payors of the CCSF in proportion to the coconut farmer’s CCSF contributions pursuant
to PCA Resolution No. 045-75 dated May 21, 1975:
RESOLVED, FURTHER, That the amount of ONE HUNDRED FIFTY MILLION
(P150,000,000.00) PESOS be appropriated and set aside from available funds of the PCA to
be utilized in payment for the shares of stock of such existing commercial bank and that the
Treasurer be instructed to disburse the said amount accordingly.
xxx xxx xxx
RESOLVED, FINALLY, That … be directed to organize a team which shall prepare a list of
coconut farmers who have paid the levy and contributed to the [CCSF] and to prepare a stock
distribution plan to the end that the aforesaid coconut farmers shall receive certificates of stock
of such commercial bank in proportion to their contributions to the Fund.
Unfortunately, the said resolution was never complied with in the distribution of the so-called
"farmers" UCPB shares.
The payments therefore under R.A. 6260 are not the same as those under P.D. No. 276. The
amounts of CIF contributions under R.A. 6260 which were collected starting 1971 are
undeniably different from the CCSF levy under P.D. No. 276, which were collected starting
1973. The two (2) groups of claimants differ not only in identity but also in the levy paid, the
amount of produce and the time the government started the collection.
Thus, petitioners and the alleged farmers claiming them pursuant to R.A. 6260 do not have any
legal basis to own the UCPB shares distributed to them, assuming for a moment the legal
feasibility of transferring these shares paid from the R.A. 6260 levy to private individuals.
2. To grant all the UCPB shares to petitioners and its alleged members would be iniquitous and
prejudicial to the remaining 4.6 million farmers who have not received any UCPB shares when
in fact they also made payments to either the CIF or the CCSF but did not receive any receipt
or who was not able to register their receipts or misplaced them.
Section 1 of P.D. No. 755 which was declared unconstitutional cannot be considered to be the
legal basis for the transfer of the supposed private ownership of the UCPB shares to petitioners
who allegedly paid the same under R.A. 6260. The Solicitor General is correct in concluding
that such unauthorized grant to petitioners constitutes illegal deprivation of property without
due process of law. Due process of law would mean that the distribution of the UCPB shares
should be made only to farmers who have paid the contribution to the CCSF pursuant to P.D.
No. 276, and not to those who paid pursuant to R.A. 6260. What would have been the
appropriate distribution scheme was violated by Section 1 of P.D. No. 755 when it required that
the UCPB shares should be distributed to coconut farmers without distinction – in fact, giving
the PCA limitless power and free hand, to determine who these farmers are, or would be.
We cannot sanction the award of the UCPB shares to petitioners who appear to represent only
1.4 million members without any legal basis to the extreme prejudice of the other 4.6 million
coconut farmers (Executive Order No. 747 fixed the number of coconut farmers at 6 million in
1981). Indeed, petitioners constitute only a small percentage of the coconut farmers in the
Philippines. Thus, the Sandiganbayan correctly declared that the UCPB shares are
government assets in trust for the coconut farmers, which would be more beneficial to all the
coconut farmers instead of a very few dubious claimants;
3. The Sandiganbayan made the finding that due to enormous operational problems and
administrative complications, the intended beneficiaries of the UCPB shares were not able to
receive the shares due to them. To reiterate what the anti-graft court said:
The actual distribution of the bank shares was admittedly an enormous operational problem
which resulted in the failure of the intended beneficiaries to receive their shares of stocks in the
bank, as shown by the rules and regulations, issued by the PCA, without adequate guidelines
being provided to it by P.D. No. 755. PCA Administrative Order No. 1, Series of 1975 (August
20, 1975), "Rules and Regulations Governing the Distribution of Shares of Stock of the Bank
Authorized to be Acquired Pursuant to PCA Board Resolution No. 246-75", quoted hereunder
discloses how the undistributed shares of stocks due to anonymous coconut farmers or payors
of the coconut levy fees were authorized to be distributed to existing shareholders of the Bank:
"Section 9. Fractional and Undistributed Shares – Fractional shares and shares which remain
undistributed as a consequence of the failure of the coconut farmers to register their
COCOFUND receipts or the destruction of the COCOFUND receipts or the registration of the
COCOFUND receipts in the name of an unqualified individual, after the final distribution is made
on the basis of the consolidated IBM registration Report as of March 31, 1976 shall be
distributed to all the coconut farmers who have qualified and received equity in the Bank and
shall be apportioned among them, as far as practicable, in proportion to their equity in relation
to the number of undistributed equity and such further rules and regulations as may hereafter
be promulgated.’
The foregoing PCA issuance was further amended by Resolution No. 074-78, still citing the
same problem of distribution of the bank shares. This latter Resolution is quoted as follows:
RESOLUTION NO. 074-78
AMENDMENT OF ADMINISTRATIVE ORDER
NO. 1, SERIES OF 1975, GOVERNING THE
DISTRIBUTION OF SHARES
99 | C O N S T I 1
WHEREAS, pursuant to PCA Board Resolution No. 246-75, the total par value of the shares
of stock of the Bank purchased by the PCA for the benefit of the coconut farmers is
P85,773,600.00 with a par value of P1.00 per share or equivalent to 85,773.600 shares;
WHEREAS, out of the 85,773,600 shares, a total of 34,572,794 shares have already been
distributed in accordance with Administrative Order No. 1, Series of 1975, to wit:
First Distribution - 12,573,059
Second Distribution - 10,841,409
Third Distribution - 11,158,326
34,572,794
"WHEREAS, there is, therefore, a total of 51,200,806 shares still available for distribution
among the coconut farmers;
WHEREAS, it was determined by the PCA Board, in consonance with the policy of the state
on the integration of the coconut industry, that the Bank shares must be widely distributed as
possible among the coconut farmers, for which purpose a national census of coconut farmers
was made through the Philippine Coconut Producers Federation (COCOFED);
WHEREAS, to implement such determination of the PCA Board, there is a need to accordingly
amend Administrative Order No. 1, Series of 1975;
NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, that the remaining
51,200,806 shares of stock of the Bank authorized to be acquired pursuant to the PCA Board
Resolution No. 246-75 dated July 25, 1975 be distributed as follows:
(1) All the coconut farmers who have received their shares in the equity of the Bank on the
basis of Section 8 of Administrative Order No. 1, Series of 1975, shall receive additional share
for each share presently owned by them;
(2) Fractional shares shall be completed into full shares, and such full shares shall be
distributed among the coconut farmers who qualified for the corresponding fractional shares;
(3) The balance of the shares, after deducting those to be distributed in accordance with (1)
and (2) above, shall be transferred to COCOFED for distribution, immediately after completion
of the national census of coconut farmers prescribed under Resolution No. 033-78 of the PCA
Board, to all those who are determined by the PCA Board to be bona fide coconut farmers and
have not received shares of stock of the Bank. The shares shall be equally determined among
them on the basis of per capita.
RESOLVED, FURTHER, That the rules and regulations under Administrative Order No. 1,
Series of 1975, which are inconsistent with this Administrative Order be, as they are hereby,
repealed and/or amended accordingly."
Thus, when 51,200,806 shares in the bank remained undistributed, the PCA deemed it proper
to give a "bonanza" to coconut farmers who already got their bank shares, by giving them an
additional share for each share owned by them and by converting their fractional shares into
full shares. The rest of the shares were then transferred to a private organization, the
COCOFED, for distribution to those determined to be "bona fide coconut farmers" who had "not
received shares of stock of the Bank." The distribution to the latter was made on the basis of
"per capita", meaning without regard to the COCOFUND receipts. The PCA considered itself
free to disregard the said receipts in the distribution of the shares although they were
considered by the May 25, 1975 Agreement between the PCA and defendant Cojuangco (par.
[8] of said Agreement) and by Sections 1, 3, 4, 6 and 9, PCA Administrative Order No. 1, Series
of 1975 as the basis for the distribution of shares.
The PCA thus assumed, due to lack of adequate guidelines set by P.D. No. 755, that it had
complete authority to define who are the coconut farmers and to decide as to who among the
coconut farmers shall be given the gift of bank shares; how many shares shall be given to them,
and what basis it shall use to determine the amount of shares to be distributed for free to the
coconut farmers. In other words, P.D. No. 755 fails the completeness test which renders it
constitutionally infirm.
Due to numerous flaws in the distribution of the UCPB shares by PCA, it would be best for the
interest of all coconut farmers to revert the ownership of the UCBP shares to the government
for the entire coconut industry, which includes the farmers;
4. The Court also takes judicial cognizance of the fact that a number, if not all, of the coconut
farmers who sold copra did not get the receipts for the payment of the coconut levy for the
reason that the copra they produced were bought by traders or middlemen who in turn sold the
same to the coconut mills. The reality on the ground is that it was these traders who got the
receipts and the corresponding UCPB shares. In addition, some uninformed coconut farmers
who actually got the COCOFUND receipts, not appreciating the importance and value of said
receipts, have already sold said receipts to non-coconut farmers, thereby depriving them of the
benefits under the coconut levy laws. Ergo, the coconut farmers are the ones who will not be
benefited by the distribution of the UCPB shares contrary to the policy behind the coconut levy
laws. The nullification of the distribution of the UCPB shares and their transfer to the
government for the coconut industry will, therefore, ensure that the benefits to be deprived from
the UCPB shares will actually accrue to the intended beneficiaries – the genuine coconut
farmers.
From the foregoing, it is highly inappropriate to apply the operative fact doctrine to the UCPB
shares. Public funds, which were supposedly given utmost safeguard, were haphazardly
distributed to private individuals based on statutory provisions that are found to be
constitutionally infirm on not only one but on a variety of grounds. Worse still, the recipients of
100 | C O N S T I 1
the UCPB shares may not actually be the intended beneficiaries of said benefit. Clearly,
applying the Operative Fact Doctrine would not only be iniquitous but would also serve injustice
to the Government, to the coconut industry, and to the people, who, whether willingly or
unwillingly, contributed to the public funds, and therefore expect that their Government would
take utmost care of them and that they would be used no less, than for public purpose.
We clarify that PSJ-A is subject of another petition for review interposed by Eduardo
Cojuangco, Jr., in G.R. No. 180705 entitled, Eduardo M. Cojuangco, Jr. v. Republic of the
Philippines, which shall be decided separately by this Court. Said petition should accordingly
not be affected by this Decision save for determinatively legal issues directly addressed herein.
WHEREFORE, the petitions in G.R. Nos. 177857-58 and 178793 are hereby DENIED. The
Partial Summary Judgment dated July 11, 2003 in Civil Case No. 0033-A as reiterated with
modification in Resolution dated June 5, 2007, as well as the Partial Summary Judgment dated
May 7, 2004 in Civil Case No. 0033-F, which was effectively amended in Resolution dated May
11, 2007, are AFFIRMED with modification, only with respect to those issues subject of the
petitions in G.R. Nos. 177857-58 and 178193. However, the issues raised in G.R. No. 180705
in relation to Partial Summary Judgment dated July 11, 2003 and Resolution dated June 5,
2007 in Civil Case No. 0033-A, shall be decided by this Court in a separate decision.
The Partial Summary Judgment in Civil Case No. 0033-A dated July 11, 2003, is hereby
MODIFIED, and shall read as follows:
WHEREFORE, in view of the foregoing, We rule as follows:
SUMMARY OF THE COURT’S RULING.
A. Re: CLASS ACTION MOTION FOR A SEPARATE SUMMARY JUDGMENT dated April 11,
2001 filed by Defendant Maria Clara L. Lobregat, COCOFED, et al., and Ballares, et al.
The Class Action Motion for Separate Summary Judgment dated April 11, 2001 filed by
defendant Maria Clara L. Lobregat, COCOFED, et al. and Ballares, et al., is hereby DENIED
for lack of merit.
B. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: COCOFED, ET AL. AND
BALLARES, ET AL.) dated April 22, 2002 filed by Plaintiff.
1. a. The portion of Section 1 of P.D. No. 755, which reads:
…and that the Philippine Coconut Authority is hereby authorized to distribute, for free, the
shares of stock of the bank it acquired to the coconut farmers under such rules and regulations
it may promulgate.
taken in relation to Section 2 of the same P.D., is unconstitutional: (i) for having allowed the Wherefore, in view of the foregoing, we hold that:
use of the CCSF to benefit directly private interest by the outright and unconditional grant of
absolute ownership of the FUB/UCPB shares paid for by PCA entirely with the CCSF to the The Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding
undefined "coconut farmers", which negated or circumvented the national policy or public Companies and Cocofed, et al) filed by Plaintiff is hereby GRANTED. Accordingly, the CIIF
purpose declared by P.D. No. 755 to accelerate the growth and development of the coconut Companies, namely:
industry and achieve its vertical integration; and (ii) for having unduly delegated legislative
power to the PCA.
1. Southern Luzon Coconut Oil Mills (SOLCOM);

b. The implementing regulations issued by PCA, namely, Administrative Order No. 1, Series of 2. Cagayan de Oro Oil Co., Inc. (CAGOIL);
1975 and Resolution No. 074-78 are likewise invalid for their failure to see to it that the
distribution of shares serve exclusively or at least primarily or directly the aforementioned public
purpose or national policy declared by P.D. No. 755. 3. Iligan Coconut Industries, Inc. (ILICOCO);

2. Section 2 of P.D. No. 755 which mandated that the coconut levy funds shall not be 4. San Pablo Manufacturing Corp. (SPMC);
considered special and/or fiduciary funds nor part of the general funds of the national
government and similar provisions of Sec. 5, Art. III, P.D. No. 961 and Sec. 5, Art. III, P.D. No. 5. Granexport Manufacturing Corp. (GRANEX); and
1468 contravene the provisions of the Constitution, particularly, Art. IX (D), Sec. 2; and Article
VI, Sec. 29 (3). 6. Legaspi Oil Co., Inc. (LEGOIL),

3. Lobregat, COCOFED, et al. and Ballares, et al. have not legally and validly obtained title of As well as the 14 Holding Companies, namely:
ownership over the subject UCPB shares by virtue of P.D. No. 755, the Agreement dated May
25, 1975 between the PCA and defendant Cojuangco, and PCA implementing rules, namely, 1. Soriano Shares, Inc.;
Adm. Order No. 1, s. 1975 and Resolution No. 074-78.
2. ACS Investors, Inc.;
4. The so-called "Farmers’ UCPB shares" covered by 64.98% of the UCPB shares of stock,
which formed part of the 72.2% of the shares of stock of the former FUB and now of the UCPB,
3. Roxas Shares, Inc.;
the entire consideration of which was charged by PCA to the CCSF, are hereby declared
conclusively owned by, the Plaintiff Republic of the Philippines.
4. Arc Investors; Inc.;
xxx xxx xxx
5. Toda Holdings, Inc.;
So ordered.
6. AP Holdings, Inc.;
The Partial Summary Judgment in Civil Case No. 0033-F dated May 7, 2004, is hereby
MODIFIED, and shall read as follows: 7. Fernandez Holdings, Inc.;

WHEREFORE, the Motion for Execution of Partial summary judgment (re: CIIF Block of Smc 8. SMC Officers Corps, Inc.;
Shares of Stock) dated August 8, 2005 of the plaintiff is hereby denied for lack of merit.
However, this Court orders the severance of this particular claim of Plaintiff. The Partial 9. Te Deum Resources, Inc.;
Summary Judgment dated May 7, 2004 is now considered a separate final and appealable
judgment with respect to the said CIIF Block of SMC shares of stock.1avvphi1 10. Anglo Ventures, Inc.;

The Partial Summary Judgment rendered on May 7, 2004 is modified by deleting the last 11. Randy Allied Ventures, Inc.;
paragraph of the dispositive portion, which will now read, as follows:

101 | C O N S T I 1
 12. Rock Steel Resources, Inc.;

13. Valhalla Properties Ltd., Inc.; and

14. First Meridian Development, Inc.

AND THE CIIF BLOCK OF SAN MIGUEL CORPORATION (SMC) SHARES OF STOCK
TOTALING 33,133,266 SHARES AS OF 1983 TOGETHER WITH ALL DIVIDENDS
DECLARED, PAID AND ISSUED THEREON AS WELL AS ANY INCREMENTS THERETO
ARISING FROM, BUT NOT LIMITED TO, EXERCISE OF PRE-EMPTIVE RIGHTS ARE
DECLARED OWNED BY THE GOVERNMENT TO BE USED ONLY FOR THE BENEFIT OF
ALL COCONUT FARMERS AND FOR THE DEVELOPMENT OF THE COCONUT
INDUSTRY, AND ORDERED RECONVEYED TO THE GOVERNMENT.

The Court affirms the Resolutions issued by the Sandiganbayan on June 5, 2007 in civil case
no. 0033-A and ON May 11, 2007 in civil case No. 0033-F, that there is no more necessity of
further trial with respect to the issue of ownership of (1) the sequestered UCPB shares, (2) the
CIIF block of SMC shares, and (3) the CIIF companies. as they have finally been
ADJUDICATED in the AFOREMENTIONED PARTIAL SUMMARY JUDGMENTS DATED jULY
11, 2003 AND mAY 7, 2004.

SO ORDERED.

102 | C O N S T I 1
G.R. No. 166715 August 14, 2008
ABAKADA GURO PARTY LIST (formerly AASJS)1 OFFICERS/MEMBERS SAMSON S.
ALCANTARA, ED VINCENT S. ALBANO, ROMEO R. ROBISO, RENE B. GOROSPE and
EDWIN R. SANDOVAL, petitioners,
vs.
HON. CESAR V. PURISIMA, in his capacity as Secretary of Finance, HON. GUILLERMO
L. PARAYNO, JR., in his capacity as Commissioner of the Bureau of Internal Revenue,
and HON. ALBERTO D. LINA, in his Capacity as Commissioner of Bureau of
Customs, respondents.
DECISION
CORONA, J.:
This petition for prohibition1 seeks to prevent respondents from implementing and enforcing
Republic Act (RA) 93352 (Attrition Act of 2005).
RA 9335 was enacted to optimize the revenue-generation capability and collection of the
Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). The law intends to
encourage BIR and BOC officials and employees to exceed their revenue targets by providing
a system of rewards and sanctions through the creation of a Rewards and Incentives Fund
(Fund) and a Revenue Performance Evaluation Board (Board). 3 It covers all officials and
employees of the BIR and the BOC with at least six months of service, regardless of
employment status.4
The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue
targets for the year, as determined by the Development Budget and Coordinating Committee
(DBCC). Any incentive or reward is taken from the fund and allocated to the BIR and the BOC
in proportion to their contribution in the excess collection of the targeted amount of tax
revenue.5
The Boards in the BIR and the BOC are composed of the Secretary of the Department of
Finance (DOF) or his/her Undersecretary, the Secretary of the Department of Budget and
Management (DBM) or his/her Undersecretary, the Director General of the National Economic
Development Authority (NEDA) or his/her Deputy Director General, the Commissioners of the
BIR and the BOC or their Deputy Commissioners, two representatives from the rank-and-file
employees and a representative from the officials nominated by their recognized organization.6
Each Board has the duty to (1) prescribe the rules and guidelines for the allocation, distribution
and release of the Fund; (2) set criteria and procedures for removing from the service officials
and employees whose revenue collection falls short of the target; (3) terminate personnel in
accordance with the criteria adopted by the Board; (4) prescribe a system for performance
evaluation; (5) perform other functions, including the issuance of rules and regulations and (6)
submit an annual report to Congress.7
103 | C O N S T I 1
The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were tasked to
promulgate and issue the implementing rules and regulations of RA 9335, 8 to be approved by
a Joint Congressional Oversight Committee created for such purpose. 9
Petitioners, invoking their right as taxpayers filed this petition challenging the constitutionality
of RA 9335, a tax reform legislation. They contend that, by establishing a system of rewards
and incentives, the law "transform[s] the officials and employees of the BIR and the BOC into
mercenaries and bounty hunters" as they will do their best only in consideration of such
rewards. Thus, the system of rewards and incentives invites corruption and undermines the
constitutionally mandated duty of these officials and employees to serve the people with utmost
responsibility, integrity, loyalty and efficiency.
Petitioners also claim that limiting the scope of the system of rewards and incentives only to
officials and employees of the BIR and the BOC violates the constitutional guarantee of equal
protection. There is no valid basis for classification or distinction as to why such a system
should not apply to officials and employees of all other government agencies.
In addition, petitioners assert that the law unduly delegates the power to fix revenue targets to
the President as it lacks a sufficient standard on that matter. While Section 7(b) and (c) of RA
9335 provides that BIR and BOC officials may be dismissed from the service if their revenue
collections fall short of the target by at least 7.5%, the law does not, however, fix the revenue
targets to be achieved. Instead, the fixing of revenue targets has been delegated to the
President without sufficient standards. It will therefore be easy for the President to fix an
unrealistic and unattainable target in order to dismiss BIR or BOC personnel.
Finally, petitioners assail the creation of a congressional oversight committee on the ground
that it violates the doctrine of separation of powers. While the legislative function is deemed
accomplished and completed upon the enactment and approval of the law, the creation of the
congressional oversight committee permits legislative participation in the implementation and
enforcement of the law.
In their comment, respondents, through the Office of the Solicitor General, question the petition
for being premature as there is no actual case or controversy yet. Petitioners have not asserted
any right or claim that will necessitate the exercise of this Court’s jurisdiction. Nevertheless,
respondents acknowledge that public policy requires the resolution of the constitutional issues
involved in this case. They assert that the allegation that the reward system will breed
mercenaries is mere speculation and does not suffice to invalidate the law. Seen in conjunction
with the declared objective of RA 9335, the law validly classifies the BIR and the BOC because
the functions they perform are distinct from those of the other government agencies and
instrumentalities. Moreover, the law provides a sufficient standard that will guide the executive
in the implementation of its provisions. Lastly, the creation of the congressional oversight
committee under the law enhances, rather than violates, separation of powers. It ensures the
fulfillment of the legislative policy and serves as a check to any over-accumulation of power on
the part of the executive and the implementing agencies.
After a careful consideration of the conflicting contentions of the parties, the Court finds that
petitioners have failed to overcome the presumption of constitutionality in favor of RA 9335,
except as shall hereafter be discussed.
Actual Case And Ripeness
An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal
claims susceptible of judicial adjudication. 10 A closely related requirement is ripeness, that is,
the question must be ripe for adjudication. And a constitutional question is ripe for adjudication
when the governmental act being challenged has a direct adverse effect on the individual
challenging it.11Thus, to be ripe for judicial adjudication, the petitioner must show a personal
stake in the outcome of the case or an injury to himself that can be redressed by a favorable
decision of the Court.12
In this case, aside from the general claim that the dispute has ripened into a judicial controversy
by the mere enactment of the law even without any further overt act, 13 petitioners fail either to
assert any specific and concrete legal claim or to demonstrate any direct adverse effect of the
law on them. They are unable to show a personal stake in the outcome of this case or an injury
to themselves. On this account, their petition is procedurally infirm.
This notwithstanding, public interest requires the resolution of the constitutional issues raised
by petitioners. The grave nature of their allegations tends to cast a cloud on the presumption
of constitutionality in favor of the law. And where an action of the legislative branch is alleged
to have infringed the Constitution, it becomes not only the right but in fact the duty of the
judiciary to settle the dispute.14
Accountability of
Public Officers
Section 1, Article 11 of the Constitution states:
Sec. 1. Public office is a public trust. Public officers and employees must at all times
be accountable to the people, serve them with utmost responsibility, integrity, loyalty,
and efficiency, act with patriotism, and justice, and lead modest lives.
Public office is a public trust. It must be discharged by its holder not for his own personal gain
but for the benefit of the public for whom he holds it in trust. By demanding accountability and
service with responsibility, integrity, loyalty, efficiency, patriotism and justice, all government
officials and employees have the duty to be responsive to the needs of the people they are
called upon to serve.
Public officers enjoy the presumption of regularity in the performance of their duties. This
presumption necessarily obtains in favor of BIR and BOC officials and employees. RA 9335
operates on the basis thereof and reinforces it by providing a system of rewards and sanctions
104 | C O N S T I 1
for the purpose of encouraging the officials and employees of the BIR and the BOC to exceed
their revenue targets and optimize their revenue-generation capability and collection.15
The presumption is disputable but proof to the contrary is required to rebut it. It cannot be
overturned by mere conjecture or denied in advance (as petitioners would have the Court do)
specially in this case where it is an underlying principle to advance a declared public policy.
Petitioners’ claim that the implementation of RA 9335 will turn BIR and BOC officials and
employees into "bounty hunters and mercenaries" is not only without any factual and legal
basis; it is also purely speculative.
A law enacted by Congress enjoys the strong presumption of constitutionality. To justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a doubtful
and equivocal one.16 To invalidate RA 9335 based on petitioners’ baseless supposition is an
affront to the wisdom not only of the legislature that passed it but also of the executive which
approved it.
Public service is its own reward. Nevertheless, public officers may by law be rewarded for
exemplary and exceptional performance. A system of incentives for exceeding the set
expectations of a public office is not anathema to the concept of public accountability. In fact,
it recognizes and reinforces dedication to duty, industry, efficiency and loyalty to public service
of deserving government personnel.
In United States v. Matthews,17 the U.S. Supreme Court validated a law which awards to
officers of the customs as well as other parties an amount not exceeding one-half of the net
proceeds of forfeitures in violation of the laws against smuggling. Citing Dorsheimer v. United
States,18 the U.S. Supreme Court said:
The offer of a portion of such penalties to the collectors is to stimulate and reward their
zeal and industry in detecting fraudulent attempts to evade payment of duties and
taxes.
In the same vein, employees of the BIR and the BOC may by law be entitled to a reward when,
as a consequence of their zeal in the enforcement of tax and customs laws, they exceed their
revenue targets. In addition, RA 9335 establishes safeguards to ensure that the reward will not
be claimed if it will be either the fruit of "bounty hunting or mercenary activity" or the product of
the irregular performance of official duties. One of these precautionary measures is embodied
in Section 8 of the law:
SEC. 8. Liability of Officials, Examiners and Employees of the BIR and the BOC. – The
officials, examiners, and employees of the [BIR] and the [BOC] who violate this Act or
who are guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to
exercise extraordinary diligence in the performance of their duties shall be held liable
for any loss or injury suffered by any business establishment or taxpayer as a result of
 such violation, negligence, abuse, malfeasance, misfeasance or failure to exercise
extraordinary diligence.
Equal Protection
Equality guaranteed under the equal protection clause is equality under the same conditions
and among persons similarly situated; it is equality among equals, not similarity of treatment of
persons who are classified based on substantial differences in relation to the object to be
accomplished.19When things or persons are different in fact or circumstance, they may be
treated in law differently. In Victoriano v. Elizalde Rope Workers’ Union,20 this Court declared:
The guaranty of equal protection of the laws is not a guaranty of equality in the
application of the laws upon all citizens of the [S]tate. It is not, therefore, a requirement,
in order to avoid the constitutional prohibition against inequality, that every man,
woman and child should be affected alike by a statute. Equality of operation of statutes
does not mean indiscriminate operation on persons merely as such, but on persons
according to the circumstances surrounding them. It guarantees equality, not identity
of rights. The Constitution does not require that things which are different in fact
be treated in law as though they were the same. The equal protection clause
does not forbid discrimination as to things that are different. It does not prohibit
legislation which is limited either in the object to which it is directed or by the
territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification.
Classification in law, as in the other departments of knowledge or practice, is the
grouping of things in speculation or practice because they agree with one another in
certain particulars. A law is not invalid because of simple inequality. The very idea of
classification is that of inequality, so that it goes without saying that the mere fact of
inequality in no manner determines the matter of constitutionality. All that is required
of a valid classification is that it be reasonable, which means that the
classification should be based on substantial distinctions which make for real
differences, that it must be germane to the purpose of the law; that it must not
be limited to existing conditions only; and that it must apply equally to each
member of the class. This Court has held that the standard is satisfied if the
classification or distinction is based on a reasonable foundation or rational basis
and is not palpably arbitrary.
In the exercise of its power to make classifications for the purpose of enacting laws
over matters within its jurisdiction, the state is recognized as enjoying a wide range of
discretion. It is not necessary that the classification be based on scientific or marked
differences of things or in their relation. Neither is it necessary that the classification
be made with mathematical nicety. Hence, legislative classification may in many cases
properly rest on narrow distinctions, for the equal protection guaranty does not
preclude the legislature from recognizing degrees of evil or harm, and legislation is
addressed to evils as they may appear.21 (emphasis supplied)
105 | C O N S T I 1
The equal protection clause recognizes a valid classification, that is, a classification that has a
reasonable foundation or rational basis and not arbitrary. 22 With respect to RA 9335, its
expressed public policy is the optimization of the revenue-generation capability and collection
of the BIR and the BOC.23 Since the subject of the law is the revenue- generation capability
and collection of the BIR and the BOC, the incentives and/or sanctions provided in the law
should logically pertain to the said agencies. Moreover, the law concerns only the BIR and the
BOC because they have the common distinct primary function of generating revenues for the
national government through the collection of taxes, customs duties, fees and charges.
The BIR performs the following functions:
Sec. 18. The Bureau of Internal Revenue. – The Bureau of Internal Revenue, which
shall be headed by and subject to the supervision and control of the Commissioner of
Internal Revenue, who shall be appointed by the President upon the recommendation
of the Secretary [of the DOF], shall have the following functions:
(1) Assess and collect all taxes, fees and charges and account for all revenues
collected;
(2) Exercise duly delegated police powers for the proper performance of its functions
and duties;
(3) Prevent and prosecute tax evasions and all other illegal economic activities;
(4) Exercise supervision and control over its constituent and subordinate units; and
(5) Perform such other functions as may be provided by law. 24
xxx xxx xxx (emphasis supplied)
On the other hand, the BOC has the following functions:
Sec. 23. The Bureau of Customs. – The Bureau of Customs which shall be headed
and subject to the management and control of the Commissioner of Customs, who
shall be appointed by the President upon the recommendation of the Secretary[of the
DOF] and hereinafter referred to as Commissioner, shall have the following functions:
(1) Collect custom duties, taxes and the corresponding fees, charges and
penalties;
(2) Account for all customs revenues collected;
(3) Exercise police authority for the enforcement of tariff and customs laws;
 (4) Prevent and suppress smuggling, pilferage and all other economic frauds within all
ports of entry;
(5) Supervise and control exports, imports, foreign mails and the clearance of vessels
and aircrafts in all ports of entry;
(6) Administer all legal requirements that are appropriate;
(7) Prevent and prosecute smuggling and other illegal activities in all ports under its
jurisdiction;
(8) Exercise supervision and control over its constituent units;
(9) Perform such other functions as may be provided by law. 25
xxx xxx xxx (emphasis supplied)
Both the BIR and the BOC are bureaus under the DOF. They principally perform the special
function of being the instrumentalities through which the State exercises one of its great
inherent functions – taxation. Indubitably, such substantial distinction is germane and intimately
related to the purpose of the law. Hence, the classification and treatment accorded to the BIR
and the BOC under RA 9335 fully satisfy the demands of equal protection.
Undue Delegation
Two tests determine the validity of delegation of legislative power: (1) the completeness test
and (2) the sufficient standard test. A law is complete when it sets forth therein the policy to be
executed, carried out or implemented by the delegate. 26 It lays down a sufficient standard when
it provides adequate guidelines or limitations in the law to map out the boundaries of the
delegate’s authority and prevent the delegation from running riot. 27 To be sufficient, the
standard must specify the limits of the delegate’s authority, announce the legislative policy and
identify the conditions under which it is to be implemented. 28
RA 9335 adequately states the policy and standards to guide the President in fixing revenue
targets and the implementing agencies in carrying out the provisions of the law. Section 2 spells
out the policy of the law:
SEC. 2. Declaration of Policy. – It is the policy of the State to optimize the revenue-
generation capability and collection of the Bureau of Internal Revenue (BIR) and the
Bureau of Customs (BOC) by providing for a system of rewards and sanctions through
the creation of a Rewards and Incentives Fund and a Revenue Performance
Evaluation Board in the above agencies for the purpose of encouraging their officials
and employees to exceed their revenue targets.
106 | C O N S T I 1
Section 4 "canalized within banks that keep it from overflowing" 29 the delegated power to the
President to fix revenue targets:
SEC. 4. Rewards and Incentives Fund. – A Rewards and Incentives Fund, hereinafter
referred to as the Fund, is hereby created, to be sourced from the collection of the BIR
and the BOC in excess of their respective revenue targets of the year, as
determined by the Development Budget and Coordinating Committee (DBCC), in
the following percentages:
Excess of Collection of the Excess the Percent (%) of the Excess Collection to Accrue to
Revenue Targets the Fund
30% or below – 15%
More than 30% – 15% of the first 30% plus 20% of the remaining
excess
The Fund shall be deemed automatically appropriated the year immediately following
the year when the revenue collection target was exceeded and shall be released on
the same fiscal year.
Revenue targets shall refer to the original estimated revenue collection expected
of the BIR and the BOC for a given fiscal year as stated in the Budget of
Expenditures and Sources of Financing (BESF) submitted by the President to
Congress. The BIR and the BOC shall submit to the DBCC the distribution of the
agencies’ revenue targets as allocated among its revenue districts in the case of the
BIR, and the collection districts in the case of the BOC.
xxx xxx xxx (emphasis supplied)
Revenue targets are based on the original estimated revenue collection expected respectively
of the BIR and the BOC for a given fiscal year as approved by the DBCC and stated in the
BESF submitted by the President to Congress. 30 Thus, the determination of revenue targets
does not rest solely on the President as it also undergoes the scrutiny of the DBCC.
On the other hand, Section 7 specifies the limits of the Board’s authority and identifies the
conditions under which officials and employees whose revenue collection falls short of the
target by at least 7.5% may be removed from the service:
SEC. 7. Powers and Functions of the Board. – The Board in the agency shall have the
following powers and functions:
xxx xxx xxx
(b) To set the criteria and procedures for removing from service officials and
employees whose revenue collection falls short of the target by at least seven
 and a half percent (7.5%), with due consideration of all relevant factors affecting
the level of collection as provided in the rules and regulations promulgated under this
Act, subject to civil service laws, rules and regulations and compliance with
substantive and procedural due process: Provided, That the following exemptions
shall apply:
1. Where the district or area of responsibility is newly-created, not exceeding
two years in operation, as has no historical record of collection performance
that can be used as basis for evaluation; and
2. Where the revenue or customs official or employee is a recent transferee in
the middle of the period under consideration unless the transfer was due to
nonperformance of revenue targets or potential nonperformance of revenue
targets: Provided, however, That when the district or area of responsibility
covered by revenue or customs officials or employees has suffered from
economic difficulties brought about by natural calamities or force majeure or
economic causes as may be determined by the Board, termination shall be
considered only after careful and proper review by the Board.
(c) To terminate personnel in accordance with the criteria adopted in the preceding
paragraph: Provided, That such decision shall be immediately executory: Provided,
further, That the application of the criteria for the separation of an official or
employee from service under this Act shall be without prejudice to the
application of other relevant laws on accountability of public officers and
employees, such as the Code of Conduct and Ethical Standards of Public
Officers and Employees and the Anti-Graft and Corrupt Practices Act;
xxx xxx xxx (emphasis supplied)
Clearly, RA 9335 in no way violates the security of tenure of officials and employees of the BIR
and the BOC. The guarantee of security of tenure only means that an employee cannot be
dismissed from the service for causes other than those provided by law and only after due
process is accorded the employee.31 In the case of RA 9335, it lays down a reasonable
yardstick for removal (when the revenue collection falls short of the target by at least 7.5%)
with due consideration of all relevant factors affecting the level of collection. This standard is
analogous to inefficiency and incompetence in the performance of official duties, a ground for
disciplinary action under civil service laws. 32 The action for removal is also subject to civil
service laws, rules and regulations and compliance with substantive and procedural due
process.
At any rate, this Court has recognized the following as sufficient standards: "public interest,"
"justice and equity," "public convenience and welfare" and "simplicity, economy and
welfare."33 In this case, the declared policy of optimization of the revenue-generation capability
and collection of the BIR and the BOC is infused with public interest.
107 | C O N S T I 1
Separation Of Powers
Section 12 of RA 9335 provides:
SEC. 12. Joint Congressional Oversight Committee. – There is hereby created a Joint
Congressional Oversight Committee composed of seven Members from the Senate
and seven Members from the House of Representatives. The Members from the
Senate shall be appointed by the Senate President, with at least two senators
representing the minority. The Members from the House of Representatives shall be
appointed by the Speaker with at least two members representing the minority. After
the Oversight Committee will have approved the implementing rules and regulations
(IRR) it shall thereafter become functus officio and therefore cease to exist.
The Joint Congressional Oversight Committee in RA 9335 was created for the purpose of
approving the implementing rules and regulations (IRR) formulated by the DOF, DBM, NEDA,
BIR, BOC and CSC. On May 22, 2006, it approved the said IRR. From then on, it
became functus officio and ceased to exist. Hence, the issue of its alleged encroachment on
the executive function of implementing and enforcing the law may be considered moot and
academic.
This notwithstanding, this might be as good a time as any for the Court to confront the issue of
the constitutionality of the Joint Congressional Oversight Committee created under RA 9335
(or other similar laws for that matter).
The scholarly discourse of Mr. Justice (now Chief Justice) Puno on the concept of
congressional oversight in Macalintal v. Commission on Elections34 is illuminating:
Concept and bases of congressional oversight
Broadly defined, the power of oversight embraces all activities undertaken by
Congress to enhance its understanding of and influence over
the implementation of legislation it has enacted. Clearly, oversight
concerns post-enactment measures undertaken by Congress: (a) to monitor
bureaucratic compliance with program objectives, (b) to determine whether
agencies are properly administered, (c) to eliminate executive waste and
dishonesty, (d) to prevent executive usurpation of legislative authority, and (d)
to assess executive conformity with the congressional perception of public
interest.
The power of oversight has been held to be intrinsic in the grant of legislative power
itself and integral to the checks and balances inherent in a democratic system of
government. x x x x x x x x x
Over the years, Congress has invoked its oversight power with increased frequency to
check the perceived "exponential accumulation of power" by the executive branch. By
 the beginning of the 20th century, Congress has delegated an enormous amount of
legislative authority to the executive branch and the administrative agencies.
Congress, thus, uses its oversight power to make sure that the administrative agencies
perform their functions within the authority delegated to them. x x x x x x x x x
Categories of congressional oversight functions
The acts done by Congress purportedly in the exercise of its oversight powers may be
divided into three categories, namely: scrutiny, investigation and supervision.
a. Scrutiny
Congressional scrutiny implies a lesser intensity and continuity of attention to
administrative operations. Its primary purpose is to determine economy and
efficiency of the operation of government activities. In the exercise of
legislative scrutiny, Congress may request information and report from the
other branches of government. It can give recommendations or pass
resolutions for consideration of the agency involved.
xxx xxx xxx
b. Congressional investigation
While congressional scrutiny is regarded as a passive process of looking at
the facts that are readily available, congressional investigation involves a more
intense digging of facts. The power of Congress to conduct investigation is
recognized by the 1987 Constitution under section 21, Article VI,
xxx xxx xxx
c. Legislative supervision
The third and most encompassing form by which Congress exercises its oversight
power is thru legislative supervision. "Supervision" connotes a continuing and informed
awareness on the part of a congressional committee regarding executive operations in
a given administrative area. While both congressional scrutiny and investigation
involve inquiry into past executive branch actions in order to influence future executive
branch performance, congressional supervision allows Congress to scrutinize the
exercise of delegated law-making authority, and permits Congress to retain part of that
delegated authority.
Congress exercises supervision over the executive agencies through its veto power. It
typically utilizes veto provisions when granting the President or an executive agency
the power to promulgate regulations with the force of law. These provisions require the
President or an agency to present the proposed regulations to Congress, which retains
108 | C O N S T I 1
a "right" to approve or disapprove any regulation before it takes effect. Such legislative
veto provisions usually provide that a proposed regulation will become a law after the
expiration of a certain period of time, only if Congress does not affirmatively disapprove
of the regulation in the meantime. Less frequently, the statute provides that a proposed
regulation will become law if Congress affirmatively approves it.
Supporters of legislative veto stress that it is necessary to maintain the balance of
power between the legislative and the executive branches of government as it offers
lawmakers a way to delegate vast power to the executive branch or to independent
agencies while retaining the option to cancel particular exercise of such power without
having to pass new legislation or to repeal existing law. They contend that this
arrangement promotes democratic accountability as it provides legislative check on
the activities of unelected administrative agencies. One proponent thus explains:
It is too late to debate the merits of this delegation policy: the policy is too
deeply embedded in our law and practice. It suffices to say that the
complexities of modern government have often led Congress-whether by
actual or perceived necessity- to legislate by declaring broad policy goals and
general statutory standards, leaving the choice of policy options to the
discretion of an executive officer. Congress articulates legislative aims, but
leaves their implementation to the judgment of parties who may or may not
have participated in or agreed with the development of those aims.
Consequently, absent safeguards, in many instances the reverse of our
constitutional scheme could be effected: Congress proposes, the Executive
disposes. One safeguard, of course, is the legislative power to enact new
legislation or to change existing law. But without some means of overseeing
post enactment activities of the executive branch, Congress would be unable
to determine whether its policies have been implemented in accordance with
legislative intent and thus whether legislative intervention is appropriate.
Its opponents, however, criticize the legislative veto as undue encroachment upon
the executive prerogatives. They urge that any post-enactment measures
undertaken by the legislative branch should be limited to scrutiny and
investigation; any measure beyond that would undermine the separation of
powers guaranteed by the Constitution. They contend that legislative veto
constitutes an impermissible evasion of the President’s veto authority and intrusion into
the powers vested in the executive or judicial branches of government. Proponents
counter that legislative veto enhances separation of powers as it prevents the
executive branch and independent agencies from accumulating too much power. They
submit that reporting requirements and congressional committee investigations allow
Congress to scrutinize only the exercise of delegated law-making authority. They do
not allow Congress to review executive proposals before they take effect and they do
not afford the opportunity for ongoing and binding expressions of congressional intent.
In contrast, legislative veto permits Congress to participate prospectively in the
approval or disapproval of "subordinate law" or those enacted by the executive branch
pursuant to a delegation of authority by Congress. They further argue that legislative
 veto "is a necessary response by Congress to the accretion of policy control by forces
outside its chambers." In an era of delegated authority, they point out that legislative
veto "is the most efficient means Congress has yet devised to retain control over the
evolution and implementation of its policy as declared by statute."
In Immigration and Naturalization Service v. Chadha, the U.S. Supreme Court
resolved the validity of legislative veto provisions. The case arose from the order
of the immigration judge suspending the deportation of Chadha pursuant to § 244(c)(1)
of the Immigration and Nationality Act. The United States House of Representatives
passed a resolution vetoing the suspension pursuant to § 244(c)(2) authorizing either
House of Congress, by resolution, to invalidate the decision of the executive branch to
allow a particular deportable alien to remain in the United States. The immigration
judge reopened the deportation proceedings to implement the House order and the
alien was ordered deported. The Board of Immigration Appeals dismissed the alien’s
appeal, holding that it had no power to declare unconstitutional an act of Congress.
The United States Court of Appeals for Ninth Circuit held that the House was without
constitutional authority to order the alien’s deportation and that § 244(c)(2) violated the
constitutional doctrine on separation of powers.
On appeal, the U.S. Supreme Court declared § 244(c)(2) unconstitutional. But the
Court shied away from the issue of separation of powers and instead held that the
provision violates the presentment clause and bicameralism. It held that the one-house
veto was essentially legislative in purpose and effect. As such, it is subject to the
procedures set out in Article I of the Constitution requiring the passage by a majority
of both Houses and presentment to the President. x x x x x x x x x
Two weeks after the Chadha decision, the Court upheld, in memorandum decision,
two lower court decisions invalidating the legislative veto provisions in the Natural Gas
Policy Act of 1978 and the Federal Trade Commission Improvement Act of 1980.
Following this precedence, lower courts invalidated statutes containing legislative veto
provisions although some of these provisions required the approval of both Houses of
Congress and thus met the bicameralism requirement of Article I. Indeed, some of
these veto provisions were not even exercised.35(emphasis supplied)
In Macalintal, given the concept and configuration of the power of congressional oversight and
considering the nature and powers of a constitutional body like the Commission on Elections,
the Court struck down the provision in RA 9189 (The Overseas Absentee Voting Act of 2003)
creating a Joint Congressional Committee. The committee was tasked not only to monitor and
evaluate the implementation of the said law but also to review, revise, amend and approve the
IRR promulgated by the Commission on Elections. The Court held that these functions infringed
on the constitutional independence of the Commission on Elections. 36
With this backdrop, it is clear that congressional oversight is not unconstitutional per se,
meaning, it neither necessarily constitutes an encroachment on the executive power to
implement laws nor undermines the constitutional separation of powers. Rather, it is integral to
109 | C O N S T I 1
the checks and balances inherent in a democratic system of government. It may in fact even
enhance the separation of powers as it prevents the over-accumulation of power in the
executive branch.
However, to forestall the danger of congressional encroachment "beyond the legislative
sphere," the Constitution imposes two basic and related constraints on Congress. 37 It may not
vest itself, any of its committees or its members with either executive or judicial power.38 And,
when it exercises its legislative power, it must follow the "single, finely wrought and exhaustively
considered, procedures" specified under the Constitution,39 including the procedure for
enactment of laws and presentment.
Thus, any post-enactment congressional measure such as this should be limited to scrutiny
and investigation. In particular, congressional oversight must be confined to the following:
(1) scrutiny based primarily on Congress’ power of appropriation and the budget
hearings conducted in connection with it, its power to ask heads of departments to
appear before and be heard by either of its Houses on any matter pertaining to their
departments and its power of confirmation 40 and
(2) investigation and monitoring41 of the implementation of laws pursuant to the power
of Congress to conduct inquiries in aid of legislation. 42
Any action or step beyond that will undermine the separation of powers guaranteed by the
Constitution. Legislative vetoes fall in this class.
Legislative veto is a statutory provision requiring the President or an administrative agency to
present the proposed implementing rules and regulations of a law to Congress which, by itself
or through a committee formed by it, retains a "right" or "power" to approve or disapprove such
regulations before they take effect. As such, a legislative veto in the form of a congressional
oversight committee is in the form of an inward-turning delegation designed to attach a
congressional leash (other than through scrutiny and investigation) to an agency to which
Congress has by law initially delegated broad powers. 43 It radically changes the design or
structure of the Constitution’s diagram of power as it entrusts to Congress a direct role in
enforcing, applying or implementing its own laws. 44
Congress has two options when enacting legislation to define national policy within the broad
horizons of its legislative competence.45 It can itself formulate the details or it can assign to the
executive branch the responsibility for making necessary managerial decisions in conformity
with those standards.46 In the latter case, the law must be complete in all its essential terms
and conditions when it leaves the hands of the legislature.47 Thus, what is left for the executive
branch or the concerned administrative agency when it formulates rules and regulations
implementing the law is to fill up details (supplementary rule-making) or ascertain facts
necessary to bring the law into actual operation (contingent rule-making).48
Administrative regulations enacted by administrative agencies to implement and interpret the
law which they are entrusted to enforce have the force of law and are entitled to respect. 49 Such
rules and regulations partake of the nature of a statute 50 and are just as binding as if they have
been written in the statute itself. As such, they have the force and effect of law and enjoy the
presumption of constitutionality and legality until they are set aside with finality in an appropriate
case by a competent court.51 Congress, in the guise of assuming the role of an overseer, may
not pass upon their legality by subjecting them to its stamp of approval without disturbing the
calculated balance of powers established by the Constitution. In exercising discretion to
approve or disapprove the IRR based on a determination of whether or not they conformed
with the provisions of RA 9335, Congress arrogated judicial power unto itself, a power
exclusively vested in this Court by the Constitution.
Considered Opinion of
Mr. Justice Dante O. Tinga
Moreover, the requirement that the implementing rules of a law be subjected to approval by
Congress as a condition for their effectivity violates the cardinal constitutional principles of
bicameralism and the rule on presentment. 52
Section 1, Article VI of the Constitution states:
Section 1. The legislative power shall be vested in the Congress of the
Philippines which shall consist of a Senate and a House of Representatives,
except to the extent reserved to the people by the provision on initiative and
referendum. (emphasis supplied)
Legislative power (or the power to propose, enact, amend and repeal laws) 53 is vested in
Congress which consists of two chambers, the Senate and the House of Representatives. A
valid exercise of legislative power requires the act of both chambers. Corrollarily, it can be
exercised neither solely by one of the two chambers nor by a committee of either or both
chambers. Thus, assuming the validity of a legislative veto, both a single-chamber legislative
veto and a congressional committee legislative veto are invalid.
Additionally, Section 27(1), Article VI of the Constitution provides:
Section 27. (1) Every bill passed by the Congress shall, before it becomes a law,
be presented to the President. If he approves the same, he shall sign it, otherwise,
he shall veto it and return the same with his objections to the House where it originated,
which shall enter the objections at large in its Journal and proceed to reconsider it. If,
after such reconsideration, two-thirds of all the Members of such House shall agree to
pass the bill, it shall be sent, together with the objections, to the other House by which
it shall likewise be reconsidered, and if approved by two-thirds of all the Members of
that House, it shall become a law. In all such cases, the votes of each House shall be
determined by yeas or nays, and the names of the members voting for or against shall
be entered in its Journal. The President shall communicate his veto of any bill to the
110 | C O N S T I 1
House where it originated within thirty days after the date of receipt thereof; otherwise,
it shall become a law as if he had signed it. (emphasis supplied)
Every bill passed by Congress must be presented to the President for approval or veto. In the
absence of presentment to the President, no bill passed by Congress can become a law. In
this sense, law-making under the Constitution is a joint act of the Legislature and of the
Executive. Assuming that legislative veto is a valid legislative act with the force of law, it cannot
take effect without such presentment even if approved by both chambers of Congress.
In sum, two steps are required before a bill becomes a law. First, it must be approved by both
Houses of Congress.54 Second, it must be presented to and approved by the President. 55 As
summarized by Justice Isagani Cruz56 and Fr. Joaquin G. Bernas, S.J.57, the following is the
procedure for the approval of bills:
A bill is introduced by any member of the House of Representatives or the Senate
except for some measures that must originate only in the former chamber.
The first reading involves only a reading of the number and title of the measure and its
referral by the Senate President or the Speaker to the proper committee for study.
The bill may be "killed" in the committee or it may be recommended for approval, with
or without amendments, sometimes after public hearings are first held thereon. If there
are other bills of the same nature or purpose, they may all be consolidated into one bill
under common authorship or as a committee bill.
Once reported out, the bill shall be calendared for second reading. It is at this stage
that the bill is read in its entirety, scrutinized, debated upon and amended when
desired. The second reading is the most important stage in the passage of a bill.
The bill as approved on second reading is printed in its final form and copies thereof
are distributed at least three days before the third reading. On the third reading, the
members merely register their votes and explain them if they are allowed by the rules.
No further debate is allowed.
Once the bill passes third reading, it is sent to the other chamber, where it will also
undergo the three readings. If there are differences between the versions approved by
the two chambers, a conference committee 58 representing both Houses will draft a
compromise measure that if ratified by the Senate and the House of Representatives
will then be submitted to the President for his consideration.
The bill is enrolled when printed as finally approved by the Congress, thereafter
authenticated with the signatures of the Senate President, the Speaker, and the
Secretaries of their respective chambers…59
 The President’s role in law-making.
The final step is submission to the President for approval. Once approved, it takes
effect as law after the required publication.60
Where Congress delegates the formulation of rules to implement the law it has enacted
pursuant to sufficient standards established in the said law, the law must be complete in all its
essential terms and conditions when it leaves the hands of the legislature. And it may be
deemed to have left the hands of the legislature when it becomes effective because it is only
upon effectivity of the statute that legal rights and obligations become available to those entitled
by the language of the statute. Subject to the indispensable requisite of publication under the
due process clause,61 the determination as to when a law takes effect is wholly the prerogative
of Congress.62 As such, it is only upon its effectivity that a law may be executed and the
executive branch acquires the duties and powers to execute the said law. Before that point, the
role of the executive branch, particularly of the President, is limited to approving or vetoing the
law.63
From the moment the law becomes effective, any provision of law that empowers Congress or
any of its members to play any role in the implementation or enforcement of the law violates
the principle of separation of powers and is thus unconstitutional. Under this principle, a
provision that requires Congress or its members to approve the implementing rules of a law
after it has already taken effect shall be unconstitutional, as is a provision that allows Congress
or its members to overturn any directive or ruling made by the members of the executive branch
charged with the implementation of the law.
Following this rationale, Section 12 of RA 9335 should be struck down as unconstitutional.
While there may be similar provisions of other laws that may be invalidated for failure to pass
this standard, the Court refrains from invalidating them wholesale but will do so at the proper
time when an appropriate case assailing those provisions is brought before us. 64
The next question to be resolved is: what is the effect of the unconstitutionality of Section 12
of RA 9335 on the other provisions of the law? Will it render the entire law unconstitutional?
No.
Section 13 of RA 9335 provides:
SEC. 13. Separability Clause. – If any provision of this Act is declared invalid by a
competent court, the remainder of this Act or any provision not affected by such
declaration of invalidity shall remain in force and effect.
In Tatad v. Secretary of the Department of Energy,65 the Court laid down the following rules:
The general rule is that where part of a statute is void as repugnant to the Constitution,
while another part is valid, the valid portion, if separable from the invalid, may stand
and be enforced. The presence of a separability clause in a statute creates the
111 | C O N S T I 1
presumption that the legislature intended separability, rather than complete nullity of
the statute. To justify this result, the valid portion must be so far independent of the
invalid portion that it is fair to presume that the legislature would have enacted it by
itself if it had supposed that it could not constitutionally enact the other. Enough must
remain to make a complete, intelligible and valid statute, which carries out the
legislative intent. x x x
The exception to the general rule is that when the parts of a statute are so mutually
dependent and connected, as conditions, considerations, inducements, or
compensations for each other, as to warrant a belief that the legislature intended them
as a whole, the nullity of one part will vitiate the rest. In making the parts of the statute
dependent, conditional, or connected with one another, the legislature intended the
statute to be carried out as a whole and would not have enacted it if one part is void,
in which case if some parts are unconstitutional, all the other provisions thus
dependent, conditional, or connected must fall with them.
The separability clause of RA 9335 reveals the intention of the legislature to isolate and detach
any invalid provision from the other provisions so that the latter may continue in force and
effect. The valid portions can stand independently of the invalid section. Without Section 12,
the remaining provisions still constitute a complete, intelligible and valid law which carries out
the legislative intent to optimize the revenue-generation capability and collection of the BIR and
the BOC by providing for a system of rewards and sanctions through the Rewards and
Incentives Fund and a Revenue Performance Evaluation Board.
To be effective, administrative rules and regulations must be published in full if their purpose is
to enforce or implement existing law pursuant to a valid delegation. The IRR of RA 9335 were
published on May 30, 2006 in two newspapers of general circulation66 and became effective
15 days thereafter.67 Until and unless the contrary is shown, the IRR are presumed valid and
effective even without the approval of the Joint Congressional Oversight Committee.
WHEREFORE, the petition is hereby PARTIALLY GRANTED. Section 12 of RA 9335 creating
a Joint Congressional Oversight Committee to approve the implementing rules and regulations
of the law is declared UNCONSTITUTIONAL and therefore NULL and VOID. The
constitutionality of the remaining provisions of RA 9335 is UPHELD. Pursuant to Section 13 of
RA 9335, the rest of the provisions remain in force and effect.
SO ORDERED.
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.
112 | C O N S T I 1
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
The petition has no merit.
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
113 | C O N S T I 1
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
114 | C O N S T I 1
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
115 | C O N S T I 1
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.
116 | C O N S T I 1
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 S[ENATOR] O[SMEÑA] (J). Is there a law that would allow the Comelec to conduct such an
existence of a vacancy in the Senate and calling the Commission on Elections (COMELEC) to election? Is it not the case that the vacancy is for a specific office? I am really at a loss. I am
fill up such vacancy through election to be held simultaneously with the regular election on May rising here because I think it is something that we should consider. I do not know if we can…
14, 2001 and the Senator thus elected to serve only for the unexpired term. No, this is not a Concurrent Resolution.

Adopted, S[ENATOR] T[ATAD]. May we solicit the legal wisdom of the Senate President.

(Sgd.) FRANCISCO S. TATAD T[HE] P[RESIDENT]. May I share this information that under Republic Act No. 6645, what is
Senator 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
S[ENATOR] T[ATAD]. Mr. President, I move for the adoption of this resolution. colleague, Senator Guingona, as Vice President.

S[ENATOR] O[SMEÑA] (J). Mr. 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.
T[HE] P[RESIDENT]. Sen. John H. Osmeña is recognized.

xxxx
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] R[OCO]. Mr. President.
S[ENATOR] T[ATAD]. With trepidation, Mr. President. [Laughter]
T[HE] P[RESIDENT]. Sen. Raul S. Roco is recognized.
S[ENATOR] O[SMEÑA] (J). What a way of flattery. [Laughter]
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
Mr. President, I think I recall that sometime in 1951 or 1953, there was a special election for a
election for this purpose. So we just nominate 13 and it is good for our colleagues. It is better
vacant seat in the Senate. As a matter of fact, the one who was elected in that special election
for the candidates. It is also less expensive because the ballot will be printed and there will be
was then Congressman, later Senator Feli[s]berto Verano.
less disfranchisement.
In that election, Mr. President, the candidates contested the seat. In other words, the electorate
T[HE] P[RESIDENT]. That is right.
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.
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.
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. T[HE] P[RESIDENT]. Yes. In other words, this shall be a guidance for the Comelec.

My question therefore is, how is this going to be done in this election? Is the candidate with the S[ENATOR] R[OCO]. Yes.
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? T[HE] P[RESIDENT]. – to implement.

S[ENATOR] T[ATAD]. Mr. President, in this resolution, we are leaving the mechanics to the S[ENATOR] R[OCO]. Yes. The Comelec will not have the flexibility.
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 T[HE] P[RESIDENT]. That is right.
of Senator Guingona.

117 | C O N S T I 1
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.
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.

S[ENATOR] T[ATAD]. Subject to style, we accept that amendment and if there will be no other WHEREFORE, we DISMISS the petition for lack of merit.
amendment, I move for the adoption of this resolution.
SO ORDERED.
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

118 | C O N S T I 1
G.R. No. 221697 made by OCR-Iloilo on petitioner's foundling certificate reflecting the court decreed
adoption,2 the petitioner's adoptive mother discovered only sometime in the second half of
MARY GRACE NATIVIDAD S. POE-LLAMANZARES, Petitioners, 2005 that the lawyer who handled petitioner's adoption failed to secure from the OCR-Iloilo a
vs. new Certificate of Live Birth indicating petitioner's new name and the name of her adoptive
COMELEC AND ESTRELLA C. ELAMPARO Respondents. parents. 3 Without delay, petitioner's mother executed an affidavit attesting to the lawyer's
omission which she submitted to the OCR-Iloilo. On 4 May 2006, OCR-Iloilo issued a new
Certificate of Live Birth in the name of Mary Grace Natividad Sonora Poe. 4
x-----------------------x

G.R. No. 221698-700
MARY GRACE NATIVIDAD S. POE-LLAMANZARES, Petitioners,
vs.
COMELEC, FRANCISCO S. TATAD, ANTONIO P. CONTRERAS AND AMADO D.
VALDEZ Respondents.
DECISION
PEREZ, J.:
Before the Court are two consolidated petitions under Rule 64 in relation to Rule 65 of the
Rules of Court with extremely urgent application for an ex parte issuance of temporary
restraining order/status quo ante order and/or writ of preliminary injunction assailing the
following: (1) 1 December 2015 Resolution of the Commission on Elections (COMELEC)
Second Division; (2) 23 December 2015 Resolution of the COMELEC En Banc, in SPA No. 15-
001 (DC); (3) 11 December 2015 Resolution of the COMELEC First Division; and ( 4) 23
December 2015 Resolution of the COMELEC En Banc, in SPA No. 15-002 (DC), SPA No. 15-
007 (DC) and SPA No. 15-139 (DC) for having been issued without jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction.
The Facts
Mary Grace Natividad S. Poe-Llamanzares (petitioner) was found abandoned as a newborn
infant in the Parish Church of Jaro, Iloilo by a certain Edgardo Militar (Edgardo) on 3 September
1968. Parental care and custody over petitioner was passed on by Edgardo to his relatives,
Emiliano Militar (Emiliano) and his wife. Three days after, 6 September 1968, Emiliano reported
and registered petitioner as a foundling with the Office of the Civil Registrar of Iloilo City (OCR-
Iloilo). In her Foundling Certificate and Certificate of Live Birth, the petitioner was given the
name "Mary Grace Natividad Contreras Militar." 1
Having reached the age of eighteen (18) years in 1986, petitioner registered as a voter with the
local COMELEC Office in San Juan City. On 13 December 1986, she received her COMELEC
Voter's Identification Card for Precinct No. 196 in Greenhills, San Juan, Metro Manila. 5
On 4 April 1988, petitioner applied for and was issued Philippine Passport No. F927287 6 by
the Department of Foreign Affairs (DFA). Subsequently, on 5 April 1993 and 19 May 1998, she
renewed her Philippine passport and respectively secured Philippine Passport Nos. L881511
and DD156616.7
Initially, the petitioner enrolled and pursued a degree in Development Studies at the University
of the Philippines8 but she opted to continue her studies abroad and left for the United States
of America (U.S.) in 1988. Petitioner graduated in 1991 from Boston College in Chestnuts Hill,
Massachusetts where she earned her Bachelor of Arts degree in Political Studies. 9
On 27 July 1991, petitioner married Teodoro Misael Daniel V. Llamanzares (Llamanzares), a
citizen of both the Philippines and the U.S., at Sanctuario de San Jose Parish in San Juan
City. 10 Desirous of being with her husband who was then based in the U.S., the couple flew
back to the U.S. two days after the wedding ceremony or on 29 July 1991. 11
While in the U.S., the petitioner gave birth to her eldest child Brian Daniel (Brian) on 16 April
1992.12 Her two daughters Hanna MacKenzie (Hanna) and Jesusa Anika (Anika) were both
born in the Philippines on 10 July 1998 and 5 June 2004, respectively. 13
14
On 18 October 2001, petitioner became a naturalized American citizen. She obtained U.S.
Passport No. 017037793 on 19 December 2001. 15
On 8 April 2004, the petitioner came back to the Philippines together with Hanna to support her
father's candidacy for President in the May 2004 elections. It was during this time that she gave
birth to her youngest daughter Anika. She returned to the U.S. with her two daughters on 8 July
2004. 16

After a few months, specifically on 13 December 2004, petitioner rushed back to the Philippines
When petitioner was five (5) years old, celebrity spouses Ronald Allan Kelley Poe (a.k.a.
upon learning of her father's deteriorating medical condition. 17 Her father slipped into a coma
Fenando Poe, Jr.) and Jesusa Sonora Poe (a.k.a. Susan Roces) filed a petition for her adoption
and eventually expired. The petitioner stayed in the country until 3 February 2005 to take care
with the Municipal Trial Court (MTC) of San Juan City. On 13 May 1974, the trial court granted
of her father's funeral arrangements as well as to assist in the settlement of his estate. 18
their petition and ordered that petitioner's name be changed from "Mary Grace Natividad
Contreras Militar" to "Mary Grace Natividad Sonora Poe." Although necessary notations were

119 | C O N S T I 1
According to the petitioner, the untimely demise of her father was a severe blow to her entire
family. In her earnest desire to be with her grieving mother, the petitioner and her husband
decided to move and reside permanently in the Philippines sometime in the first quarter of
2005.19 The couple began preparing for their resettlement including notification of their
children's schools that they will be transferring to Philippine schools for the next
semester;20coordination with property movers for the relocation of their household goods,
furniture and cars from the U.S. to the Philippines; 21 and inquiry with Philippine authorities as
to the proper procedure to be followed in bringing their pet dog into the country.22 As early as
2004, the petitioner already quit her job in the U.S. 23
Finally, petitioner came home to the Philippines on 24 May 2005 24 and without delay, secured
a Tax Identification Number from the Bureau of Internal Revenue. Her three (3) children
immediately followed25 while her husband was forced to stay in the U.S. to complete pending
projects as well as to arrange the sale of their family home there. 26
The petitioner and her children briefly stayed at her mother's place until she and her husband
purchased a condominium unit with a parking slot at One Wilson Place Condominium in San
Juan City in the second half of 2005.27 The corresponding Condominium Certificates of Title
covering the unit and parking slot were issued by the Register of Deeds of San Juan City to
petitioner and her husband on 20 February 2006. 28 Meanwhile, her children of school age
began attending Philippine private schools.
On 14 February 2006, the petitioner made a quick trip to the U.S. to supervise the disposal of
some of the family's remaining household belongings.29 She travelled back to the Philippines
on 11 March 2006.30
In late March 2006, petitioner's husband officially informed the U.S. Postal Service of the
family's change and abandonment of their address in the U.S. 31 The family home was
eventually sold on 27 April 2006.32 Petitioner's husband resigned from his job in the U.S. in
April 2006, arrived in the country on 4 May 2006 and started working for a major Philippine
company in July 2006.33
In early 2006, petitioner and her husband acquired a 509-square meter lot in Corinthian Hills,
Quezon City where they built their family home 34 and to this day, is where the couple and their
children have been residing.35 A Transfer Certificate of Title covering said property was issued
in the couple's name by the Register of Deeds of Quezon City on 1June 2006.
On 7 July 2006, petitioner took her Oath of Allegiance to the Republic of the Philippines
pursuant to Republic Act (R.A.) No. 9225 or the Citizenship Retention and Re-acquisition Act
of 2003.36 Under the same Act, she filed with the Bureau of Immigration (BI) a sworn petition
to reacquire Philippine citizenship together with petitions for derivative citizenship on behalf of
her three minor children on 10 July 2006. 37 As can be gathered from its 18 July 2006 Order,
the BI acted favorably on petitioner's petitions and declared that she is deemed to have
reacquired her Philippine citizenship while her children are considered as citizens of the
120 | C O N S T I 1
Philippines.38 Consequently, the BI issued Identification Certificates (ICs) in petitioner's name
and in the names of her three (3) children. 39
Again, petitioner registered as a voter of Barangay Santa Lucia, San Juan City on 31 August
2006.40 She also secured from the DFA a new Philippine Passport bearing the No.
XX4731999.41 This passport was renewed on 18 March 2014 and she was issued Philippine
Passport No. EC0588861 by the DFA.42
On 6 October 2010, President Benigno S. Aquino III appointed petitioner as Chairperson of the
Movie and Television Review and Classification Board (MTRCB). 43 Before assuming her post,
petitioner executed an "Affidavit of Renunciation of Allegiance to the United States of America
and Renunciation of American Citizenship" before a notary public in Pasig City on 20 October
2010,44 in satisfaction of the legal requisites stated in Section 5 of R.A. No. 9225. 45 The
following day, 21 October 2010 petitioner submitted the said affidavit to the BI 46 and took her
oath of office as Chairperson of the MTRCB. 47 From then on, petitioner stopped using her
American passport.48
On 12 July 2011, the petitioner executed before the Vice Consul of the U.S. Embassy in Manila
an "Oath/Affirmation of Renunciation of Nationality of the United States." 49 On that day, she
accomplished a sworn questionnaire before the U.S. Vice Consul wherein she stated that she
had taken her oath as MTRCB Chairperson on 21 October 2010 with the intent, among others,
of relinquishing her American citizenship.50 In the same questionnaire, the petitioner stated that
she had resided outside of the U.S., specifically in the Philippines, from 3 September 1968 to
29 July 1991 and from May 2005 to present.51
On 9 December 2011, the U.S. Vice Consul issued to petitioner a "Certificate of Loss of
Nationality of the United States" effective 21 October 2010.52
On 2 October 2012, the petitioner filed with the COMELEC her Certificate of Candidacy (COC)
for Senator for the 2013 Elections wherein she answered "6 years and 6 months" to the
question "Period of residence in the Philippines before May 13, 2013." 53 Petitioner obtained the
highest number of votes and was proclaimed Senator on 16 May 2013. 54
On 19 December 2013, petitioner obtained Philippine Diplomatic Passport No. DE0004530. 55
On 15 October 2015, petitioner filed her COC for the Presidency for the May 2016
Elections. 56 In her COC, the petitioner declared that she is a natural-born citizen and that her
residence in the Philippines up to the day before 9 May 2016 would be ten (10) years and
eleven (11) months counted from 24 May 2005.57 The petitioner attached to her COC an
"Affidavit Affirming Renunciation of U.S.A. Citizenship" subscribed and sworn to before a notary
public in Quezon City on 14 October 2015. 58
Petitioner's filing of her COC for President in the upcoming elections triggered the filing of
several COMELEC cases against her which were the subject of these consolidated cases.
Origin of Petition for Certiorari in G.R. No. 221697
A day after petitioner filed her COC for President, Estrella Elamparo (Elamparo) filed a petition
to deny due course or cancel said COC which was docketed as SPA No. 15-001 (DC) and
raffled to the COMELEC Second Division.59She is convinced that the COMELEC has
jurisdiction over her petition.60 Essentially, Elamparo's contention is that petitioner committed
material misrepresentation when she stated in her COC that she is a natural-born Filipino
citizen and that she is a resident of the Philippines for at least ten (10) years and eleven (11)
months up to the day before the 9 May 2016 Elections. 61
On the issue of citizenship, Elamparo argued that petitioner cannot be considered as a natural-
born Filipino on account of the fact that she was a foundling. 62 Elamparo claimed that
international law does not confer natural-born status and Filipino citizenship on
foundlings.63 Following this line of reasoning, petitioner is not qualified to apply for reacquisition
of Filipino citizenship under R.A. No. 9225 for she is not a natural-born Filipino citizen to begin
with.64Even assuming arguendo that petitioner was a natural-born Filipino, she is deemed to
have lost that status when she became a naturalized American citizen. 65 According to
Elamparo, natural-born citizenship must be continuous from birth. 66
On the matter of petitioner's residency, Elamparo pointed out that petitioner was bound by the
sworn declaration she made in her 2012 COC for Senator wherein she indicated that she had
resided in the country for only six ( 6) years and six ( 6) months as of May 2013 Elections.
Elamparo likewise insisted that assuming arguendo that petitioner is qualified to regain her
natural-born status under R.A. No. 9225, she still fell short of the ten-year residency
requirement of the Constitution as her residence could only be counted at the earliest from July
2006, when she reacquired Philippine citizenship under the said Act. Also on the assumption
that petitioner is qualified to reacquire lost Philippine Citizenship, Elamparo is of the belief that
she failed to reestablish her domicile in the Philippines. 67
Petitioner seasonably filed her Answer wherein she countered that:
(1) the COMELEC did not have jurisdiction over Elamparo's petition as it was actually
a petition for quo warranto which could only be filed if Grace Poe wins in the
Presidential elections, and that the Department of Justice (DOJ) has primary
jurisdiction to revoke the BI's July 18, 2006 Order;
(2) the petition failed to state a cause of action because it did not contain allegations
which, if hypothetically admitted, would make false the statement in her COC that she
is a natural-born Filipino citizen nor was there any allegation that there was a willful or
deliberate intent to misrepresent on her part;
(3) she did not make any material misrepresentation in the COC regarding her
citizenship and residency qualifications for:
121 | C O N S T I 1
a. the 1934 Constitutional Convention deliberations show that foundlings were
considered citizens;
b. foundlings are presumed under international law to have been born of
citizens of the place where they are found;
c. she reacquired her natural-born Philippine citizenship under the provisions
of R.A. No. 9225;
d. she executed a sworn renunciation of her American citizenship prior to the
filing of her COC for President in the May 9, 2016 Elections and that the same
is in full force and effect and has not been withdrawn or recanted;
e. the burden was on Elamparo in proving that she did not possess natural-
born status;
f. residence is a matter of evidence and that she reestablished her domicile in
the Philippines as early as May 24, 2005;
g. she could reestablish residence even before she reacquired natural-born
citizenship under R.A. No. 9225;
h. statement regarding the period of residence in her 2012 COC for Senator
was an honest mistake, not binding and should give way to evidence on her
true date of reacquisition of domicile;
i. Elamparo's petition is merely an action to usurp the sovereign right of the
Filipino people to decide a purely political question, that is, should she serve
as the country's next leader.68
After the parties submitted their respective Memoranda, the petition was deemed submitted for
resolution.
On 1 December 2015, the COMELEC Second Division promulgated a Resolution finding that
petitioner's COC, filed for the purpose of running for the President of the Republic of the
Philippines in the 9 May 2016 National and Local Elections, contained material representations
which are false. The fallo of the aforesaid Resolution reads:
WHEREFORE, in view of all the foregoing considerations, the instant Petition to Deny Due
Course to or Cancel Certificate of Candidacy is hereby GRANTED. Accordingly, the Certificate
of Candidacy for President of the Republic of the Philippines in the May 9, 2016 National and
Local Elections filed by respondent Mary Grace Natividad Sonora Poe Llamanzares is
hereby CANCELLED.69
Motion for Reconsideration of the 1 December 2015 Resolution was filed by petitioner which
the COMELEC En Banc resolved in its 23 December 2015 Resolution by denying the same.70
Origin of Petition for Certiorari in G.R. Nos. 221698-700
This case stemmed from three (3) separate petitions filed by Francisco S. Tatad (Tatad),
Antonio P. Contreras (Contreras) and Amado D. Valdez (Valdez) against petitioner before the
COMELEC which were consolidated and raffled to its First Division.
In his petition to disqualify petitioner under Rule 25 of the COMELEC Rules of
Procedure,71 docketed as SPA No. 15-002 (DC), Tatad alleged that petitioner lacks the
requisite residency and citizenship to qualify her for the Presidency. 72
Tatad theorized that since the Philippines adheres to the principle of jus sanguinis, persons of
unknown parentage, particularly foundlings, cannot be considered natural-born Filipino citizens
since blood relationship is determinative of natural-born status.73 Tatad invoked the rule of
statutory construction that what is not included is excluded. He averred that the fact that
foundlings were not expressly included in the categories of citizens in the 193 5 Constitution is
indicative of the framers' intent to exclude them.74 Therefore, the burden lies on petitioner to
prove that she is a natural-born citizen.75
Neither can petitioner seek refuge under international conventions or treaties to support her
claim that foundlings have a nationality. 76 According to Tatad, international conventions and
treaties are not self-executory and that local legislations are necessary in order to give effect
to treaty obligations assumed by the Philippines. 77 He also stressed that there is no standard
state practice that automatically confers natural-born status to foundlings.78
Similar to Elamparo's argument, Tatad claimed that petitioner cannot avail of the option to
reacquire Philippine citizenship under R.A. No. 9225 because it only applies to former natural-
born citizens and petitioner was not as she was a foundling.79
Referring to petitioner's COC for Senator, Tatad concluded that she did not comply with the ten
(10) year residency requirement.80 Tatad opined that petitioner acquired her domicile in
Quezon City only from the time she renounced her American citizenship which was sometime
in 2010 or 2011.81 Additionally, Tatad questioned petitioner's lack of intention to abandon her
U.S. domicile as evinced by the fact that her husband stayed thereat and her frequent trips to
the U.S.82
In support of his petition to deny due course or cancel the COC of petitioner, docketed as SPA
No. 15-139 (DC), Valdez alleged that her repatriation under R.A. No. 9225 did not bestow upon
her the status of a natural-born citizen.83 He advanced the view that former natural-born citizens
who are repatriated under the said Act reacquires only their Philippine citizenship and will not
revert to their original status as natural-born citizens.84
122 | C O N S T I 1
He further argued that petitioner's own admission in her COC for Senator that she had only
been a resident of the Philippines for at least six (6) years and six (6) months prior to the 13
May 2013 Elections operates against her. Valdez rejected petitioner's claim that she could have
validly reestablished her domicile in the Philippines prior to her reacquisition of Philippine
citizenship. In effect, his position was that petitioner did not meet the ten (10) year residency
requirement for President.
Unlike the previous COMELEC cases filed against petitioner, Contreras' petition, 85 docketed
as SPA No. 15-007 (DC), limited the attack to the residency issue. He claimed that petitioner's
2015 COC for President should be cancelled on the ground that she did not possess the ten-
year period of residency required for said candidacy and that she made false entry in her COC
when she stated that she is a legal resident of the Philippines for ten (10) years and eleven
(11) months by 9 May 2016.86 Contreras contended that the reckoning period for computing
petitioner's residency in the Philippines should be from 18 July 2006, the date when her petition
to reacquire Philippine citizenship was approved by the BI. 87 He asserted that petitioner's
physical presence in the country before 18 July 2006 could not be valid evidence of
reacquisition of her Philippine domicile since she was then living here as an American citizen
and as such, she was governed by the Philippine immigration laws. 88
In her defense, petitioner raised the following arguments:
First, Tatad's petition should be dismissed outright for failure to state a cause of action. His
petition did not invoke grounds proper for a disqualification case as enumerated under Sections
12 and 68 of the Omnibus Election Code.89 Instead, Tatad completely relied on the alleged lack
of residency and natural-born status of petitioner which are not among the recognized grounds
for the disqualification of a candidate to an elective office.90
Second, the petitions filed against her are basically petitions for quo warranto as they focus on
establishing her ineligibility for the Presidency. 91 A petition for quo warranto falls within the
exclusive jurisdiction of the Presidential Electoral Tribunal (PET) and not the COMELEC. 92
Third, the burden to prove that she is not a natural-born Filipino citizen is on the
respondents.93 Otherwise stated, she has a presumption in her favor that she is a natural-born
citizen of this country.
Fourth, customary international law dictates that foundlings are entitled to a nationality and are
presumed to be citizens of the country where they are found.94 Consequently, the petitioner is
considered as a natural-born citizen of the Philippines.95
Fifth, she claimed that as a natural-born citizen, she has every right to be repatriated under
R.A. No. 9225 or the right to reacquire her natural-born status.96 Moreover, the official acts of
the Philippine Government enjoy the presumption of regularity, to wit: the issuance of the 18
July 2006 Order of the BI declaring her as natural-born citizen, her appointment as MTRCB
Chair and the issuance of the decree of adoption of San Juan RTC. 97 She believed that all
these acts reinforced her position that she is a natural-born citizen of the Philippines.98
Sixth, she maintained that as early as the first quarter of 2005, she started reestablishing her
domicile of choice in the Philippines as demonstrated by her children's resettlement and
schooling in the country, purchase of a condominium unit in San Juan City and the construction
of their family home in Corinthian Hills.99
Seventh, she insisted that she could legally reestablish her domicile of choice in the Philippines
even before she renounced her American citizenship as long as the three determinants for a
change of domicile are complied with. 100She reasoned out that there was no requirement that
renunciation of foreign citizenship is a prerequisite for the acquisition of a new domicile of
choice.101
Eighth, she reiterated that the period appearing in the residency portion of her COC for Senator
was a mistake made in good faith.102
In a Resolution103 promulgated on 11 December 2015, the COMELEC First Division ruled that
petitioner is not a natural-born citizen, that she failed to complete the ten (10) year residency
requirement, and that she committed material misrepresentation in her COC when she
declared therein that she has been a resident of the Philippines for a period of ten (10) years
and eleven (11) months as of the day of the elections on 9 May 2016. The COMELEC First
Division concluded that she is not qualified for the elective position of President of the Republic
of the Philippines. The dispositive portion of said Resolution reads:
WHEREFORE, premises considered, the Commission RESOLVED, as it hereby RESOLVES,
to GRANT the Petitions and cancel the Certificate of Candidacy of MARY GRACE NATIVIDAD
SONORA POE-LLAMANZARES for the elective position of President of the Republic of the
Philippines in connection with the 9 May 2016 Synchronized Local and National Elections.
Petitioner filed a motion for reconsideration seeking a reversal of the COMELEC First Division's
Resolution. On 23 December 2015, the COMELEC En Banc issued a Resolution denying
petitioner's motion for reconsideration.
Alarmed by the adverse rulings of the COMELEC, petitioner instituted the present petitions
for certiorari with urgent prayer for the issuance of an ex parte temporary
restraining order/status quo ante order and/or writ of preliminary injunction. On 28 December
2015, temporary restraining orders were issued by the Court enjoining the COMELEC and its
representatives from implementing the assailed COMELEC Resolutions until further orders
from the Court. The Court also ordered the consolidation of the two petitions filed by petitioner
in its Resolution of 12 January 2016. Thereafter, oral arguments were held in these cases.
The Court GRANTS the petition of Mary Grace Natividad S. Poe-Llamanzares and to ANNUL
and SET ASIDE the:
1. Resolution dated 1 December 2015 rendered through its Second Division, in SPA
No. 15-001 (DC), entitled Estrella C. Elamparo, petitioner, vs. Mary Grace Natividad
Sonora Poe-Llamanzares.
123 | C O N S T I 1
2. Resolution dated 11 December 2015, rendered through its First Division, in the
consolidated cases SPA No. 15-002 (DC) entitled Francisco S. Tatad, petitioner, vs.
Mary Grace Natividad Sonora Poe-Llamanzares, respondent; SPA No. 15-007 (DC)
entitled Antonio P. Contreras, petitioner, vs. Mary Grace Natividad Sonora Poe-
Llamanzares, respondent; and SPA No. 15-139 (DC) entitled Amado D. Valdez,
petitioner, v. Mary Grace Natividad Sonora Poe-Llamanzares, respondent.
3. Resolution dated 23 December 2015 of the Commission En Banc, upholding the 1
December 2015 Resolution of the Second Division.
4. Resolution dated 23 December 2015 of the Commission En Banc, upholding the 11
December 2015 Resolution of the First Division.
The procedure and the conclusions from which the questioned Resolutions emanated are
tainted with grave abuse of discretion amounting to lack of jurisdiction. The petitioner is a
QUALIFIED CANDIDATE for President in the 9 May 2016 National Elections.
The issue before the COMELEC is whether or not the COC of petitioner should be denied due
course or cancelled "on the exclusive ground" that she made in the certificate a false material
representation. The exclusivity of the ground should hedge in the discretion of the COMELEC
and restrain it from going into the issue of the qualifications of the candidate for the position, if,
as in this case, such issue is yet undecided or undetermined by the proper authority. The
COMELEC cannot itself, in the same cancellation case, decide the qualification or lack thereof
of the candidate.
We rely, first of all, on the Constitution of our Republic, particularly its provisions in Article IX,
C, Section 2:
Section 2. The Commission on Elections shall exercise the following powers and functions:
(1) Enforce and administer all laws and regulations relative to the conduct of
an election, plebiscite, initiative, referendum, and recall.
(2) Exercise exclusive original jurisdiction over all contests relating to the
elections, returns, and qualifications of all elective regional, provincial, and city
officials, and appellate jurisdiction over all contests involving elective municipal
officials decided by trial courts of general jurisdiction, or involving elective
barangay officials decided by trial courts of limited jurisdiction.
Decisions, final orders, or rulings of the Commission on election contests
involving elective municipal and barangay offices shall be final, executory, and
not appealable.
 (3) Decide, except those involving the right to vote, all questions affecting
elections, including determination of the number and location of polling places,
appointment of election officials and inspectors, and registration of voters.
(4) Deputize, with the concurrence of the President, law enforcement agencies
and instrumentalities of the Government, including the Armed Forces of the
Philippines, for the exclusive purpose of ensuring free, orderly, honest,
peaceful, and credible elections.
(5) Register, after sufficient publication, political parties, organizations, or
coalitions which, in addition to other requirements, must present their platform
or program of government; and accredit citizens' arms of the Commission on
Elections. Religious denominations and sects shall not be registered. Those
which seek to achieve their goals through violence or unlawful means, or
refuse to uphold and adhere to this Constitution, or which are supported by
any foreign government shall likewise be refused registration.
Financial contributions from foreign governments and their agencies to political
parties, organizations, coalitions, or candidates related to elections constitute
interference in national affairs, and, when accepted, shall be an additional
ground for the cancellation of their registration with the Commission, in addition
to other penalties that may be prescribed by law.
(6) File, upon a verified complaint, or on its own initiative, petitions in court for
inclusion or exclusion of voters; investigate and, where appropriate, prosecute
cases of violations of election laws, including acts or omissions constituting
election frauds, offenses, and malpractices.
(7) Recommend to the Congress effective measures to minimize election
spending, including limitation of places where propaganda materials shall be
posted, and to prevent and penalize all forms of election frauds, offenses,
malpractices, and nuisance candidacies.
(8) Recommend to the President the removal of any officer or employee it has
deputized, or the imposition of any other disciplinary action, for violation or
disregard of, or disobedience to its directive, order, or decision.
(9) Submit to the President and the Congress a comprehensive report on the
conduct of each election, plebiscite, initiative, referendum, or recall.
Not any one of the enumerated powers approximate the exactitude of the provisions of Article
VI, Section 17 of the same basic law stating that:
The Senate and the House of Representatives shall each have an Electoral Tribunal
which shall be the sole judge of all contests relating to the election, returns, and
124 | C O N S T I 1
qualifications of their respective Members. Each Electoral Tribunal shall be composed
of nine Members, three of whom shall be Justices of the Supreme Court to be
designated by the Chief Justice, and the remaining six shall be Members of the Senate
or the House of Representatives, as the case may be, who shall be chosen on the
basis of proportional representation from the political parties and the parties or
organizations registered under the party-list system represented therein. The senior
Justice in the Electoral Tribunal shall be its Chairman.
or of the last paragraph of Article VII, Section 4 which provides that:
The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to
the election, returns, and qualifications of the President or Vice-President, and may
promulgate its rules for the purpose.
The tribunals which have jurisdiction over the question of the qualifications of the President,
the Vice-President, Senators and the Members of the House of Representatives was made
clear by the Constitution. There is no such provision for candidates for these positions.
Can the COMELEC be such judge?
The opinion of Justice Vicente V. Mendoza in Romualdez-Marcos v. Commission on
Elections,104 which was affirmatively cited in the En Banc decision in Fermin v. COMELEC105 is
our guide. The citation in Fermin reads:
Apparently realizing the lack of an authorized proceeding for declaring the ineligibility of
candidates, the COMELEC amended its rules on February 15, 1993 so as to provide in Rule
25 § 1, the following:
Grounds for disqualification. - Any candidate who does not possess all the
qualifications of a candidate as provided for by the Constitution or by existing
law or who commits any act declared by law to be grounds for disqualification
may be disqualified from continuing as a candidate.
The lack of provision for declaring the ineligibility of candidates, however, cannot be supplied
by a mere rule. Such an act is equivalent to the creation of a cause of action which is a
substantive matter which the COMELEC, in the exercise of its rule-making power under Art.
IX, A, §6 of the Constitution, cannot do it. It is noteworthy that the Constitution withholds from
the COMELEC even the power to decide cases involving the right to vote, which essentially
involves an inquiry into qualifications based on age, residence and citizenship of voters. [Art.
IX, C, §2(3)]
The assimilation in Rule 25 of the COMELEC rules of grounds for ineligibility into grounds for
disqualification is contrary to the evident intention of the law. For not only in their grounds but
also in their consequences are proceedings for "disqualification" different from those for a
declaration of "ineligibility." "Disqualification" proceedings, as already stated, are based on
grounds specified in § 12 and §68 of the Omnibus Election Code and in §40 of the Local
Government Code and are for the purpose of barring an individual from becoming a candidate
or from continuing as a candidate for public office. In a word, their purpose is to eliminate a
candidate from the race either from the start or during its progress. "Ineligibility," on the other
hand, refers to the lack of the qualifications prescribed in the Constitution or the statutes
for holding public office and the purpose of the proceedings for declaration of ineligibility is
to remove the incumbent from office.
Consequently, that an individual possesses the qualifications for a public office does not imply
that he is not disqualified from becoming a candidate or continuing as a candidate for a public
office and vice versa. We have this sort of dichotomy in our Naturalization Law. (C.A. No. 473)
That an alien has the qualifications prescribed in §2 of the Law does not imply that he does not
suffer from any of [the] disqualifications provided in §4.
Before we get derailed by the distinction as to grounds and the consequences of the respective
proceedings, the importance of the opinion is in its statement that "the lack of provision for
declaring the ineligibility of candidates, however, cannot be supplied by a mere rule". Justice
Mendoza lectured in Romualdez-Marcos that:
Three reasons may be cited to explain the absence of an authorized proceeding for
determining before election the qualifications of a candidate.
First is the fact that unless a candidate wins and is proclaimed elected, there is no necessity
for determining his eligibility for the office. In contrast, whether an individual should be
disqualified as a candidate for acts constituting election offenses (e.g., vote buying, over
spending, commission of prohibited acts) is a prejudicial question which should be determined
lest he wins because of the very acts for which his disqualification is being sought. That is why
it is provided that if the grounds for disqualification are established, a candidate will not be
voted for; if he has been voted for, the votes in his favor will not be counted; and if for some
reason he has been voted for and he has won, either he will not be proclaimed or his
proclamation will be set aside.
Second is the fact that the determination of a candidates' eligibility, e.g., his citizenship or, as
in this case, his domicile, may take a long time to make, extending beyond the beginning of the
term of the office. This is amply demonstrated in the companion case (G.R. No.
120265, Agapito A. Aquino v. COMELEC) where the determination of Aquino's residence was
still pending in the COMELEC even after the elections of May 8, 1995. This is contrary to the
summary character proceedings relating to certificates of candidacy. That is why the law makes
the receipt of certificates of candidacy a ministerial duty of the COMELEC and its officers. The
law is satisfied if candidates state in their certificates of candidacy that they are eligible for the
position which they seek to fill, leaving the determination of their qualifications to be made after
the election and only in the event they are elected. Only in cases involving charges of false
representations made in certificates of candidacy is the COMELEC given jurisdiction.
125 | C O N S T I 1
Third is the policy underlying the prohibition against pre-proclamation cases in elections for
President, Vice President, Senators and members of the House of Representatives. (R.A. No.
7166, § 15) The purpose is to preserve the prerogatives of the House of Representatives
Electoral Tribunal and the other Tribunals as "sole judges" under the Constitution of
the election, returns and qualifications of members of Congress of the President and Vice
President, as the case may be.106
To be sure, the authoritativeness of the Romualdez pronouncements as reiterated
in Fermin, led to the amendment through COMELEC Resolution No. 9523, on 25 September
2012 of its Rule 25. This, the 15 February1993 version of Rule 25, which states that:
Grounds for disqualification. -Any candidate who does not possess all the qualifications of a
candidate as provided for by the Constitution or by existing law or who commits any act
declared by law to be grounds for disqualification may be disqualified from continuing as a
candidate.107
was in the 2012 rendition, drastically changed to:
Grounds. - Any candidate who, in action or protest in which he is a party, is declared by final
decision of a competent court, guilty of, or found by the Commission to be suffering from any
disqualification provided by law or the Constitution.
A Petition to Disqualify a Candidate invoking grounds for a Petition to Deny to or Cancel a
Certificate of Candidacy or Petition to Declare a Candidate as a Nuisance Candidate, or a
combination thereof, shall be summarily dismissed.
Clearly, the amendment done in 2012 is an acceptance of the reality of absence of an
authorized proceeding for determining before election the qualifications of candidate. Such
that, as presently required, to disqualify a candidate there must be a declaration by a final
judgment of a competent court that the candidate sought to be disqualified "is guilty of or found
by the Commission to be suffering from any disqualification provided by law or the
Constitution."
Insofar as the qualification of a candidate is concerned, Rule 25 and Rule 23 are flipsides of
one to the other. Both do not allow, are not authorizations, are not vestment of jurisdiction, for
the COMELEC to determine the qualification of a candidate. The facts of qualification must
beforehand be established in a prior proceeding before an authority properly vested with
jurisdiction. The prior determination of qualification may be by statute, by executive order or by
a judgment of a competent court or tribunal.
If a candidate cannot be disqualified without a prior finding that he or she is suffering from a
disqualification "provided by law or the Constitution," neither can the certificate of candidacy
be cancelled or denied due course on grounds of false representations regarding his or her
qualifications, without a prior authoritative finding that he or she is not qualified, such prior
authority being the necessary measure by which the falsity of the representation can be found.
The only exception that can be conceded are self-evident facts of unquestioned or
unquestionable veracity and judicial confessions. Such are, anyway, bases equivalent to prior
decisions against which the falsity of representation can be determined.
The need for a predicate finding or final pronouncement in a proceeding under Rule 23 that
deals with, as in this case, alleged false representations regarding the candidate's citizenship
and residence, forced the COMELEC to rule essentially that since foundlings 108 are not
mentioned in the enumeration of citizens under the 1935 Constitution, 109 they then cannot be
citizens. As the COMELEC stated in oral arguments, when petitioner admitted that she is a
foundling, she said it all. This borders on bigotry. Oddly, in an effort at tolerance, the
COMELEC, after saying that it cannot rule that herein petitioner possesses blood relationship
with a Filipino citizen when "it is certain that such relationship is indemonstrable," proceeded
to say that "she now has the burden to present evidence to prove her natural filiation with a
Filipino parent."
The fact is that petitioner's blood relationship with a Filipino citizen is DEMONSTRABLE.
At the outset, it must be noted that presumptions regarding paternity is neither unknown nor
unaccepted in Philippine Law. The Family Code of the Philippines has a whole chapter on
Paternity and Filiation.110 That said, there is more than sufficient evider1ce that petitioner has
Filipino parents and is therefore a natural-born Filipino. Parenthetically, the burden of proof
was on private respondents to show that petitioner is not a Filipino citizen. The private
respondents should have shown that both of petitioner's parents were aliens. Her admission
that she is a foundling did not shift the burden to her because such status did not exclude the
possibility that her parents were Filipinos, especially as in this case where there is a high
probability, if not certainty, that her parents are Filipinos.
The factual issue is not who the parents of petitioner are, as their identities are unknown, but
whether such parents are Filipinos. Under Section 4, Rule 128:
Sect. 4. Relevancy, collateral matters - Evidence must have such a relation to the fact in issue
as to induce belief in its existence or no-existence. Evidence on collateral matters shall not be
allowed, except when it tends in any reasonable degree to establish the probability of
improbability of the fact in issue.
The Solicitor General offered official statistics from the Philippine Statistics Authority
(PSA)111 that from 1965 to 1975, the total number of foreigners born in the Philippines was
15,986 while the total number of Filipinos born in the country was 10,558,278. The statistical
probability that any child born in the Philippines in that decade is natural-born Filipino
was 99.83%. For her part, petitioner presented census statistics for Iloilo Province for 1960 and
1970, also from the PSA. In 1960, there were 962,532 Filipinos and 4,734 foreigners in the
province; 99.62% of the population were Filipinos. In 1970, the figures were 1,162,669 Filipinos
and 5,304 foreigners, or 99.55%. Also presented were figures for the child producing ages (15-
49). In 1960, there were 230,528 female Filipinos as against 730 female foreigners
or 99.68%. In the same year, there were 210,349 Filipino males and 886 male aliens,
126 | C O N S T I 1
or 99.58%. In 1970, there were 270,299 Filipino females versus 1, 190 female aliens,
or 99.56%. That same year, there were 245,740 Filipino males as against only 1,165 male
aliens or 99.53%. COMELEC did not dispute these figures. Notably, Commissioner Arthur Lim
admitted, during the oral arguments, that at the time petitioner was found in 1968, the majority
of the population in Iloilo was Filipino.112
Other circumstantial evidence of the nationality of petitioner's parents are the fact that she was
abandoned as an infant in a Roman Catholic Church in Iloilo City.1âwphi1 She also has typical
Filipino features: height, flat nasal bridge, straight black hair, almond shaped eyes and an oval
face.
There is a disputable presumption that things have happened according to the ordinary course
of nature and the ordinary habits of life. 113 All of the foregoing evidence, that a person with
typical Filipino features is abandoned in Catholic Church in a municipality where the population
of the Philippines is overwhelmingly Filipinos such that there would be more than a 99% chance
that a child born in the province would be a Filipino, would indicate more than ample probability
if not statistical certainty, that petitioner's parents are Filipinos. That probability and the
evidence on which it is based are admissible under Rule 128, Section 4 of the Revised Rules
on Evidence.
To assume otherwise is to accept the absurd, if not the virtually impossible, as the norm. In the
words of the Solicitor General:
Second. It is contrary to common sense because foreigners do not come to the Philippines so
they can get pregnant and leave their newborn babies behind. We do not face a situation where
the probability is such that every foundling would have a 50% chance of being a Filipino and a
50% chance of being a foreigner. We need to frame our questions properly. What are the
chances that the parents of anyone born in the Philippines would be foreigners? Almost zero.
What are the chances that the parents of anyone born in the Philippines would be Filipinos?
99.9%.
According to the Philippine Statistics Authority, from 2010 to 2014, on a yearly average, there
were 1,766,046 children born in the Philippines to Filipino parents, as opposed to 1,301 children
in the Philippines of foreign parents. Thus, for that sample period, the ratio of non-Filipino
children to natural born Filipino children is 1:1357. This means that the statistical probability
that any child born in the Philippines would be a natural born Filipino is 99.93%.
From 1965 to 1975, the total number of foreigners born in the Philippines is 15,986 while the
total number of Filipinos born in the Philippines is 15,558,278. For this period, the ratio of non-
Filipino children is 1:661. This means that the statistical probability that any child born in the
Philippines on that decade would be a natural born Filipino is 99.83%.
We can invite statisticians and social anthropologists to crunch the numbers for us, but I am
confident that the statistical probability that a child born in the Philippines would be a natural
born Filipino will not be affected by whether or not the parents are known. If at all, the likelihood
that a foundling would have a Filipino parent might even be higher than 99.9%. Filipinos
abandon their children out of poverty or perhaps, shame. We do not imagine foreigners
abandoning their children here in the Philippines thinking those infants would have better
economic opportunities or believing that this country is a tropical paradise suitable for raising
abandoned children. I certainly doubt whether a foreign couple has ever considered their child
excess baggage that is best left behind.
To deny full Filipino citizenship to all foundlings and render them stateless just because there
may be a theoretical chance that one among the thousands of these foundlings might be the
child of not just one, but two, foreigners is downright discriminatory, irrational, and unjust. It just
doesn't make any sense. Given the statistical certainty - 99.9% - that any child born in the
Philippines would be a natural born citizen, a decision denying foundlings such status is
effectively a denial of their birthright. There is no reason why this Honorable Court should use
an improbable hypothetical to sacrifice the fundamental political rights of an entire class of
human beings. Your Honor, constitutional interpretation and the use of common sense are not
separate disciplines.
Sr. Rafols:
To all kinds of illegitimate children. It also includes natural children of unknown
parentage, natural or illegitimate children of unknown parents.
Sr. Montinola:
For clarification. The gentleman said "of unknown parents." Current codes consider them
Filipino, that is, I refer to the Spanish Code wherein all children of unknown parentage born in
Spanish territory are considered Spaniards, because the presumption is that a child of unknown
parentage is the son of a Spaniard. This may be applied in the Philippines in that a child of
unknown parentage born in the Philippines is deemed to be Filipino, and there is no need ...
Sr. Rafols:
There is a need, because we are relating the conditions that are [required] to be Filipino.
Sr. Montinola:
But that is the interpretation of the law, therefore, there is no [more] need for amendment.

As a matter of law, foundlings are as a class, natural-born citizens. While the 1935 Sr. Rafols:
Constitution's enumeration is silent as to foundlings, there is no restrictive language which The amendment should read thus:
would definitely exclude foundlings either. Because of silence and ambiguity in the enumeration "Natural or illegitimate of a foreign father and a Filipino mother recognized by one, or the
with respect to foundlings, there is a need to examine the intent of the framers. In Nitafan v. children of unknown parentage."
Commissioner of Internal Revenue,114 this Court held that:
Sr. Briones:
The ascertainment of that intent is but in keeping with the fundamental principle of The amendment [should] mean children born in the Philippines of unknown parentage.
constitutional construction that the intent of the framers of the organic law and of the
people adopting it should be given effect. The primary task in constitutional
construction is to ascertain and thereafter assure the realization of the purpose of the Sr. Rafols:
framers and of the people in the adoption of the Constitution. It may also be safely The son of a Filipina to a Foreigner, although this [person] does not recognize the child, is not
assumed that the people in ratifying the Constitution were guided mainly by the unknown.
explanation offered by the framers.115
President:
As pointed out by petitioner as well as the Solicitor General, the deliberations of the 1934 Does the gentleman accept the amendment or not?
Constitutional Convention show that the framers intended foundlings to be covered by the
enumeration. The following exchange is recorded: Sr. Rafols:
I do not accept the amendment because the amendment would exclude the children of a
Sr. Rafols: For an amendment. I propose that after subsection 2, the following is inserted: "The Filipina with a foreigner who does not recognize the child. Their parentage is not unknown and
natural children of a foreign father and a Filipino mother not recognized by the father. I think those of overseas Filipino mother and father [whom the latter] does not recognize, should
also be considered as Filipinos.
xxxx
President:
The question in order is the amendment to the amendment from the Gentleman from Cebu,
President: Mr. Briones.
[We] would like to request a clarification from the proponent of the amendment. The gentleman
refers to natural children or to any kind of illegitimate children?

127 | C O N S T I 1
Sr. Busion:
Mr. President, don't you think it would be better to leave this matter in the hands of the
Legislature?
Sr. Roxas:
Mr. President, my humble opinion is that these cases are few and far in between, that the
constitution need [not] refer to them. By international law the principle that children or people
born in a country of unknown parents are citizens in this nation is recognized, and it is not
necessary to include a provision on the subject exhaustively. 116
Though the Rafols amendment was not carried out, it was not because there was any objection
to the notion that persons of "unknown parentage" are not citizens but only because their
number was not enough to merit specific mention. Such was the account,117 cited by petitioner,
of delegate and constitution law author Jose Aruego who said:
During the debates on this provision, Delegate Rafols presented an amendment to
include as Filipino citizens the illegitimate children with a foreign father of a mother who
was a citizen of the Philippines, and also foundlings; but this amendment was defeated
primarily because the Convention believed that the cases, being too few to warrant the
inclusion of a provision in the Constitution to apply to them, should be governed by
statutory legislation. Moreover, it was believed that the rules of international law were
already clear to the effect that illegitimate children followed the citizenship of the
mother, and that foundlings followed the nationality of the place where they were
found, thereby making unnecessary the inclusion in the Constitution of the proposed
amendment.
This explanation was likewise the position of the Solicitor General during the 16 February 2016
Oral Arguments:
We all know that the Rafols proposal was rejected. But note that what was declined was the
proposal for a textual and explicit recognition of foundlings as Filipinos. And so, the way to
explain the constitutional silence is by saying that it was the view of Montinola and Roxas which
prevailed that there is no more need to expressly declare foundlings as Filipinos.
Obviously, it doesn't matter whether Montinola's or Roxas' views were legally correct. Framers
of a constitution can constitutionalize rules based on assumptions that are imperfect or even
wrong. They can even overturn existing rules. This is basic. What matters here is that Montinola
and Roxas were able to convince their colleagues in the convention that there is no more need
to expressly declare foundlings as Filipinos because they are already impliedly so recognized.
In other words, the constitutional silence is fully explained in terms of linguistic efficiency and
the avoidance of redundancy. The policy is clear: it is to recognize foundlings, as a class, as
Filipinos under Art. IV, Section 1 (3) of the 1935 Constitution. This inclusive policy is carried
over into the 1973 and 1987 Constitution. It is appropriate to invoke a famous scholar as he
128 | C O N S T I 1
was paraphrased by Chief Justice Fernando: the constitution is not silently silent, it is silently
vocal. 118
The Solicitor General makes the further point that the framers "worked to create a just and
humane society," that "they were reasonable patriots and that it would be unfair to impute upon
them a discriminatory intent against foundlings." He exhorts that, given the grave implications
of the argument that foundlings are not natural-born Filipinos, the Court must search the
records of the 1935, 1973 and 1987 Constitutions "for an express intention to deny foundlings
the status of Filipinos. The burden is on those who wish to use the constitution to discriminate
against foundlings to show that the constitution really intended to take this path to the dark side
and inflict this across the board marginalization."
We find no such intent or language permitting discrimination against foundlings. On the
contrary, all three Constitutions guarantee the basic right to equal protection of the laws. All
exhort the State to render social justice. Of special consideration are several provisions in the
present charter: Article II, Section 11 which provides that the "State values the dignity of every
human person and guarantees full respect for human rights," Article XIII, Section 1 which
mandates Congress to "give highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic, and political
inequalities x x x" and Article XV, Section 3 which requires the State to defend the "right of
children to assistance, including proper care and nutrition, and special protection from all forms
of neglect, abuse, cruelty, exploitation, and other conditions prejudicial to their development."
Certainly, these provisions contradict an intent to discriminate against foundlings on account
of their unfortunate status.
Domestic laws on adoption also support the principle that foundlings are Filipinos. These laws
do not provide that adoption confers citizenship upon the adoptee. Rather, the adoptee must
be a Filipino in the first place to be adopted. The most basic of such laws is Article 15 of the
Civil Code which provides that "[l]aws relating to family rights, duties, status, conditions, legal
capacity of persons are binding on citizens of the Philippines even though living abroad."
Adoption deals with status, and a Philippine adoption court will have jurisdiction only if the
adoptee is a Filipino. In Ellis and Ellis v. Republic,119 a child left by an unidentified mother was
sought to be adopted by aliens. This Court said:
In this connection, it should be noted that this is a proceedings in rem, which no court may
entertain unless it has jurisdiction, not only over the subject matter of the case and over the
parties, but also over the res, which is the personal status of Baby Rose as well as that of
petitioners herein. Our Civil Code (Art. 15) adheres to the theory that jurisdiction over the status
of a natural person is determined by the latter's nationality. Pursuant to this theory, we
have jurisdiction over the status of Baby Rose, she being a citizen of the Philippines, but not
over the status of the petitioners, who are foreigners. 120 (Underlining supplied)
Recent legislation is more direct. R.A. No. 8043 entitled "An Act Establishing the Rules to
Govern the Inter-Country Adoption of Filipino Children and For Other Purposes" (otherwise
known as the "Inter-Country Adoption Act of 1995"), R.A. No. 8552, entitled "An Act
Establishing the Rules and Policies on the Adoption of Filipino Children and For Other
Purposes" (otherwise known as the Domestic Adoption Act of 1998) and this Court's A.M. No.
02-6-02-SC or the "Rule on Adoption," all expressly refer to "Filipino children" and include
foundlings as among Filipino children who may be adopted.
It has been argued that the process to determine that the child is a foundling leading to the
issuance of a foundling certificate under these laws and the issuance of said certificate are acts
to acquire or perfect Philippine citizenship which make the foundling a naturalized Filipino at
best. This is erroneous. Under Article IV, Section 2 "Natural-born citizens are those who are
citizens of the Philippines from birth without having to perform any act to acquire or perfect their
Philippine citizenship." In the first place, "having to perform an act" means that the act must be
personally done by the citizen. In this instance, the determination of foundling status is done
not by the child but by the authorities. 121 Secondly, the object of the process is the
determination of the whereabouts of the parents, not the citizenship of the child. Lastly, the
process is certainly not analogous to naturalization proceedings to acquire Philippine
citizenship, or the election of such citizenship by one born of an alien father and a Filipino
mother under the 1935 Constitution, which is an act to perfect it.
In this instance, such issue is moot because there is no dispute that petitioner is a foundling,
as evidenced by a Foundling Certificate issued in her favor. 122 The Decree of Adoption issued
on 13 May 1974, which approved petitioner's adoption by Jesusa Sonora Poe and Ronald Allan
Kelley Poe, expressly refers to Emiliano and his wife, Rosario Militar, as her "foundling
parents," hence effectively affirming petitioner's status as a foundling. 123
Foundlings are likewise citizens under international law. Under the 1987 Constitution, an
international law can become part of the sphere of domestic law either by transformation or
incorporation. The transformation method requires that an international law be transformed into
a domestic law through a constitutional mechanism such as local legislation. 124 On the other
hand, generally accepted principles of international law, by virtue of the incorporation clause of
the Constitution, form part of the laws of the land even if they do not derive from treaty
obligations. Generally accepted principles of international law include international custom as
evidence of a general practice accepted as law, and general principles of law recognized by
civilized nations.125 International customary rules are accepted as binding as a result from the
combination of two elements: the established, widespread, and consistent practice on the part
of States; and a psychological element known as the opinionjuris sive necessitates (opinion as
to law or necessity). Implicit in the latter element is a belief that the practice in question is
rendered obligatory by the existence of a rule of law requiring it. 126 "General principles of law
recognized by civilized nations" are principles "established by a process of reasoning" or
judicial logic, based on principles which are "basic to legal systems generally," 127 such as
"general principles of equity, i.e., the general principles of fairness and justice," and the
"general principle against discrimination" which is embodied in the "Universal Declaration of
Human Rights, the International Covenant on Economic, Social and Cultural Rights, the
International Convention on the Elimination of All Forms of Racial Discrimination, the
Convention Against Discrimination in Education, the Convention (No. 111) Concerning
Discrimination in Respect of Employment and Occupation." 128 These are the same core
129 | C O N S T I 1
principles which underlie the Philippine Constitution itself, as embodied in the due process and
equal protection clauses of the Bill of Rights.129
Universal Declaration of Human Rights ("UDHR") has been interpreted by this Court as part of
the generally accepted principles of international law and binding on the State.130 Article 15
thereof states:
1. Everyone has the right to a nationality.
2. No one shall be arbitrarily deprived of his nationality nor denied the right to change
his nationality.
The Philippines has also ratified the UN Convention on the Rights of the Child (UNCRC). Article
7 of the UNCRC imposes the following obligations on our country:
Article 7
1. The child shall be registered immediately after birth and shall have the right from birth to a
name, the right to acquire a nationality and as far as possible, the right to know and be cared
for by his or her parents.
2. States Parties shall ensure the implementation of these rights in accordance with their
national law and their obligations under the relevant international instruments in this field, in
particular where the child would otherwise be stateless.
In 1986, the country also ratified the 1966 International Covenant on Civil and Political Rights
(ICCPR). Article 24 thereof provide for the right of every child "to acquire a nationality:"
Article 24
1. Every child shall have, without any discrimination as to race, colour, sex, language, religion,
national or social origin, property or birth, the right, to such measures of protection as are
required by his status as a minor, on the part of his family, society and the State.
2. Every child shall be registered immediately after birth and shall have a name.
3. Every child has the right to acquire a nationality.
The common thread of the UDHR, UNCRC and ICCPR is to obligate the Philippines to grant
nationality from birth and ensure that no child is stateless. This grant of nationality must be at
the time of birth, and it cannot be accomplished by the application of our present naturalization
laws, Commonwealth Act No. 473, as amended, and R.A. No. 9139, both of which require the
applicant to be at least eighteen (18) years old.
The principles found in two conventions, while yet unratified by the Philippines, are generally
accepted principles of international law. The first is Article 14 of the 1930 Hague Convention
on Certain Questions Relating to the Conflict of Nationality Laws under which a foundling is
presumed to have the "nationality of the country of birth," to wit:
Article 14
A child whose parents are both unknown shall have the nationality of the country of birth. If the
child's parentage is established, its nationality shall be determined by the rules applicable in
cases where the parentage is known.
A foundling is, until the contrary is proved, presumed to have been born on the territory of the
State in which it was found. (Underlining supplied)
The second is the principle that a foundling is presumed born of citizens of the country where
he is found, contained in Article 2 of the 1961 United Nations Convention on the Reduction of
Statelessness:
Article 2
A foundling found in the territory of a Contracting State shall, in the absence of proof to the
contrary, be considered to have been born within the territory of parents possessing the
nationality of that State.
That the Philippines is not a party to the 1930 Hague Convention nor to the 1961 Convention
on the Reduction of Statelessness does not mean that their principles are not binding. While
the Philippines is not a party to the 1930 Hague Convention, it is a signatory to the Universal
Declaration on Human Rights, Article 15(1) ofwhich131effectively affirms Article 14 of the 1930
Hague Convention. Article 2 of the 1961 "United Nations Convention on the Reduction of
Statelessness" merely "gives effect" to Article 15(1) of the UDHR. 132 In Razon v. Tagitis, 133 this
Court noted that the Philippines had not signed or ratified the "International Convention for the
Protection of All Persons from Enforced Disappearance." Yet, we ruled that the proscription
against enforced disappearances in the said convention was nonetheless binding as a
"generally accepted principle of international law." Razon v. Tagitis is likewise notable for
declaring the ban as a generally accepted principle of international law although the convention
had been ratified by only sixteen states and had not even come into force and which needed
the ratification of a minimum of twenty states. Additionally, as petitioner points out, the Court
was content with the practice of international and regional state organs, regional state practice
in Latin America, and State Practice in the United States.
Another case where the number of ratifying countries was not determinative is Mijares v.
Ranada, 134 where only four countries had "either ratified or acceded to" 135 the 1966
"Convention on the Recognition and Enforcement of Foreign Judgments in Civil and
Commercial Matters" when the case was decided in 2005. The Court also pointed out that that
nine member countries of the European Common Market had acceded to the Judgments
130 | C O N S T I 1
Convention. The Court also cited U.S. laws and jurisprudence on recognition of foreign
judgments. In all, only the practices of fourteen countries were considered and yet, there was
pronouncement that recognition of foreign judgments was widespread practice.
Our approach in Razon and Mijares effectively takes into account the fact that "generally
accepted principles of international law" are based not only on international custom, but also
on "general principles of law recognized by civilized nations," as the phrase is understood in
Article 38.1 paragraph (c) of the ICJ Statute. Justice, fairness, equity and the policy against
discrimination, which are fundamental principles underlying the Bill of Rights and which are
"basic to legal systems generally,"136 support the notion that the right against enforced
disappearances and the recognition of foreign judgments, were correctly considered as
"generally accepted principles of international law" under the incorporation clause.
Petitioner's evidence137 shows that at least sixty countries in Asia, North and South America,
and Europe have passed legislation recognizing foundlings as its citizen. Forty-two (42) of
those countries follow the jus sanguinis regime. Of the sixty, only thirty-three (33) are parties
to the 1961 Convention on Statelessness; twenty-six (26) are not signatories to the Convention.
Also, the Chief Justice, at the 2 February 2016 Oral Arguments pointed out that in 166 out of
189 countries surveyed (or 87.83%), foundlings are recognized as citizens. These
circumstances, including the practice of jus sanguinis countries, show that it is a generally
accepted principle of international law to presume foundlings as having been born of nationals
of the country in which the foundling is found.
Current legislation reveals the adherence of the Philippines to this generally accepted principle
of international law. In particular, R.A. No. 8552, R.A. No. 8042 and this Court's Rules on
Adoption, expressly refer to "Filipino children." In all of them, foundlings are among the Filipino
children who could be adopted. Likewise, it has been pointed that the DFA issues passports to
foundlings. Passports are by law, issued only to citizens. This shows that even the executive
department, acting through the DFA, considers foundlings as Philippine citizens.
Adopting these legal principles from the 1930 Hague Convention and the 1961 Convention on
Statelessness is rational and reasonable and consistent with the jus sanguinis regime in our
Constitution. The presumption of natural-born citizenship of foundlings stems from the
presumption that their parents are nationals of the Philippines. As the empirical data provided
by the PSA show, that presumption is at more than 99% and is a virtual certainty.
In sum, all of the international law conventions and instruments on the matter of nationality of
foundlings were designed to address the plight of a defenseless class which suffers from a
misfortune not of their own making. We cannot be restrictive as to their application if we are a
country which calls itself civilized and a member of the community of nations. The Solicitor
General's warning in his opening statement is relevant:
.... the total effect of those documents is to signify to this Honorable Court that those treaties
and conventions were drafted because the world community is concerned that the situation of
foundlings renders them legally invisible. It would be tragically ironic if this Honorable Court
ended up using the international instruments which seek to protect and uplift foundlings a tool
to deny them political status or to accord them second-class citizenship.138
The COMELEC also ruled139 that petitioner's repatriation in July 2006 under the provisions of
R.A. No. 9225 did not result in the reacquisition of natural-born citizenship. The COMELEC
reasoned that since the applicant must perform an act, what is reacquired is not "natural-born"
citizenship but only plain "Philippine citizenship."
The COMELEC's rule arrogantly disregards consistent jurisprudence on the matter of
repatriation statutes in general and of R.A. No. 9225 in particular.
In the seminal case of Bengson Ill v. HRET, 140 repatriation was explained as follows:
Moreover, repatriation results in the recovery of the original nationality. This means that a
naturalized Filipino who lost his citizenship will be restored to his prior status as a naturalized
Filipino citizen. On the other hand, if he was originally a natural-born citizen before he lost his
Philippine citizenship, he will be restored to his former status as a natural-born Filipino.
R.A. No. 9225 is a repatriation statute and has been described as such in several cases. They
include Sobejana-Condon v. COMELEC141 where we described it as an
"abbreviated repatriation process that restores one's Filipino citizenship x x x." Also included
is Parreno v. Commission on Audit,142 which cited Tabasa v. Court of Appeals,143where we said
that "[t]he repatriation of the former Filipino will allow him to recover his natural-born
citizenship. Parreno v. Commission on Audit144 is categorical that "if petitioner reacquires his
Filipino citizenship (under R.A. No. 9225), he will ... recover his natural-born citizenship."
The COMELEC construed the phrase "from birth" in the definition of natural citizens as implying
"that natural-born citizenship must begin at birth and remain uninterrupted and continuous from
birth." R.A. No. 9225 was obviously passed in line with Congress' sole prerogative to determine
how citizenship may be lost or reacquired. Congress saw it fit to decree that natural-born
citizenship may be reacquired even if it had been once lost. It is not for the COMELEC to
disagree with the Congress' determination.
More importantly, COMELEC's position that natural-born status must be continuous was
already rejected in Bengson III v. HRET145 where the phrase "from birth" was clarified to mean
at the time of birth: "A person who at the time of his birth, is a citizen of a particular country, is
a natural-born citizen thereof." Neither is "repatriation" an act to "acquire or perfect" one's
citizenship. In Bengson III v. HRET, this Court pointed out that there are only two types of
citizens under the 1987 Constitution: natural-born citizen and naturalized, and that there is no
third category for repatriated citizens:
It is apparent from the enumeration of who are citizens under the present Constitution that
there are only two classes of citizens: (1) those who are natural-born and (2) those who are
naturalized in accordance with law. A citizen who is not a naturalized Filipino, ie., did not have
to undergo the process of naturalization to obtain Philippine citizenship, necessarily is a natural-
131 | C O N S T I 1
born Filipino. Noteworthy is the absence in said enumeration of a separate category for persons
who, after losing Philippine citizenship, subsequently reacquire it. The reason therefor is clear:
as to such persons, they would either be natural-born or naturalized depending on the reasons
for the loss of their citizenship and the mode prescribed by the applicable law for the
reacquisition thereof. As respondent Cruz was not required by law to go through naturalization
proceedings in order to reacquire his citizenship, he is perforce a natural-born Filipino. As such,
he possessed all the necessary qualifications to be elected as member of the House of
Representatives.146
The COMELEC cannot reverse a judicial precedent. That is reserved to this Court. And while
we may always revisit a doctrine, a new rule reversing standing doctrine cannot be retroactively
applied. In Morales v. Court of Appeals and Jejomar Erwin S. Binay, Jr.,147 where we decreed
reversed the condonation doctrine, we cautioned that it "should be prospective in application
for the reason that judicial decisions applying or interpreting the laws of the Constitution, until
reversed, shall form part of the legal system of the Philippines." This Court also said that "while
the future may ultimately uncover a doctrine's error, it should be, as a general rule, recognized
as good law prior to its abandonment. Consequently, the people's reliance thereupon should
be respected."148
Lastly, it was repeatedly pointed out during the oral arguments that petitioner committed a
falsehood when she put in the spaces for "born to" in her application for repatriation under R.A.
No. 9225 the names of her adoptive parents, and this misled the BI to presume that she was a
natural-born Filipino. It has been contended that the data required were the names of her
biological parents which are precisely unknown.
This position disregards one important fact - petitioner was legally adopted. One of the effects
of adoption is "to sever all legal ties between the biological parents and the adoptee, except
when the biological parent is the spouse of the adoptee." 149 Under R.A. No. 8552, petitioner
was also entitled to an amended birth certificate "attesting to the fact that the adoptee is the
child of the adopter(s)" and which certificate "shall not bear any notation that it is an amended
issue."150 That law also requires that "[a]ll records, books, and papers relating to the adoption
cases in the files of the court, the Department [of Social Welfare and Development], or any
other agency or institution participating in the adoption proceedings shall be kept strictly
confidential."151 The law therefore allows petitioner to state that her adoptive parents were her
birth parents as that was what would be stated in her birth certificate anyway. And given the
policy of strict confidentiality of adoption records, petitioner was not obligated to disclose that
she was an adoptee.
Clearly, to avoid a direct ruling on the qualifications of petitioner, which it cannot make in the
same case for cancellation of COC, it resorted to opinionatedness which is,
moreover, erroneous. The whole process undertaken by COMELEC is wrapped in grave abuse
of discretion.
On Residence
The tainted process was repeated in disposing of the issue of whether or not petitioner
committed false material representation when she stated in her COC that she has before and
until 9 May 2016 been a resident of the Philippines for ten (10) years and eleven (11) months.
Petitioner's claim that she will have been a resident for ten (10) years and eleven (11) months
on the day before the 2016 elections, is true.
The Constitution requires presidential candidates to have ten (10) years' residence in the
Philippines before the day of the elections. Since the forthcoming elections will be held on 9
May 2016, petitioner must have been a resident of the Philippines prior to 9 May 2016 for ten
(10) years. In answer to the requested information of "Period of Residence in the Philippines
up to the day before May 09, 2016," she put in "10 years 11 months" which according to her
pleadings in these cases corresponds to a beginning date of 25 May 2005 when she returned
for good from the U.S.
When petitioner immigrated to the U.S. in 1991, she lost her original domicile, which is the
Philippines. There are three requisites to acquire a new domicile: 1. Residence or bodily
presence in a new locality; 2. an intention to remain there; and 3. an intention to abandon the
old domicile.152 To successfully effect a change of domicile, one must demonstrate an actual
removal or an actual change of domicile; a bona fide intention of abandoning the former place
of residence and establishing a new one and definite acts which correspond with the purpose.
In other words, there must basically be animus manendi coupled with animus non
revertendi. The purpose to remain in or at the domicile of choice must be for an indefinite period
of time; the change of residence must be voluntary; and the residence at the place chosen for
the new domicile must be actual.153
Petitioner presented voluminous evidence showing that she and her family abandoned their
U.S. domicile and relocated to the Philippines for good. These evidence include petitioner's
former U.S. passport showing her arrival on 24 May 2005 and her return to the Philippines
every time she travelled abroad; e-mail correspondences starting in March 2005 to September
2006 with a freight company to arrange for the shipment of their household items weighing
about 28,000 pounds to the Philippines; e-mail with the Philippine Bureau of Animal Industry
inquiring how to ship their dog to the Philippines; school records of her children showing
enrollment in Philippine schools starting June 2005 and for succeeding years; tax identification
card for petitioner issued on July 2005; titles for condominium and parking slot issued in
February 2006 and their corresponding tax declarations issued in April 2006; receipts dated 23
February 2005 from the Salvation Army in the U.S. acknowledging donation of items from
petitioner's family; March 2006 e-mail to the U.S. Postal Service confirming request for change
of address; final statement from the First American Title Insurance Company showing sale of
their U.S. home on 27 April 2006; 12 July 2011 filled-up questionnaire submitted to the U.S.
Embassy where petitioner indicated that she had been a Philippine resident since May 2005;
affidavit from Jesusa Sonora Poe (attesting to the return of petitioner on 24 May 2005 and that
she and her family stayed with affiant until the condominium was purchased); and Affidavit from
petitioner's husband (confirming that the spouses jointly decided to relocate to the Philippines
in 2005 and that he stayed behind in the U.S. only to finish some work and to sell the family
home).
132 | C O N S T I 1
The foregoing evidence were undisputed and the facts were even listed by the COMELEC,
particularly in its Resolution in the Tatad, Contreras and Valdez cases.
However, the COMELEC refused to consider that petitioner's domicile had been timely
changed as of 24 May 2005. At the oral arguments, COMELEC Commissioner Arthur Lim
conceded the presence of the first two requisites, namely, physical presence and animus
manendi, but maintained there was no animus non-revertendi.154 The COMELEC disregarded
the import of all the evidence presented by petitioner on the basis of the position that the earliest
date that petitioner could have started residence in the Philippines was in July 2006 when her
application under R.A. No. 9225 was approved by the BI. In this regard, COMELEC relied
on Coquilla v. COMELEC,155 Japzon v. COMELEC156 and Caballero v. COMELEC. 157 During
the oral arguments, the private respondents also added Reyes v. COMELEC.158 Respondents
contend that these cases decree that the stay of an alien former Filipino cannot be counted
until he/she obtains a permanent resident visa or reacquires Philippine citizenship, a visa-free
entry under a balikbayan stamp being insufficient. Since petitioner was still an American
(without any resident visa) until her reacquisition of citizenship under R.A. No. 9225, her stay
from 24 May 2005 to 7 July 2006 cannot be counted.
But as the petitioner pointed out, the facts in these four cases are very different from her
situation. In Coquilla v. COMELEC,159 the only evidence presented was a community tax
certificate secured by the candidate and his declaration that he would be running in the
elections. Japzon v. COMELEC160 did not involve a candidate who wanted to count residence
prior to his reacquisition of Philippine citizenship. With the Court decreeing that residence is
distinct from citizenship, the issue there was whether the candidate's acts after reacquisition
sufficed to establish residence. In Caballero v. COMELEC, 161 the candidate admitted that his
place of work was abroad and that he only visited during his frequent vacations. In Reyes v.
COMELEC,162 the candidate was found to be an American citizen who had not even reacquired
Philippine citizenship under R.A. No. 9225 or had renounced her U.S. citizenship. She was
disqualified on the citizenship issue. On residence, the only proof she offered was a seven-
month stint as provincial officer. The COMELEC, quoted with approval by this Court, said that
"such fact alone is not sufficient to prove her one-year residency."
It is obvious that because of the sparse evidence on residence in the four cases cited by the
respondents, the Court had no choice but to hold that residence could be counted only from
acquisition of a permanent resident visa or from reacquisition of Philippine citizenship. In
contrast, the evidence of petitioner is overwhelming and taken together leads to no other
conclusion that she decided to permanently abandon her U.S. residence (selling the house,
taking the children from U.S. schools, getting quotes from the freight company, notifying the
U.S. Post Office of the abandonment of their address in the U.S., donating excess items to the
Salvation Army, her husband resigning from U.S. employment right after selling the U.S. house)
and permanently relocate to the Philippines and actually re-established her residence here on
24 May 2005 (securing T.I.N, enrolling her children in Philippine schools, buying property here,
constructing a residence here, returning to the Philippines after all trips abroad, her husband
getting employed here). Indeed, coupled with her eventual application to reacquire Philippine
citizenship and her family's actual continuous stay in the Philippines over the years, it is clear
that when petitioner returned on 24 May 2005 it was for good.
In this connection, the COMELEC also took it against petitioner that she had entered the
Philippines visa-free as a balikbayan. A closer look at R.A. No. 6768 as amended, otherwise
known as the "An Act Instituting a Balikbayan Program," shows that there is no overriding intent
to treat balikbayans as temporary visitors who must leave after one year. Included in the law is
a former Filipino who has been naturalized abroad and "comes or returns to the
Philippines." 163 The law institutes a balikbayan program "providing the opportunity to avail of
the necessary training to enable the balikbayan to become economically self-reliant members
of society upon their return to the country"164in line with the government's "reintegration
program."165 Obviously, balikbayans are not ordinary transients.
Given the law's express policy to facilitate the return of a balikbayan and help him reintegrate
into society, it would be an unduly harsh conclusion to say in absolute terms that
the balikbayan must leave after one year. That visa-free period is obviously granted him to
allow him to re-establish his life and reintegrate himself into the community before he attends
to the necessary formal and legal requirements of repatriation. And that is exactly what
petitioner did - she reestablished life here by enrolling her children and buying property while
awaiting the return of her husband and then applying for repatriation shortly thereafter.
No case similar to petitioner's, where the former Filipino's evidence of change in domicile is
extensive and overwhelming, has as yet been decided by the Court. Petitioner's evidence of
residence is unprecedented. There is no judicial precedent that comes close to the facts of
residence of petitioner. There is no indication in Coquilla v. COMELEC,166 and the other cases
cited by the respondents that the Court intended to have its rulings there apply to a situation
where the facts are different. Surely, the issue of residence has been decided particularly on
the facts-of-the case basis.
To avoid the logical conclusion pointed out by the evidence of residence of petitioner, the
COMELEC ruled that petitioner's claim of residence of ten (10) years and eleven (11) months
by 9 May 2016 in her 2015 COC was false because she put six ( 6) years and six ( 6) months
as "period of residence before May 13, 2013" in her 2012 COC for Senator. Thus, according
to the COMELEC, she started being a Philippine resident only in November 2006. In doing so,
the COMELEC automatically assumed as true the statement in the 2012 COC and the 2015
COC as false.
As explained by petitioner in her verified pleadings, she misunderstood the date required in the
2013 COC as the period of residence as of the day she submitted that COC in 2012. She said
that she reckoned residency from April-May 2006 which was the period when the U.S. house
was sold and her husband returned to the Philippines. In that regard, she was advised by her
lawyers in 2015 that residence could be counted from 25 May 2005.
Petitioner's explanation that she misunderstood the query in 2012 (period of residence before
13 May 2013) as inquiring about residence as of the time she submitted the COC, is bolstered
by the change which the COMELEC itself introduced in the 2015 COC which is now "period of
residence in the Philippines up to the day before May 09, 2016." The COMELEC would not
have revised the query if it did not acknowledge that the first version was vague.
133 | C O N S T I 1
That petitioner could have reckoned residence from a date earlier than the sale of her U.S.
house and the return of her husband is plausible given the evidence that she had returned a
year before. Such evidence, to repeat, would include her passport and the school records of
her children.
It was grave abuse of discretion for the COMELEC to treat the 2012 COC as a binding and
conclusive admission against petitioner. It could be given in evidence against her, yes, but it
was by no means conclusive. There is precedent after all where a candidate's mistake as to
period of residence made in a COC was overcome by evidence. In Romualdez-Marcos v.
COMELEC,167 the candidate mistakenly put seven (7) months as her period of residence where
the required period was a minimum of one year. We said that "[i]t is the fact of residence, not
a statement in a certificate of candidacy which ought to be decisive in determining whether or
not an individual has satisfied the constitutions residency qualification requirement." The
COMELEC ought to have looked at the evidence presented and see if petitioner was telling the
truth that she was in the Philippines from 24 May 2005. Had the COMELEC done its duty, it
would have seen that the 2012 COC and the 2015 COC both correctly stated
the pertinent period of residency.
The COMELEC, by its own admission, disregarded the evidence that petitioner actually and
physically returned here on 24 May 2005 not because it was false, but only because COMELEC
took the position that domicile could be established only from petitioner's repatriation under
R.A. No. 9225 in July 2006. However, it does not take away the fact that in reality, petitioner
had returned from the U.S. and was here to stay permanently, on 24 May 2005. When she
claimed to have been a resident for ten (10) years and eleven (11) months, she could do so in
good faith.
For another, it could not be said that petitioner was attempting to hide anything. As already
stated, a petition for quo warranto had been filed against her with the SET as early as August
2015. The event from which the COMELEC pegged the commencement of residence,
petitioner's repatriation in July 2006 under R.A. No. 9225, was an established fact to repeat,
for purposes of her senatorial candidacy.
Notably, on the statement of residence of six (6) years and six (6) months in the 2012 COC,
petitioner recounted that this was first brought up in the media on 2 June 2015 by Rep. Tobias
Tiangco of the United Nationalist Alliance. Petitioner appears to have answered the issue
immediately, also in the press. Respondents have not disputed petitioner's evidence on this
point. From that time therefore when Rep. Tiangco discussed it in the media, the stated period
of residence in the 2012 COC and the circumstances that surrounded the statement were
already matters of public record and were not hidden.
Petitioner likewise proved that the 2012 COC was also brought up in the SET petition for quo
warranto. Her Verified Answer, which was filed on 1 September 2015, admitted that she made
a mistake in the 2012 COC when she put in six ( 6) years and six ( 6) months as she
misunderstood the question and could have truthfully indicated a longer period. Her answer in
the SET case was a matter of public record. Therefore, when petitioner accomplished her COC
for President on 15 October 2015, she could not be said to have been attempting to hide her
erroneous statement in her 2012 COC for Senator which was expressly mentioned in her
Verified Answer.
The facts now, if not stretched to distortion, do not show or even hint at an intention to hide the
2012 statement and have it covered by the 2015 representation. Petitioner, moreover, has on
her side this Court's pronouncement that:
Concededly, a candidate's disqualification to run for public office does not necessarily
constitute material misrepresentation which is the sole ground for denying due course to, and
for the cancellation of, a COC. Further, as already discussed, the candidate's
misrepresentation in his COC must not only refer to a material fact (eligibility and qualifications
for elective office), but should evince a deliberate intent to mislead, misinform or hide a fact
which would otherwise render a candidate ineligible. It must be made with an intention to
deceive the electorate as to one's qualifications to run for public office. 168
In sum, the COMELEC, with the same posture of infallibilism, virtually ignored a good number
of evidenced dates all of which can evince animus manendi to the Philippines and animus non
revertedi to the United States of America. The veracity of the events of coming and staying
home was as much as dismissed as inconsequential, the focus having been fixed at the
petitioner's "sworn declaration in her COC for Senator" which the COMELEC said "amounts to
a declaration and therefore an admission that her residence in the Philippines only commence
sometime in November 2006"; such that "based on this declaration, [petitioner] fails to meet
the residency requirement for President." This conclusion, as already shown, ignores the
standing jurisprudence that it is the fact of residence, not the statement of the person that
determines residence for purposes of compliance with the constitutional requirement of
residency for election as President. It ignores the easily researched matter that cases on
questions of residency have been decided favorably for the candidate on the basis of facts of
residence far less in number, weight and substance than that presented by petitioner. 169 It
ignores, above all else, what we consider as a primary reason why petitioner cannot be bound
by her declaration in her COC for Senator which declaration was not even considered by the
SET as an issue against her eligibility for Senator. When petitioner made the declaration in her
COC for Senator that she has been a resident for a period of six (6) years and six (6) months
counted up to the 13 May 2013 Elections, she naturally had as reference the residency
requirements for election as Senator which was satisfied by her declared years of residence. It
was uncontested during the oral arguments before us that at the time the declaration for
Senator was made, petitioner did not have as yet any intention to vie for the Presidency in 2016
and that the general public was never made aware by petitioner, by word or action, that she
would run for President in 2016. Presidential candidacy has a length-of-residence different from
that of a senatorial candidacy. There are facts of residence other than that which was
mentioned in the COC for Senator. Such other facts of residence have never been proven to
be false, and these, to repeat include:
[Petitioner] returned to the Philippines on 24 May 2005. (petitioner's] husband however stayed
in the USA to finish pending projects and arrange the sale of their family home.
134 | C O N S T I 1
Meanwhile [petitioner] and her children lived with her mother in San Juan City. [Petitioner]
enrolled Brian in Beacon School in Taguig City in 2005 and Hanna in Assumption College in
Makati City in 2005. Anika was enrolled in Learning Connection in San Juan in 2007, when she
was already old enough to go to school.
In the second half of 2005, [petitioner] and her husband acquired Unit 7F of One Wilson Place
Condominium in San Juan. [Petitioner] and her family lived in Unit 7F until the construction of
their family home in Corinthian Hills was completed.
Sometime in the second half of 2005, [petitioner's] mother discovered that her former lawyer
who handled [petitioner's] adoption in 1974 failed to secure from the Office of the Civil Registrar
of Iloilo a new Certificate of Live Birth indicating [petitioner's] new name and stating that her
parents are "Ronald Allan K. Poe" and "Jesusa L. Sonora."
In February 2006, [petitioner] travelled briefly to the US in order to supervise the disposal of
some of the family's remaining household belongings.1a\^/phi1 [Petitioner] returned to the
Philippines on 11 March 2006.
In late March 2006, [petitioner's] husband informed the United States Postal Service of the
family's abandonment of their address in the US.
The family home in the US was sole on 27 April 2006.
In April 2006, [petitioner's] husband resigned from his work in the US. He returned to the
Philippines on 4 May 2006 and began working for a Philippine company in July 2006.
In early 2006, [petitioner] and her husband acquired a vacant lot in Corinthian Hills, where they
eventually built their family home.170
In light of all these, it was arbitrary for the COMELEC to satisfy its intention to let the case fall
under the exclusive ground of false representation, to consider no other date than that
mentioned by petitioner in her COC for Senator.
All put together, in the matter of the citizenship and residence of petitioner for her candidacy
as President of the Republic, the questioned Resolutions of the COMELEC in Division and En
Banc are, one and all, deadly diseased with grave abuse of discretion from root to fruits.
WHEREFORE, the petition is GRANTED. The Resolutions, to wit:
1. dated 1 December 2015 rendered through the COMELEC Second Division, in SPA No. 15-
001 (DC), entitled Estrella C. Elamparo, petitioner, vs. Mary Grace Natividad Sonora Poe-
Llamanzares, respondent, stating that:
[T]he Certificate of Candidacy for President of the Republic of the Philippines in the May 9,
2016 National and Local Elections filed by respondent Mary Grace Natividad Sonora Poe-
Llamanzares is hereby GRANTED.

2. dated 11 December 2015, rendered through the COMELEC First Division, in the
consolidated cases SPA No. 15-002 (DC) entitled Francisco S. Tatad, petitioner, vs. Mary
Grace Natividad Sonora Poe-Llamanzares, respondent; SPA No. 15-007 (DC) entitled Antonio
P. Contreras, petitioner, vs. Mary Grace Natividad Sonora Poe-Llamanzares, respondent; and
SPA No. 15-139 (DC) entitled Amado D. Valdez, petitioner, v. Mary Grace Natividad Sonora
Poe-Llamanzares, respondent; stating that:

WHEREFORE, premises considered, the Commission RESOLVED, as it hereby RESOLVES,

to GRANT the petitions and cancel the Certificate of Candidacy of MARY GRACE NATIVIDAD
SONORA POE-LLAMANZARES for the elective position of President of the Republic of the
Philippines in connection with the 9 May 2016 Synchronized Local and National Elections.

3. dated 23 December 2015 of the COMELEC En Banc, upholding the 1 December 2015
Resolution of the Second Division stating that:

WHEREFORE, premises considered, the Commission RESOLVED, as it hereby RESOLVES,

to DENY the Verified Motion for Reconsideration of SENATOR MARY GRACE NATIVIDAD
SONORA POE-LLAMANZARES. The Resolution dated 11 December 2015 of the Commission
First Division is AFFIRMED.

4. dated 23 December 2015 of the COMELEC En Banc, upholding the 11 December 2015
Resolution of the First Division.

are hereby ANNULED and SET ASIDE. Petitioner MARY GRACE NATIVIDAD SONORA
POE-LLAMANZARES is DECLARED QUALIFIED to be a candidate for President in the
National and Local Elections of 9 May 2016.

SO ORDERED.

135 | C O N S T I 1
G.R. No. L-24761 September 7, 1965 3. That, in consequence of said Republic Act No. 4421 and the aforementioned action
of the Commission on Elections, every candidate has to pay the premium charged by
LEON G. MAQUERA, petitioner, bonding companies, and, to offer thereto, either his own properties, worth, at least, the
vs. amount of the surety bond, or properties of the same worth, belonging to other persons
JUAN BORRA, CESAR MIRAFLOR, and GREGORIO SANTAYANA, in their respective willing to accommodate him, by way of counter-bond in favor of said bonding
capacities as Chairman and Members of the Commission on Elections, and the companies;
COMMISSION ON ELECTIONS, respondents.
4. That the effect of said Republic Act No. 4421 is, therefore, to prevent or disqualify
--------------------------- from running for President, Vice-President, Senator or Member of the House of
Representatives those persons who, although having the qualifications prescribed by
G.R. No. L-24828 September 7, 1965 the Constitution therefore, cannot file the surety bond aforementioned, owing to failure
to pay the premium charged by the bonding company and/or lack of the property
necessary for said counter-bond;
FELIPE N. AUREA and MELECIO MALABANAN, petitioners,
vs.
COMMISSION ON ELECTIONS, respondent. 5. That said Republic Act No. 4421 has, likewise, the effect of disqualifying for
provincial, city or municipal elective offices, persons who, although possessing the
qualifications prescribed by law therefor, cannot pay said premium and/or do not have
Leon G. Maquera in his own behalf as petitioner. the property essential for the aforementioned counter-bond;
Ramon Barrios for respondents.
6. That said Republic Act No. 4421 has, accordingly, the effect of imposing property
RESOLUTION qualifications in order that a person could run for a public office and that the people
could validly vote for him;

PER CURIAM:
Upon consideration of case G.R. No. L-24761, "Leon G. Maquera vs. Juan Borra, et al.," and
case G.R. No. L-24828, "Felipe N. Aurea and Melecio Malabanan vs. Commission on
Elections," and it appearing:
1. That Republic Act No. 4421 requires "all candidates for national, provincial, city and
municipal offices" to post a surety bond equivalent to the one-year salary or
emoluments of the position to which he is a candidate, which bond shall be forfeited in
favor of the national, provincial, city or municipal government concerned if the
candidate, except when declared winner, fails to obtain at least 10% of the votes cast
for the office to which he has filed his certificate of candidacy, there being not more
than four (4) candidates for the same office;"
2. That, in compliance with said Republic Act No. 4421, the Commission on Elections
had, on July 20, 1965, decided to require all candidates for President, Vice-President,
Senator and Member of the House of Representatives to file a surety bond, by a
bonding company of good reputation, acceptable to the Commission, in the sums of
P60,000.00 and P40,000.00, for President and Vice-President, respectively, and
P32,000.00 for Senator and Member of the House of Representatives;
7. That said property qualifications are inconsistent with the nature and essence of the
Republican system ordained in our Constitution and the principle of social justice
underlying the same, for said political system is premised upon the tenet that
sovereignty resides in the people and all government authority emanates from them,
and this, in turn, implies necessarily that the right to vote and to be voted for shall not
be dependent upon the wealth of the individual concerned, whereas social justice
presupposes equal opportunity for all, rich and poor alike, and that, accordingly, no
person shall, by reason of poverty, be denied the chance to be elected to public office;
and
8. That the bond required in Republic Act No. 4421 and the confiscation of said bond
are not predicated upon the necessity of defraying certain expenses or of
compensating services given in connection with elections, and is, therefore, arbitrary
and oppressive.
The Court RESOLVED, without prejudice to rendering an extended decision, to declare that
said Republic Act No. 4421 is unconstitutional and hence null and void, and, hence, to enjoin
respondents herein, as well as their representatives and agents, from enforcing and/or
implementing said constitutional enactment.

136 | C O N S T I 1
Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon., Makalintal and Zaldivar, JJ., concur. per cent of the votes cast for the office to which he has filed his certificate of candidacy
Bengzon, C.J., took no part. there being not more than four candidates for the same office.
Barrera, J., is on leave.
The Commission on Elections, implementing Sec. 36-A aforementioned, adopted on July 20,
1965 the following guidelines for the purpose of the November 9, 1965 elections:

1. WHO SHALL POST SURETY BOND — All candidates for national offices shall post
Separate Opinions a surety bond. A candidate who withdraws his candidacy or ceases to be one, may ask
for the return or cancellation of his bond. A party may post surety bond for each of its
official candidates.

2. WHEN TO FILE — On or before September 10, 1965, to coincide with the last day
BENGZON, J.P., J., concurring:. for filing certificates of candidacy, to facilitate processing of both bond and certificates
of candidacy by the Law Department.
A democratic form of government requires that political rights be enjoyed by the citizens
regardless of social or economic distinctions. Such is our government. As far back as 1899, 3. WHERE TO FILE — The surety bond shall be filed with the Cash Division,
the Representatives of the Filipino people adopted a Political Constitution at Malolos, Bulacan, Commission on Elections. Cash bonds may be allowed and the same to be filed in the
providing that: "The political association of all the Filipinos constitutes a nation, whose state is Commission.
called the Philippine Republic"; "The Philippine Republic is free and independent"; and
"Sovereignty resides exclusively in the people." (Arts. 1, 2 and 3.) A generation later, in 1935, 4. AMOUNT OF BOND — The surety bond shall be equivalent to the one-year salary
the Filipino people, imploring the aid of Divine Providence, ordained and promulgated the or emoluments of the position to which he is a candidate, to wit:
present Constitution of the Philippines, stating the same principle: "The Philippines is a
republican state. Sovereignty resides in the people and all government authority emanates President P60,000 (R.A. 4134)
from them." (See. 1, Art. II). Clearly and solemnly, therefore, our citizenry have thus been given
the supreme guaranty of a democratic way of life, with all its freedom and limitations, all its Vice-President P40,000 — do —
rights and duties. Senators P32,000 — do —
Congressmen P32,000 — do —
Among the political rights of a Filipino citizen is the right to vote and be voted for a public office.
The Constitution has given the right of suffrage to "citizens of the Philippines not otherwise 5. CONDITION OF THE BOND — That the bond shall be forfeited in favor of the
disqualified by law who are twenty-one years of age or over and are able to read and write, national government if the candidate, except when declared the winner, fails to obtain
and who shall have resided in the Philippines for one year and in the municipality wherein they at least ten percent of the votes cast for the office to which he has filed his certificate
propose to vote for at least six months preceding the election." (Sec. 1, Art. V.) of candidacy, there being not more than four candidates for the same office.

It is within the power of Congress, however, to prescribe the manner of exercising political 6. FAILURE TO POST SURETY BOND — If a candidate fails to post the required
rights so long as it does not run counter to the Constitution. The Revised Election Code (RA surety bond, the Commission on Elections shall refuse to give due course to the
180) is the chief instance of the exercise of such legislative power. certificate of candidacy of said candidate.

Republic Act 4421, effective June 19, 1965, incorporated to the Revised Election Code: 7. SURETY — A bonding company of good reputation and acceptable to the
Commission.
SEC. 36-A. Posting of bond by candidates; exception; forfeiture. — All candidates for
national, provincial, city and municipal offices shall post a surety bond equivalent to 8. FORFEITURE — The 10% required number of votes shall be based on and
the one-year salary or emoluments of the position to which he is a candidate, which determined by the certificate of canvass and proclamation.
bond shall be forfeited in favor of the national, provincial, city or municipal government
concerned if the candidate, except when declared winner, fails to obtain at least ten

137 | C O N S T I 1
At bar are petitions that question the constitutionality of Republic Act 4421 in the ground that
the same is undemocratic and contrary to the letter and spirit of the Constitution.
The avowed purpose of Republic Act 4421 in requiring a candidate to post a bond equal to a
year's salary of the office for which he will run is to curb the practice of so-called nuisance
candidates. Said the explanatory note to said law:
We have had sad experiences along that line. When a person, having the same name
as that of a strong candidate, files his candidacy for the same position sought by the
latter, this act has the ultimate effect of frustrating the true intent of the voters. While
their intent was to vote for the publicly known strong candidate, their votes could be
credited to the nuisance candidate. If this practice is not curbed, the Filipino people
may find the wrong men elected to an office.
1awphîl.nèt
Such an objective is indeed within the competence of the legislature to provide for.
Nonetheless, the purpose alone does not resolve the constitutionality of a statute. It must also
be asked whether the effect of said law is or is not to transgress the fundamental law.
Does the law, it may then be asked, operate to bar bona fide candidates from running for office
because of their financial inability to meet the bond required? For this the test must be the
amount at which the bond is fixed. Where it is fixed at an amount that will impose no hardship
on any person for whom there should be any desire to vote as a nominee for an office, and yet
enough to prevent the filing of certificates of candidates by anyone, regardless of whether or
not he is a desirable candidate, it is a reasonable means to regulate elections. On the
otherhand, if it puts a real barrier that would stop many suitable men and women from
presenting themselves as prospective candidates, it becomes unjustifiable, for it would defeat
its very objective of securing the right of honest candidates to run for public office.
Foremost democracies have similar measure to discourage "freak and propaganda candidates.
One was adopted in the electoral system of England. A candidate for the House of Commons,
where each member receives 3,250 pounds annual compensation (formerly 1,000 pounds) is
required, by the Representatives of the People Act of 1918, to deposit 150 pounds with the
returning officer at the time of nomination, the money to be forfeited if he failed to secure 1/8
of the votes. *
In the United States of America a fee system obtains in some states whereby candidates are
required to pay filing fees — frequently to help defray costs of election services — ranging from
one dollar upwards or a certain percentage of the annual salary of the office sought, the
percentage being from 1/4% to 5%.**
several or a considerable number of deserving, honest and sincere prospective candidates for
that office would be prevented from running in the election solely due to their being less
endowed with the material things in life. It is worth remembering that Section 48 of the Revised
Election Code provides: "No candidate shall spend for his election campaign more than the
total amount of the emoluments for one year attached to the office for which he is a candidate."
Thus, the amount of a one-year salary is considered by the law itself to be substantial enough
to finance the entire election campaign of the candidate. For Congress, therefore, to require
such amount to be posted in the form of surety bond, with the danger of forfeiting the same in
the event of failure to obtain the required percentage of votes, unless there are more than four
candidates, places a financial burden on honest candidates that will in effect disqualify some
of them who would otherwise have been qualified and bona fide candidates.
The Constitution, in providing for the qualification of Congressmen, sets forth only age,
citizenship, voting and residence qualifications. No property qualification of any kind is
thereunder required. Since the effect of Republic Act 4421 is to require of candidates for
Congress a substantial property qualification, and to disqualify those who do not meet the
same, it goes against the provision of the Constitution which, in line with its democratic
character, requires no property qualification for the right to hold said public office.
Freedom of the voters to exercise the elective franchise at a general election implies the right
to freely choose from all qualified candidates for public office. The imposition of unwarranted
restrictions and hindrances precluding qualified candidates from running is, therefore, violative
of the constitutional guaranty of freedom in the exercise of elective franchise. It seriously
interferes with the right of the electorate to choose freely from among those eligible to office
whomever they may desire. ***
Republic Act 4421, moreover, relates a person's right to run for office to the degree of success
he will show at the polls. A candidate, however, has no less a right to run when he faces
prospects of defeat as when he is expected to win. Consequently, for the law to impose on said
candidate — should he lose by the fatal margin — a financial penalty not imposed on others
would unreasonably deny him equal protection of the law. It is, also, in my opinion,
unconstitutional on this account. (Sec. 1 [1], Art. III, Phil. Const.)
Nuisance candidates, as an evil to be remedied, do not justify the adoption of measures that
would bar poor candidates from running for office. Republic Act 4421 in fact enables rich
candidates, whether nuisance or not, to present themselves for election. Consequently, it
cannot be sustained as a valid regulation of elections to secure the expression of the popular
will.
I fully concur, therefore, with the majority opinion.

It should be noted that in the foregoing the deposits or fees are based on or constitute a certain
percentage of the yearly salary. The amount of the bond required by RA 4421 is, as noted,
equal to the one-year salary or emolument of the office. It is quite evident, therefore, that
138 | C O N S T I 1
G.R. No. 157870 November 3, 2008 xxxx

SOCIAL JUSTICE SOCIETY (SJS), petitioner (c) Students of secondary and tertiary schools. - Students of secondary and tertiary
vs. schools shall, pursuant to the related rules and regulations as contained in the school's
DANGEROUS DRUGS BOARD and PHILIPPINE DRUG ENFORCEMENT AGENCY student handbook and with notice to the parents, undergo a random drug testing x x x;
(PDEA),respondents.
(d) Officers and employees of public and private offices. - Officers and employees of
x-----------------------------------------------x public and private offices, whether domestic or overseas, shall be subjected to undergo
a random drug test as contained in the company's work rules and regulations, x x x for
G.R. No. 158633 November 3, 2008 purposes of reducing the risk in the workplace. Any officer or employee found positive
for use of dangerous drugs shall be dealt with administratively which shall be a ground
ATTY. MANUEL J. LASERNA, JR., petitioner for suspension or termination, subject to the provisions of Article 282 of the Labor Code
and pertinent provisions of the Civil Service Law;
vs.
DANGEROUS DRUGS BOARD and PHILIPPINE DRUG ENFORCEMENT
AGENCY, respondents. xxxx

x-----------------------------------------------x (f) All persons charged before the prosecutor's office with a criminal offense having an
imposable penalty of imprisonment of not less than six (6) years and one (1) day shall
G.R. No. 161658 November 3, 2008 undergo a mandatory drug test;

AQUILINO Q. PIMENTEL, JR., petitioner (g) All candidates for public office whether appointed or elected both in the national or
local government shall undergo a mandatory drug test.
vs.
COMMISSION ON ELECTIONS, respondents.
In addition to the above stated penalties in this Section, those found to be positive for
DECISION dangerous drugs use shall be subject to the provisions of Section 15 of this Act.

G.R. No. 161658 (Aquilino Q. Pimentel, Jr. v. Commission on Elections)

VELASCO, JR., J.:

On December 23, 2003, the Commission on Elections (COMELEC) issued Resolution No.
In these kindred petitions, the constitutionality of Section 36 of Republic Act No. (RA) 9165,
6486, prescribing the rules and regulations on the mandatory drug testing of candidates for
otherwise known as the Comprehensive Dangerous Drugs Act of 2002, insofar as it requires
mandatory drug testing of candidates for public office, students of secondary and tertiary public office in connection with the May 10, 2004 synchronized national and local elections.
schools, officers and employees of public and private offices, and persons charged before the The pertinent portions of the said resolution read as follows:
prosecutor's office with certain offenses, among other personalities, is put in issue.
WHEREAS, Section 36 (g) of Republic Act No. 9165 provides:
As far as pertinent, the challenged section reads as follows:
SEC. 36. Authorized Drug Testing. - x x x
SEC. 36. Authorized Drug Testing. - Authorized drug testing shall be done by any
government forensic laboratories or by any of the drug testing laboratories accredited xxxx
and monitored by the DOH to safeguard the quality of the test results. x x x The drug
testing shall employ, among others, two (2) testing methods, the screening test which (g) All candidates for public office x x x both in the national or local government shall
will determine the positive result as well as the type of drug used and the confirmatory undergo a mandatory drug test.
test which will confirm a positive screening test. x x x The following shall be subjected
to undergo drug testing:

139 | C O N S T I 1
 WHEREAS, Section 1, Article XI of the 1987 Constitution provides that public officers
and employees must at all times be accountable to the people, serve them with utmost
responsibility, integrity, loyalty and efficiency;
WHEREAS, by requiring candidates to undergo mandatory drug test, the public will
know the quality of candidates they are electing and they will be assured that only
those who can serve with utmost responsibility, integrity, loyalty, and efficiency would
be elected x x x.
NOW THEREFORE, The [COMELEC], pursuant to the authority vested in it under the
Constitution, Batas Pambansa Blg. 881 (Omnibus Election Code), [RA] 9165 and other
election laws, RESOLVED to promulgate, as it hereby promulgates, the following rules
and regulations on the conduct of mandatory drug testing to candidates for public
office[:]
SECTION 1. Coverage. - All candidates for public office, both national and local,
in the May 10, 2004 Synchronized National and Local Elections shall undergo
mandatory drug test in government forensic laboratories or any drug testing
laboratories monitored and accredited by the Department of Health.
SEC. 3. x x x
On March 25, 2004, in addition to the drug certificates filed with their respective offices,
the Comelec Offices and employees concerned shall submit to the Law Department
two (2) separate lists of candidates. The first list shall consist of those candidates who
complied with the mandatory drug test while the second list shall consist of those
candidates who failed to comply x x x.
SEC. 4. Preparation and publication of names of candidates. - Before the start of the
campaign period, the [COMELEC] shall prepare two separate lists of candidates. The
first list shall consist of those candidates who complied with the mandatory drug test
while the second list shall consist of those candidates who failed to comply with said
drug test. x x x
SEC. 5. Effect of failure to undergo mandatory drug test and file drug test certificate. -
No person elected to any public office shall enter upon the duties of his office until he
has undergone mandatory drug test and filed with the offices enumerated under
Section 2 hereof the drug test certificate herein required. (Emphasis supplied.)
Petitioner Aquilino Q. Pimentel, Jr., a senator of the Republic and a candidate for re - election
in the May 10, 2004 elections,1 filed a Petition for Certiorari and Prohibition under Rule 65. In
it, he seeks (1) to nullify Sec. 36(g) of RA 9165 and COMELEC Resolution No. 6486 dated
December 23, 2003 for being unconstitutional in that they impose a qualification for candidates
for senators in addition to those already provided for in the 1987 Constitution; and (2) to enjoin
the COMELEC from implementing Resolution No. 6486.
140 | C O N S T I 1
Pimentel invokes as legal basis for his petition Sec. 3, Article VI of the Constitution, which
states:
SECTION 3. No person shall be a Senator unless he is a natural - born citizen of the
Philippines, and, on the day of the election, is at least thirty - five years of age, able to
read and write, a registered voter, and a resident of the Philippines for not less than
two years immediately preceding the day of the election.
According to Pimentel, the Constitution only prescribes a maximum of five (5) qualifications for
one to be a candidate for, elected to, and be a member of the Senate. He says that both the
Congress and COMELEC, by requiring, via RA 9165 and Resolution No. 6486, a senatorial
aspirant, among other candidates, to undergo a mandatory drug test, create an additional
qualification that all candidates for senator must first be certified as drug free. He adds that
there is no provision in the Constitution authorizing the Congress or COMELEC to expand the
qualification requirements of candidates for senator.
G.R. No. 157870 (Social Justice Society v. Dangerous
Drugs Board and Philippine Drug Enforcement Agency)
In its Petition for Prohibition under Rule 65, petitioner Social Justice Society (SJS), a registered
political party, seeks to prohibit the Dangerous Drugs Board (DDB) and the Philippine Drug
Enforcement Agency (PDEA) from enforcing paragraphs (c), (d), (f), and (g) of Sec. 36 of RA
9165 on the ground that they are constitutionally infirm. For one, the provisions constitute
undue delegation of legislative power when they give unbridled discretion to schools and
employers to determine the manner of drug testing. For another, the provisions trench in the
equal protection clause inasmuch as they can be used to harass a student or an employee
deemed undesirable. And for a third, a person's constitutional right against unreasonable
searches is also breached by said provisions.
G.R. No. 158633 (Atty. Manuel J. Laserna, Jr. v. Dangerous
Drugs Board and Philippine Drug Enforcement Agency)
Petitioner Atty. Manuel J. Laserna, Jr., as citizen and taxpayer, also seeks in his Petition for
Certiorari and Prohibition under Rule 65 that Sec. 36(c), (d), (f), and (g) of RA 9165 be struck
down as unconstitutional for infringing on the constitutional right to privacy, the right against
unreasonable search and seizure, and the right against self - incrimination, and for being
contrary to the due process and equal protection guarantees.
The Issue on Locus Standi
First off, we shall address the justiciability of the cases at bench and the matter of the standing
of petitioners SJS and Laserna to sue. As respondents DDB and PDEA assert, SJS and
Laserna failed to allege any incident amounting to a violation of the constitutional rights
mentioned in their separate petitions.2
It is basic that the power of judicial review can only be exercised in connection with a bona
fidecontroversy which involves the statute sought to be reviewed. 3 But 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.4 To have standing, one must establish that he or she 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. 5
The rule on standing, however, is a matter of procedure; hence, it can be relaxed for non -
traditional 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. 6 There is no doubt that Pimentel, as senator of the
Philippines and candidate for the May 10, 2004 elections, possesses the requisite standing
since he has substantial interests in the subject matter of the petition, among other preliminary
considerations. Regarding SJS and Laserna, this Court is wont to relax the rule on locus
standi owing primarily to the transcendental importance and the paramount public interest
involved in the enforcement of Sec. 36 of RA 9165.
The Consolidated Issues
The principal issues before us are as follows:
(1) Do Sec. 36(g) of RA 9165 and COMELEC Resolution No. 6486 impose an additional
qualification for candidates for senator? Corollarily, can Congress enact a law prescribing
qualifications for candidates for senator in addition to those laid down by the Constitution? and
(2) Are paragraphs (c), (d), (f), and (g) of Sec. 36, RA 9165 unconstitutional? Specifically, do
these paragraphs violate the right to privacy, the right against unreasonable searches and
seizure, and the equal protection clause? Or do they constitute undue delegation of legislative
power?
Pimentel Petition
(Constitutionality of Sec. 36[g] of RA 9165 and
COMELEC Resolution No. 6486)
In essence, Pimentel claims that Sec. 36(g) of RA 9165 and COMELEC Resolution No. 6486
illegally impose an additional qualification on candidates for senator. He points out that, subject
to the provisions on nuisance candidates, a candidate for senator needs only to meet the
qualifications laid down in Sec. 3, Art. VI of the Constitution, to wit: (1) citizenship, (2) voter
registration, (3) literacy, (4) age, and (5) residency. Beyond these stated qualification
requirements, candidates for senator need not possess any other qualification to run for senator
and be voted upon and elected as member of the Senate. The Congress cannot validly amend
or otherwise modify these qualification standards, as it cannot disregard, evade, or weaken the
force of a constitutional mandate,7 or alter or enlarge the Constitution.
141 | C O N S T I 1
Pimentel's contention is well - taken. Accordingly, Sec. 36(g) of RA 9165 should be, as it is
hereby declared as, unconstitutional. It is basic that if a law or an administrative rule violates
any norm of the Constitution, that issuance is null and void and has no effect. The Constitution
is the basic law to which all laws must conform; no act shall be valid if it conflicts with the
Constitution.8 In the discharge of their defined functions, the three departments of government
have no choice but to yield obedience to the commands of the Constitution. Whatever limits it
imposes must be observed.9
Congress' inherent legislative powers, broad as they may be, are subject to certain limitations.
As early as 1927, in Government v. Springer, the Court has defined, in the abstract, the limits
on legislative power in the following wise:
Someone has said that the powers of the legislative department of the Government,
like the boundaries of the ocean, are unlimited. In constitutional governments,
however, as well as governments acting under delegated authority, the powers of each
of the departments x x x are limited and confined within the four walls of the constitution
or the charter, and each department can only exercise such powers as are necessarily
implied from the given powers. The Constitution is the shore of legislative authority
against which the waves of legislative enactment may dash, but over which it cannot
leap.10
Thus, legislative power remains limited in the sense that it is subject to substantive and
constitutional limitations which circumscribe both the exercise of the power itself and the
allowable subjects of legislation.11 The substantive constitutional limitations are chiefly found
in the Bill of Rights12 and other provisions, such as Sec. 3, Art. VI of the Constitution prescribing
the qualifications of candidates for senators.
In the same vein, the COMELEC cannot, in the guise of enforcing and administering election
laws or promulgating rules and regulations to implement Sec. 36(g), validly impose
qualifications on candidates for senator in addition to what the Constitution prescribes. If
Congress cannot require a candidate for senator to meet such additional qualification, the
COMELEC, to be sure, is also without such power. The right of a citizen in the democratic
process of election should not be defeated by unwarranted impositions of requirement not
otherwise specified in the Constitution.13
Sec. 36(g) of RA 9165, as sought to be implemented by the assailed COMELEC resolution,
effectively enlarges the qualification requirements enumerated in the Sec. 3, Art. VI of the
Constitution. As couched, said Sec. 36(g) unmistakably requires a candidate for senator to be
certified illegal - drug clean, obviously as a pre - condition to the validity of a certificate of
candidacy for senator or, with like effect, a condition sine qua non to be voted upon and, if
proper, be proclaimed as senator - elect. The COMELEC resolution completes the chain with
the proviso that "[n]o person elected to any public office shall enter upon the duties of his office
until he has undergone mandatory drug test." Viewed, therefore, in its proper context, Sec.
36(g) of RA 9165 and the implementing COMELEC Resolution add another qualification layer
to what the 1987 Constitution, at the minimum, requires for membership in the Senate. Whether
or not the drug - free bar set up under the challenged provision is to be hurdled before or after
election is really of no moment, as getting elected would be of little value if one cannot assume
office for non - compliance with the drug - testing requirement.
It may of course be argued, in defense of the validity of Sec. 36(g) of RA 9165, that the provision
does not expressly state that non - compliance with the drug test imposition is a disqualifying
factor or would work to nullify a certificate of candidacy. This argument may be accorded
plausibility if the drug test requirement is optional. But the particular section of the law, without
exception, made drug - testing on those covered mandatory, necessarily suggesting that the
obstinate ones shall have to suffer the adverse consequences for not adhering to the statutory
command. And since the provision deals with candidates for public office, it stands to reason
that the adverse consequence adverted to can only refer to and revolve around the election
and the assumption of public office of the candidates. Any other construal would reduce the
mandatory nature of Sec. 36(g) of RA 9165 into a pure jargon without meaning and effect
whatsoever.
While it is anti - climactic to state it at this juncture, COMELEC Resolution No. 6486 is no longer
enforceable, for by its terms, it was intended to cover only the May 10, 2004 synchronized
elections and the candidates running in that electoral event. Nonetheless, to obviate repetition,
the Court deems it appropriate to review and rule, as it hereby rules, on its validity as an
implementing issuance.
It ought to be made abundantly clear, however, that the unconstitutionality of Sec. 36(g) of RA
9165 is rooted on its having infringed the constitutional provision defining the qualification or
eligibility requirements for one aspiring to run for and serve as senator.
SJS Petition
(Constitutionality of Sec. 36[c], [d], [f], and [g] of RA 9165)
The drug test prescribed under Sec. 36(c), (d), and (f) of RA 9165 for secondary and tertiary
level students and public and private employees, while mandatory, is a random and
suspicionless arrangement. The objective is to stamp out illegal drug and safeguard in the
process "the well being of [the] citizenry, particularly the youth, from the harmful effects of
dangerous drugs." This statutory purpose, per the policy - declaration portion of the law, can
be achieved via the pursuit by the state of "an intensive and unrelenting campaign against the
trafficking and use of dangerous drugs x x x through an integrated system of planning,
implementation and enforcement of anti - drug abuse policies, programs and projects." 14 The
primary legislative intent is not criminal prosecution, as those found positive for illegal drug use
as a result of this random testing are not necessarily treated as criminals. They may even be
exempt from criminal liability should the illegal drug user consent to undergo rehabilitation.
Secs. 54 and 55 of RA 9165 are clear on this point:
Sec. 54. Voluntary Submission of a Drug Dependent to Confinement, Treatment and
Rehabilitation. - A drug dependent or any person who violates Section 15 of this Act
may, by himself/herself or through his/her parent, [close relatives] x x x apply to the
142 | C O N S T I 1
Board x x x for treatment and rehabilitation of the drug dependency. Upon such
application, the Board shall bring forth the matter to the Court which shall order that
the applicant be examined for drug dependency. If the examination x x x results in the
certification that the applicant is a drug dependent, he/she shall be ordered by the
Court to undergo treatment and rehabilitation in a Center designated by the Board x x
x.
xxxx
Sec. 55. Exemption from the Criminal Liability Under the Voluntary Submission
Program. - A drug dependent under the voluntary submission program, who is finally
discharged from confinement, shall be exempt from the criminal liability under Section
15 of this Act subject to the following conditions:
xxxx
School children, the US Supreme Court noted, are most vulnerable to the physical,
psychological, and addictive effects of drugs. Maturing nervous systems of the young are more
critically impaired by intoxicants and are more inclined to drug dependency. Their recovery is
also at a depressingly low rate.15
The right to privacy has been accorded recognition in this jurisdiction as a facet of the right
protected by the guarantee against unreasonable search and seizure 16 under Sec. 2, Art.
III17 of the Constitution. But while the right to privacy has long come into its own, this case
appears to be the first time that the validity of a state - decreed search or intrusion through the
medium of mandatory random drug testing among students and employees is, in this
jurisdiction, made the focal point. Thus, the issue tendered in these proceedings is veritably
one of first impression.
US jurisprudence is, however, a rich source of persuasive jurisprudence. With respect to
random drug testing among school children, we turn to the teachings of Vernonia School
District 47J v. Acton (Vernonia) and Board of Education of Independent School District No. 92
of Pottawatomie County, et al. v. Earls, et al. (Board of Education),18 both fairly pertinent US
Supreme Court - decided cases involving the constitutionality of governmental search.
In Vernonia, school administrators in Vernonia, Oregon wanted to address the drug menace in
their respective institutions following the discovery of frequent drug use by school athletes.
After consultation with the parents, they required random urinalysis drug testing for the school's
athletes. James Acton, a high school student, was denied participation in the football program
after he refused to undertake the urinalysis drug testing. Acton forthwith sued, claiming that the
school's drug testing policy violated, inter alia, the Fourth Amendment19 of the US Constitution.
The US Supreme Court, in fashioning a solution to the issues raised in Vernonia, considered
the following: (1) schools stand in loco parentis over their students; (2) school children, while
not shedding their constitutional rights at the school gate, have less privacy rights; (3) athletes
have less privacy rights than non - athletes since the former observe communal undress before
and after sports events; (4) by joining the sports activity, the athletes voluntarily subjected
themselves to a higher degree of school supervision and regulation; (5) requiring urine samples
does not invade a student's privacy since a student need not undress for this kind of drug
testing; and (6) there is need for the drug testing because of the dangerous effects of illegal
drugs on the young. The US Supreme Court held that the policy constituted reasonable search
under the Fourth20 and 14th Amendments and declared the random drug - testing policy
constitutional.
In Board of Education, the Board of Education of a school in Tecumseh, Oklahoma required a
drug test for high school students desiring to join extra - curricular activities. Lindsay Earls, a
member of the show choir, marching band, and academic team declined to undergo a drug test
and averred that the drug - testing policy made to apply to non - athletes violated the Fourth
and 14th Amendments. As Earls argued, unlike athletes who routinely undergo physical
examinations and undress before their peers in locker rooms, non - athletes are entitled to
more privacy.
The US Supreme Court, citing Vernonia, upheld the constitutionality of drug testing even
among non - athletes on the basis of the school's custodial responsibility and authority. In so
ruling, said court made no distinction between a non - athlete and an athlete. It ratiocinated
that schools and teachers act in place of the parents with a similar interest and duty of
safeguarding the health of the students. And in holding that the school could implement its
random drug - testing policy, the Court hinted that such a test was a kind of search in which
even a reasonable parent might need to engage.
In sum, what can reasonably be deduced from the above two cases and applied to this
jurisdiction are: (1) schools and their administrators stand in loco parentis with respect to their
students; (2) minor students have contextually fewer rights than an adult, and are subject to
the custody and supervision of their parents, guardians, and schools; (3) schools, acting in loco
parentis, have a duty to safeguard the health and well - being of their students and may adopt
such measures as may reasonably be necessary to discharge such duty; and (4) schools have
the right to impose conditions on applicants for admission that are fair, just, and non-
discriminatory.
Guided by Vernonia and Board of Education, the Court is of the view and so holds that the
provisions of RA 9165 requiring mandatory, random, and suspicionless drug testing of students
are constitutional. Indeed, it is within the prerogative of educational institutions to require, as a
condition for admission, compliance with reasonable school rules and regulations and policies.
To be sure, the right to enroll is not absolute; it is subject to fair, reasonable, and equitable
requirements.
The Court can take judicial notice of the proliferation of prohibited drugs in the country that
threatens the well - being of the people,21 particularly the youth and school children who usually
end up as victims. Accordingly, and until a more effective method is conceptualized and put in
motion, a random drug testing of students in secondary and tertiary schools is not only
143 | C O N S T I 1
acceptable but may even be necessary if the safety and interest of the student population,
doubtless a legitimate concern of the government, are to be promoted and protected. To borrow
from Vernonia, "[d]eterring drug use by our Nation's schoolchildren is as important as
enhancing efficient enforcement of the Nation's laws against the importation of drugs"; the
necessity for the State to act is magnified by the fact that the effects of a drug - infested school
are visited not just upon the users, but upon the entire student body and faculty. 22 Needless to
stress, the random testing scheme provided under the law argues against the idea that the
testing aims to incriminate unsuspecting individual students.
Just as in the case of secondary and tertiary level students, the mandatory but random drug
test prescribed by Sec. 36 of RA 9165 for officers and employees of public and private offices
is justifiable, albeit not exactly for the same reason. The Court notes in this regard that petitioner
SJS, other than saying that "subjecting almost everybody to drug testing, without probable
cause, is unreasonable, an unwarranted intrusion of the individual right to privacy," 23 has failed
to show how the mandatory, random, and suspicionless drug testing under Sec. 36(c) and (d)
of RA 9165 violates the right to privacy and constitutes unlawful and/or unconsented search
under Art. III, Secs. 1 and 2 of the Constitution. 24 Petitioner Laserna's lament is just as
simplistic, sweeping, and gratuitous and does not merit serious consideration. Consider what
he wrote without elaboration:
The US Supreme Court and US Circuit Courts of Appeals have made various rulings
on the constitutionality of mandatory drug tests in the school and the workplaces. The
US courts have been consistent in their rulings that the mandatory drug tests violate a
citizen's constitutional right to privacy and right against unreasonable search and
seizure. They are quoted extensively hereinbelow.25
The essence of privacy is the right to be left alone.26 In context, the right to privacy means the
right to be free from unwarranted exploitation of one's person or from intrusion into one's private
activities in such a way as to cause humiliation to a person's ordinary sensibilities. 27 And while
there has been general agreement as to the basic function of the guarantee against
unwarranted search, "translation of the abstract prohibition against ‘unreasonable searches
and seizures' into workable broad guidelines for the decision of particular cases is a difficult
task," to borrow from C. Camara v. Municipal Court.28 Authorities are agreed though that the
right to privacy yields to certain paramount rights of the public and defers to the state's exercise
of police power.29
As the warrantless clause of Sec. 2, Art III of the Constitution is couched and as has been held,
"reasonableness" is the touchstone of the validity of a government search or intrusion. 30 And
whether a search at issue hews to the reasonableness standard is judged by the balancing of
the government - mandated intrusion on the individual's privacy interest against the promotion
of some compelling state interest.31 In the criminal context, reasonableness requires showing
of probable cause to be personally determined by a judge. Given that the drug - testing policy
for employees--and students for that matter--under RA 9165 is in the nature of administrative
search needing what was referred to in Vernonia as "swift and informal disciplinary
procedures," the probable - cause standard is not required or even practicable. Be that as it
may, the review should focus on the reasonableness of the challenged administrative search
in question.
The first factor to consider in the matter of reasonableness is the nature of the privacy interest
upon which the drug testing, which effects a search within the meaning of Sec. 2, Art. III of the
Constitution, intrudes. In this case, the office or workplace serves as the backdrop for the
analysis of the privacy expectation of the employees and the reasonableness of drug testing
requirement. The employees' privacy interest in an office is to a large extent circumscribed by
the company's work policies, the collective bargaining agreement, if any, entered into by
management and the bargaining unit, and the inherent right of the employer to maintain
discipline and efficiency in the workplace. Their privacy expectation in a regulated office
environment is, in fine, reduced; and a degree of impingement upon such privacy has been
upheld.
Just as defining as the first factor is the character of the intrusion authorized by the challenged
law. Reduced to a question form, is the scope of the search or intrusion clearly set forth, or, as
formulated in Ople v. Torres, is the enabling law authorizing a search "narrowly drawn" or
"narrowly focused"?32
The poser should be answered in the affirmative. For one, Sec. 36 of RA 9165 and its
implementing rules and regulations (IRR), as couched, contain provisions specifically directed
towards preventing a situation that would unduly embarrass the employees or place them under
a humiliating experience. While every officer and employee in a private establishment is under
the law deemed forewarned that he or she may be a possible subject of a drug test, nobody is
really singled out in advance for drug testing. The goal is to discourage drug use by not telling
in advance anyone when and who is to be tested. And as may be observed, Sec. 36(d) of RA
9165 itself prescribes what, in Ople, is a narrowing ingredient by providing that the employees
concerned shall be subjected to "random drug test as contained in the company's work rules
and regulations x x x for purposes of reducing the risk in the work place."
For another, the random drug testing shall be undertaken under conditions calculated to protect
as much as possible the employee's privacy and dignity. As to the mechanics of the test, the
law specifies that the procedure shall employ two testing methods, i.e., the screening test and
the confirmatory test, doubtless to ensure as much as possible the trustworthiness of the
results. But the more important consideration lies in the fact that the test shall be conducted by
trained professionals in access - controlled laboratories monitored by the Department of Health
(DOH) to safeguard against results tampering and to ensure an accurate chain of custody. 33 In
addition, the IRR issued by the DOH provides that access to the drug results shall be on the
"need to know" basis;34 that the "drug test result and the records shall be [kept] confidential
subject to the usual accepted practices to protect the confidentiality of the test
results."35 Notably, RA 9165 does not oblige the employer concerned to report to the
prosecuting agencies any information or evidence relating to the violation of
the Comprehensive Dangerous Drugs Act received as a result of the operation of the drug
testing. All told, therefore, the intrusion into the employees' privacy, under RA 9165, is
accompanied by proper safeguards, particularly against embarrassing leakages of test results,
and is relatively minimal.
144 | C O N S T I 1
To reiterate, RA 9165 was enacted as a measure to stamp out illegal drug in the country and
thus protect the well - being of the citizens, especially the youth, from the deleterious effects of
dangerous drugs. The law intends to achieve this through the medium, among others, of
promoting and resolutely pursuing a national drug abuse policy in the workplace via a
mandatory random drug test.36 To the Court, the need for drug testing to at least minimize
illegal drug use is substantial enough to override the individual's privacy interest under the
premises. The Court can consider that the illegal drug menace cuts across gender, age group,
and social - economic lines. And it may not be amiss to state that the sale, manufacture, or
trafficking of illegal drugs, with their ready market, would be an investor's dream were it not for
the illegal and immoral components of any of such activities. The drug problem has hardly
abated since the martial law public execution of a notorious drug trafficker. The state can no
longer assume a laid back stance with respect to this modern - day scourge. Drug enforcement
agencies perceive a mandatory random drug test to be an effective way of preventing and
deterring drug use among employees in private offices, the threat of detection by random
testing being higher than other modes. The Court holds that the chosen method is a reasonable
and enough means to lick the problem.
Taking into account the foregoing factors, i.e., the reduced expectation of privacy on the part
of the employees, the compelling state concern likely to be met by the search, and the well -
defined limits set forth in the law to properly guide authorities in the conduct of the random
testing, we hold that the challenged drug test requirement is, under the limited context of the
case, reasonable and, ergo, constitutional.
Like their counterparts in the private sector, government officials and employees also labor
under reasonable supervision and restrictions imposed by the Civil Service law and other laws
on public officers, all enacted to promote a high standard of ethics in the public service. 37 And
if RA 9165 passes the norm of reasonableness for private employees, the more reason that it
should pass the test for civil servants, who, by constitutional command, are required to be
accountable at all times to the people and to serve them with utmost responsibility and
efficiency.38
Petitioner SJS' next posture that Sec. 36 of RA 9165 is objectionable on the ground of undue
delegation of power hardly commends itself for concurrence. Contrary to its position, the
provision in question is not so extensively drawn as to give unbridled options to schools and
employers to determine the manner of drug testing. Sec. 36 expressly provides how drug
testing for students of secondary and tertiary schools and officers/employees of public/private
offices should be conducted. It enumerates the persons who shall undergo drug testing. In the
case of students, the testing shall be in accordance with the school rules as contained in the
student handbook and with notice to parents. On the part of officers/employees, the testing
shall take into account the company's work rules. In either case, the random procedure shall
be observed, meaning that the persons to be subjected to drug test shall be picked by chance
or in an unplanned way. And in all cases, safeguards against misusing and compromising the
confidentiality of the test results are established.
Lest it be overlooked, Sec. 94 of RA 9165 charges the DDB to issue, in consultation with the
DOH, Department of the Interior and Local Government, Department of Education, and
Department of Labor and Employment, among other agencies, the IRR necessary to enforce
the law. In net effect then, the participation of schools and offices in the drug testing scheme
shall always be subject to the IRR of RA 9165. It is, therefore, incorrect to say that schools and
employers have unchecked discretion to determine how often, under what conditions, and
where the drug tests shall be conducted.
Sec. 36(f) UNCONSTITUTIONAL. All concerned agencies are, accordingly, permanently
enjoined from implementing Sec. 36(f) and (g) of RA 9165. No costs.
SO ORDERED.

The validity of delegating legislative power is now a quiet area in the constitutional
landscape.39 In the face of the increasing complexity of the task of the government and the
increasing inability of the legislature to cope directly with the many problems demanding its
attention, resort to delegation of power, or entrusting to administrative agencies the power of
subordinate legislation, has become imperative, as here.

Laserna Petition (Constitutionality of Sec. 36[c], [d],

[f], and [g] of RA 9165)

Unlike the situation covered by Sec. 36(c) and (d) of RA 9165, the Court finds no valid
justification for mandatory drug testing for persons accused of crimes. In the case of students,
the constitutional viability of the mandatory, random, and suspicionless drug testing for
students emanates primarily from the waiver by the students of their right to privacy when they
seek entry to the school, and from their voluntarily submitting their persons to the parental
authority of school authorities. In the case of private and public employees, the constitutional
soundness of the mandatory, random, and suspicionless drug testing proceeds from the
reasonableness of the drug test policy and requirement.

We find the situation entirely different in the case of persons charged before the public
prosecutor's office with criminal offenses punishable with six (6) years and one (1) day
imprisonment. The operative concepts in the mandatory drug testing are "randomness" and
"suspicionless." In the case of persons charged with a crime before the prosecutor's office, a
mandatory drug testing can never be random or suspicionless. The ideas of randomness and
being suspicionless are antithetical to their being made defendants in a criminal complaint.
They are not randomly picked; neither are they beyond suspicion. When persons suspected of
committing a crime are charged, they are singled out and are impleaded against their will. The
persons thus charged, by the bare fact of being haled before the prosecutor's office and
peaceably submitting themselves to drug testing, if that be the case, do not necessarily consent
to the procedure, let alone waive their right to privacy. 40 To impose mandatory drug testing on
the accused is a blatant attempt to harness a medical test as a tool for criminal prosecution,
contrary to the stated objectives of RA 9165. Drug testing in this case would violate a persons'
right to privacy guaranteed under Sec. 2, Art. III of the Constitution. Worse still, the accused
persons are veritably forced to incriminate themselves.

WHEREFORE, the Court resolves to GRANT the petition in G.R. No. 161658 and
declares Sec. 36(g) of RA 9165 and COMELEC Resolution No.
6486 as UNCONSTITUTIONAL; and to PARTIALLY GRANT the petition in G.R. Nos. 157870
and 158633 by declaring Sec. 36(c) and (d) of RA 9165 CONSTITUTIONAL, but declaring its

145 | C O N S T I 1
G.R. Nos. L-10360 and L-10433 January 17, 1957
JULIANO A. ALBA, in his capacity as Acting Vice Mayor of Roxas City, petitioner,
vs.
HONORABLE JOSE D. EVANGELISTA, Judge of the Court of First Instance of Capiz
and VIVENCIO C. ALAJAR, respondents.
VIVENCIO C. ALAJAR, petitioner-appellee,
vs.
JULIANO A. ALBA, respondent-appellant.
Nicolas V. Villaruz, Solicitor General Ambrosio Padilla and Solicitor Troadio Quiazon, Jr. for
Juliano A. Alba.
Alvarez, Cacnio, Pamatian and Associates, Abeleda and Amores, Antonio J. Beldia, Pedro M.
Bermejo, Jose M. F. Belo, Atila R. Balgos and Alfonso V. Legaspi for Vivencio C. Alajar.
FELIX, J.:
On January 1, 1954, the President of the Philippines appointed Vivencio Alajar as Vice-Mayor
of the City of Roxas (Annex D). He took his oath and assumed office on January 6, 1954; on
March 31 of that year, his appointment was confirmed by the Commission on Appointment
(Annex D-1) and he continued holding office until November, 1955, when he received a
communication from Assistant Executive Secretary Enrique C. Quema informing him that the
President had designated Juliano Alba in his stead as Acting Vice-Mayor of the City of Roxas
and requesting him to turn over his said office to Mr. Alba effective immediately. This
communication wherein the President directed the writer thereof to convey to Mr. Alajar his
appreciation for the invaluable services he had rendered as Vice-Mayor of the City of Roxas
(Annex C), was confirmed by a telegram that Alajar received from the President dated
November 23, 1955 (Annex B).
On the other hand, Executive Secretary Fred Ruiz Castro addressed Juliano A. Alba a
communication through the Mayor of the City of Roxas wherein Alba was informed that the
President has designated him as Acting Vice-Mayor of the City of Roxas vice Vivencio Alajar,
and instructed him to qualify and enter upon the performance of the office, furnishing the
Commissioner of Civil Service with the copy of his oath (Annex A). On November 19, 1955,
Juliano A. Alba took his oath and assumed office (Annex A-1).
Not satisfied with the action of the President, Vivencio C. Alajar instituted quo
warranto proceedings in the Court of First Instance of Capiz against Juliano A. Alba (Civil Case
No. V-2041), contending:
(a) That he was appointed Vice-Mayor of Roxas City on 1 January 1954 and his
appointment was confirmed by the Commission on Appointments on 31 March 1954
and that on 19 November 1955, Juliano A. Alba usurped the office of Vice-Mayor of
Roxas City;
146 | C O N S T I 1
(b) That there existed no vacancy of said office at the time of the designation by the
President of the Philippines of Juliano A. Alba as Acting Vice-Mayor of Roxas City; and
(c) That there existed no legal cause or reason whatsoever for the removal or
disqualification of said Vivencio C. Alajar by the appointment of Juliano Alba by the
President of the Philippines as Acting Vice-Mayor of Roxas City.
After proper proceedings and hearing, the parties submitted the case for decision on the only
issue of whether the alleged removal of the petitioner and the designation in his place of
respondent as Vice-Mayor of Roxas City was legal or illegal. On this point, the lower court held
that the petitioner (Vivencio C. Alajar) was "entitled to remain in office as Vice-Mayor of the
City of Roxas with all the emoluments, rights and privileges appurtenant thereto until he
resigns, dies or is removed for cause. Without costs." (Decision, Annex C).
From this decision, Juliano A. Alba appealed to Us by filing a notice of appeal dated February
3, 1956. Four days later, the appeal notwithstanding, Vivencio Alajar filed a petition (Annex D)
praying for immediate execution of the judgment, and despite the strong opposition of
appellant, the motion was granted by the Court on February 18, 1956 (Annex )E), based on the
special reasons adduced by the petitioner and
Moreover, to uphold the supremacy of the law and constitution, which is the supreme
and fundamental authority, pertinent provisions of which are involved in this case, and
considering that the immediate and positive effect of the motion, if the same is denied,
is to prolong the status of the illegality of the appointment of the second appointee and
present incumbent to the position of Vice-Mayor of the City of Roxas and the Question
of who is entitled to occupy the same and to exercise the public function of the office
which affects public interest and public service, this Court, if it is to be consistent with
its pronouncement, conclusion or judgment, as it should be, is constrained to grant
said motion.
The decision, however, was not executed because the herein petitioner, Juliano A. Alba,
brought the matter up to this Superiority praying:
(1) That pending the determination of the validity of the order of immediate execution,
a writ of preliminary injunction be issued, upon previous filing of the bond fixed by this
Honorable Court by the herein petitioner, restraining the herein respondent Vivencio
C. Alajar from discharging the duties and functions of the Vice-Mayor of Roxas City in
order that the herein petitioner shall continue unmolested as acting Vice-Mayor of
Roxas City until the final determination of the question of the validity of the order for
the immediate execution of the decision of the trial court;
(2) That after hearing, judgment be rendered declaring null and void the order of
respondent, Hon. Jose D. Evangelista, dated 18 February 1956 for the immediate
execution of his decision in the Quo Warranto Case (Alajar vs. Alba) on the ground
 that the same was improperly issued as there existed no good reason for its issuance
as contemplated and provided by Section 2 of Rule 39 of the Rules of Court.
(3) For such other relief as may be just and equitable in the premises.
In this instance, the Solicitor General requested permission to intervene in the certiorari case
(G.R. No. L-10360), alleging that the order of immediate execution issued by the trial judge
deprived him of the opportunity to be heard and defend the constitutionality of Republic Act No.
603 in the lower court and he desire to heard by this Court before We proceed to determine
the constitutionality of section 8 of Republic Act No. 603 by the affirmative vote of 8 Justice
thereof (section 23, Rule 3 of the Rules of Court — I Moran, Comments on the Rules of Court,
1953 ed., p. 111). The stand of the Solicitor General is that said section 8 is constitutional
(Article VI, section 1 and Article XII, section 1 of the Constitution of the Philippines;
Jover vs. Borra, 49 Off. Gaz., 2765 and enactments of Congress subsequent to the case of
Santos vs. Mallare, 48 Off. Gaz., 1793, etc., declaring certain position to be terminable at the
pleasure of the appointing authority — section 2545 Revised Administrative Code;
Commonwealth Act Nos. 39, 51, 520, 547 and 592; Republic Acts Nos. 162, 170, as amended;
179, as amended; 183, 288, as amended; 305, 306, 327, 328, 521, 523, 525, as amended;
537, and 603) The motion for intervention of the Solicitor General was granted by this Court.
In the meanwhile, the appeal of Juliano A. Alba in said case V-2041, was given due course
and reached this Court. In this instance the parties have already filed their respective briefs
and the case was submitted for decision at the hearing held on August 3, 1956.
Appellant's counsel maintains that the trial Court erred:
1. In predicating its decision on the mistaken assumption that the petitioner-appellee
belongs to the unclassified civil service, an assumption which begs the very issue;
whether the vice-mayor of Roxas City belongs to the unclassified service as claimed
by the petitioner-appellee;
2. In not declaring without the necessity of making a pronouncement of its validity, that
section 8 of Republic Act 603 was precisely intended by the Congress to exclude the
office of vice-mayor of Roxas City from persons belonging to the unclassified service
under section 671 of the Revised Administrative Code, as amended;
3. In not declaring that in the case of Jover vs. Borra (49 Off. Gaz., 2767) the Supreme
Court passed upon the validity of section 8 of Republic Act No. 603;
4. In holding that the office of vice-mayor of Roxas City is neither primarily confidential
nor policy-determining, and
5. In not holding that section 8 of Republic Act No. 603 is a valid exercise of the broad
legislative powers vested in the Congress of the Philippines by our Constitution.
147 | C O N S T I 1
As the petition for certiorari was admitted and given due course by this Court and the writ of
preliminary injunction prayed for was issued, We shall confine ourselves to the statement that
appeal from a decision of the Court of First Instance in quo warranto proceedings is perfected
by the mere presentation of the notice of appeal (section 16 and 17, Rule 41 of the Rules of
Court), and from that moment "the trial court losses its jurisdiction over the case, except to
issue orders for the protection and preservation of the rights of the parties which do not involve
any matter litigated by the appeal, and to approve compromises offered by the parties prior to
the transmittal of the record on appeal (which is not required in cases of quo warranto) to the
appellate court" (section 9, Rule 41 of the Rules of Court). Hence, in the case at bar, the trial
court had no jurisdiction to provide for the issuance of the writ for the advanced execution of
its judgment, as it did by order of February 18, 1956 (Annex E). Consequently, We have to
declare that said order is null and void and of no force and effect and to make permanent the
writ of preliminary injunction We have issued at the instance of the herein petitioner.
We will now consider the merits of respondent's appeal in case G.R. No. L-10433. The solution
of the controversy hinges on the main question at issue, which may be propounded as follows:
Section 8 of Republic Act No. 603 creating the City of Roxas provides that the Vice-
Mayor shall be appointed by the President of the Philippines with the consent of the
Commission on Appointments and shall hold office at the pleasure of the President. In
view of this provision of the law, could the President of the Philippines legally replace
respondent Vivencio C. Alajar, with or without cause, by petitioner Juliano A. Alba?
Vivencio C. Alajar and judge Jose D. Evangelista maintain of course the negative side alleging
that in the case of De los Santos vs. Mallare, 48 Off. Gaz., 1791, a similar provision of the
Administrative Code which prescribed:
Sec. 2545. Appointment of City Officials. — The President of the Philippines shall
appoint, with the consent of the Commission on Appointments of the Congress of the
Philippines, the mayor, the vice-mayor . . . and he may REMOVE at pleasure any of
the said officers . . .,
has been declared incompatible with the constitutional inhibitation that "no officer or employee
in the Civil Service shall be removed or suspended except for cause as provided by law",
because the two provisions are mutually repugnant and absolutely irreconcilable. In express
terms, one permits what the other in similar manner prohibits. And the Supreme Court then
said "that the particular provisions of law (section 2545 of the Revised Administrative Code)
which gives the Chief Executive power to remove an officer at pleasure (though not
unconstitutional) have been repealed by the Constitutional and ceased to be operative from
the time the latter went into effect."
On the other hand, the Solicitor General in his reply memorandum considers the matter from
different angle. The view expressed by him therein refer to the tenure of office of public officials.
We quote from said memorandum the following:
 A public office is the right, authority and duty, created and conferred by law, by which
for a given period, either fixed by law or enduring at the pleasure of the creating power,
an individual is invested with some portion of the sovereign function of government, to
be exercised by him for the benefit of the public. The individual so invested is a public
officer (7 Mechem, Public Officers, section 1).
The question is whether an officer appointed for a definite time or during good
behaviour, had any vested interest or contract right in his office, of which Congress
could not deprive him. The question is not novel. There seems to be but little difficulty
in deciding that there was no such interest or right (Grenshaw vs. United States, 134,
U.S. 99, 104).
xxx xxx xxx
Admittedly, the act of Congress in creating a public office, defining its powers, functions
and fixing the "term" or the period during which the officer may claim to hold the office
as of right and the "tenure" or the term during which the incumbent actually holds the
office, is a valid and constitutional exercise of legislative power (Article VI, section 1,
Constitution of the Philippines; Jover vs. Borra, G.R. No. L-6782, July 25, 1953;
Nueno vs. Angeles, 76 Phil., 12; Francia vs. Pecson and Subido, 47 Off, Gaz., 12
Supp. p. 296). In the exercise of the power, Congress enacted Republic Act No. 603
on April 11, 1951, creating the City of Roxas and providing, among others for the
position of Vice-Mayor and its tenure or period during which the incumbent Vice-Mayor
holds office at the pleasure of the President (section 8, article II, Republic Act No. 603).
In Jover vs. Borra, supra, this Court through Mr. Justice Padilla, held that:
The legislative intent to provide for a fixed period of office tenure for the Mayor of the
City of Iloilo and not to make him removable at the pleasure of the appointing authority
may be inferred from the fact that whereas the appointment of the Vice-Mayor of the
same city, as provided for in an amendatory act (Republic Act No. 365), and those of
the Mayors and Vice-Mayor of other cities (section 2545, Rev. Adm. Code;
Commonwealth Acts Nos. 39, 51, 338, 520, 547 and 592; Republic Acts Nos. 162, 170,
as amended, 179, as amended; 183, 288, as amended; 305, 306, 327, 328, 521, 523,
525, as amended; 537 and 603) are at pleasure, that of the Mayor of the City of Iloilo
is for a fixed period of time, as provided for in the original charter (Commonwealth Act
No. 57), and in this continued unchanged despite subsequent amendatory acts
(Commonwealth Act No. 158; Republic Act Nos. 276 and 365).
So, the logical inference from the above quoted excerpt of the decision of this Court
promulgated long after the decision rendered in the case of De los Santos vs. Mallare,
supra, is that Congress can legally and constitutionally make the tenure of certain
officials dependent upon the pleasure of the President.
xxx xxx xxx
148 | C O N S T I 1
The pervading error of the respondents lies in the fact that they insist on the act of the
President in designating petitioner Alba in the place of respondent Alajar as one
of removal. The replacement of respondent Alajar is not removal, but an expiration
of its tenure, which is one of the ordinary modes of terminating official relations. On
this score, section 2545 of the Revised Administrative Code which was declared
inoperative in the Santos vs. Mallare case, is different from section 8 of Republic Act
No. 603, Section 2545 refers to removal at pleasure while section 8 of Republic Act
No. 603 refers to holding office at the pleasure of the President.
Clearly, what is involved here is not the question of removal, or whether legal cause
should precede or not that removal. What is involved here is the creation of an office
and the tenure of such office, which has been made expressly dependent upon the
pleasure of the President.
The cases relied upon by respondents are, therefore, inopposite to the instant
proceedings. For all of them relate to removal of officials in violation of laws
which prescribed fixity of term.
Even assuming for the moment that the act of replacing Alajar constitute removal, the
act itself is valid and lawful, for under section 8 of Republic Act No. 603, no fixity of
tenure has been provided for, and the pleasure of the President has been exercised in
accordance with the policy laid down by Congress therein.
"Thus, in Lacson vs. Roque (49 Off. Gaz., 93, 101-102), this Court made clear that:
The most liberal view that can be taken of the power of the President to remove the
Mayor of the City of Manila is that it must be for cause. Even those who would uphold
the legality of the Mayor's suspension do not go so far as to claim power in the Chief
Executive to remove the Mayor at pleasure. Untramelled discretionary power to
remove does not apply to appointed officers whose term of office is definite, much less
elective officers. As has been pointedly stated: "Fixity of tenure destroy the power of
removal at pleasure otherwise incident to the appointing power; the reason of this rule
is the evident repugnance between the fixed term and the power of arbitrary removal.
...
An inferential authority to remove at pleasure cannot be declared, since the existence
of a defined term, ipso facto, negatives such an inference, and implies a contrary
presumption, i.e., that the incumbent shall hold office to the end of his term subject to
removal for cause. (State ex rel. Gallaghar vs. Brown, 57 Mo. Ap., 302, expressly
adopted by the Supreme Court in State ex rel. vs. Maroney, 191 Mo., 548; etc.)
It is only in those cases in which the office is held at the pleasure of the appointing
power and where the power of removal is exercisable at its mere discretion, that the
officer may be removed without notice or hearing.
"Thus, in Jover vs. Borra, supra, the same rule was reiterated:
The legislative intent to provide for a fixed period of office tenure for the Mayor of the
City of Iloilo and not to make him removable at the pleasure of the appointing authority
may be inferred from the fact that whereas the appointment of the Vice-Mayor of the
same city, as provided for in an amendatory act (Republic Act No. 365), and those of
the Mayors and Vice-Mayor of other cities (section 2545, Revised Administrative Code;
Commonwealth Acts Nos. 39, 51, 338, 520, 547 and 592; Republic Acts Nos. 162; 170,
as amended; 179, as amended; 183, 288, as amended; 305; 306; 327; 328; 521; 523;
525, as amended; 537; and 603) are at pleasure, that of the Mayor of the City of Iloilo
is for a fixed period of time, as provided for in the original charter (Commonwealth Act
No. 57), and this continued unchanged despite subsequent amendatory acts
(Commonwealth Act No. 158; Republic Acts Nos. 276 and 365).
It is an established rule that when the law authorizes a superior officer to remove a
subordinate at pleasure his discretion in the exercise of the power of removal is
absolute. As long as the removal is effected in accordance with the procedure
prescribed by law, it may not be declared invalid by the courts, no matter how
reprehensible and unjust the motives of the removal might be (State vs. Kennelly, 55
Atl. 555).
For respondent judge to ignore these judicial doctrines brought to his attention by
petitioner Alba even during the quo warranto proceedings and in the face of their
impressive clarity to rashly resolve his doubt against the constitutionality of section 8
of Republic Act No. 603 is to exert his discretion with the greatest measure of abuse
as to amount to lack of jurisdiction (Abad Santos, vs. Tarlac, 38 Off. Gaz., 830).
After all the foregoing circumstances are found to be present, it must be shown that
the statute violates the constitution clearly, palpably, plainly, and in such manner as to
leave no doubt or hesitation in the mind of the court (Sharpless vs. Mayor, 21 Pa. 147).
The court presume that every statute is valid. This presumption is based upon the
theory of separation of powers which makes the enactment and repeal of laws
exclusively a legislative function. As Chief Justice Marshall said: "It is but a decent
respect due to the wisdom, the integrity, and the patriotism of the legislative body, by
which any law is passed, to presume in favor of its validity, until its violation of the
constitution is proved beyond all reasonable doubt." (Darmouth College vs.
Woodward, 4 Wheat, 625.)
It should be remembered in this connection that before a legislature passes a bill, it is
presumed that it has decided the measure to be constitutional; and when the executive
approves that bill it is also presumed that he has been convinced of its validity. Under
these conditions, therefore, if a statute is reasonably suspectible of two interpretations,
one making it unconstitutional and other valid, it is the duty of the court to adopt the
second construction in order to save the measure. (U.S. vs. Delaware & Hudson Co.,
213 U.S. 366.) Sinco, Philippine Political Law, 10 ed., pp. 525-526; Emphasis supplied.
149 | C O N S T I 1
We certainly agree with the foregoing views of the Solicitor General because they constitute a
clear and fair exposition of the law on the matter. Anyway, the provision of Section 8 of Republic
Act No. 603 empowering the President of the Philippine to appoint, with the consent of the
Commission on Appointments, the Vice-Mayor of Roxas City, the latter to hold office at the
pleasure of the President, can not by any stench of imagination he considered unconstitutional
and void.
WHEREFORE, on the strenght of the foregoing considerations, and upon declaring the order
of the Court of February 18, 1956 (Annex E) null and void and of no effect and upon making
permanent the writ of preliminary injunction issued by this Court in the present case, We hereby
dismiss the quo warranto proceedings, for respondent Vivencio C. Alajar has no right to
continue occupying the office of Vice-Mayor of Roxas City after the President of the Philippines,
in the exercise of his power of allowing said respondent to hold office at his pleasure, displaced
him from said office and designated petitioner Juliano A. Alba as Acting Vice-Mayor of said
City. Costs in both cases are taxed against Vivencio C. Alajar.
Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador, Reyes, J.B.L. and Endencia,
JJ., concur.
Separate Opinions
CONCEPCION, J., concurring:
The majority opinion quotes, with approval, from the memorandum of the Solicitor General,
who states, among other things, ". . . that Congress can legally and constitutional make
the tenure of certain officials dependent upon the pleasure of the President"; that "the
replacement of respondent Alajar is not removal but an expiration of its tenure, which is one of
the ordinary modes of terminating official relations"; and that "what is involved here is the
creation of an office and the tenure of such office, which has been made expressly dependent
upon the pleasure of the President". (Emphasis supplied.)
I believe that the word "tenure" in the foregoing expression should be submitted by "term", for:
. . . the term of an office must be distinguished from the tenure incumbent. The term
means the time during which the officer may claim to hold office as of right, and fixes
the interval after which the several incumbents shall succeed one another. The tenure
represents the term during which the incumbent actually holds the office. The term of
office is not affected by the hold-over. The tenure may be shorter than the term for
reasons within or beyond the power of the incumbent. (Topacio Nueno et
al. vs. Angeles, 76 Phil., 12, 21-22; emphasis supplied.)
The distinction between "term" and "tenure" is important, for, pursuant to the Constitution, "no
officer or employee in the Civil Service may be removed or suspended except for cause, as
provided by law" (Art. XII, section 4), and this fundamental principle would be defeated if
Congress could legally make the tenure of some officials dependent upon the pleasure of the
President, by clothing the latter with blanket authority to replace a public officer before the
expiration of his term.

In the case at bar, the term of respondent Alajar as Vice-Mayor of the City of Roxas is not fixed
by law. However, the latter, in effect, vests in the President the power to fix such term. When,
in November, 1955, petitioner Alba was designated as Acting Vice-Mayor of said City, the term
of respondent Alajar was, thereby, fixed implicity by the President, in the exercise of his
aforementioned authority. Thus, the term of office of Alajar expired and his right to hold office
was extinguished, with the same legal effect as if the term had been fixed by Congress itself.
In other words, Alajar was not removed from office, for "to remove an officer is to oust him from
office before the expiration of his term" (Manalang vs. Quitoriano et al., 50 Off. Gaz., 2515).
Alajar merely lost the right to hold the office of Vice-Mayor of the City of Roxas by expiration of
his term as such.

Subject to the foregoing qualifications, I concur in the opinion penned by Mr. Justice Felix.

Paras, C.J. and Montemayor, JJ., concur.

150 | C O N S T I 1
G.R. No. 179817 June 27, 2008
ANTONIO F. TRILLANES IV, petitioner,
vs.
HON. OSCAR PIMENTEL, SR., IN HIS CAPACITY AS PRESIDING JUDGE, REGIONAL
TRIAL COURT- BRANCH 148, MAKATI CITY; GEN. HERMOGENES ESPERON, VICE
ADM. ROGELIO I. CALUNSAG, MGEN. BENJAMIN DOLORFINO, AND LT. COL.
LUCIARDO OBEÑA, respondents.
DECISION
CARPIO MORALES, J.:
At the wee hours of July 27, 2003, a group of more than 300 heavily armed soldiers led by
junior officers of the Armed Forces of the Philippines (AFP) stormed into the Oakwood Premier
Apartments in Makati City and publicly demanded the resignation of the President and key
national officials.
Later in the day, President Gloria Macapagal Arroyo issued Proclamation No. 427 and General
Order No. 4 declaring a state of rebellion and calling out the Armed Forces to suppress the
rebellion.1 A series of negotiations quelled the teeming tension and eventually resolved the
impasse with the surrender of the militant soldiers that evening.
In the aftermath of this eventful episode dubbed as the "Oakwood Incident," petitioner Antonio
F. Trillanes IV was charged, along with his comrades, with coup d’etat defined under Article
134-A of the Revised Penal Code before the Regional Trial Court (RTC) of Makati. The case
was docketed as Criminal Case No. 03-2784, "People v. Capt. Milo D. Maestrecampo, et al."
Close to four years later, petitioner, who has remained in detention, 2 threw his hat in the political
arena and won a seat in the Senate with a six-year term commencing at noon on June 30,
2007.3
Before the commencement of his term or on June 22, 2007, petitioner filed with the RTC, Makati
City, Branch 148, an "Omnibus Motion for Leave of Court to be Allowed to Attend Senate
Sessions and Related Requests"4 (Omnibus Motion). Among his requests were:
(a) To be allowed to go to the Senate to attend all official functions of the
Senate (whether at the Senate or elsewhere) particularly when the Senate is in
session, and to attend the regular and plenary sessions of the Senate, committee
hearings, committee meetings, consultations, investigations and hearings in aid of
legislation, caucuses, staff meetings, etc., which are normally held at the Senate of the
Philippines located at the GSIS Financial Center, Pasay City (usually from Mondays to
Thursdays from 8:00 a.m. to 7:00 p.m.);
151 | C O N S T I 1
(b) To be allowed to set up a working area at his place of detention at the Marine Brig,
Marine Barracks Manila, Fort Bonifacio, Taguig City, with a personal desktop computer
and the appropriate communications equipment (i.e., a telephone line and internet
access) in order that he may be able to work there when there are no sessions,
meetings or hearings at the Senate or when the Senate is not in session. The costs of
setting up the said working area and the related equipment and utility costs can be
charged against the budget/allocation of the Office of the accused from the Senate;
(c) To be allowed to receive members of his staff at the said working area at his place
of detention at the Marine Brig, Marine Barracks Manila, Fort Bonifacio, Taguig City, at
reasonable times of the day particularly during working days for purposes of meetings,
briefings, consultations and/or coordination, so that the latter may be able to assists
(sic) him in the performance and discharge of his duties as a Senator of the Republic;
(d) To be allowed to give interviews and to air his comments, reactions and/or opinions
to the press or the media regarding the important issues affecting the country and the
public while at the Senate or elsewhere in the performance of his duties as Senator to
help shape public policy and in the light of the important role of the Senate in
maintaining the system of checks and balance between the three (3) co-equal
branches of Government;
(e) With prior notice to the Honorable Court and to the accused and his custodians, to
be allowed to receive, on Tuesdays and Fridays, reporters and other members of the
media who may wish to interview him and/or to get his comments, reactions and/or
opinion at his place of confinement at the Marine Brig, Marine Barracks Manila, Fort
Bonifacio, Taguig City, particularly when there are no sessions, meetings or hearings
at the Senate or when the Senate is not in session; and
(f) To be allowed to attend the organizational meeting and election of officers of the
Senate and related activities scheduled in the morning (9:00 or 10:00 a.m.) of 23 July
2007 at the Senate of the Philippines located at the GSIS Financial Center, Pasay
City.5
By Order of July 25, 2007,6 the trial court denied all the requests in the Omnibus Motion.
Petitioner moved for reconsideration in which he waived his requests in paragraphs (b), (c) and
(f) to thus trim them down to three.7 The trial court just the same denied the motion by Order of
September 18, 2007.8
Hence, the present petition for certiorari to set aside the two Orders of the trial court, and
for prohibition and mandamus to (i) enjoin respondents from banning the Senate staff,
resource persons and guests from meeting with him or transacting business with him in his
capacity as Senator; and (ii) direct respondents to allow him access to the Senate staff,
resource persons and guests and permit him to attend all sessions and official functions of the
Senate. Petitioner preliminarily prayed for the maintenance of the status quo ante of having
been able hitherto to convene his staff, resource persons and guests 9 at the Marine Brig.
Impleaded as co-respondents of Judge Oscar Pimentel, Sr. are AFP Chief of Staff, Gen.
Hermogenes Esperon (Esperon); Philippine Navy’s Flag Officer-in-Command, Vice Admiral
Rogelio Calunsag; Philippine Marines’ Commandant, Major Gen. Benjamin Dolorfino; and
Marine Barracks Manila Commanding Officer, Lt. Col. Luciardo Obeña (Obeña).
Petitioner later manifested, in his Reply of February 26, 2008, that he has, since November 30,
2007, been in the custody of the Philippine National Police (PNP) Custodial Center following
the foiled take-over of the Manila Peninsula Hotel 10 the day before or on November 29, 2007.
Such change in circumstances thus dictates the discontinuation of the action as against the
above-named military officers-respondents. The issues raised in relation to them had ceased
to present a justiciable controversy, so that a determination thereof would be without practical
value and use. Meanwhile, against those not made parties to the case, petitioner cannot ask
for reliefs from this Court.11 Petitioner did not, by way of substitution, implead the police officers
currently exercising custodial responsibility over him; and he did not satisfactorily show that
they have adopted or continued the assailed actions of the former custodians. 12
Petitioner reiterates the following grounds which mirror those previously raised in his Motion
for Reconsideration filed with the trial court:
I.
THE JURISPRUDENCE CITED BY THE HONORABLE COURT A QUO IS CLEARLY
INAPPLICABLE TO THE INSTANT CASE BECAUSE OF THE FOLLOWING
REASONS:
A.
UNLIKE IN THIS CASE, THE ACCUSED IN THE JALOSJOS CASE WAS
ALREADY CONVICTED AT THE TIME HE FILED HIS MOTION. IN THE
INSTANT CASE, ACCUSED/PETITIONER HAS NOT BEEN CONVICTED
AND, THEREFORE, STILL ENJOYS THE PRESUMPTION OF INNOCENCE;
B.
THE ACCUSED IN THE JALOJOS (SIC) CASE WAS CHARGED WITH TWO
(2) COUNTS OF STATUTORY RAPE AND SIX (6) COUNTS OF ACTS OF
LASCIVIOUSNESS, CRIMES INVOLVING MORAL TURPITUDE. HEREIN
ACCUSED/PETITIONER IS CHARGED WITH THE OFFENSE OF "COUP
D’ETAT", A CHARGE WHICH IS COMMONLY REGARDED AS A POLITICAL
OFFENSE;
C.
152 | C O N S T I 1
THE ACCUSED IN THE JALOSJOS CASE ATTEMPTED TO FLEE PRIOR
TO BEING ARRESTED. THE ACCUSED/ PETITIONER VOLUNTARILY
SURRENDERED TO THE AUTHORITIES AND AGREED TO TAKE
RESPONSIBILITY FOR HIS ACTS AT OAKWOOD;
II.
GEN. ESPERON DID NOT OVERRULE THE RECOMMENDATION OF THE MARINE
BRIG’S COMMANDING OFFICER TO ALLOW PETITIONER TO ATTEND THE
SENATE SESSIONS;
III.
ACCUSED/PETITIONER SUBMITS THAT THE FACT THAT THE PEOPLE, IN THEIR
SOVEREIGN CAPACITY, ELECTED HIM TO THE POSITION OF SENATOR OF THE
REPUBLIC PROVIDES THE PROPER LEGAL JUSTIFICATION TO ALLOW HIM TO
WORK AND SERVE HIS MANDATE AS A SENATOR;
- AND -
IV.
MOREOVER, THERE ARE ENOUGH PRECEDENTS TO ALLOW LIBERAL
TREATMENT OF DETENTION PRISONERS WHO ARE HELD WITHOUT BAIL AS
IN THE CASE OF FORMER PRESIDENT JOSEPH "ERAP" ESTRADA AND
FORMER ARMM GOV. NUR MISUARI.13
The petition is bereft of merit.
In attempting to strike a distinction between his case and that of Jalosjos, petitioner chiefly
points out that former Rep. Romeo Jalosjos (Jalosjos) was already convicted, albeit his
conviction was pending appeal, when he filed a motion similar to petitioner’s Omnibus Motion,
whereas he (petitioner) is a mere detention prisoner. He asserts that he continues to enjoy civil
and political rights since the presumption of innocence is still in his favor.
Further, petitioner illustrates that Jalosjos was charged with crimes involving moral
turpitude, i.e., two counts of statutory rape and six counts of acts of lasciviousness, whereas
he is indicted for coup d’etat which is regarded as a "political offense."
Furthermore, petitioner justifies in his favor the presence of noble causes in expressing
legitimate grievances against the rampant and institutionalized practice of graft and corruption
in the AFP.
In sum, petitioner’s first ground posits that there is a world of difference between his case and
that of Jalosjos respecting the type of offense involved, the stage of filing of the motion, and
other circumstances which demonstrate the inapplicability of Jalosjos.14
A plain reading of. Jalosjos suggests otherwise, however.
The distinctions cited by petitioner were not elemental in the pronouncement in Jalosjos that
election to Congress is not a reasonable classification in criminal law enforcement as the
functions and duties of the office are not substantial distinctions which lift one from the class of
prisoners interrupted in their freedom and restricted in liberty of movement. 15
It cannot be gainsaid that a person charged with a crime is taken into custody for purposes of
the administration of justice. No less than the Constitution provides:
All persons, except those charged with offenses punishable by reclusion
perpetua when evidence of guilt is strong, shall, before conviction, be bailable by
sufficient sureties, or be released on recognizance as may be provided by law. The
right to bail shall not be impaired even when the privilege of the writ of habeas corpus is
suspended. Excessive bail shall not be required. 16 (Underscoring supplied)
The Rules also state that no person charged with a capital offense, 17 or an offense punishable
by reclusion perpetua or life imprisonment, shall be admitted to bail when evidence of guilt is
strong, regardless of the stage of the criminal action. 18
That the cited provisions apply equally to rape and coup d’etat cases, both being punishable
by reclusion perpetua,19 is beyond cavil. Within the class of offenses covered by the stated
range of imposable penalties, there is clearly no distinction as to the political complexion of or
moral turpitude involved in the crime charged.
In the present case, it is uncontroverted that petitioner’s application for bail and for release on
recognizance was denied.20 The determination that the evidence of guilt is strong, whether
ascertained in a hearing of an application for bail 21 or imported from a trial court’s judgment of
conviction,22 justifies the detention of an accused as a valid curtailment of his right to provisional
liberty. This accentuates the proviso that the denial of the right to bail in such cases is
"regardless of the stage of the criminal action." Such justification for confinement with its
underlying rationale of public self-defense23 applies equally to detention prisoners like
petitioner or convicted prisoners-appellants like Jalosjos.
As the Court observed in Alejano v. Cabuay,24 it is impractical to draw a line between convicted
prisoners and pre-trial detainees for the purpose of maintaining jail security; and while pre-trial
detainees do not forfeit their constitutional rights upon confinement, the fact of their detention
makes their rights more limited than those of the public.
The Court was more emphatic in People v. Hon. Maceda:25
153 | C O N S T I 1
As a matter of law, when a person indicted for an offense is arrested, he is deemed
placed under the custody of the law. He is placed in actual restraint of liberty in jail so
that he may be bound to answer for the commission of the offense. He must be
detained in jail during the pendency of the case against him, unless he is authorized
by the court to be released on bail or on recognizance. Let it be stressed that all
prisoners whether under preventive detention or serving final sentence can not practice
their profession nor engage in any business or occupation, or hold office, elective or
appointive, while in detention. This is a necessary consequence of arrest and
detention.26 (Underscoring supplied)
These inherent limitations, however, must be taken into account only to the extent that
confinement restrains the power of locomotion or actual physical movement. It bears noting
that in Jalosjos, which was decided en banc one month after Maceda, the Court recognized
that the accused could somehow accomplish legislative results. 27
The trial court thus correctly concluded that the presumption of innocence does not carry with
it the full enjoyment of civil and political rights.
Petitioner is similarly situated with Jalosjos with respect to the application of the presumption
of innocence during the period material to the resolution of their respective motions. The Court
in Jalosjos did not mention that the presumption of innocence no longer operates in favor of
the accused pending the review on appeal of the judgment of conviction. The rule stands that
until a promulgation of final conviction is made, the constitutional mandate ofpresumption of
innocence prevails.28
In addition to the inherent restraints, the Court notes that petitioner neither denied nor disputed
his agreeing to a consensus with the prosecution that media access to him should cease after
his proclamation by the Commission on Elections.29
Petitioner goes on to allege that unlike Jalosjos who attempted to evade trial, he is not a flight
risk since he voluntarily surrendered to the proper authorities and such can be proven by the
numerous times he was allowed to travel outside his place of detention.
Subsequent events reveal the contrary, however. The assailed Orders augured well when on
November 29, 2007 petitioner went past security detail for some reason and proceeded from
the courtroom to a posh hotel to issue certain statements. The account, dubbed this time as
the "Manila Pen Incident,"30 proves that petitioner’s argument bites the dust. The risk that he
would escape ceased to be neither remote nor nil as, in fact, the cause for foreboding became
real.
Moreover, circumstances indicating probability of flight find relevance as a factor in ascertaining
the reasonable amount of bail and in canceling a discretionary grant of bail.31 In cases involving
non-bailable offenses, what is controlling is the determination of whether the evidence of guilt
is strong. Once it is established that it is so, bail shall be denied as it is neither a matter of right
nor of discretion.32
Petitioner cannot find solace in Montano v. Ocampo33 to buttress his plea for leeway because
unlike petitioner, the therein petitioner, then Senator Justiniano Montano, who was charged
with multiple murder and multiple frustrated murder,34 was able to rebut the strong evidence
for the prosecution. Notatu dignum is this Court’s pronouncement therein that "if denial of bail
is authorized in capital cases, it is only on the theory that the proof being strong, the defendant
would flee, if he has the opportunity, rather than face the verdict of the jury." 35 At the time
Montano was indicted, when only capital offenses were non-bailable where evidence of guilt is
strong,36 the Court noted the obvious reason that "one who faces a probable death sentence
has a particularly strong temptation to flee." 37Petitioner’s petition for bail having earlier been
denied, he cannot rely on Montano to reiterate his requests which are akin to bailing him out.
Second, petitioner posits that, contrary to the trial court’s findings, Esperon did not overrule
Obeña’s recommendation to allow him to attend Senate sessions. Petitioner cites the
Comment38 of Obeña that he interposed no objection to such request but recommended that
he be transported by the Senate Sergeant-at-Arms with adequate Senate security. And
petitioner faults the trial court for deeming that Esperon, despite professing non-obstruction to
the performance of petitioner’s duties, flatly rejected all his requests, when what Esperon only
disallowed was the setting up of a political office inside a military installation owing to AFP’s
apolitical nature.39
The effective management of the detention facility has been recognized as a valid objective
that may justify the imposition of conditions and restrictions of pre-trial detention.40 The officer
with custodial responsibility over a detainee may undertake such reasonable measures as may
be necessary to secure the safety and prevent the escape of the detainee. 41 Nevertheless,
while the comments of the detention officers provide guidance on security concerns, they are
not binding on the trial court in the same manner that pleadings are not impositions upon a
court.
Third, petitioner posits that his election provides the legal justification to allow him to serve his
mandate, after the people, in their sovereign capacity, elected him as Senator. He argues that
denying his Omnibus Motion is tantamount to removing him from office, depriving the people
of proper representation, denying the people’s will, repudiating the people’s choice, and
overruling the mandate of the people.
Petitioner’s contention hinges on the doctrine in administrative law that "a public official can not
be removed for administrative misconduct committed during a prior term, since his re-
election to office operates as a condonation of the officer’s previous misconduct to the extent
of cutting off the right to remove him therefor."42
The assertion is unavailing. The case against petitioner is not administrative in nature. And
there is no "prior term" to speak of. In a plethora of cases, 43 the Court categorically held that
the doctrine of condonation does not apply to criminal cases. Election, or more precisely, re-
election to office, does not obliterate a criminal charge. Petitioner’s electoral victory only
signifies pertinently that when the voters elected him to the Senate, "they did so with full
awareness of the limitations on his freedom of action [and] x x x with the knowledge that he
154 | C O N S T I 1
could achieve only such legislative results which he could accomplish within the confines of
prison."44
In once more debunking the disenfranchisement argument, 45 it is opportune to wipe out the
lingering misimpression that the call of duty conferred by the voice of the people is louder than
the litany of lawful restraints articulated in the Constitution and echoed by jurisprudence. The
apparent discord may be harmonized by the overarching tenet that the mandate of the people
yields to the Constitution which the people themselves ordained to govern all under the rule of
law.
The performance of legitimate and even essential duties by public officers has never
been an excuse to free a person validly in prison. The duties imposed by the "mandate
of the people" are multifarious. The accused-appellant asserts that the duty to legislate
ranks highest in the hierarchy of government. The accused-appellant is only one of
250 members of the House of Representatives, not to mention the 24 members of the
Senate, charged with the duties of legislation. Congress continues to function well in
the physical absence of one or a few of its members. x x x Never has the call of a
particular duty lifted a prisoner into a different classification from those others who are
validly restrained by law.46 (Underscoring supplied)
Lastly, petitioner pleads for the same liberal treatment accorded certain detention prisoners
who have also been charged with non-bailable offenses, like former President Joseph Estrada
and former Governor Nur Misuari who were allowed to attend "social functions." Finding no
rhyme and reason in the denial of the more serious request to perform the duties of a Senator,
petitioner harps on an alleged violation of the equal protection clause.
In arguing against maintaining double standards in the treatment of detention prisoners,
petitioner expressly admits that he intentionally did not seek preferential treatment in the form
of being placed under Senate custody or house arrest, 47 yet he at the same time, gripes about
the granting of house arrest to others.
Emergency or compelling temporary leaves from imprisonment are allowed to all prisoners, at
the discretion of the authorities or upon court orders. 48 That this discretion was gravely abused,
petitioner failed to establish. In fact, the trial court previously allowed petitioner to register as a
voter in December 2006, file his certificate of candidacy in February 2007, cast his vote on May
14, 2007, be proclaimed as senator-elect, and take his oath of office49 on June 29, 2007. In a
seeming attempt to bind or twist the hands of the trial court lest it be accused of taking a
complete turn-around,50 petitioner largely banks on these prior grants to him and insists on
unending concessions and blanket authorizations.
Petitioner’s position fails. On the generality and permanence of his requests alone, petitioner’s
case fails to compare with the species of allowable leaves. Jaloslos succinctly expounds:
x x x Allowing accused-appellant to attend congressional sessions and committee
meetings for five (5) days or more in a week will virtually make him a free man with all
 the privileges appurtenant to his position. Such an aberrant situation not only elevates
accused-appellant’s status to that of a special class, it also would be a mockery of the
purposes of the correction system.51

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

155 | C O N S T I 1