VELOSO v.

CA

G.R. No. 102737; August 21, 1996

Ponente: J. Torres Jr.

FACTS:

Petitioner Francisco Veloso was the owner of a parcel of land situated in the district
of Tondo, Manila, with an area of 177 square meters. The title was registered in the
name of Francisco A. Veloso. The said title was subsequently cancelled and a new
one issued in the name of Aglaloma B. Escario, married to Gregorio L. Escario, on
May 24, 1988.

On August 24, 1988, petitioner Veloso filed an action for annulment of documents,
reconveyance of property with damages and preliminary injunction and/or
restraining order. Petitioner alleged therein that he was the absolute owner of the
subject property and he never authorized anybody, not even his wife, to sell it. He
alleged that he was in possession of the title but when his wife, Irma, left for
abroad, he found out that his copy was missing. He then verified with the Registry
of Deeds of Manila and there he discovered that his title was already canceled in
favor of defendant Aglaloma Escario.

The transfer of property was supported by a General Power of Attorney dated

November 29, 1985 and Deed of Absolute Sale, dated November 2, 1987, executed
by Irma Veloso, wife of the petitioner and appearing as his attorney-in-fact, and
defendant Aglaloma Escario.

Petitioner Veloso, however, denied having executed the power of attorney and
alleged that his signature was falsified. He also denied having seen or even known
Rosemarie Reyes and Imelda Santos, the supposed witnesses in the execution of
the power of attorney. He vehemently denied having met or transacted with the
defendant. Thus, he contended that the sale of the property, and the subsequent
transfer thereof, were null and void.

Defendant Aglaloma Escario in her answer alleged that she was a buyer in good
faith and denied any knowledge of the alleged irregularity. She allegedly relied on
the general power of attorney of Irma Veloso which was sufficient in form and
substance and was duly notarized.

ISSUE:

Whether there was a valid sale of the subject property

HELD:

Yes, the sale of the subject property is valid

The Supreme Court held that an examination of the records showed that the
assailed power of attorney was valid and regular on its face. It was notarized and
as such, it carries the evidentiary weight conferred upon it with respect to its due
execution. While it is true that it was denominated as a general power of attorney,
a perusal thereof revealed that it stated an authority to sell.

Respondent Aglaloma relied on the power of attorney presented by petitioner's

wife, Irma. Being the wife of the owner and having with her the title of the
property, there was no reason for the private respondent not to believe, in her
authority. Thus, having had no inkling on any irregularity and having no
participation thereof, private respondent was a buyer in good faith. It has been
consistently held that a purchaser in good faith is one who buys property of
another, without notice that some other person has a right to, or interest in such
property and pays a full and fair price for the same, at the time of such purchase,
or before he has notice of the claim or interest of some other person in the

Tolentino V Loyola
 G.R No. 163809

670 Phil. 50

LEONARDO-DE CASTRO, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure seeking to reverse and set aside the Decision[1] dated December 3, 2001
of the Court of Appeals as well as its Resolution[2] dated May 28, 2002 in CA-G.R.
SP No. 61841, entitled "Eloisa L. Tolentino v. Atty. Roy M. Loyola, et al." The
December 3, 2001 Decision of the Court of Appeals affirmed the Decision[3] dated
May 23, 2000 of Ombudsman Aniano A. Desierto in OMB-ADM-1-99-1035, which
dismissed the administrative complaint that petitioner filed against herein
respondents. On the other hand, the May 28, 2002 Resolution of the Court of
Appeals denied the motion for reconsideration filed by petitioner.

The facts of this case, as narrated in the assailed Court of Appeals ruling, are as
follows:

On November 9, 1999, the petitioner filed a Complaint-Affidavit charging

respondents with Violation of Section 3 (e) of R.A. 3019 otherwise known as the
Anti-Graft and Corrupt Practices Act, for Malversation of Public Funds thru
Falsification of Public Documents and, administratively, for Grave Misconduct,
Dishonesty, Gross Neglect of Duty, and Falsification of Official Documents.

The complaint averred that in a letter dated October 6, 1998, respondent Municipal
Mayor Roy M. Loyola requested the Sangguniang Bayan of Carmona, Cavite for the
creation of twenty-four (24) unappropriated positions for the inclusion in the 1998
Plantilla, to wit:

xxxx

OFFICE OF THE MAYOR

One (1) Computer Programmer III - SG - 18

One (1) Licensing Officer II - SG - 15

GENERAL SERVICE OFFICE

One (1) Supply Officer III - SG - 18

Eight (8) Driver I - SG - 3
Two (2) Utility I - SG - 1

HUMAN RESOURCE MANAGEMENT OFFICE

One (1) HRM Officer II - SG - 15

TREASURER'S OFFICE

One (1) Local Rev. Coll. Officer II - SG - 15

ACCOUNTING OFFICE

One (1) Bookkeeper II - SG - 9

ENRO

Two (2) Environment Mngt. Specialist II - SG - 15

One (1) Clerk III - SG - 6

DA

Agriculture Chief Center IV - SG - 18

Farm Foreman - SG - 6
Three (3) Farm Worker II - SG - 4

On November 23, 1998, the Sangguniang Bayan of Carmona, Cavite passed

Municipal Resolution No. 061-98 approving the creation of only 19 out of the 24
requested positions, under the different offices of the Municipality of Carmona for
inclusion in the 1998 Plantilla of Personnel. The following proposed positions were
[allegedly] set aside:

xxxx

DA

Agriculture Chief Center IV - SG - 18

Farm Foreman - SG - 6
Three (3) Farm Worker II - SG - 4

Despite the disapproval of the aforesaid positions, on April 5, 1999, the Personnel
Selection Board presided by the respondent Municipal Mayor as Chairman with
Amelia C. Samson, HRMO V, as Secretary, together with the following respondents
- Board Members: Edwin E. Tolentino, Domingo R. Tenedero and Roel Z. Manarin,
filled-up the aforesaid inexistent positions and appointed the following:

1. Irene C. Paduyos - Farm Foreman

2. Mustiola A. Mojica - Farm Worker II
3. Ma. Cecilia F. Alumia - Farm Worker II
4. Lilibeth R. Bayugo - Farm Worker II
The appointment papers of the aforesaid personnel were subsequently approved by
the Civil Service Commission.

Thereafter, respondents Budget Officer Domingo C. Flores, Municipal Treasurer

Alicia L. Olimpo, Municipal Accountant Annaliza L. Barabat, Municipal Agriculturist
Nenita L. Ernacio and Municipal Administrator Amador B. Alumia, allowed and
caused the payment of salaries of the aforesaid employees.

The petitioner further alleged that by the respondents' concerted efforts to make it
appear that the inexistent positions were created, causing the unlawful payment of
salaries to illegally appointed employees, the respondents are liable for
malversation of public funds thru falsification of public documents. Likewise, the
respondents are allegedly liable administratively for gross neglect of duty, grave
misconduct, dishonesty and falsification of official documents.

The respondents filed their respective Counter-Affidavits on February 16, 2000,

alleging among others that the Appropriation Ordinance No. 006-98 which is the
Annual Budget of the Municipality of Carmona for the year 1999 carries with it the
24 positions requested in the letter-request dated October 6, 1998 of the
respondent Mayor for the inclusion of such 24 positions in the proposed 1998
Annual Budget. The approval of the budget was in the form of an ordinance.
Moreover, the appointments were approved by the Civil Service Commission and
the salaries were paid out of savings.

On March 9, 2000, the petitioner filed a Consolidated Reply refuting the allegations
in the respondents' Counter-Affidavits, to which respondent Mayor Loyola filed a
Rejoinder-Affidavit. On April 3, 2000, the petitioner submitted a Consolidated
Rebuttal.

On May 23, 2000, upon recommendation of the OIC Deputy Ombudsman for Luzon
Emilio A. Gonzales III, Ombudsman Aniano A. Desierto ordered the dismissal of the
instant administrative Complaint for lack of merit. The respondent moved for a
reconsideration of the aforesaid Decision which the respondents opposed. The said
motion for reconsideration was however denied.[4]

Petitioner appealed the Ombudsman's dismissal order to the Court of Appeals but
the appellate court merely affirmed the assailed ruling in its December 3, 2001
Decision. Undaunted, petitioner moved for reconsideration but this was denied by
the Court of Appeals in its May 28, 2002 Resolution.

Hence, the instant petition.

Petitioner submits the following issues for consideration:

I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
THE QUESTIONED POSITIONS WERE CREATED BY CIRCUMSTANCES

II

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING

THAT RESPONDENTS SHOULD BE DISMISSED FROM THE SERVICE FOR GRAVE
MISCONDUCT, GROSS NEGLECT OF DUTY, DISHONESTY AND FALSIFICATION OF
PUBLIC DOCUMENTS[5]

Petitioner, then Vice-Mayor of Carmona, Cavite filed the present case against
respondent Mayor, members of the Sangguniang Bayan, and municipal officials to
expose the alleged malfeasance committed by the respondents. She maintains that
when Appropriation Ordinance No. 006-98,[6] otherwise known as the 1999 Annual
Budget for the Municipal Government of Carmona, Cavite was passed, the same did
not create the 24 government positions at issue. Aside from the fact that no
express provision for the creation of the government positions at issue can be found
in the said ordinance, no intent on the part of the Sangguniang Bayan to include
said positions can be gleaned from the Minutes of the Sangguniang Bayan Session
held on November 9, 1998 when the said ordinance was passed. The Minutes
would allegedly show that the proposed creation of 19 government positions was
deferred until such time that the copy of the proposed 1999 Plantilla of Positions
was submitted by respondent Amelia C. Samson to the Sangguniang Bayan.

On November 23, 1998, Municipal Resolution No. 061-98 was passed, mentioning
the creation of 19 government positions out of the 24 government positions
requested by respondent Roy M. Loyola (Loyola), who was then the Municipal
Mayor. Thus, it was petitioner's theory that 5 of the 24 positions requested by
respondent Loyola for inclusion in the plantilla were not validly created. When the
1999 Plantilla of Positions was submitted together with the Appropriation Ordinance
No. 006-98 to the Sangguniang Panlalawigan for approval, the Plantilla or Personnel
Schedule for the Department of Agriculture was allegedly drastically changed by
respondents Loyola, Samson and Domingo Flores, making it appear that the five
questioned positions were created and vacant. This was made possible because the
preparation of the Plantilla or Personnel Schedule for the different offices of the
Municipal Government of Carmona, Cavite was undertaken by respondent Samson,
reviewed by respondent Flores, and approved by respondent Loyola.

Petitioner alleges that this is a clear case of falsification because the

1999 Plantilla allegedly did not indicate a specific amount allocated for the created
but vacant government positions at issue in the Proposed Budget for January-
December 1999. Consequently, as purportedly admitted by respondent Flores, the
funding for the government positions at issue was sourced from the savings of the
municipal budget for 1999.

In the same manner, petitioner argued that the enactment of Appropriation

Ordinance No. 001-99 (Annual Budget for 2000) on November 8, 1999 with the
government positions at issue again reflected to have been created and funded, is
also an act of falsification committed by respondents. The said continuing act of
falsification prompted the petitioner to bring the same to the attention of the
Sangguniang Bayan during its regular session on November 8, 1999. However, the
Sangguniang Bayan members did not deliberate on such unwarranted inclusion.
Hence, petitioner wrote a letter to the Presiding Officer of the Sangguniang
Panlalawigan on November 16, 1999.

Petitioner likewise asserts that the approval by the Civil Service Commission of the
questioned appointments is tainted with illegality; hence, void ab initio. In her
view, what were approved are falsified and uncreated government positions;
therefore, the confirmation or approval of the invalid appointments has no force
and effect. Moreover, contrary to the Ombudsman's findings, whatever flaw that
attended the creation of the government positions at issue had not been cured by
Municipal Resolution No. 012-00 dated March 13, 2000 passed by the Sangguniang
Bayan, affirming the creation of the assailed positions. The said Resolution is also
allegedly an act of falsification committed by the Sangguniang Bayan members
because they made it appear that the said positions were created.

On the other hand, respondents counter petitioner's assertions by asserting that

the dismissal of the criminal case, which involved the same set of facts, allegations
and arguments as the administrative case at bar, by the Ombudsman and later
affirmed successively by the Court of Appeals via a Decision[7] dated June 8, 2001
in CA-G.R. SP No. 61840 and by this Court in a minute Resolution[8] dated
September 25, 2001 in G.R. No. 149534, effectively barred the review of the
dismissal of the administrative complaint before this Court because of the
application of the law of the case doctrine.

Respondents further argue that, as per jurisprudence on the matter, the reelection
of respondent Loyola as Mayor of the Municipality of Carmona, Cavite during the
May 14, 2001 local election had the effect of automatically abating the
administrative charge leveled against him for an offense allegedly committed during
his preceding term.

Moreover, respondents aver that under Section 7, Rule III of the Ombudsman Rules
of Procedure, the decision of the Ombudsman in an administrative case absolving a
respondent of the charge filed against him is final and unappealable, thus, the
petition before the Court of Appeals and, subsequently, this Court should have been
disallowed. In any case, the appeal before the Court of Appeals was filed beyond
the reglementary period. Lastly, respondents contend that it is axiomatic that the
factual findings of the Ombudsman and the Court of Appeals should be accorded
great weight and finality.

After a careful review of the records, we find the petition to be without merit.

Before proceeding to the discussion on why the petitioner's contentions fail to

convince, it is appropriate to restate here the law of the case doctrine in light of
respondents' erroneous appreciation of the same.

In Padillo v. Court of Appeals,[9] we had occasion to explain this principle, to wit:

Law of the case has been defined as the opinion delivered on a former appeal. More
specifically, 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, whether correct on general principles or not, so
long as the facts on which such decision was predicated continue to be the facts of
the case before the court. As a general rule, a decision on a prior appeal of the
same case is held to be the law of the case whether that question is right or
wrong, the remedy of the party deeming himself aggrieved being to seek a
rehearing.[10]

The concept of law of the case was further elucidated in the 1919 case of Zarate v.
Director of Lands,[11] to wit:

A well-known legal principle is that when an appellate court has once declared the
law in a case, such declaration continues to be the law of that case even on a
subsequent appeal. The rule made by an appellate court, while it may be reversed
in other cases, cannot be departed from in subsequent proceedings in the same
case. The "Law of the Case," as applied to a former decision of an appellate court,
merely expresses the practice of the courts in refusing to reopen what has been
decided. Such a rule is "necessary to enable an appellate court to perform its duties
satisfactorily and efficiently, which would be impossible if a question, once
considered and decided by it, were to be litigated anew in the same case upon any
and every subsequent appeal." Again, the rule is necessary as a matter of policy to
end litigation. "There would be no end to a suit if every obstinate litigant could, by
repeated appeals, compel a court to listen to criticisms on their opinions, or
speculate of chances from changes in its members." x x x.[12]

The law of the case doctrine applies in a situation where an appellate court has
made a ruling on a question on appeal and thereafter remands the case to the
lower court for further proceedings; the question settled by the appellate court
becomes the law of the case at the lower court and in any subsequent appeal.[13]

Contrary to respondents' assertion, the law of the case doctrine does not find
application in the case at bar simply because what was involved in G.R. No. 149534
was a criminal proceeding while what we have before us is an administrative case.
Although both cases possess a similar set of facts, allegations and arguments, they
do not serve the same objectives and do not require the same quantum of evidence
necessary for a finding of guilt or conviction/liability which makes them entirely
different cases altogether and, therefore, beyond the purview of the legal principle
of law of the case.

In administrative cases, substantial evidence is required to support any finding.

Substantial evidence is such relevant evidence as a reasonable mind may accept as
adequate to support a conclusion. The requirement is satisfied where there is
reasonable ground to believe that the petitioner is guilty of the act or omission
complained of, even if the evidence might not be overwhelming.[14] While in
criminal cases, the accused is entitled to an acquittal, unless his guilt is shown
beyond a reasonable doubt.[15] Proof beyond reasonable doubt does not mean
evidence that which produces absolute certainty; only moral certainty is required or
that degree of proof which produces conviction in an unprejudiced mind.[16]

Having disposed of that issue, we now proceed to discuss the reasons why the
instant petition must fail.

On a procedural note, the assailed ruling of the Ombudsman obviously possesses

the character of finality and, thus, not subject to appeal. The pertinent provision in
this case is the old Section 7, Rule III of Ombudsman Administrative Order No. 7,
Series of 1990 (Rules of Procedure of the Office of the Ombudsman), before it was
amended by Ombudsman Administrative Order No. 17, Series of 2003 (Amendment
of Rule III, Administrative Order No. 7), which states that:

Sec. 7. FINALITY OF DECISION. -- Where the respondent is absolved of the charge

and in case of conviction where the penalty imposed is public censure or reprimand,
suspension of not more than one month, or a fine equivalent to one month salary,
the decision shall be final and unappealable. In all other cases, the decision shall
become final after the expiration of ten (10) days from receipt thereof by the
respondent, unless a motion for reconsideration or petition for certiorari shall have
been filed by him as prescribed in Section 27 of RA 6770.

The basis for the said rule of procedure is Section 27 of Republic Act No. 6770 (The
Ombudsman Act), to wit:

Section 27. Effectivity and Finality of Decisions. -- (1) All provisionary orders of the
Office of the Ombudsman are immediately effective and executory.

xxxx

Findings of fact by the Office of the Ombudsman when supported by substantial

evidence are conclusive. Any order, directive or decision imposing the penalty of
public censure or reprimand, suspension of not more than one (1) month's salary
shall be final and unappealable.

As shown by the aforementioned regulation and statute, a decision of the

Ombudsman absolving the respondent of an administrative charge is final and
unappealable.

The Court categorically upheld this principle in Reyes, Jr. v. Belisario,[17] to wit:
Notably, exoneration is not mentioned in Section 27 as final and unappealable.
However, its inclusion is implicit for, as we held in Barata v. Abalos, if a sentence of
censure, reprimand and a one-month suspension is considered final and
unappealable, so should exoneration.

The clear import of Section 7, Rule III of the Ombudsman Rules is to deny the
complainant in an administrative complaint the right to appeal where the
Ombudsman has exonerated the respondent of the administrative charge, as in this
case. The complainant, therefore, is not entitle to any corrective recourse, whether
by motion for reconsideration in the Office of the Ombudsman, or by appeal to the
courts, to effect a reversal of the exoneration. Only the respondent is granted the
right to appeal but only in case he is found liable and the penalty imposed is higher
than public censure, reprimand, one-month suspension or a fine equivalent to one
month salary.

The absence of any statutory right to appeal the exoneration of the respondent in
an administrative case does not mean, however, that the complainant is left with
absolutely no remedy. Over and above our statutes is the Constitution whose
Section 1, Article VIII empowers the courts of justice 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. This is
an overriding authority that cuts across all branches and instrumentalities of the
government and is implemented through the petition for certiorarithat Rule 65 of
the Rules of Court provides. A petition for certiorari is appropriate when a tribunal,
clothed with judicial or quasi-judicial authority, acted without jurisdiction (i.e.,
without the appropriate legal power to resolve a case), or in excess of jurisdiction
(i.e., although clothed with the appropriate power to resolve a case, it oversteps its
authority as determined by law, or that it committed grave abuse of its discretion
by acting either outside the contemplation of the law or in a capricious, whimsical,
arbitrary or despotic manner equivalent to lack of jurisdiction). The Rules of Court
and its provisions and jurisprudence on writs of certiorari fully apply to the Office of
the Ombudsman as these Rules are suppletory to the Ombudsman's Rules. The
Rules of Court are also the applicable rules in procedural matters on recourses to
the courts and hence, are the rules the parties have to contend with in going to the
CA.[18]

In the case at bar, the petitioner did not file a petition for certiorari under Rule 65
of the Rules of Court and instead filed a petition for review under Rule 43 of the
Rules of Court with the Court of Appeals. The latter is effectively an appeal to the
Court of Appeals which is disallowed by the Rules of Procedure of the Office of the
Ombudsman as well as the Ombudsman Act in case the respondent is exonerated
by the Ombudsman for an administrative charge.

In any event, the instant petition failed to show any grave abuse of discretion or
any reversible error on the part of the Ombudsman in issuing its assailed
administrative decision, as affirmed by the Court of Appeals, which would compel
this Court to overturn it.

Elementary is the rule that the findings of fact of the Office of the Ombudsman are
conclusive when supported by substantial evidence and are accorded due respect
and weight, especially when they are affirmed by the Court of Appeals. It is only
when there is grave abuse of discretion by the Ombudsman that a review of factual
findings may aptly be made. In reviewing administrative decisions, it is beyond the
province of this Court to weigh the conflicting evidence, determine the credibility of
witnesses, or otherwise substitute its judgment for that of the administrative
agency with respect to the sufficiency of evidence. It is not the function of this
Court to analyze and weigh the parties' evidence all over again except when there
is serious ground to believe that a possible miscarriage of justice would thereby
result.[19]

The Court quotes with approval the findings and conclusion of the assailed
Ombudsman ruling which was also adopted by the Court of Appeals:

We believe that the questioned positions had been created under the
circumstances. Evidence shows that on October 6, 1998, respondent Mayor Loyola
requested the Sanggunian to create twenty-four (24) positions by including the
same in the 1998 plantilla. Such creation has been taken up by the Sanggunian in
its session and traces of favorable action thereon has been shown in the minutes of
the Sanggunian session held on November 19, 1998 when the 1999 Annual Budget
was taken up (pp. 3-4, Complainants Consolidated Reply). Though the four (4)
positions had not been created by a separate ordinance, its creation has been made
when the Sanggunian included them in the 1999 Plantilla of Positions under
Ordinance No. 006-98 enacting the 1999 Annual Budget.

The positions having been created, personnel were appointed thereto by the
respondent Mayor which appointments were confirmed by the Civil Service
Commission. Since the appointments were confirmed/approved by the CSC all
questions pertaining thereto including the validity of the creation of positions has
been rendered moot and academic. It is the CSC which is empowered to look into
the validity of creation of positions and appointments thereto. Also, such
confirmation further strengthened the presumption of regularity of official functions
particularly the creation of position.

There being a valid appointment confirmed by CSC and the concerned personnel
having rendered services, payment of their salaries is proper and legal. Thus,
respondent Flores, as Budget Officer; Olimpo as Treasurer; Barabat as Accountant;
Alumia as Administrator and Ernacio as the Agriculturist/Head of Office acted in
accordance with law when they processed and allowed the payment of salaries to
the four (4) employees. The payment of salaries to the employees who has
rendered service to the government does not constitute grave misconduct, neglect
of duty and dishonesty.

The appointments made by respondent Loyola including the selection and screening
of employees by the Selection Board could not be considered grave misconduct and
dishonesty by respondents who compose the Board. There were vacant positions
caused by the creation of positions and the exigencies of the service demand that
these vacancies should be filled up. There is misconduct if there is a transgressi[on]
of some established and definite rule of action (Phil. Law Dictionary, 3rd Edition,
Federico B. Moreno). In the instant case, evidence show that respondents did not
transgress some established and definite rule of action. Had there been a
transgression in the creation of positions and appointments thereto, the Civil
Service Commission should have so stated when the appointments were submitted
for approval/confirmation.

Since the appointed personnel has already rendered service, the processing and
payment of their salaries was but legal and proper and does not constitute
dishonesty, falsification and neglect of duty on the part of the respondents
responsible therefore. Had respondents refused to pay the salaries of the concerned
employees, they could have been held liable for neglect of duty.

In sum, respondents could not be held administratively liable since their official
actions starting from the creation of positions to selection of personnel,
appointment, and ultimately payment of salaries were all in accordance with the
law.[20]

To reiterate, the Court is not a trier of facts. As long as there is substantial

evidence in support of the Ombudsman's decision, that decision will not be
overturned.[21] We are also guided by the ruling in Cortes v. Bartolome,[22] which
similarly dealt with a purportedly invalid appointment to an allegedly inexistent
office, to wit:

It is undisputed that on January 1, 1976, there was no existing position of

"Sangguniang Bayan" Secretary in the organizational set-up of the municipal
Government of Piddig, Ilocos Norte. Neither was there any appropriation for the
said position in the municipal budget for 1975-1976 although an appropriation for
the position of Municipal Secretary was retained in said budget.

Respondent took his oath of office before Mayor Aquino on February 1, 1976.

In a special session held on February 23, 1976, the "Sangguniang Bayan" of Piddig
passed Resolution No. 1 creating the position of "Sangguniang Bayan" Secretary as
a "vital" position, and Resolution No. 2 revalidating the appointment of respondent
as such.

xxxx

While it may be that at the time of appointment, no position of "Sangguniang

Bayan" Secretary formally existed, whatever defect there may have been initially
was cured subsequently by the creation of said position and the revalidation of
respondent's appointment. That appointment was ultimately approved by the Civil
Service Commission on May 11, 1976 thus giving it the stamp of finality. x x
x[23] (Emphases supplied.)

In the case at bar, the 24 new positions were included in Ordinance No. 006-98
enacting the 1999 Annual Budget. Subsequently, the Sangguniang Bayan later
affirmed the creation of all questioned positions in separate resolutions and
continued to include the said positions in the appropriations in subsequent budget
ordinances. It is likewise undisputed that the questioned appointments were all
approved by the Civil Service Commission.

In view of the foregoing, petitioner's underlying premise for her administrative

complaint, i.e., the alleged non-creation of the subject positions, cannot be upheld
and thus, it is no longer necessary to pass upon the remaining corollary issues of
the instant petition.

WHEREFORE, premises considered, the petition is hereby DENIED. The assailed

Decision dated December 3, 2001 as well as the Resolution dated May 28, 2002 of
the Court of Appeals in CA-G.R. SP No. 61841 are AFFIRMED. The assailed Decision
dated May 23, 2000 of the Ombudsman in OMB-ADM-1-99-1035 is
likewise AFFIRMED.

SO ORDERED.

Corona, C.J., (Chairperson), Bersamin, Del Castillo, and Villarama, Jr., JJ., concur.
 Agustin v. Court of Appeals
G.R. No. 107846. April 18, 1997

Where the mortgagor plainly refuses to deliver the chattel subject of the mortgage
upon his failure to pay two or more installments, or if he conceals the chattel to
place it beyond the reach of the mortgagee, he may be held liable to pay expenses
as a result of the enforcement of the foreclosure.

Facts: Leovillo C. Agustin executed a promissory note in favor of ERM Commercial

for the amount ofP43,480.80 (ERM). The note was payable in monthly
installments and secured by a chattel mortgage over an Isuzu diesel truck, both of
which were subsequently assigned to private respondent Filinvest Finance
Corporation. When petitioner defaulted in paying the installments, private
respondent demanded from him the payment of the entire balance or,
in lieuthereof, the possession of the mortgaged vehicle. Neither payment nor
surrender was made.

Aggrieved, private respondent filed a complaint with the Regional Trial Court of
Manila, Branch 26 (RTC Branch 26) against petitioner praying for the issuance of
a writ of replevin o Trial ensued and, thereafter, a writ of replevin was issued by
RTC Branch 26. By virtue thereof, private respondent acquired possession of the
vehicle. Upon repossession, the latter discovered that the vehicle was no longer in
running condition and that several parts were missing which private respondent
replaced. The vehicle was then foreclosed and sold at public auction. Petitioner
contends that the award of repossession expenses to private respondent as
mortgagee is “contrary to the letter, intent and spirit of Article 1484 of the Civil
Code”. He asserts that private respondent’s repossession expenses have been
amply covered by the foreclosure of the chattel mortgage, hence he could no longer
be held liable.

Issue: Whether or not mortgagor is liable to pay expenses as a result of the

enforcement of the foreclosure.

Held: Where the mortgagor plainly refuses to deliver the chattel subject of the
mortgage upon his failure to pay two or more installments, or if he conceals the
chattel to place it beyond the reach of the mortgagee, he may be held liable to pay
expenses as a result of the enforcement of the foreclosure. It logically follows as a
matter of common sense, that the necessary expenses incurred in the prosecution
by the mortgagee of the action for replevin so that he can regain possession of the
chattel, should be borne by the mortgagor. Recoverable expenses would, in our
view, include expenses properly incurred in effecting seizure of the chattel and
reasonable attorney’s fees in prosecuting the action for replevin.

GENERAL MILLING CORP. - INDEPENDENT LABOR UNION (GMC-ILU) vs. GENERAL

MILLING CORPORATION
G.R. No. 183122, June 15, 2011

Facts:

On 28 April 1989, GMC and the Union entered into a collective bargaining
agreement (CBA) which provided, among other terms, the latter’s representation of
the collective bargaining unit for a three-year term made to retroact to 1 December
1988. On 29 November 1991 or one day before the expiration of the subject CBA,
the Union sent a draft CBA proposal to GMC, with a request for counter-proposals
from the latter. In view of GMC’s failure to comply with said request, the Union
commenced the complaint for unfair labor practice which was dismissed for lack of
merit. On appeal, said dismissal was reversed and set aside in the 30 January 1998
decision rendered by the NLRC, the dispositive portion of which states:

WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The

Decision dated December 21, 1993 is hereby VACATED and SET ASIDE and a new
one issued ordering the imposition upon the respondent company of the
complainant union[‘s] draft CBA proposal for the remaining two years duration of
the original CBA which is from December 1, 1991 to November 30, 1993…

SO ORDERED.

Since the abovementioned decision was reconsidered and set aside by the NLRC,
the Union filed the petitions for certiorari before the CA, which in turn reversed and
set aside the NLRC’s resolution and reinstated the aforesaid 30 January 1998
decision. Aggrieved by the CA’s resolution denying its motion for reconsideration,
GMC elevated the case to this Court via the petition for review on certiorari. In a
decision dated 11 February 2004 rendered by the Court’s then Second Division, the
CA’s 30 January 1998 decision and 26 October 2000 resolution were affirmed,12
upon the following findings and conclusions, to wit:

GMC’s failure to make a timely reply to the proposals presented by the union is
indicative of its utter lack of interest in bargaining with the union. Its excuse that it
felt the union no longer represented the worker, was mainly dilatory as it turned
out to be utterly baseless.

We hold that GMC’s refusal to make a counter proposal to the union’s proposal for
CBA negotiation is an indication of its bad faith. Where the employer did not even
bother to submit an answer to the bargaining proposals of the union, there is a
clear evasion of the duty to bargain collectively.
Failing to comply with the mandatory obligation to submit a reply to the union’s
proposals, GMC violated its duty to bargain collectively, making it liable for unfair
labor practice. Perforce, the Court of Appeals did not commit grave abuse of
discretion amounting to lack or excess of jurisdiction in finding that GMC is, under
the circumstances, guilty of unfair labor practice.

xxxx

x x x (I)t would be unfair to the union and its members if the terms and conditions
contained in the old CBA would continue to be imposed on GMC’s employees for the
remaining two (2) years of the CBA’s duration. We are not inclined to gratify GMC
with an extended term of the old CBA after it resorted to delaying tactics to prevent
negotiations. Since it was GMC which violated the duty to bargain collectively, it
had lost its statutory right to negotiate or renegotiate the terms and conditions of
the draft CBA proposed by the union.

xxxx

Under ordinary circumstances, it is not obligatory upon either side of a labor

controversy to precipitately accept or agree to the proposals of the other. But an
erring party should not be allowed with impunity to schemes feigning negotiations
by going through empty gestures. Thus, by imposing on GMC the provisions of the
draft CBA proposed by the union, in our view, the interests of equity and fair play
were properly served and both the parties regained equal footing, which was lost
when GMC thwarted the negotiations for new economic terms of the CBA.

With the ensuing finality of the foregoing decision, the Union filed a motion for
issuance of a writ of execution dated 21 March 2005, to enforce the claims of the
covered employees which it computed in the sum of P433,786,786.36 and to
require GMC to produce said employee’s time cards for the purpose of computing
their overtime pay, night shift differentials and labor standard benefits for work
rendered on rest days, legal holidays and special holidays. GMC filed a petition for
review on certiorari.

Issue:

Whether the imposed CBA has full force and effect considering that it was not
agreed upon by the Union and GMC.

Held:
Anent its period of effectivity, Article XIV of the imposed CBA provides that "(t)his
Agreement shall be in full force and effect for a period of five (5) years from 1
December 1991, provided that sixty (60) days prior to the lapse of the third year of
effectivity hereof, the parties shall open negotiations on economic aspect for the
fourth and fifth years effectivity of this Agreement." Considering that no new CBA
had been, in the meantime, agreed upon by GMC and the Union, we find that the
CA correctly ruled in CA-G.R. CEB-SP No. 02226 that, pursuant to Article 253 of the
Labor Code, the provisions of the imposed CBA continues to have full force and
effect until a new CBA has been entered into by the parties. Article 253 mandates
the parties to keep the status quo and to continue in full force and effect the terms
and conditions of the existing agreement during the 60-day period prior to the
expiration of the old CBA and/or until a new agreement is reached by the parties.
In the same manner that it does not provide for any exception nor qualification on
which economic provisions of the existing agreement are to retain its force and
effect, the law does not distinguish between a CBA duly agreed upon by the parties
and an imposed CBA like the one under consideration property.

Municipality of Daet v CA
GR. No.L-35861
 182 Phil. 81

GUERRERO, J.:
The judgment of the respondent Court of Appeals, subject of the instant petition to
review on certiorari, "fixing the fair market value of the property sought to be
expropriated at P200.00 per square meter or for a total of FIVE HUNDRED FORTY
THREE THOUSAND FOUR HUNDRED (P543,400.00) PESOS, and the value of the
improvement thereon at THIRTY SIX THOUSAND FIVE HUNDRED (P36,500.00)
PESOS, Philippine Currency, both amounts to bear legal interest from and after the
date of the actual taking of possession by the Municipality of Daet, Camarines Norte
until the full amount is paid, with costs against plaintiff-appellant," must be
affirmed in the light of the unusual, unique and abnormal circumstances obtaining
in this case where the complaint for condemnation was filed on August 9, 1962 or
seventeen (17) years ago but up to the present, the petitioner Municipality
of Daet has failed to make the deposit required to take possession of the property
sought to be expropriated.
The Municipality of Daet instituted condemnation proceedings against private
respondent Li Seng Giap & Co., Inc. on August 9, 1962 before the Court of First
Instance of Camarines Norte for the purpose of acquiring and subsequently
converting the following described property owned by private respondent as a
public park:
"A parcel of land (Lot No. 3 Plans PSU-57331 situated in the Poblacion, Municipality
of Daet, bounded on the North-East by a provincial road known as Vinzons Avenue;
on the South-East, by Felipe II Street; on the South, by IldefonsoMoreno Street,
and on the West, by J. Lukban Street, covering an area of TWO THOUSAND SEVEN
HUNDRED AND SEVENTEEN (2,717 sq. meters) SQUARE METERS, more or less and
assessed at P54,370.00 under Tax Declaration No. 11683 and covered by
TRANSFER CERTIFICATE OF TITLE NO. 207 in the name of Li SengGiap & Co."[1]

On August 20, 1962, private respondent, having been served with summons
through counsel, filed a "Motion to Dismiss" on the following grounds:
"1. The proposed expropriation has not been duly authorized as provided by law,
principally because it has not been approved by the Office of the President as
required by Section 2245 of the Revised Administrative Code;

2. There is no genuine necessity for the proposed expropriation of the defendant's

property;

3. The proposed park could be put up in a different site which would entail less
expense to the plaintiff;

4. The present expropriation proceeding instituted by the herein plaintiff against the
defendant is discriminatory;
5. The plaintiff does not have sufficient funds to push through its project of
constructing a park and to allow the plaintiff to expropriate defendant's property
this time would be only to needlessly deprive the latter of the use of its property."[2]

On February 8, 1963, the trial court rendered a decision dismissing the

expropriation proceedings mainly on the grounds that there is no "genuine need"
for the petitioner to convert the aforestated lot into a park nor necessity to widen
the streets and that even if there is genuine necessity for the proposed
expropriation, still the petitioner cannot, in this case, exercise the power of eminent
domain as it has no funds to pay the reasonable value of the land and the building
thereon.[3]
On February 12, 1963, petitioner filed a motion for reconsideration which was
denied on February 27, 1963. Petitioner then appealed to the Court of Appeals,
which appeal was docketed as CA-G.R. No. 32-259-R. On April 14, 1968, the Court
of Appeals rendered a decision reversing the trial court's decision,
the dispositive portion of which is as follows:
"WHEREFORE, the appealed 'decision' (order) in Civil Case No. 1436 for
expropriation is hereby reversed and set aside, and, in lieu thereof, another one is
hereby rendered denying defendant Li Seng Giap & Company's motion to dismiss;
declaring that plaintiff Municipality of Daet has a lawful right to take the property
sought to be condemned, for the public use described in the complaint, upon
payment of just compensation to be determined as of the date of the filing of the
complaint; directing the court a quoto promptly fix the provisional value of the
property sought to be condemned for the purpose of the motion of plaintiff
Municipality of Daet to take immediate possession of said property under Sec. 2 of
Rule 67 (formerly Sec. 3 of Rule 69) of the Rules of Court; and remanding the case
to the court a quo for further proceedings consistent with this decision, the costs in
this appeal to be taxed against plaintiff Municipality of Daet in accordance with Sec.
12 of Rule 67 (formerly Sec. 13 of Rule 69) of the Rules of Court; x x x"[4]

On March 20, 1969, after the records of the case were remanded to the trial court,
private respondent filed a "Motion for Appointment of Commissioners to Fix Just
Compensation for the Property Sought to be Taken."
On April 15, 1969, the trial court issued twin orders: (1) fixing the provisional
value of the land at P120.00 per square meter and the value of the improvement at
P30,000.00 totaling P356,040.00 and require the Municipality to deposit with the
Provincial Treasurer in cash or in security which should be payable on demand and
upon deposit being effected, the Clerk of Court was ordered to issue the necessary
writ to place the Municipality in possession of the property; and (2) appointing Atty.
Ernesto de Jesus, Provincial Assessor, as chairman; Atty. Jose V. Jamito, PNB
Branch Attorney and Dr. Mateo Aquino, a resident of the municipality, as members
of the committee on appraisal. The committee members proceeded to qualify by
taking their oaths of office and then held three sessions on May 10, May 17 and
May 24, 1969. On May 28, 1969, the committee filed the following report:
"COMMISSIONERS' REPORT
In compliance with the order of this Honorable Court dated April 15, 1969, and
pursuant to the provisions of Sec. 6, Rule 67 of the Rules of Court, the undersigned
commissioners, with due notice to the counsels of both parties, convened in the
morning of May 10, 1969, for the purpose of finding ways and means by which the
commissioners could ascertain the fair market value of the property subject of this
proceeding. There are two basic approaches used in the appraisal of land sought to
be condemned - the sale approach, and the income approach. The commissioners
as well as the counsels of both parties agreed to use the sale approach. In order to
enable the counsels of both parties, as well as the commissioners, to gather or
secure documents regarding transactions of real property which the commissioners
might use as guide in determining the fair market value, the parties agreed to
postpone the hearing to May 17, 1969, at 6:30 in the morning.

Hearing was resumed in the morning of May 17, forthwith, the counsel for the
plaintiff presented documents which were submitted as Exhibits, to wit:

1. Exh. "A" - Deed of absolute sale executed by Lydia Moreno in favor of Jaime
R. Alegre, entered as Doc. No. 160; Page No. 33; Book No. VI; Series of
1962. (The consideration was about P13.00 per square meter).

2. Exh. "B" - Deed of absolute sale executed by Jesus Villafranca y Aules in

favor of Southern Products Import and Export Corporation, entered as Doc. No.
314; Page No. 64; Book No. II; Series of 1962. (The consideration was around
P14.00 per square meter).

3. Exh. "C" - Deed of absolute sale executed by Julio Curva, et als. in favor
of Felicidad Vinzons Pajarillo, entered as Doc. No. 186; Page No. 39; Book No. 1;
Series of 1958. (The consideration was P15.00 per square meter).

4. Exh. "D" - Deed of Absolute Sale executed by Clao DyKim To in favor

of Concepcion Fonacier-Abaño, entered as Doc. No. 133; Page No. 88; Book No. V;
Series of 1948. (The consideration was about P8.57 per square meter).

5. Exh. "E" - Deed of sale with mortgage executed by Dr. Agustin F. Cuevas
and Leticia Lopez, in favor of the Camarines Norte Teachers Cooperative Credit
Union, Inc., entered as Doc. No. 117; Page No. 56; Book No. VIII; Series of
1961. (The consideration was P57,000.00 - the lot with an area of 972 square
meters, and a three-storey concrete building assessed at P16,000.00 under Tax
Dec. No. 7083. If we will exclude the value of the building, the consideration for the
land will be about P43.00 per square meter).

After the submission of the aforementioned exhibits, upon motion of the counsel for
the defendant, the hearing was postponed to May 24, 1969, at 8:30 in the
morning. Upon resumption of the hearing on said hour and date, the counsel for
the defendant presented Exh. 1, which is the deed of sale executed by the
Municipality of Daet in favor of the Development Bank of the Philippines; the
document was executed on January 30, 1969; Exh. "1-A", the consideration in the
amount of P205,600.00; Exh. "1-B", the area of 2,056 square meters; and Exh.
"2", the letter of Tomas Cootauco to Li Seng Giap & Co., dated July 21, 1962. In
addition to the aforementioned evidence, the counsel for the defendant presented
as witness Lo Chin who testified that sometime in July, 1962 (after the fire), he was
instructed by his son-in-law, Mr. Jesus Ty Poco, to see Mr. Jose Ong, the
representative of Mr. William Lee, for the purpose of making an offer to buy the
land subject of this proceeding for a price of P120.00 per square meter, and
P30,000.00 for the structure thereon; that he had talked with Mr. Jose Ong, for the
same purpose, on several occasions 5 or 6 times, the last was sometime in the first
week of May, this year wherein he offered to pay as high as P150.00 per square
meter, and P50,000.00 for the structure thereon; and that Mr. Ty Poco, having
been born in Mercedes, and resided here since birth, was desirous of buying said
property because he intends to build a memorial thereon. Counsel likewise
presented Mr. Jose Ong as witness to corroborate the testimony of Lo Chin.

After the hearing held by the commissioners, Atty. Ernesto de Jesus, who is the
incumbent provincial assessor, dig up the records in his office for the purpose of
finding, in addition to the exhibits already presented, other documents covering
transactions of properties located within the areas near the land sought to be
condemned, but failed to locate even a single document. Hence, the
commissioners have no other recourse but to base their appraisal of the value of
the land under consideration from the Exhibits submitted by the parties.

Under Sec. 4, Rule 67, of the Rules of Court, just compensation is to be determined
as of the date of the filing of the complaint. The above-entitled complaint was filed
in August, 1962; hence, Exh. "1", Exh. "1-B" and Exh. "1-C" could not be taken into
consideration, the same having been executed in the year 1969 - seven years after
the filing of the complaint. The offer of Mr. Jesus Ty Poco could not also be
considered because the same was made by one who was under an imperative
necessity of buying the property.

After all the exhibits submitted by the plaintiff had been examined by the
commissioners, and upon a conscientious and analytical study of the sales of land
near the land subject of this proceeding, and after serious deliberations on the
matter, the commissioners agreed that, in the year 1962, the reasonable or fair
market value of the land subject of this proceeding should be P60.00 per square
meter; and the structure remaining thereon at P15,000.00.

Attached hereto is the map of the commercial center of Daet wherein the land
subject of this case is shown. The lands described in the Exhibits submitted by the
plaintiff are also indicated thereon.

Daet, Camarines Norte, May 28, 1969.

Respectfully submitted,

(Sgd.) Ernesto de Jesus

Commissioner

(Sgd.) Jose V. Jamito

Commissioner
(Sgd.) Mateo D. Aquino

Commissioner"[5]

Private respondent, having received copy of the commissioners' report, filed a

"Motion to Admit Additional Evidence" which was opposed by petitioner but the
same was granted by the Court provided that the additional evidence consisted of
the expert testimony of a duly licensed broker. On August 20, 1969, the
municipality manifested its conformity to the commissioners' report.
Meanwhile, on July 23, 1969, Judge Gabriel V. Valero, the Presiding Judge at
Branch I, issued an order transferring this case to Judge Isidoro Vera of Branch II,
who proceeded to take the additional evidence of private respondent. Said
evidence consisted of the testimony of Engineer Aurelio B. Aquino, who appraised
the land involved herein at P200.00 per square meter and the improvement thereon
at P36,500.00 in 1969.
On December 2, 1969, after submission of evidence for both parties, the trial court
rendered a decision disregarding the valuation made by the commissioners and
using the appraisal of Engineer Aurelio B. Aquino in 1969 as the basis in
determining the value of the land in 1962. The dispositive portion of said decision
is quoted herein as follows:
"WHEREFORE, the Court renders judgment fixing the reasonable value of the
property sought to be expropriated at P117.00 per square meter or for a total
amount of Three Hundred Seventeen Thousand Eight Hundred Eighty Nine Pesos
(P317,889.00), and the value of the improvement at Thirty Six Thousand Five
Hundred Pesos (P36,500.00), this amount to bear interest at the legal rate from the
filing of the complaint until paid with costs against the plaintiff.

SO ORDERED."[6]

Both petitioner and private respondent filed their respective motions for
reconsideration, the former praying that the trial court give due course to the
commissioners' report while the latter insisting that the market value of the land be
fixed at P200.00 per square meter. Upon denial of the said motions, both parties
then appealed to the Court of Appeals.
On October 18, 1972, respondent Court of Appeals rendered a decision sustaining
the valuation of the property in 1969, declaring the municipality to have a lawful
right to expropriate and modified the judgment of the trial court with respect to the
interest that can be recovered which should be from and after the date of actual
taking.
Petitioner's motion for reconsideration having been denied, the instant petition for
review on certiorari was filed and the following assignment of errors raised:
I. Contrary to law and jurisprudence, the Court of Appeals erred in the
interpretation and application of Section 4, Rule 67 of the Rules of Court by
determining the value of the property in condemnation proceedings at the time of
the rendition of the judgment of the trial court and not at the date of the filing of
the complaint.

II. Contrary to the principle of res judicata, the Court of Appeals gravely
abused its power in modifying, disregarding and amending its own decision which
has long become final and executory (in CA-G.R. No. 32259-R).

III. Without regard to the guidelines set forth by procedural laws and
jurisprudence, the Court of Appeals erred in giving credence to an appraiser under
the employ of the private respondent and totally disregarded the findings of the
commissioners appointed by the Court and by not declaring that the trial judge of
Branch II of the Court of First Instance of Camarines Note has gravely abused his
discretion in taking cognizance of the condemnation case.

IV. In any event, by virtue of the Presidential Decree No. 42 issued

on November 9, 1972, private respondent is estopped from claiming a valuation
higher than the assessed value of the property sought to be condemned.[7]

The first assignment of error assails the respondent Court's application of Section 4,
Rule 67 of the Revised Rules of Court which states the time when the value of the
land should be determined in condemnation proceedings. The Rule provides thus:
"Sec. 4. Order of condemnation.? When such a motion is overruled or when any
party fails to defend as required by this rule, the court may enter an order of
condemnation declaring that the plaintiff has a lawful right to take the property
sought to be condemned, for the public use or purpose described in the complaint,
upon payment of just compensation to be determined as of the date of the filing of
the complaint. x x x"

A look into the origin of this provision reveals that it is a reproduction of Section 5,
Rule 69 of the Rules of Court of July 1, 1940. In turn, the said provision in the
Rules of 1940 appears to have been taken from the ruling in Manila Railroad
Company vs. Caligsihan,[8] a 1919 case, where the rule that "the value of the
property taken should be fixed as of the date of the proceedings" was enunciated.
Prior to the promulgation of the Rules of 1940, however, there is another case that
touched on the question of time when valuation of the property taken should be
fixed. This is the case of Provincial Government of Rizal vs. Caro de Araullo,[9] a
1938 case, where the value of the property therein involved was fixed as of the
date when it was taken in 1927 and not at the time of the filing of the complaint in
1928. This ruling was reiterated in Republic vs. Lara,[10] a 1954 case, where it was
held that the value of the lands expropriated must be reckoned as of the time of
the actual possession by the Government in 1946 and not as of the time of the
filing of the complaint in 1949. Such was the ruling notwithstanding the fact that
the Rules of 1940 was already in force and effect. In explaining the ruling, the
Court therein held:
"x x x Ordinarily, inquiry is limited to actual market values at the time of the
institution of the condemnation proceedings because under normal circumstances,
the filing of the complaint coincides or even precedes the taking of the property by
the plaintiff; and Rule 69 simply fixes this convenient date for the valuation of
property sought to be expropriated. Where, however, the actual taking or
occupation by the plaintiff, with the consent of the landowner long precedes the
filing of the complaint for expropriation the rule to be followed must still be that
enunciated by us in Provincial Government of Rizal vs. Caro, supra, that 'that value
of the property should be fixed as of the date when it was taken and not of the date
of the filing of the proceedings.' For where property is taken ahead of the filing of
the condemnation proceedings, the value thereof may be enhanced by the public
purpose for which it is taken, the entry of the plaintiff upon the property may have
depreciated its value thereby, or there may have been a natural increase in the
value of the property from the time it is taken to the time the complaint is filed,
due to general economic conditions. The owner of the private property should be
compensated only for what he actually loses, it is not intended that his
compensation shall extend beyond his loss or injury. And what he loses is only the
actual value of his property at the time it is taken. This is the only way the
compensation to be paid can be truly just, i.e., 'just' not only to the individual
whose property is taken, 'but to the public, which is to pay for it.' (18 Am. Jur. 873,
874)"

Subsequent cases where the taking preceded the filing of the expropriation
proceedings followed the doctrine in the Carocase. These cases were: Republic
vs. Garcellano, et al.;[11]Municipal Government of Sagay vs. Jison, et al.;[12] and
Alfonso vs. Pasay City.[13] However, in the case of Republic vs. Narciso, et
al.,[14] where the expropriation proceeding preceded the taking, it was held that the
value of "the property to be considered are those at the beginning of the
expropriation" and not accordingly at the time of the taking of said property. For
this reason, this Court fittingly saw the need to clarify the departure of some cases
from the mandate of Section 5, Rule 69 of the Rules of Court of 1940 (now Section
4, Rule 67 of the Revised Rules of Court) in the case of Republic of the Philippines
vs. Philippine National Bank,[15] where it was held:
"It is apparent from the foregoing that, when plaintiff takes possession before the
institution of the condemnation proceedings, the value should be fixed as of the
time of the taking of the said possession not the filing of the complaint, and
the latter should be the basis for the determination of the value, when the taking of
the property involved coincides with or is subsequent to, the commencement of the
proceedings. Indeed, otherwise, the provision of Rule 69, Section 5, directing that
compensation "be determined as of the date of the filing of the complaint," would
never be operative."

In Capitol Subdivision, Inc. vs. Province of Negros Occidental, 7 SCRA 60, the Court
said that "Since the right of the Province of Negros Occidental to expropriate the lot
in question in the present case is not contested, the owner of said lot is entitled to
recover from said province the fair and full value of the lot, as of the time when
possession thereof was actually taken by the province, plus consequential damages
- including attorney's fees - from which the consequential benefits, if any, should be
deducted with interest at the legal rate, on the aggregate sum due to the owner
from and after the date of actual taking." And in the case of J.M. Tuason & Co., Inc.
vs. Land Tenure Administration, 31 SCRA 413, the Court, speaking thru
nowChiep Justice Fernando, reiterated the "well-settled (rule) that just
compensation means the equivalent for the value of the property at the time of its
taking. Anything beyond that is more and anything short of that is less, than just
compensation. It means a fair and full equivalent for the loss sustained, which is
the measure of the indemnity, not whatever gain would accrue to the expropriating
entity."
In the case at bar, it is a fact that there has been no taking of the property prior to
the institution of the condemnation proceedings. And it cannot even be said that
the filing of the complaint coincided with the taking of the property by the plaintiff
because the latter did not enter into possession of the property since it failed or did
not comply with the order of the Court requiring the municipality to make the
necessary deposit of the provisional value as fixed by the Court in its Order of April
15, 1969. Petitioner did not even move for a reconsideration of said Order. The
trial proceeded and after hearing and submission of evidence for both parties, the
trial court rendered on December 2, 1969 its decision "fixing the reasonable value
of the property sought to be expropriated at P117.00 per square meter or for a
total amount of Three Hundred Seventeen Thousand Eight Hundred Eighty Nine
Pesos (P317,889.00), and the value of the improvement at Thirty Six Thousand
Five Hundred Pesos (P36,500.00), said amount x x x to bear interest at the legal
rate from the date of the filing of the complaint until paid."
Still questioning the value determined by the trial court, petitioner appealed to the
Court of Appeals and on October 8, 1972, the appellate court in its judgment fixed
the value of the property at P200.00 per square meter and P36,500.00 for the
improvement. Not yet satisfied, the municipality appealed to the Supreme Court
and meantime took no step to take possession of the land. While petitioner
submitted a Manifestation on September 15, 1977 to this Court invoking
Presidential Decree No. 42 dated November 9, 1972 and manifesting that it had
made a deposit to the Philippine National Bank in the amount of P54,370.00 as per
PNB Certificate No. 9381 dated February 9, 1973, We hold that petitioner has not
made the correct and proper deposit of the provisional value as fixed by the trial
court. It is elementary that Presidential Decree No. 42 of November 9, 1972 which
grants the right to take or enter upon the possession of the property sought to be
expropriated if he deposits with the Philippine National Bank an amount equivalent
to the assessed value of the property for purposes of taxation has no application to
the case at bar where the Court of Appeals had already fixed the value of the
property at P200.00 per square meter and P36,500.00 for the improvement in its
decision promulgated on October 18, 1972 about three weeks earlier than the
issuance of the Presidential Decree No. 42.
By not complying with the orders of the trial court and the appellate court,
petitioner would benefit by its non-compliance and dilly-dallying in taking posses-
sion of the property which We will not sanction or allow to the prejudice of the
private respondent landowner who should not be penalized by the protracted delay
of petitioner in taking over the property over a period of seventeen (17) years
during which time private respondent was deprived of the beneficial use of the land
and the improvement thereon. Petitioner upon filing the complaint has the duty to
make the deposit in the amount provisionally ascertained and fixed by the court
(Sec. 2, Rule 67, Rules of Court), which deposit serves the double purpose of pre-
payment of the property if the same is finally expropriated and of an indemnity for
damages if the proceedings are dismissed. (Visayan Refining Co. vs. Camus, 40
Phil. 550; Republic of the Philippines vs. Baylosis, L-13582, Sept. 30, 1960)
The records disclose that petitioner filed a Motion for Authority to Demolish Building
of Private Respondent dated June 27, 1974 for reasons therein alleged which
private respondent opposed as not being the proper procedure under the law to
abate a nuisance unless petitioner deposits the amount of P36,500.00 which is the
value of the improvement. The Court resolved to deny the motion without
prejudice to petitioner's taking the proper proceedings for the abatement of the
alleged nuisance pursuant to the provisions of the new Civil Code in its Resolution
of July 24, 1974.
The records further disclose that in the Petition to Cite the Mayor of the Municipality
of Daet (Herein Petitioner) in Contempt of Court filed by private respondent on
February 14, 1978, this Court was informed that the petitioner acting thru its
Mayor, Engineer Jose P. Timoner, started to demolish on February 6, 1978 the
building of the private respondent, attaching thereto photographs marked Annexes
1 and 2 showing the building before and during the demolition. Private respondent
prayed that the Mayor be cited for contempt or alternatively, that the petitioner be
ordered to deposit with the Philippine National Bank the amount of P36,500.00
instead of P28,830.00 to await the final outcome of this case.
Commenting on the petition to cite the Mayor in contempt of court, petitioner again
relies on Presidential Decree No. 42 alleging that the assessed value of the property
for taxation purposes is only P18,250.00 which is less than the amount of
P28,830.00 it had already deposited with the Philippine National Bank.
The above antecedent facts and circumstances of this case are unusual, unique and
abnormal such that by reason thereof, We agree with the judgment of the Court of
Appeals fixing the fair market value of the property sought to be expropriated at
P200.00 per sq. meter or for a total of FIVE HUNDRED FORTY THREE THOUSAND
FOUR HUNDRED (P543,400.00) PESOS, and the value of the improvement thereon
at THIRTY SIX THOUSAND FIVE HUNDRED (P36,500.00) PESOS, Philippine
Currency, both amounts to bear legal interest from and after the date of the actual
taking of possession by the Municipality of Daet, Camarines Norte until the full
amount is paid, with costs against plaintiff-appellant.
We hold that the decision of the Court of Appeals fixing the market value of the
property to be that obtaining, at least, as of the date of the rendition of the
judgment on December 2, 1969 as prayed by private respondent, which the Court
fixed at P200.00 per square meter is in conformity with doctrinal rulings herein-
above cited that the value should be fixed as of the time of the taking of the
possession of the property because firstly, at the time judgment was rendered on
December 2, 1969, petitioner had not actually taken possession of the property
sought to be expropriated and secondly, We find the valuation determined by the
Court of Appeals to be just, fair and reasonable.
On the second assignment of error, petitioner faults the respondent court in
modifying, disregarding and amending its own decision in CA-G.R. No. 32259-R
which directed payment of just compensation to be determined as of the date of
the filing of the complaint. Petitioner claims that this decision has long become
final and executory and it would be contrary to the doctrine of res judicata to
modify, disregard and amend said decision.
In order that there may be res judicata, the following requisites must be
present: (a) the former judgment must be final; (b) it must have been rendered by
a court having jurisdiction of the subject-matter and of the parties; (c) it must be a
judgment on the merits; and (d) there must be, between the first and second
actions, identity of parties, of subject matter, and of cause of action.[16]
When, between the first case where the judgment was rendered, and the second
case where such judgment is invoked, the three identities mentioned in paragraph
(a), above, are present, the judgment on the merits rendered in the first case
constitutes an absolute bar to the subsequent action. It is final as to the claim or
demand in the controversy, including the parties and those in privity with them, not
only as to every matter which was offered and received to sustain or defeat the
claim or demand, but as to any other admissible matter which might have been
offered for that purpose and of all matters that could have been adjudged in that
case.[17]
This is, however, not the situation in the case at bar. The only question drawn in
issue before the Court of Appeals in CA-G.R. No. 32259-R was whether petitioner
had the authority to exercise the right of eminent domain. The question regarding
the amount of just compensation was expressly reserved by the Court of Appeals
for the trial court to determine. Perforce, between the first case wherein the
judgment is rendered, and the second case wherein such judgment is invoked,
there is identity of parties but there is no identity of causes of action. In such a
situation, the judgment is conclusive in the second case only to those matters
actually and directly controverted and determined, and not as to matters merely
involved therein. To constitute resjudicata, the right to relief in one suit must rest
upon the same question which in essence and substance was litigated and
determined in the first suit.[18]
That phrase in the dispositive portion of the decision of the Court of Appeals in CA-
G.R. No. 32259-R referring to the time that should be considered in reckoning the
just compensation, to wit - "declaring that plaintiff Municipality of Daet has the
lawful right to stake the property sought to be condemned, for the public use
described in the complaint, upon payment of just compensation to be determined
as of the date of the filing of the complaint" - cannot likewise constitute the Iaw of
the case, which is a doctrine closely akin to res judicata. The law of the case, as
applied to a former decision of an appellate court, merely expresses the practice of
the courts in refusing to reopen what has been decided.[19] It differs
from res judicata in that the conclusiveness of the first judgment is not dependent
upon its finality. The first judgment is generally, if not universally, not final.[20] It
relates entirely to questions of law, and is confined in its operation to subsequent
proceedings in the same case.[21]While it is conclusive as to all matters within its
scope, it cannot be invoked, except as to questions as have been actually
considered and determined in the first appeal. In the application of this rule, courts
will take cognizance of such points only as affirmatively appears in the last to have
been decided in the former appeal.[22]
Moreover, this case is before the Supreme Court and being the Court of last resort,
it is the final arbiter of all legal questions properly brought before it and its decision
in any given case constitutes the law of this particular case. Once Our judgment
becomes final, it is binding on all inferior courts, and hence beyond their power and
authority to alter or modify. (Kabigtingvs. Acting Director of Prisons, 6 SCRA 281,
286). Petitioner's second assignment of error is, therefore, without merit.
The first part of the third assignment of error hinges on what is the proper
procedure in determining the just compensation in expropriation proceedings.
Section 5, Rule 67 of the Revised Rules of Court calls for the appointment of not
more than three (3) competent and disinterested persons as commissioners to
ascertain and report to the court the just compensation for the property sought to
be taken. As to the extent of this function and power of the commissioners, this
Court held in Manila Railroad Company vs. Velasquez[23] that the commissioners'
power is limited to assessing the value and determining the amount of
damages. There it stops; they can go no farther. The value and damages awarded
must be a just compensation and no more and no less. But in fixing these amounts,
the commissioners are not to act adlibitum. They are to discharge the trust
reposed in them according to well-established rules and form their judgment upon
correct legal principles. To deny this is to place them where no one else in this
country is placed, above the law and beyond accountability.
Corollary to this limitation, it has been held that reports submitted by
commissioners of appraisals in condemnation proceedings are not binding, but
merely advisory in character, as far as the court is concerned.[24] An early case
enunciated the rule that a Court of First Instance has the undoubted right to reject
the report of the commissioners as to the value of the land, if the report is not
founded upon legal evidence. The judge has the undoubted right also to discharge
the commission and appoint a new one. He also has the right to formulate an
opinion of his own as to the value of the land in question, nevertheless, if he
formulates such an opinion, he must base it upon competent evidence.[25] When the
commissioners' report is not in accordance with the law on the matter, another case
ruled that it cannot serve as the basis of the judicial decision but must be annulled
and set aside, and the case remanded to the court below for reopening of
trial.[26] Then, in still other cases, it was held that a Court of First Instance or on
appeal, the Supreme Court may substitute its own estimate of value as gathered
from the record submitted to it, in cases where the only error of the commissioners
is that they have applied illegal principles to the evidence submitted to them; or
that they have disregarded a clear preponderance of evidence; or that they have
used an improper rule of assessment in arriving at the amount of the award;
provided always that the evidence be clear and convincing and the amount allowed
by the commissioners is grossly inadequate or excessive.[27]
That the commissioners' report is not final and conclusive, but merely
recommendatory is bolstered by the requirement in Section 8, Rule 67 of the
Revised Rules of Court of conducting a hearing thereon. Otherwise stated, said
provision requires that upon the expiration of the period of ten (10) days within
which all interested parties may file their objects to the report, or even before the
expiration of such period if all interested parties have filed their objections to the
report or their statement of agreement therewith, the court must conduct a hearing
on the report.
In view of these basic provisions of the Rules of Court on eminent domain and
various jurisprudence on the function of the commissioners as limited by the Court,
We hold that the respondent Court of Appeals did not err in giving credence to the
appraiser employed by private respondent and in disregarding the commissioners'
report.
Respondent court found that aside from being a civil engineer, Aurelio B. Aquino is
a licensed real estate broker and appraiser of long standing, being one of the
incorporators of C.M. Hoskins and Co., Inc., a corporation engaged in real estate
brokerage since October, 1938 and of which firm he is presently the Chairman of
the board of directors. With these qualifications, respondent court committed no
error in concluding that he was competent to make the appraisal of the fair market
value of the parcel of land under consideration. Although he does not maintain an
office in Daet nor does he appear to have had any transactions in said locality, he is
competent since a commercial parcel of land retains the same characteristics
whether it is located in Manila or Daet, and the criterion for making an appraisal of
a parcel of land is universally applied, irrespective of the locality where it is
situated. And since the value of a parcel of land taken by eminent domain is
always a matter of opinion, the same may be proved by opinion evidence of the
real estate appraiser.[28] Hence, We find substantial basis for the court to fix the
value of the land at P200.00 per square meter and the building at P36,500.00 as
testified to by the broker.
Petitioner assails the transfer of the case from Branch I of the Court of First
Instance of Camarines Norte to Branch II thereof, claiming that the jurisdiction of
the respective branches are delineated by a controlling department circular and
thereby concluding that Branch II has no legal and valid authority to take over said
expropriation case.
We do not agree. Where a court of first instance is divided into several branches,
each of the branches is not a court distinct and separate from the
others. Jurisdiction is vested in the court, not in the judges, so that when a
complaint or information is filed before one branch or judge, jurisdiction does not
attach to said branch or judge alone, to the exclusion of the others. Trial may be
had or proceedings may continue by and before another branch or judge. It is for
this reason that Section 57 of the Judiciary Act, expressly grants the Minister of
Justice, upon recommendation of the district Judge, the administrative right or
power to apportion the cases among the different branches, both for the
convenience of the parties and the coordination of the work by the different
branches, and the judges presiding each branch. The apportionment does not
involve a grant or limitation or jurisdiction; this continues to be vested in the court
of first instance of the province as a whole, and trial may be had by any judge or
branch of the court.[29]
We do agree, however, that the apportionment of cases must be respected by the
judges in the interest of order and coordination in the dispatch of cases. But the
question of whether Branch II took cognizance of a case properly belonging to
another branch is negated by the fact, pointed out by respondents, that
Administrative Order No. 472 of the Secretary of Justice dividing the Province
of Camarines Norte between Branch I and Branch II took effect on January 1, 1971
long after Branch II had disposed of the case at bar because said case was decided
on December 2, 1969.
The fourth assignment of error is clearly untenable. Presidential Decree No. 42
issued on November 9, 1972 does not limit the just compensation in expropriation
proceedings to the assessed value of the value sought to be condemned. By its
title alone, i.e., "Authorizing the Plaintiff in Eminent Domain Proceedings to Take
Possession of the Property Involved Upon Depositing the Assessed Value for
Purposes of Taxation," it can already be gleaned that said decree fixes only the
provisional value of the property. As a provisional value, "it does not necessarily
represent the true and correct value of the land. The value is only 'provisional' or
'tentative' to serve as the basis for the immediate occupancy of the property being
expropriated by the condemnor."[30]
This decree repealed Section 2, Rule 67 of the Revised Rules of Court which
imposed upon the court having jurisdiction of the proceeding with the duty of
ascertaining and fixing the provisional value of the property. As stated in the said
decree itself, the repeal was necessary inasmuch as the "existing procedure for the
exercise of the right of eminent domain is not expeditious enough to enable the
plaintiff to take possession of the real property involved as soon as possible, when
needed for public purposes."
Even in Presidential Decree No. 76, "Requiring All Persons, Natural or Juridical,
Owning or Administering Real Property, Including the Improvements Thereon, to
File Sworn Statement of the True Value of Such Property," issued on December 6,
1972, it is clearly stated that the just compensation is based on the current and fair
market value and not on the assessed value. The pertinent provisions state as
follows:
"For purposes of just compensation in cases of private property acquired by the
government for public use, the basis shall be the current and fair market value as
declared by the owner or administrator or such market value as determined by the
assessor, whichever is lower.

"Under this Decree, the assessed valuation which shall be the basis for payment of
real property tax beginning the calendar year 1974 shall be fifty per centum of the
current fair market value, as determined by the assessor, in case of commercial,
industrial or mineral lands; forty per centum in the case of agricultural lands and
thirty per centum in the case of lands for purely residential purposes."

Clearly, therefore, the assessed value of a property constitutes only a percentage of

its current fair market value. It cannot, thus, be the direct basis of just
compensation in expropriation proceedings.
But more importantly, this assignment of error is bereft of merit because
Presidential Decree No. 42 is inapplicable in the case at bar. As pointed out by
private respondent, it is a cardinal rule of statutory construction that laws shall
have only prospective effect. The provisional value of the property in this case
having already been fixed, the deposit on February 9, 1973 of the amount of
P54,370.00 representing the assessed value of the land and the deposit on October
21, 1977 of the amount of P25,830.00 representing the assessed value of the
improvement, both pursuant to the said decree, are not sufficient. Nevertheless,
said amounts should be deducted from the total amount due to private respondent.
To elucidate and clarify the judgment of this Court in affirming the decision
appealed from, We consider and hold that the demolition of the building of private
respondent standing on the land by the Municipal Mayor, Engr. Jose P. Timoner on
February 14, 1978 constituted the actual taking of possession of the property
sought to be expropriated by the Municipality of Daet. And from said date,
February 14, 1978, interest at the legal rate shall be paid by the municipality until
the full amount is paid.
IN VIEW OF ALL THE FOREGOING, the judgment under review is hereby
AFFIRMED in toto.
SO ORDERED.

Makasiar, Fernandez, De Castro, and Melencio-Herrera, JJ., concur.

Teehankee, Acting Chief Justice, (Chairman), no part.
 Republic of the Phlippines

Supreme Court

Manila

SECOND DIVISION

G.R. NO. 169214, June 19, 2013

SPOUSES MANUEL SY AND VICTORIA SY, Petitioners, v. GENALYN D.

YOUNG, Respondent.

DECISION

BRION, J.:

We resolve the petition for review on certiorari1 filed by petitioner-spouses Manuel

Sy and Victoria Sy to challenge the March 30, 2005 Decision2 and the August 8,
2005 Resolution3 of the Court of Appeals (CA)in CA-G.R. CV No. 74045.cralaw
lawlibrary

The Factual Antecedents

The petition originated from a Complaint for Nullification of Second Supplemental

Extrajudicial Settlement, Mortgage, Foreclosure Sale and Tax Declaration4 filed by
respondent Genalyn D. Young with the Regional Trial Court of San Pablo City,
Branch 32 (RTC). The complaint was docketed as Civil Case No. SP-5703.

Genalyn alleged that she is the legitimate daughter of spouses George Young and
Lilia Dy.5 When George died, he left an unregistered parcel of
land (property) covered by Tax Declaration No. 91-489296 in San Roque, San Pablo
City, Laguna. On September 3, 1993, Lilia executed a Second Supplemental to the
Deed of Extrajudicial Partition.7 The property was adjudicated solely in Lilia’s favor
in the partition. Lilia represented Genalyn, who was then a minor, in the execution
of the document.

Subsequently, Lilia obtained a loan from the spouses Sy with the property as
security.8 When Lilia defaulted on her loan, the property was foreclosed and sold to
the spouses Sy. Thereafter, the spouses Sy registered the certificate of sale9 with
the Office of the Register of Deeds and obtained a tax declaration10 in their name.

In her complaint, Genalyn argued that the partition was unenforceable since she
was only a minor at the time of its execution. She also pointed out that the
partition was contrary to the Rules of Court because it was without the courts
approval. She further asserted that the spouses Sy entered into the contract of
mortgage with the knowledge that Lilia was unauthorized to mortgage the property.
On July 20, 2000, Genalyn filed with the RTC a Motion to Admit a Supplemental
Complaint with the attached Supplemental Complaint. In the supplemental
complaint, she invoked her right to exercise legal redemption as a co-owner of the
disputed property. However, the RTC denied the motion in its Order11dated
December 28, 2000. Subsequently, she filed a petition
for certiorari and mandamus under Rule 65 of the Rules of Court docketed as CA-
G.R. Sp. No. 65629 with the CA.

The CA denied the petition in its decision dated November 18, 2002. It held that
Genalyn’s cause of action in the supplemental complaint is entirely different from
her original complaint. Thereafter, she elevated the case with this Court in a
petition for certiorari under Rule 65 of the Rules of Court docketed as G.R. NO.
157955.12chanroblesvirtuallawlibrary

Trial in the RTC continued while CA-G.R. Sp. No. 65629 was pending in the CA.
Consequently, Genalyn moved to suspend the proceedings until the CA has decided
on the propriety of the admission of the supplemental complaint. However, the RTC
denied the motion.13 At the pre-trial conference, Genalyn moved again for the
suspension of the proceedings but to no avail. On a trial dated August 29, 2001,
Genalyn filed a Motion to Cancel Hearing on the ground that she was indisposed. As
a result, the RTC issued an Order dated August 30, 2001 which dismissed the
complaint on the ground of non-suit. The RTC denied Genalyn’s motion for
reconsideration in an Order dated January 4, 2002. On January 16, 2002, the RTC
issued an Order correcting the January 4, 2002 Order due to a typographical
error.14chanroblesvirtuallawlibrary

On January 31, 2002, Genalyn filed an appeal docketed as CA-G.R. SP No.

74045. In the appeal, she questioned the RTC Orders dated August 30, 2001,
January 4, 2002, and January 16, 2002. On May 28, 2002, Genalyn again filed with
the CA a petition for certiorari under Rule 65 of the Rules of Court to annul the
same RTC Orders that comprise the subject matter of the ordinary appeal.
However, the CA denied the said petition. Tirelessly, Genalyn filed a petition for
review under Rule 45 of the Rules of Court before this Court, docketed as G.R. NO.
157745 which was consolidated with G.R. NO. 157955.15chanroblesvirtuallawlibrary

With respect to CA-G.R. CV No. 74045, the CA reversed the RTC’s ruling and
remanded the case for further proceedings.16 The CA also denied17 the spouses Sy’s
motion for reconsideration, prompting them to file the present petition.

On September 26, 2006, this Court promulgated a decision on the consolidated

cases entitled "Young v. Spouses Sy." We granted the petition in G.R. NO. 157955
but denied the petition in G.R. NO. 157745 for lack of
merit.18chanroblesvirtuallawlibrary

In G.R. NO. 157955, we ruled that Genalyn's right to redeem the property is
dependent on the nullification of the partition which is the subject of the original
complaint. We held that the right of legal redemption as a co-owner is conferred by
law and is merely a natural consequence of co-ownership. In effect, Genalyn's
cause of action for legal redemption in her supplemental complaint stems directly
from her rights as a co-owner of the property subject of the complaint. We thus
ordered the RTC to admit the supplemental complaint.19chanroblesvirtuallawlibrary

In G.R. NO. 157745, we held that Genalyn had engaged in forum shopping in
appealing the RTC Orders and in subsequently filing a petition for certiorari under
Rule 65 with the CA involving the same RTC Orders. We found that the elements of
litis pendentia are present in the two suits because they are founded on exactly the
same facts and refer to the same subject matter. We thus pronounced that the
dismissal of the petition for certiorari was proper.20chanroblesvirtuallawlibrary

We entered the entry of judgment in Young on March 19, 2007.cralaw lawlibrary

The Issues

In the present case, the spouses Sy pray that the CA’s Decision dated March 30,
2005 and Resolution dated August 8, 2005 be reversed and that the RTC’s Orders
dated August 30, 2001, January 4, 2002 and January 16, 2002 be reinstated. The
spouses Sy raise the same issues which were already disposed by this Court
in Young, namely:chanroblesvirtualawlibrary

(1) whether or not the CA erred in setting aside the RTC Orders dated August 30,
2001, January 4, 2002 and January 16, 2002 which dismissed the case for non-
suit; and

(2) whether or not the CA erred in not holding Genalyn guilty of forum shopping in
the CA’s Decision dated March 30, 2005 and Resolution dated August 8, 2005.

The Court’s Ruling

We deny the petition.

The present action is barred by the

law of the case

In denying the petition, we necessarily must reiterate our ruling in Young which
constitutes as the controlling doctrine or the law of the case in the present case.

Law of the case has been defined as the opinion delivered on a former appeal. It
means that whatever is once irrevocably established the controlling legal rule of
decision between the same parties in the same case continues to be the law of the
case whether correct on general principles or not, so long as the facts on which
such decision was predicated continue to be the facts of the case before the
court.21chanroblesvirtuallawlibrary

We point out in this respect that the law of the case does not have the finality
of res judicata. Law of the case applies only to the same case, whereas res judicata
forecloses parties or privies one case by what has been done in another case. In
law of the case, the rule made by an appellate court cannot be departed from in
subsequent proceedings in the same case. Furthermore, law of the case relates
entirely to questions of law while res judicata is applicable to the conclusive
determination of issues of fact. Although res judicata may include questions of law,
it is generally concerned with the effect of adjudication in a wholly independent
proceeding.22chanroblesvirtuallawlibrary

The rationale behind this rule is to enable an appellate court to perform its duties
satisfactorily and efficiently, which would be impossible if a question, once
considered and decided by it, were to be litigated anew in the same case upon any
and every subsequent appeal. Without it, there would be endless litigation. Litigants
would be free to speculate on changes in the personnel of a court, or on the chance
of our rewriting propositions once gravely ruled on solemn argument and handed
down as the law of a given case.23chanroblesvirtuallawlibrary

In Young, we directed the RTC to admit Genalyn’s supplemental complaint. In so

ruling, we also vacated the RTC Orders which dismissed Genalyn’s complaint for
failure to prosecute. Moreover, Genalyn’s move to suspend the proceedings which
led to the dismissal of her complaint stemmed essentially from the RTC’s erroneous
refusal to admit the supplemental complaint. On the second issue, we
unequivocably also settled that Genalyn committed forum shopping when she filed
an appeal and a petition for certiorari successively. This ruling we uphold as the
ruling that should apply.

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit. The
CA Decision dated March 30, 2005 and Resolution dated August 8, 2005 are
hereby AFFIRMED.

No costs.

SO ORDERED.

Carpio, (Chairperson), Del Castillo, Perez, and Perlas-Bernabe, JJ. concur.

 Rodriguez v. COMELEC

GR. No.120099

Facts:

In 1992, petitioner Rodriguez and respondent Marquez ran for Governor of Quezon
Province. Rodriguez won. Marquez challenged Rodriguez’ victory via a Quo
Warranto on the ground that there is a charge pending against him at the Los
Angeles Municipal Court for fraudulent insurance claims, grand theft, etc. Thus, he
is a fugitive from justice.

COMELEC dismissed the case. Upon certiorari to the Supreme Court, it was held
that: Fugitive from justice includes not only those who flee after conviction to
avoid punishment, but also those who after being charged, flee to
avoid prosecution. The case was remanded to the COMELEC to determine WON
Rodriguez is a fugitive from justice.

In 1995, Rodriguez and Marquez again ran for Governor. Marquez filed a Petition
for Disqualification against Rodriquez on the same ground that he is a fugitive from
justice. COMELEC then consolidated both cases and found Rodriguez guilty based
on the authenticated copy of the warrant of arrest at LA Court and of the felony
complaint.

Rodriguez won again, and despite a Motion to suspend his proclamation, the
Provincial Board of Canvassers proclaimed him.

Upon motion of Marquez, the COMELEC nullified the proclamation. Rodriguez filed a
petition for certiorari.

Issue:

Is Rodriguez a fugitive from justice as defined by the Court in the MARQUEZ

Decision?
Held:

No. A fugitive from justice is defined as “not only those who flee after conviction to
avoid punishment but likewise who, after being charged, flee to avoid
prosecution.” This indicates that the intent to evade is the compelling factor that
makes a person leave a particular jurisdiction, and there can only be intent to
evade prosecution or punishment when the fleeing person knows of an already
instituted indictment, or of a promulgated judgment of conviction. Intent to evade
on the part of a candidate must therefore be established by proof that there has
already been a conviction or at least, a charge has already been filed, at the time of
flight. This cannot be applied in the case of Rodriguez. Rodriguez arrived in the
Philippines on June 25, 1985, five months before the filing of the felony complaint
in the Los Angeles Court on November 12, 1985 and of the issuance of the arrest
warrant by that same foreign court. It was clearly impossible for Rodriguez to have
known about such felony complaint and arrest warrant at the time he left the US,
as there was in fact no complaint and arrest warrant — much less conviction — to
speak of yet at such time.

Not being a "fugitive from justice" under this definition, Rodriguez cannot be denied
the Quezon Province gubernatorial post. (G.R. No. 120099. July 24, 1996)

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 176951 November 18, 2008

LEAGUE OF CITIES OF THE PHILIPPINES (LCP) represented by LCP National
President JERRY P. TREÑAS, CITY OF ILOILO represented by MAYOR JERRY P.
TREÑAS, CITY OF CALBAYOG represented by MAYOR MEL SENEN S. SARMIENTO,
and JERRY P. TREÑAS in his personal capacity as taxpayer, petitioners,
vs.
COMMISSION ON ELECTIONS; MUNICIPALITY OF BAYBAY, PROVINCE OF LEYTE;
MUNICIPALITY OF BOGO, PROVINCE OF CEBU; MUNICIPALITY OF CATBALOGAN,
PROVINCE OF WESTERN SAMAR; MUNICIPALITY OF TANDAG, PROVINCE OF
SURIGAO DEL SUR; MUNICIPALITY OF BORONGAN, PROVINCE OF EASTERN
SAMAR; and MUNICIPALITY OF TAYABAS, PROVINCE OF QUEZON, respondents.
CITY OF TARLAC, CITY OF SANTIAGO, CITY OF IRIGA, CITY OF LIGAO, CITY OF
LEGAZPI, CITY OF TAGAYTAY, CITY OF SURIGAO, CITY OF BAYAWAN, CITY OF
SILAY, CITY OF GENERAL SANTOS, CITY OF ZAMBOANGA, CITY OF GINGOOG, CITY
OF CAUAYAN, CITY OF PAGADIAN, CITY OF SAN CARLOS, CITY OF SAN FERNANDO,
CITY OF TACURONG, CITY OF TANGUB, CITY OF OROQUIETA, CITY OF URDANETA,
CITY OF VICTORIAS, CITY OF CALAPAN, CITY OF HIMAMAYLAN, CITY OF
BATANGAS, CITY OF BAIS, CITY OF CADIZ, and CITY OF TAGUM,petitioners-in-
intervention.

x-----------------------------x

G.R. No. 177499 November 18, 2008

LEAGUE OF CITIES OF THE PHILIPPINES (LCP) represented by LCP National

President JERRY P. TREÑAS, CITY OF ILOILO represented by MAYOR JERRY P.
TREÑAS, CITY OF CALBAYOG represented by MAYOR MEL SENEN S. SARMIENTO,
and JERRY P. TREÑAS in his personal capacity as taxpayer, petitioners,
vs.
COMMISSION ON ELECTIONS; MUNICIPALITY OF LAMITAN, PROVINCE OF
BASILAN; MUNICIPALITY OF TABUK, PROVINCE OF KALINGA; MUNICIPALITY OF
BAYUGAN, PROVINCE OF AGUSAN DEL SUR; MUNICIPALITY OF BATAC, PROVINCE
OF ILOCOS NORTE; MUNICIPALITY OF MATI, PROVINCE OF DAVAO ORIENTAL; and
MUNICIPALITY OF GUIHULNGAN, PROVINCE OF NEGROS ORIENTAL, respondents.
CITY OF TARLAC, CITY OF SANTIAGO, CITY OF IRIGA, CITY OF LIGAO, CITY OF
LEGAZPI, CITY OF TAGAYTAY, CITY OF SURIGAO, CITY OF BAYAWAN, CITY OF
SILAY, CITY OF GENERAL SANTOS, CITY OF ZAMBOANGA, CITY OF GINGOOG, CITY
OF CAUAYAN, CITY OF PAGADIAN, CITY OF SAN CARLOS, CITY OF SAN FERNANDO,
CITY OF TACURONG, CITY OF TANGUB, CITY OF OROQUIETA, CITY OF URDANETA,
CITY OF VICTORIAS, CITY OF CALAPAN, CITY OF HIMAMAYLAN, CITY OF
BATANGAS, CITY OF BAIS, CITY OF CADIZ, and CITY OF TAGUM,petitioners-in-
intervention.

x - - - - - - - - - - - - - - - - - - - - - - - - - - --x

G.R. No. 178056 November 18, 2008

LEAGUE OF CITIES OF THE PHILIPPINES (LCP) represented by LCP National

President JERRY P. TREÑAS, CITY OF ILOILO represented by MAYOR JERRY P.
TREÑAS, CITY OF CALBAYOG represented by MAYOR MEL SENEN S. SARMIENTO,
and JERRY P. TREÑAS in his personal capacity as taxpayer, petitioners
vs.
COMMISSION ON ELECTIONS; MUNICIPALITY OF CABADBARAN, PROVINCE OF
AGUSAN DEL NORTE; MUNICIPALITY OF CARCAR, PROVINCE OF CEBU; and
MUNICIPALITY OF EL SALVADOR, MISAMIS ORIENTAL,respondents.
CITY OF TARLAC, CITY OF SANTIAGO, CITY OF IRIGA, CITY OF LIGAO, CITY OF
LEGAZPI, CITY OF TAGAYTAY, CITY OF SURIGAO, CITY OF BAYAWAN, CITY OF
SILAY, CITY OF GENERAL SANTOS, CITY OF ZAMBOANGA, CITY OF GINGOOG, CITY
OF CAUAYAN, CITY OF PAGADIAN, CITY OF SAN CARLOS, CITY OF SAN FERNANDO,
CITY OF TACURONG, CITY OF TANGUB, CITY OF OROQUIETA, CITY OF URDANETA,
CITY OF VICTORIAS, CITY OF CALAPAN, CITY OF HIMAMAYLAN, CITY OF
BATANGAS, CITY OF BAIS, CITY OF CADIZ, and CITY OF TAGUM,petitioners-in-
intervention.

DECISION

CARPIO, J.:

The Case

These are consolidated petitions for prohibition1 with prayer for the issuance of a
writ of preliminary injunction or temporary restraining order filed by the League of
Cities of the Philippines, City of Iloilo, City of Calbayog, and Jerry P.
Treñas2 assailing the constitutionality of the subject Cityhood Laws and enjoining
the Commission on Elections (COMELEC) and respondent municipalities from
conducting plebiscites pursuant to the Cityhood Laws.

The Facts

During the 11th Congress,3 Congress enacted into law 33 bills converting 33
municipalities into cities. However, Congress did not act on bills converting 24 other
municipalities into cities.

During the 12th Congress,4 Congress enacted into law Republic Act No. 9009 (RA
9009),5 which took effect on 30 June 2001. RA 9009 amended Section 450 of the
Local Government Code by increasing the annual income requirement for
conversion of a municipality into a city from P20 million to P100 million. The
rationale for the amendment was to restrain, in the words of Senator Aquilino
Pimentel, "the mad rush" of municipalities to convert into cities solely to secure a
larger share in the Internal Revenue Allotment despite the fact that they are
incapable of fiscal independence.6

After the effectivity of RA 9009, the House of Representatives of the

12th Congress7 adopted Joint Resolution No. 29,8which sought to exempt from
the P100 million income requirement in RA 9009 the 24 municipalities whose
cityhood bills were not approved in the 11th Congress. However, the 12th Congress
ended without the Senate approving Joint Resolution No. 29.
During the 13th Congress,9 the House of Representatives re-adopted Joint
Resolution No. 29 as Joint Resolution No. 1 and forwarded it to the Senate for
approval. However, the Senate again failed to approve the Joint Resolution.
Following the advice of Senator Aquilino Pimentel, 16 municipalities filed, through
their respective sponsors, individual cityhood bills. The 16 cityhood bills contained a
common provision exempting all the 16 municipalities from the P100 million income
requirement in RA 9009.

On 22 December 2006, the House of Representatives approved the cityhood bills.

The Senate also approved the cityhood bills in February 2007, except that of Naga,
Cebu which was passed on 7 June 2007. The cityhood bills lapsed into law
(Cityhood Laws10) on various dates from March to July 2007 without the President's
signature.11

The Cityhood Laws direct the COMELEC to hold plebiscites to determine whether the
voters in each respondent municipality approve of the conversion of their
municipality into a city.

Petitioners filed the present petitions to declare the Cityhood Laws unconstitutional
for violation of Section 10, Article X of the Constitution, as well as for violation of
the equal protection clause.12 Petitioners also lament that the wholesale conversion
of municipalities into cities will reduce the share of existing cities in the Internal
Revenue Allotment because more cities will share the same amount of internal
revenue set aside for all cities under Section 285 of the Local Government Code.13

The Issues

The petitions raise the following fundamental issues:

1. Whether the Cityhood Laws violate Section 10, Article X of the

Constitution; and

2. Whether the Cityhood Laws violate the equal protection clause.

The Ruling of the Court

We grant the petitions.

The Cityhood Laws violate Sections 6 and 10, Article X of the Constitution, and are
thus unconstitutional.

First, applying the P100 million income requirement in RA 9009 to the present case
is a prospective, not a retroactive application, because RA 9009 took effect in 2001
while the cityhood bills became law more than five years later.
Second, the Constitution requires that Congress shall prescribe all the criteria for
the creation of a city in the Local Government Code and not in any other law,
including the Cityhood Laws.

Third, the Cityhood Laws violate Section 6, Article X of the Constitution because
they prevent a fair and just distribution of the national taxes to local government
units.

Fourth, the criteria prescribed in Section 450 of the Local Government Code, as
amended by RA 9009, for converting a municipality into a city are clear, plain and
unambiguous, needing no resort to any statutory construction.

Fifth, the intent of members of the 11th Congress to exempt certain municipalities
from the coverage of RA 9009 remained an intent and was never written into
Section 450 of the Local Government Code.

Sixth, the deliberations of the 11th or 12th Congress on unapproved bills or

resolutions are not extrinsic aids in interpreting a law passed in the 13th Congress.

Seventh, even if the exemption in the Cityhood Laws were written in Section 450 of
the Local Government Code, the exemption would still be unconstitutional for
violation of the equal protection clause.

Preliminary Matters

Prohibition is the proper action for testing the constitutionality of laws administered
by the COMELEC,14 like the Cityhood Laws, which direct the COMELEC to hold
plebiscites in implementation of the Cityhood Laws. Petitioner League of Cities of
the Philippines has legal standing because Section 499 of the Local Government
Code tasks the League with the "primary purpose of ventilating, articulating and
crystallizing issues affecting city government administration and securing, through
proper and legal means, solutions thereto."15 Petitioners-in-intervention,16 which
are existing cities, have legal standing because their Internal Revenue Allotment
will be reduced if the Cityhood Laws are declared constitutional. Mayor Jerry P.
Treñas has legal standing because as Mayor of Iloilo City and as a taxpayer he has
sufficient interest to prevent the unlawful expenditure of public funds, like the
release of more Internal Revenue Allotment to political units than what the law
allows.

Applying RA 9009 is a Prospective Application of the Law

RA 9009 became effective on 30 June 2001 during the 11th Congress. This law
specifically amended Section 450 of the Local Government Code, which now
provides:

Section 450. Requisites for Creation. – (a) A municipality or a cluster of

barangays may be converted into a component city if it has a locally
 generated average annual income, as certified by the Department of Finance,
of at least One hundred million pesos (P100,000,000.00) for the last two (2)
consecutive years based on 2000 constant prices, and if it has either of the
following requisites:

(i) a contiguous territory of at least one hundred (100) square

kilometers, as certified by the Land Management Bureau; or

(ii) a population of not less than one hundred fifty thousand (150,000)
inhabitants, as certified by the National Statistics Office.

The creation thereof shall not reduce the land area, population and income of
the original unit or units at the time of said creation to less than the
minimum requirements prescribed herein.

(b) The territorial jurisdiction of a newly-created city shall be properly

identified by metes and bounds. The requirement on land area shall not apply
where the city proposed to be created is composed of one (1) or more
islands. The territory need not be contiguous if it comprises two (2) or more
islands.

(c) The average annual income shall include the income accruing to the
general fund, exclusive of special funds, transfers, and non-recurring income.
(Emphasis supplied)

Thus, RA 9009 increased the income requirement for conversion of a municipality

into a city from P20 million to P100 million. Section 450 of the Local Government
Code, as amended by RA 9009, does not provide any exemption from the increased
income requirement.

Prior to the enactment of RA 9009, a total of 57 municipalities had cityhood bills

pending in Congress. Thirty-three cityhood bills became law before the enactment
of RA 9009. Congress did not act on 24 cityhood bills during the 11th Congress.

During the 12th Congress, the House of Representatives adopted Joint Resolution
No. 29, exempting from the income requirement of P100 million in RA 9009 the 24
municipalities whose cityhood bills were not acted upon during the 11thCongress.
This Resolution reached the Senate. However, the 12th Congress adjourned without
the Senate approving Joint Resolution No. 29.

During the 13th Congress, 16 of the 24 municipalities mentioned in the unapproved

Joint Resolution No. 29 filed between November and December of 2006, through
their respective sponsors in Congress, individual cityhood bills containing a common
provision, as follows:

Exemption from Republic Act No. 9009. - The City of x x x shall be exempted
from the income requirement prescribed under Republic Act No. 9009.
This common provision exempted each of the 16 municipalities from the income
requirement of P100 million prescribed in Section 450 of the Local Government
Code, as amended by RA 9009. These cityhood bills lapsed into law on various
dates from March to July 2007 after President Gloria Macapagal-Arroyo failed to
sign them.

Indisputably, Congress passed the Cityhood Laws long after the effectivity of RA
9009. RA 9009 became effective on 30 June 2001 or during the 11th Congress. The
13th Congress passed in December 2006 the cityhood bills which became law only in
2007. Thus, respondent municipalities cannot invoke the principle of non-
retroactivity of laws.17 This basic rule has no application because RA 9009, an
earlier law to the Cityhood Laws, is not being applied retroactively but
prospectively.

Congress Must Prescribe in the Local Government Code All Criteria

Section 10, Article X of the 1987 Constitution provides:

No province, city, municipality, or barangay shall be created, divided,

merged, abolished or its boundary substantially altered, except in accordance
with the criteria established in the local government code and subject to
approval by a majority of the votes cast in a plebiscite in the political units
directly affected. (Emphasis supplied)

The Constitution is clear. The creation of local government units must follow
the criteria established in the Local Government Code and not in any other law.
There is only one Local Government Code.18 The Constitution requires Congress to
stipulate in the Local Government Code all the criteria necessary for the creation of
a city, including the conversion of a municipality into a city. Congress cannot write
such criteria in any other law, like the Cityhood Laws.

The criteria prescribed in the Local Government Code govern exclusively the
creation of a city. No other law, not even the charter of the city, can govern such
creation. The clear intent of the Constitution is to insure that the creation of cities
and other political units must follow the same uniform, non-discriminatory criteria
found solely in the Local Government Code. Any derogation or deviation from the
criteria prescribed in the Local Government Code violates Section 10, Article X of
the Constitution.

RA 9009 amended Section 450 of the Local Government Code to increase the
income requirement from P20 million to P100 million for the creation of a city. This
took effect on 30 June 2001. Hence, from that moment the Local Government Code
required that any municipality desiring to become a city must satisfy the P100
million income requirement. Section 450 of the Local Government Code, as
amended by RA 9009, does not contain any exemption from this income
requirement.
In enacting RA 9009, Congress did not grant any exemption to respondent
municipalities, even though their cityhood bills were pending in Congress when
Congress passed RA 9009. The Cityhood Laws, all enacted after the effectivity of RA
9009, explicitly exempt respondent municipalities from the increased income
requirement in Section 450 of the Local Government Code, as amended by RA
9009. Such exemption clearly violates Section 10, Article X of the Constitution and
is thus patently unconstitutional. To be valid, such exemption must be written in
the Local Government Code and not in any other law, including the Cityhood Laws.

Cityhood Laws Violate Section 6, Article X of the Constitution

Uniform and non-discriminatory criteria as prescribed in the Local Government Code

are essential to implement a fair and equitable distribution of national taxes to all
local government units. Section 6, Article X of the Constitution provides:

Local government units shall have a just share, as determined by law, in the
national taxes which shall be automatically released to them. (Emphasis
supplied)

If the criteria in creating local government units are not uniform and discriminatory,
there can be no fair and just distribution of the national taxes to local government
units.

A city with an annual income of only P20 million, all other criteria being equal,
should not receive the same share in national taxes as a city with an annual income
of P100 million or more. The criteria of land area, population and income, as
prescribed in Section 450 of the Local Government Code, must be strictly followed
because such criteria, prescribed by law, are material in determining the "just
share" of local government units in national taxes. Since the Cityhood Laws do not
follow the income criterion in Section 450 of the Local Government Code, they
prevent the fair and just distribution of the Internal Revenue Allotment in violation
of Section 6, Article X of the Constitution.

Section 450 of the Local Government Code is Clear,

Plain and Unambiguous

There can be no resort to extrinsic aids – like deliberations of Congress – if the

language of the law is plain, clear and unambiguous. Courts determine the intent of
the law from the literal language of the law, within the law's four corners.19 If the
language of the law is plain, clear and unambiguous, courts simply apply the law
according to its express terms. If a literal application of the law results in absurdity,
impossibility or injustice, then courts may resort to extrinsic aids of statutory
construction like the legislative history of the law.20

Congress, in enacting RA 9009 to amend Section 450 of the Local Government

Code, did not provide any exemption from the increased income requirement, not
even to respondent municipalities whose cityhood bills were then pending when
Congress passed RA 9009. Section 450 of the Local Government Code, as amended
by RA 9009, contains no exemption whatsoever. Since the law is clear, plain and
unambiguous that any municipality desiring to convert into a city must meet the
increased income requirement, there is no reason to go beyond the letter of the law
in applying Section 450 of the Local Government Code, as amended by RA 9009.

The 11th Congress' Intent was not Written into the Local Government Code

True, members of Congress discussed exempting respondent municipalities from RA

9009, as shown by the various deliberations on the matter during the
11th Congress. However, Congress did not write this intended exemption into law.
Congress could have easily included such exemption in RA 9009 but Congress did
not. This is fatal to the cause of respondent municipalities because such exemption
must appear in RA 9009 as an amendment to Section 450 of the Local Government
Code. The Constitution requires that the criteria for the conversion of a municipality
into a city, including any exemption from such criteria, must all be written in the
Local Government Code. Congress cannot prescribe such criteria or exemption from
such criteria in any other law. In short, Congress cannot create a city through a law
that does not comply with the criteria or exemption found in the Local Government
Code.

Section 10 of Article X is similar to Section 16, Article XII of the Constitution

prohibiting Congress from creating private corporations except by a general law.
Section 16 of Article XII provides:

The Congress shall not, except by general law, provide for the formation,
organization, or regulation of private corporations. Government-owned or
controlled corporations may be created or established by special charters in
the interest of the common good and subject to the test of economic
viability. (Emphasis supplied)

Thus, Congress must prescribe all the criteria for the "formation, organization, or
regulation" of private corporations in a general law applicable to all without
discrimination.21 Congress cannot create a private corporation through a special law
or charter.

Deliberations of the 11th Congress on Unapproved Bills Inapplicable

Congress is not a continuing body.22 The unapproved cityhood bills filed during the
11th Congress became mere scraps of paper upon the adjournment of the
11th Congress. All the hearings and deliberations conducted during the
11th Congress on unapproved bills also became worthless upon the adjournment of
the 11th Congress. These hearings and deliberations cannot be used to interpret
bills enacted into law in the 13th or subsequent Congresses.

The members and officers of each Congress are different. All unapproved bills filed
in one Congress become functus officioupon adjournment of that Congress and
must be re-filed anew in order to be taken up in the next Congress. When their
respective authors re-filed the cityhood bills in 2006 during the 13th Congress, the
bills had to start from square one again, going through the legislative mill just like
bills taken up for the first time, from the filing to the approval. Section 123, Rule
XLIV of the Rules of the Senate, on Unfinished Business, provides:

Sec. 123. x x x

All pending matters and proceedings shall terminate upon the expiration of
one (1) Congress, but may be taken by the succeeding Congress as if
presented for the first time. (Emphasis supplied)

Similarly, Section 78 of the Rules of the House of Representatives, on Unfinished

Business, states:

Section 78. Calendar of Business. The Calendar of Business shall consist of

the following:

a. Unfinished Business. This is business being considered by the House

at the time of its last adjournment. Its consideration shall be resumed
until it is disposed of. The Unfinished Business at the end of a session
shall be resumed at the commencement of the next session as if no
adjournment has taken place. At the end of the term of a Congress, all
Unfinished Business are deemed terminated. (Emphasis supplied)

Thus, the deliberations during the 11th Congress on the unapproved cityhood bills,
as well as the deliberations during the 12th and 13th Congresses on the unapproved
resolution exempting from RA 9009 certain municipalities, have no legal
significance. They do not qualify as extrinsic aids in construing laws passed by
subsequent Congresses.

Applicability of Equal Protection Clause

If Section 450 of the Local Government Code, as amended by RA 9009, contained

an exemption to the P100 million annual income requirement, the criteria for such
exemption could be scrutinized for possible violation of the equal protection clause.
Thus, the criteria for the exemption, if found in the Local Government Code, could
be assailed on the ground of absence of a valid classification. However, Section 450
of the Local Government Code, as amended by RA 9009, does not contain any
exemption. The exemption is contained in the Cityhood Laws, which are
unconstitutional because such exemption must be prescribed in the Local
Government Code as mandated in Section 10, Article X of the Constitution.

Even if the exemption provision in the Cityhood Laws were written in Section 450 of
the Local Government Code, as amended by RA 9009, such exemption would still
be unconstitutional for violation of the equal protection clause. The exemption
provision merely states, "Exemption from Republic Act No. 9009 ─ The City of x x x
shall be exempted from the income requirement prescribed under Republic Act No.
9009." This one sentence exemption provision contains no classification standards
or guidelines differentiating the exempted municipalities from those that are not
exempted.

Even if we take into account the deliberations in the 11th Congress that
municipalities with pending cityhood bills should be exempt from the P100 million
income requirement, there is still no valid classification to satisfy the equal
protection clause. The exemption will be based solely on the fact that the 16
municipalities had cityhood bills pending in the 11thCongress when RA 9009 was
enacted. This is not a valid classification between those entitled and those not
entitled to exemption from the P100 million income requirement.

To be valid, the classification in the present case must be based on substantial

distinctions, rationally related to a legitimate government objective which is the
purpose of the law,23 not limited to existing conditions only, and applicable to all
similarly situated. Thus, this Court has ruled:

The equal protection clause of the 1987 Constitution permits a valid

classification under the following conditions:

1. The classification must rest on substantial distinctions;

2. The classification must be germane to the purpose of the law;

3. The classification must not be limited to existing conditions only; and

4. The classification must apply equally to all members of the same class.24

There is no substantial distinction between municipalities with pending cityhood bills

in the 11th Congress and municipalities that did not have pending bills. The mere
pendency of a cityhood bill in the 11th Congress is not a material difference to
distinguish one municipality from another for the purpose of the income
requirement. The pendency of a cityhood bill in the 11th Congress does not affect or
determine the level of income of a municipality. Municipalities with pending
cityhood bills in the 11th Congress might even have lower annual income than
municipalities that did not have pending cityhood bills. In short, the classification
criterion − mere pendency of a cityhood bill in the 11th Congress − is not rationally
related to the purpose of the law which is to prevent fiscally non-viable
municipalities from converting into cities.

Municipalities that did not have pending cityhood bills were not informed that a
pending cityhood bill in the 11th Congress would be a condition for exemption from
the increased P100 million income requirement. Had they been informed, many
municipalities would have caused the filing of their own cityhood bills. These
municipalities, even if they have bigger annual income than the 16 respondent
municipalities, cannot now convert into cities if their income is less than P100
million.
The fact of pendency of a cityhood bill in the 11th Congress limits the exemption to
a specific condition existing at the time of passage of RA 9009. That specific
condition will never happen again. This violates the requirement that a valid
classification must not be limited to existing conditions only. This requirement is
illustrated in Mayflower Farms, Inc. v. Ten Eyck,25 where the challenged law allowed
milk dealers engaged in business prior to a fixed date to sell at a price lower than
that allowed to newcomers in the same business. In Mayflower, the U.S. Supreme
Court held:

We are referred to a host of decisions to the effect that a regulatory law may
be prospective in operation and may except from its sweep those presently
engaged in the calling or activity to which it is directed. Examples are
statutes licensing physicians and dentists, which apply only to those entering
the profession subsequent to the passage of the act and exempt those then
in practice, or zoning laws which exempt existing buildings, or laws
forbidding slaughterhouses within certain areas, but excepting existing
establishments. The challenged provision is unlike such laws, since, on its
face, it is not a regulation of a business or an activity in the interest of, or for
the protection of, the public, but an attempt to give an economic advantage
to those engaged in a given business at an arbitrary date as against all those
who enter the industry after that date. The appellees do not intimate that the
classification bears any relation to the public health or welfare generally; that
the provision will discourage monopoly; or that it was aimed at any abuse,
cognizable by law, in the milk business. In the absence of any such showing,
we have no right to conjure up possible situations which might justify the
discrimination. The classification is arbitrary and unreasonable and denies the
appellant the equal protection of the law. (Emphasis supplied)

In the same vein, the exemption provision in the Cityhood Laws gives the 16
municipalities a unique advantage based on an arbitrary date − the filing of their
cityhood bills before the end of the 11th Congress - as against all other
municipalities that want to convert into cities after the effectivity of RA 9009.

Furthermore, limiting the exemption only to the 16 municipalities violates the

requirement that the classification must apply to all similarly situated. Municipalities
with the same income as the 16 respondent municipalities cannot convert into
cities, while the 16 respondent municipalities can. Clearly, as worded the exemption
provision found in the Cityhood Laws, even if it were written in Section 450 of the
Local Government Code, would still be unconstitutional for violation of the equal
protection clause.

WHEREFORE, we GRANT the petitions and declare UNCONSTITUTIONAL the

Cityhood Laws, namely: Republic Act Nos. 9389, 9390, 9391, 9392, 9393, 9394,
9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491.

SO ORDERED.
ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING *CONSUELO YNARES-SANTIAGO

Associate Justice Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA

Associate Justice Associate Justice

CONCHITA CARPIO MORALES ADOLFO S. AZCUNA

Associate Justice Associate Justice

DANTE O. TINGA MINITA V. CHICO-NAZARIO

Associate Justice Associate Justice

PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

RUBEN T. REYES TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

ARTURO D. BRION
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court.

REYNATO S. PUNO
Chief Justice
Republic of the Philippines

SUPREME COURT

Manila

EN BANC

LEAGUE OF CITIES OF G.R. No. 176951

THE PHILIPPINES (LCP) represented
by LCP National President

JERRY P. TREAS, CITY OF

ILOILO represented by MAYOR JERRY Present:

P. TREAS, CITY OF
CALBAYOG represented by MAYOR MEL
SENEN S. SARMIENTO, and JERRY P. PUNO,* C.J.,
TREAS in his personal capacity as
CARPIO,
taxpayer, CORONA,

Petitioners, CARPIO MORALES,

- versus - VELASCO, JR.,

NACHURA,*
COMMISSION ON ELECTIONS;
LEONARDO-DE CASTRO,
MUNICIPALITY OF BAYBAY,
BRION,
PROVINCE OF LEYTE;MUNICIPALITY OF
PERALTA,
BOGO,PROVINCE OF
CEBU;MUNICIPALITY OF BERSAMIN,
CATBALOGAN, PROVINCE OF WESTERN
SAMAR;MUNICIPALITY OF TANDAG, DEL CASTILLO,*

PROVINCE OF SURIGAO DEL ABAD, and

SUR; MUNICIPALITY OF
VILLARAMA, JR., JJ.
BORONGAN, PROVINCE OF EASTERN
SAMAR; and MUNICIPALITY OF TAYABAS,

PROVINCE OF QUEZON,

Respondents.

CITY OF TARLAC, CITY OFSANTIAGO,

CITY OF IRIGA, CITY OF LIGAO, CITY OF
LEGAZPI, CITY OFTAGAYTAY, CITY OF
SURIGAO, CITY OF BAYAWAN, CITY OF
SILAY, CITY OF GENERAL SANTOS,

CITY OF ZAMBOANGA, CITY

OF GINGOOG, CITY OF CAUAYAN, CITY
OF PAGADIAN, CITY OF SAN CARLOS,
CITY OF SAN FERNANDO, CITY OF
TACURONG, CITY OF TANGUB,

CITY OF OROQUIETA, CITY OF

URDANETA, CITY OF VICTORIAS, CITY

OF CALAPAN, CITY OF HIMAMAYLAN,
CITY OF BATANGAS, CITY OF BAIS,
CITY OF CADIZ, and CITY OF TAGUM,

Petitioners-In-Intervention.

x-------------------------------------------x

LEAGUE OF CITIES OF THE

PHILIPPINES (LCP) represented

by LCP National President

JERRY P. TREAS, CITY OF

ILOILO represented by MAYOR JERRY

P. TREAS, CITY OF
CALBAYOG represented by MAYOR MEL
SENEN S. SARMIENTO, and JERRY
P.TREAS in his personal capacity as
taxpayer,

Petitioners,

- versus -

COMMISSION ON ELECTIONS;

MUNICIPALITY OF LAMITAN,

PROVINCE OF BASILAN;

MUNICIPALITY OF TABUK,

PROVINCE OF KALINGA;

MUNICIPALITY OF BAYUGAN,

PROVINCE OF AGUSAN DEL

SUR; MUNICIPALITY OF
BATAC, PROVINCE OF ILOCOS
NORTE;MUNICIPALITY OF
MATI,PROVINCE OF DAVAO
ORIENTAL; and MUNICIPALITY OF
GUIHULNGAN, PROVINCE OF NEGROS G.R. No. 177499
ORIENTAL,

Respondents.

CITY OF TARLAC, CITY OFSANTIAGO,

CITY OF IRIGA,

CITY OF LIGAO, CITY OF LEGAZPI, CITY

OF TAGAYTAY, CITY OF SURIGAO, CITY
OF BAYAWAN, CITY OF SILAY, CITY OF
GENERAL SANTOS,

CITY OF ZAMBOANGA, CITY

OF GINGOOG, CITY OF CAUAYAN, CITY
OF PAGADIAN, CITY OF SAN CARLOS,
CITY OF SAN FERNANDO, CITY OF
TACURONG, CITY OF TANGUB,

CITY OF OROQUIETA, CITY OF

URDANETA, CITY OF VICTORIAS, CITY

OF CALAPAN, CITY OF HIMAMAYLAN,
CITY OF

BATANGAS, CITY OF BAIS,

CITY OF CADIZ, and CITY OF TAGUM,

Petitioners-In-Intervention.

x-------------------------------------------x

LEAGUE OF CITIES OF
THEPHILIPPINES (LCP) represented
by LCP National President

JERRY P. TREAS, CITY OF

ILOILO represented by MAYOR JERRY

P. TREAS, CITY OF CALBAYOG
represented by MAYOR MEL SENEN S.
SARMIENTO, and JERRY P. TREAS in
his personal capacity as taxpayer,

Petitioners,

- versus -

COMMISSION ON ELECTIONS;

MUNICIPALITY OF CABADBARAN,

PROVINCE OF AGUSAN DEL NORTE;

MUNICIPALITY OF CARCAR, PROVINCE
OF CEBU; and MUNICIPALITY OF EL
SALVADOR, MISAMIS ORIENTAL,

Respondents.

CITY OF TARLAC, CITY OFSANTIAGO,

CITY OF IRIGA,

CITY OF LIGAO, CITY OF LEGAZPI, CITY

OF TAGAYTAY, CITY OF SURIGAO, CITY
OF BAYAWAN, CITY OF SILAY,

CITY OF GENERAL SANTOS,

CITY OF ZAMBOANGA, CITY

OF GINGOOG, CITY OF CAUAYAN, CITY
OF PAGADIAN, CITY OF SAN CARLOS,
CITY OF SAN FERNANDO, CITY OF
TACURONG, CITY OF TANGUB,

CITY OF OROQUIETA, CITY OF

URDANETA, CITY OF VICTORIAS, CITY

OF CALAPAN, CITY OF HIMAMAYLAN,
CITY OF BATANGAS, CITY OF BAIS,CITY
OF CADIZ, and CITY OF TAGUM,

Petitioners-In-Intervention G.R. No. 178056

Promulgated:
 December 21, 2009

x-----------------------------------------------------------------------------------------x

DECISION
VELASCO, JR. J.:

Ratio legis est anima. The spirit rather than the letter of the law. A statute must be
read according to its spirit or intent,[1] for what is within the spirit is within the
statute although it is not within its letter, and that which is within the letter but not
within the spirit is not within the statute.[2] Put a bit differently, that which is within
the intent of the lawmaker is as much within the statute as if within the letter; and
that which is within the letter of the statute is not within the statute unless within
the intent of the lawmakers.[3] Withal, courts ought not to interpret and should not
accept an interpretation that would defeat the intent of the law and its legislators.[4]

So as it is exhorted to pass on a challenge against the validity of an act of

Congress, a co-equal branch of government, it behooves the Court to have at once
one principle in mind: the presumption of constitutionality of statutes.[5] This
presumption finds its roots in the tri-partite system of government and the corollary
separation of powers, which enjoins the three great departments of the government
to accord a becoming courtesy for each others acts, and not to interfere
inordinately with the exercise by one of its official functions. Towards this end,
courts ought to reject assaults against the validity of statutes, barring of course
their clear unconstitutionality. To doubt is to sustain, the theory in context being
that the law is the product of earnest studies by Congress to ensure that no
constitutional prescription or concept is infringed.[6]Consequently, before a law duly
challenged is nullified, an unequivocal breach of, or a clear conflict with, the
Constitution, not merely a doubtful or argumentative one, must be demonstrated in
such a manner as to leave no doubt in the mind of the Court.[7]

BACKGROUND

The consolidated petitions for prohibition commenced by the League of Cities

of the Philippines (LCP), City of Iloilo, City of Calbayog, and Jerry P. Treas[8] assail
the constitutionality of the sixteen (16) laws,[9] each converting the municipality
covered thereby into a city (cityhood laws, hereinafter) and seek to enjoin the
Commission on Elections (COMELEC) from conducting plebiscites pursuant to
subject laws.

By Decision[10] dated November 18, 2008, the Court en banc, by a 6-5 vote,

granted the petitions and nullified the sixteen (16) cityhood laws for being violative

of the Constitution, specifically its Section 10, Article X and the equal protection

clause.

Subsequently, respondent local government units (LGUs) moved for

reconsideration, raising, as one of the issues, the validity of the factual premises

not contained in the pleadings of the parties, let alone established, which became

the bases of the Decision subject of reconsideration.[11] By Resolution of March 31,

2009, a divided Court denied the motion for reconsideration.

A second motion for reconsideration followed in which respondent LGUs

prayed as follows:
 WHEREFORE, respondents respectfully pray that the Honorable
Court reconsider its Resolution dated March 31, 2009, in so far as it
denies for lack of merit respondents Motion for Reconsideration dated
December 9, 2008 and in lieu thereof, considering that new and
meritorious arguments are raised by respondents Motion for
Reconsideration dated December 9, 2008 to grant afore-mentioned
Motion for Reconsideration dated December 9, 2008 and dismiss the
Petitions For Prohibition in the instant case.

Per Resolution dated April 28, 2009, the Court, voting 6-6, disposed of the

motion as follows:

By a vote of 6-6, the Motion for Reconsideration of the Resolution of

31 March 2009 is DENIED for lack of merit. The motion is denied since
there is no majority that voted to overturn the Resolution of 31 March
2009.

The Second Motion for Reconsideration of the Decision of 18

November 2008 is DENIED for being a prohibited pleading, and the
Motion for Leave to Admit Attached Petition in Intervention x x x filed
by counsel for Ludivina T. Mas, et al. are also DENIED. No further
pleadings shall be entertained. Let entry of judgment be made in due
course. x x x

On May 14, 2009, respondent LGUs filed a Motion to Amend the Resolution of April

28, 2009 by Declaring Instead that RespondentsMotion for Reconsideration of the

Resolution of March 31, 2009 and Motion for Leave to File and to Admit Attached

Second Motion for Reconsideration of the Decision Dated November 18, 2008

Remain Unresolved and to Conduct Further Proceedings Thereon.

Per its Resolution of June 2, 2009, the Court declared the May 14, 2009

motion adverted to as expunged in light of the entry of judgment made on May 21,
2009. Justice Leonardo-De Castro, however, taking common cause with Justice

Bersamin to grant the motion for reconsideration of the April 28, 2009 Resolution

and to recall the entry of judgment, stated the observation, and with reason, that

the entry was effected before the Court could act on the aforesaid motion which

was filed within the 15-day period counted from receipt of the April 28, 2009

Resolution.[12]

Forthwith, respondent LGUs filed a Motion for Reconsideration of the

Resolution of June 2, 2009 to which some of the petitioners and petitioners-in-

intervention filed their respective comments. The Court will now rule on this

incident. But first, we set and underscore some basic premises:

(1) The initial motion to reconsider the November 18, 2008 Decision, as

Justice Leonardo-De Castro noted, indeed raised new and substantial issues,

inclusive of the matter of the correctness of the factual premises upon which the

said decision was predicated. The 6-6 vote on the motion for reconsideration per

the Resolution of March 31, 2009, which denied the motion on the sole ground that

the basic issues have already been passed upon reflected a divided Court on the

issue of whether or not the underlying Decision of November 18, 2008 had indeed

passed upon the basic issues raised in the motion for reconsideration of the said

decision;
 (2) The aforesaid May 14, 2009 Motion to Amend Resolution of April 28,

2009 was precipitated by the tie vote which served as basis for the issuance of said

resolution. This May 14, 2009 motionwhich mainly argued that a tie vote is

inadequate to declare a law unconstitutionalremains unresolved; and

(3) Pursuant to Sec. 4(2), Art. VIII of the Constitution, all cases involving the

constitutionality of a law shall be heard by the Court en banc and decided with the

concurrence of a majority of the Members who actually took part in the

deliberations on the issues in the case and voted thereon.

The basic issue tendered in this motion for reconsideration of the June 2,

2009 Resolution boils down to whether or not the required vote set forth in the

aforesaid Sec. 4(2), Art. VIII is limited only to the initial vote on the petition or also

to the subsequent voting on the motion for reconsideration where the Court is

called upon and actually votes on the constitutionality of a law or like issuances. Or,

as applied to this case, would a minute resolution dismissing, on a tie vote, a

motion for reconsideration on the sole stated groundthat the basic issues have

already been passed suffice to hurdle the voting requirement required for a

declaration of the unconstitutionality of the cityhood laws in question?

The 6-6 vote on the motion to reconsider the Resolution of March 31, 2009,

which denied the initial motion on the sole ground that the basic issues had already
been passed upon betrayed an evenly divided Court on the issue of whether or not

the underlying Decision of November 18, 2008 had indeed passed upon the issues

raised in the motion for reconsideration of the said decision. But at the end of the

day, the single issue that matters and the vote that really counts really turn on the

constitutionality of the cityhood laws. And be it remembered that the inconclusive

6-6 tie vote reflected in the April 28, 2009 Resolution was the last vote on the issue

of whether or not the cityhood laws infringe the Constitution. Accordingly, the

motions of the respondent LGUs, in light of the 6-6 vote, should be deliberated

anew until the required concurrence on the issue of the validity or invalidity of the

laws in question is, on the merits, secured.

It ought to be clear that a deadlocked vote does not reflect the majority of

the Members contemplated in Sec. 4 (2) of Art. VIII of the Constitution, which

requires that:

All cases involving the constitutionality of a treaty, international

or executive agreement, or law shall be heard by the Supreme
Court en banc, x x x shall be decided with the concurrence of a
majority of the Members who actually took part in the deliberations on
the issues in the case and voted thereon. (Emphasis added.)

Webster defines majority as a number greater than half of a total.[13] In plain

language, this means 50% plus one. In Lambino v. Commission on Elections,

Justice, now Chief Justice, Puno, in a separate opinion, expressed the view that a
deadlocked vote of six (6) is not a majority and a non-majority cannot write a rule

with precedential value.[14]

As may be noted, the aforequoted Sec. 4 of Art. VIII, as couched, exacts a

majority vote in the determination of a case involving the constitutionality of a

statute, without distinguishing whether such determination is made on the main

petition or thereafter on a motion for reconsideration. This is as it should be, for, to

borrow from the late Justice Ricardo J. Francisco: x x x [E]ven assuming x x x that

the constitutional requirement on the concurrence of the majority was initially

reached in the x x x ponencia, the same is inconclusive as it was still open for

review by way of a motion for reconsideration.[15]

To be sure, the Court has taken stock of the rule on a tie-vote situation, i.e.,

Sec. 7, Rule 56 and the complementary A.M. No. 99-1-09- SC, respectively,

providing that:
SEC. 7. Procedure if opinion is equally divided. Where the court
en banc is equally divided in opinion, or the necessary majority cannot
be had, the case shall again be deliberated on, and if after such
deliberation no decision is reached, the original action commenced in
the court shall be dismissed; in appealed cases, the judgment or order
appealed from shall stand affirmed; and on all incidental matters, the
petition or motion shall be denied.

A.M. No. 99-1-09-SC x x x A motion for reconsideration of a

decision or resolution of the Court En Banc or of a Division may be
granted upon a vote of a majority of the En Banc or of a Division, as
the case may be, who actually took part in the deliberation of the
motion.

If the voting results in a tie, the motion for reconsideration is

deemed denied.
 But since the instant cases fall under Sec. 4 (2), Art. VIII of the Constitution,

the aforequoted provisions ought to be applied in conjunction with the prescription

of the Constitution that the cases shall be decided with the concurrence of a

majority of the Members who actually took part in the deliberations on the issues in

the instant cases and voted thereon. To repeat, the last vote on the issue of the

constitutionality of the cityhood bills is that reflected in the April 28, 2009

Resolutiona 6-6 deadlock.

On the postulate then that first, the finality of the November 18, 2008
Decision has yet to set in, the issuance of the precipitate[16] entry of judgment
notwithstanding, and second, the deadlocked vote on the second motion for
reconsideration did not definitely settle the constitutionality of the cityhood laws,
the Court is inclined to take another hard look at the underlying decision. Without
belaboring in their smallest details the arguments for and against the procedural
dimension of this disposition, it bears to stress that the Court has the power to
suspend its own rules when the ends of justice would be served thereby.[17] In the
performance of their duties, courts should not be shackled by stringent rules which
would result in manifest injustice. Rules of procedure are only tools crafted to
facilitate the attainment of justice. Their strict and rigid application must be
eschewed, if they result in technicalities that tend to frustrate rather than promote
substantial justice.Substantial rights must not be prejudiced by a rigid and technical
application of the rules in the altar of expediency. When a case is impressed with
public interest, a relaxation of the application of the rules is in order.[18] Time and
again, this Court has suspended its own rules or excepted a particular case from
their operation whenever the higher interests of justice so require.[19]
 While perhaps not on all fours with the case, because it involved a purely

business transaction, what the Court said in Chuidian v. Sandiganbayan[20] is most

apropos:

To reiterate what the Court has said in Ginete vs. Court of

Appeals and other cases, the rules of procedure should be viewed as
mere instruments designed to facilitate the attainment of justice. They
are not to be applied with severity and rigidity when such application
would clearly defeat the very rationale for their conception and
existence. Even the Rules of Court reflects this principle. The power to
suspend or even disregard rules, inclusive of the one-motion rule, can
be so pervasive and compelling as to alter even that which this Court
has already declared to be final. The peculiarities of this case impel us
to do so now.

The Court, by a vote of 6-4, grants the respondent LGUs motion for reconsideration
of the Resolution of June 2, 2009, as well as their May 14, 2009 motion to consider
the second motion for reconsideration of the November 18, 2008 Decision
unresolved, and also grants said second motion for reconsideration.

This brings us to the substantive aspect of the case.

The Undisputed Factual Antecedents in Brief

During the 11th Congress,[21] fifty-seven (57) cityhood bills were filed before
the House of Representatives.[22] Of the fifty-seven (57), thirty-three (33)
eventually became laws. The twenty-four (24) other bills were not acted upon.

Later developments saw the introduction in the Senate of Senate Bill (S. Bill)
No. 2157[23] to amend Sec. 450 of Republic Act No. (RA) 7160, otherwise known as
the Local Government Code (LGC) of 1991.The proposed amendment sought to
increase the income requirement to qualify for conversion into a city from PhP 20
million average annual income to PhP 100 million locally generated income.

In March 2001, S. Bill No. 2157 was signed into law as RA 9009 to take
effect on June 30, 2001. As thus amended by RA 9009, Sec. 450 of the LGC of
1991 now provides that [a] municipality x x x may be converted into a component
city if it has a [certified] locally generated average annual income x x x of at least
[PhP 100 million] for the last two (2) consecutive years based on 2000 constant
prices.

After the effectivity of RA 9009, the Lower House of the 12thCongress

adopted in July 2001 House (H.) Joint Resolution No. 29[24]which, as its title
indicated, sought to exempt from the income requirement prescribed in RA 9009
the 24 municipalities whose conversions into cities were not acted upon during the
previous Congress. The 12th Congress ended without the Senate approving H. Joint
Resolution No. 29.

Then came the 13th Congress (July 2004 to June 2007), which saw the House
of Representatives re-adopting H. Joint Resolution No. 29 as H. Joint Resolution No.
1 and forwarding it to the Senate for approval.

The Senate, however, again failed to approve the joint resolution.During the
Senate session held on November 6, 2006, Senator Aquilino Pimentel, Jr. asserted
that passing H. Resolution No. 1 would, in net effect, allow a wholesale exemption
from the income requirement imposed under RA 9009 on the municipalities. For this
reason, he suggested the filing by the House of Representatives of individual bills to
pave the way for the municipalities to become cities and then forwarding them to
the Senate for proper action.[25]
 Heeding the advice, sixteen (16) municipalities filed, through their respective
sponsors, individual cityhood bills. Common to all 16 measures was a provision
exempting the municipality covered from the PhP 100 million income requirement.

As of June 7, 2007, both Houses of Congress had approved the individual cityhood
bills, all of which eventually lapsed into law on various dates. Each cityhood law
directs the COMELEC, within thirty (30) days from its approval, to hold a plebiscite
to determine whether the voters approve of the conversion.

As earlier stated, the instant petitions seek to declare the cityhood laws
unconstitutional for violation of Sec. 10, Art. X of the Constitution, as well as for
violation of the equal-protection clause. The wholesale conversion of municipalities
into cities, the petitioners bemoan, will reduce the share of existing cities in the
Internal Revenue Allotment (IRA), since more cities will partake of the internal
revenue set aside for all cities under Sec. 285 of the LGC of 1991.[26]

Petitioners-in-intervention, LPC members themselves, would later seek leave and

be allowed to intervene.

Aside from their basic plea to strike down as unconstitutional the cityhood laws in
question, petitioners and petitioners-in-intervention collectively pray that an order
issue enjoining the COMELEC from conducting plebiscites in the affected areas. An
alternative prayer would urge the Court to restrain the poll body from proclaiming
the plebiscite results.

On July 24, 2007, the Court en banc resolved to consolidate the petitions and
the petitions-in-intervention. On March 11, 2008, it heard the parties in oral
arguments.

The Issues
 In the main, the issues to which all others must yield pivot on whether or
not the cityhood laws violate (1) Sec. 10. Art. X of the Constitution and (2) the
equal protection clause.

In the November 18, 2008 Decision granting the petitions, Justice Antonio T.
Carpio, for the Court, resolved the twin posers in the affirmative and accordingly
declared the cityhood laws unconstitutional, deviating as they do from the uniform
and non-discriminatory income criterion prescribed by the LGC of 1991. In so
doing, the ponenciaveritably agreed with the petitioners that the Constitution, in
clear and unambiguous language, requires that all the criteria for the creation of a
city shall be embodied and written in the LGC, and not in any other law.

After a circumspect reflection, the Court is disposed to reconsider.

Petitioners threshold posture, characterized by a strained interpretation of

the Constitution, if accorded cogency, would veritably curtail and cripple Congress
valid exercise of its authority to create political subdivisions.

By constitutional design[27] and as a matter of long-established principle, the

power to create political subdivisions or LGUs is essentially legislative in
character.[28] But even without any constitutional grant, Congress can, by law,
create, divide, merge, or altogether abolish or alter the boundaries of a province,
city, or municipality. We said as much in the fairly recent case, Sema v.
CIMELEC.[29] The 1987 Constitution, under its Art. X, Sec. 10, nonetheless provides
for the creation of LGUs, thus:

Section 10. No province, city, municipality, or barangay shall be

created, divided, merged, abolished, or its boundary substantially
altered, except in accordance with the criteria established in the local
government code and subject to approval by a majority of the votes
 cast in a plebiscite in the political units directly affected. (Emphasis
supplied.)

As may be noted, the afore-quoted provision specifically provides for the

creation of political subdivisions in accordance with the criteria established in the
local government code, subject to the approval of the voters in the unit concerned.
The criteria referred to are the verifiable indicators of viability, i.e., area,
population, and income, now set forth in Sec. 450 of the LGC of 1991, as amended
by RA 9009. The petitioners would parlay the thesis that these indicators or criteria
must be written only in the LGC and not in any other statute. Doubtless, the code
they are referring to is the LGC of 1991. Pushing their point, they conclude that the
cityhood laws that exempted the respondent LGUs from the income standard
spelled out in the amendatory RA 9009 offend the Constitution.

Petitioners posture does not persuade.

The supposedly infringed Art. X, Sec. 10 is not a new constitutional provision.

Save for the use of the term barrio in lieu of barangay, may be instead of shall, the
change of the phrase unit or units to political unit and the addition of the
modifier directly to the word affected, the aforesaid provision is a substantial
reproduction of Art. XI, Sec. 3 of the 1973 Constitution, which reads:

Section 3. No province, city, municipality, or barrio may

becreated, divided, merged, abolished, or its boundary substantially
altered, except in accordance with the criteria established in the local
government code and subject to approval by a majority of the votes
cast in a plebiscite in the unit or units affected. (Emphasis supplied.)

It bears notice, however, that the code similarly referred to in the 1973 and
1987 Constitutions is clearly but a law Congress enacted. This is consistent with the
aforementioned plenary power of Congress to create political units. Necessarily,
since Congress wields the vast poser of creating political subdivisions, surely it can
exercise the lesser authority of requiring a set of criteria, standards, or
ascertainable indicators of viability for their creation. Thus, the only conceivable
reason why the Constitution employs the clause in accordance with the criteria
established in the local government code is to lay stress that it is Congress alone,
and no other, which can impose the criteria. The eminent constitutionalist, Fr.
Joaquin G. Bernas, S.J., in his treatise on Constitutional Law, specifically on the
subject provision, explains:

Prior to 1965, there was a certain lack of clarity with regard to

the power to create, divide, merge, dissolve, or change the boundaries
of municipal corporations. The extent to which the executive may
share in this power was obscured by Cardona v. Municipality of
Binangonan.[30] Pelaez v. Auditor General subsequently clarified
the Cardona case when the Supreme Court said that the authority
to create municipal corporations is essentially legislative in
nature.[31]Pelaez, however, conceded that the power to fix such
common boundary, in order to avoid or settle conflicts of jurisdiction
between adjoining municipalities, may partake of
an administrative nature-involving as it does, the adoption of means
and ways to carry into effect the law creating said
municipalities.[32] Pelaez was silent about division, merger, and
dissolution of municipal corporations. But since division in
effect creates a new municipality, and both dissolution and merger in
effect abolish a legal creation, it may fairly be inferred that these acts
are also legislative in nature.

Section 10 [Art. X of the 1987 Constitution], which is a legacy from

the 1973 Constitution, goes further than the doctrine in
the Pelaezcase. It not only makes creation, division, merger, abolition
or substantial alteration of boundaries of provinces, cities,
municipalities x x x subject to criteria established in the local
government code, thereby declaring these actions properly legislative,
but it also makes creation, division, merger, abolition or substantial
alteration of boundaries subject to approval by a majority of the votes
 cast in a plebiscite in the political units directly affected.[33] x x x
(Emphasis added.)

It remains to be observed at this juncture that when the 1987 Constitution

speaks of the LGC, the reference cannot be to any specific statute or codification of
laws, let alone the LGC of 1991.[34] Be it noted that at the time of the adoption of
the 1987 Constitution, Batas Pambansa Blg. (BP) 337, the then LGC, was still in
effect. Accordingly, had the framers of the 1987 Constitution intended to isolate the
embodiment of the criteria only in the LGC, then they would have actually referred
to BP 337. Also, they would then not have provided for the enactment by Congress
of a new LGC, as they did in Art. X, Sec. 3[35] of the Constitution.

Consistent with its plenary legislative power on the matter, Congress

can, via either a consolidated set of laws or a much simpler, single-subject
enactment, impose the said verifiable criteria of viability. These criteria need not be
embodied in the local government code, albeit this code is the ideal repository to
ensure, as much as possible, the element of uniformity. Congress can even, after
making a codification, enact an amendatory law, adding to the existing layers of
indicators earlier codified, just as efficaciously as it may reduce the same. In this
case, the amendatory RA 9009 upped the already codified income requirement
from PhP 20 million to PhP 100 million. At the end of the day, the passage of
amendatory laws is no different from the enactment of laws, i.e., the cityhood laws
specifically exempting a particular political subdivision from the criteria earlier
mentioned. Congress, in enacting the exempting law/s, effectively decreased the
already codified indicators.

Petitioners theory that Congress must provide the criteria solely in the LGC
and not in any other law strikes the Court as illogical. For if we pursue their
contention to its logical conclusion, then RA 9009 embodying the new and increased
income criterion would, in a way, also suffer the vice of unconstitutionality. It is
startling, however, that petitioners do not question the constitutionality of RA 9009,
as they in fact use said law as an argument for the alleged unconstitutionality of the
cityhood laws.

As it were, Congress, through the medium of the cityhood laws, validly

decreased the income criterion vis--vis the respondent LGUs, but without
necessarily being unreasonably discriminatory, as shall be discussed shortly, by
reverting to the PhP 20 million threshold what it earlier raised to PhP 100 million.
The legislative intent not to subject respondent LGUs to the more stringent
requirements of RA 9009 finds expression in the following uniform provision of the
cityhood laws:

Exemption from Republic Act No. 9009. The City of x x x shall

be exempted from the income requirement prescribed under Republic
Act No. 9009.

In any event, petitioners constitutional objection would still be untenable

even if we were to assume purely ex hypothesi the correctness of their underlying
thesis, viz: that the conversion of a municipality to a city shall be in accordance
with, among other things, the income criterion set forth in the LGC of 1991, and in
no other; otherwise, the conversion is invalid. We shall explain.

Looking at the circumstances behind the enactment of the laws subject of

contention, the Court finds that the LGC-amending RA 9009, no less, intended the
LGUs covered by the cityhood laws to be exempt from the PhP 100 million income
criterion. In other words, the cityhood laws, which merely carried out the intent of
RA 9009, adhered, in the final analysis, to the criteria established in the Local
Government Code, pursuant to Sec. 10, Art. X of the 1987 Constitution. We shall
now proceed to discuss this exemption angle.[36]

Among the criteria established in the LGC pursuant to Sec.10, Art. X of the
1987 Constitution are those detailed in Sec. 450 of the LGC of 1991 under the
heading Requisites for Creation. The section sets the minimum income qualifying
bar before a municipality or a cluster of barangays may be considered for cityhood.
Originally, Sec. 164 of BP 337 imposed an average regular annual income of at
least ten million pesos for the last three consecutive years as a minimum income
standard for a municipal-to-city conversion. The LGC that BP 337 established was
superseded by the LGC of 1991 whose then Sec. 450 provided that [a] municipality
or cluster of barangays may be converted into a component city if it has an average
annual income, x x x of at least twenty million pesos (P20,000,000.00) for at least
two (2) consecutive years based on 1991 constant prices x x x. RA 9009 in
turn amended said Sec. 450 by further increasing the income requirement
to PhP 100 million, thus:

Section 450. Requisites for Creation. (a) A municipality or a cluster

of barangays may be converted into a component city if it has a locally
generated average annual income, as certified by the Department of
Finance, of at least One Hundred Million Pesos (P100,000,000.00) for
the last two (2) consecutive years based on 2000 constant prices, and
if it has either of the following requisites:

xxxx

(c) The average annual income shall include the income

accruing to the general fund, exclusive of special funds, transfers, and
non-recurring income. (Emphasis supplied.)

The legislative intent is not at all times accurately reflected in the manner in which
the resulting law is couched. Thus, applying a verba legis[37]or strictly literal
interpretation of a statute may render it meaningless and lead to inconvenience, an
absurd situation or injustice.[38] To obviate this aberration, and bearing in mind the
principle that the intent or the spirit of the law is the law itself,[39] resort should be
to the rule that the spirit of the law controls its letter.[40]

It is in this respect that the history of the passage of RA 9009 and the logical
inferences derivable therefrom assume relevancy in discovering legislative intent.[41]
 The rationale behind the enactment of RA 9009 to amend Sec. 450 of the
LGC of 1991 can reasonably be deduced from Senator Pimentels sponsorship
speech on S. Bill No. 2157. Of particular significance is his statement regarding the
basis for the proposed increase from PhP 20 million to PhP 100 million in the
income requirement for municipalities wanting to be converted into cities, viz:

Senator Pimentel. Mr. President, I would have wanted this bill to be

included in the whole set of proposed amendments that we have
introduced to precisely amend the [LGC]. However, it is a fact that
there is a mad rush of municipalities wanting to be converted into
cities. Whereas in 1991, when the [LGC] was approved, there were
only 60 cities, today the number has increased to 85 cities, with 41
more municipalities applying for conversion x x x. At the rate we are
going, I am apprehensive that before long this nation will be a nation
of all cities and no municipalities.

It is for that reason, Mr. President, that we are proposing among other
things, that the financial requirement, which, under the [LGC], is fixed
at P20 million, be raised to P100 million to enable a municipality to
have the right to be converted into a city, and the P100 million should
be sourced from locally generated funds.

Congress to be sure knew, when RA 9009 was being deliberated upon, of the
pendency of several bills on cityhood, wherein the applying municipalities were
qualified under the then obtaining PhP 20 million-income threshold. These included
respondent LGUs. Thus, equally noteworthy is the ensuing excerpts from the floor
exchange between then Senate President Franklin Drilon and Senator Pimentel, the
latter stopping short of saying that the income threshold of PhP 100 million under
S. Bill No. 2157 would not apply to municipalities that have pending cityhood bills,
thus:
THE PRESIDENT. The Chair would like to ask for some clarificatory point. x x
x

THE PRESIDENT. This is just on the point of the pending bills in the
Senate which propose the conversion of a number of municipalities into
cities and which qualify under the present standard.

We would like to know the view of the sponsor: Assuming that this bill
becomes a law, will the Chamber apply the standard as proposed in
this bill to those bills which are pending for consideration?

SENATOR PIMENTEL, Mr. President, it might not be fair to make

this bill x x x [if] approved, retroact to the bills that are pending in the
Senate for conversion from municipalities to cities.

THE PRESIDENT. Will there be an appropriate language crafted to

reflect that view? Or does it not become a policy of the Chamber,
assuming that this bill becomes a law x x x that it will apply to those
bills which are already approved by the House under the old version of
the [LGC] and are now pending in the Senate? The Chair does not know
if we can craft a language which will limit the application to those which
are not yet in the Senate. Or is that a policy that the Chamber will
adopt?

SENATOR PIMENTEL. Mr. President, personally, I do not think it is

necessary to put that provision because what we are saying here will
form part of the interpretation of this bill. Besides, if there is no
retroactivity clause, I do not think that the bill would have any
retroactive effect.

THE PRESIDENT. So the understanding is that those bills which

are already pending in the Chamber will not be affected.
 SENATOR PIMENTEL. These will not be affected, Mr.
President.[42] (Emphasis and underscoring supplied.)

What the foregoing Pimental-Drilon exchange eloquently indicates are the following
complementary legislative intentions: (1) the then pending cityhood bills would be
outside the pale of the minimum income requirement of PhP 100 million that S. Bill
No. 2159 proposes; and (2)RA 9009 would not have any retroactive effect insofar
as the cityhood bills are concerned.

Given the foregoing perspective, it is not amiss to state that the basis for the
inclusion of the exemption clause of the cityhood laws is the clear-cut intent of
Congress of not according retroactive effect to RA 9009. Not only do the
congressional records bear the legislative intent of exempting the cityhood laws
from the income requirement of PhP 100 million. Congress has now made its
intention to exempt express in the challenged cityhood laws.

Legislative intent is part and parcel of the law, the controlling factor in
interpreting a statute. In construing a statute, the proper course is to start out and
follow the true intent of the Legislature and to adopt the sense that best
harmonizes with the context and promotes in the fullest manner the policy and
objects of the legislature.[43] In fact, any interpretation that runs counter to the
legislative intent is unacceptable and invalid.[44] Torres v. Limjap could not have
been more precise:

The intent of a Statute is the Law. If a statute is valid, it is to

have effect according to the purpose and intent of the lawmaker. The
intent is x x x the essence of the law and the primary rule of
construction is to ascertain and give effect to that intent. The intention
of the legislature in enacting a law is the law itself, and must be
enforced when ascertained, although it may not be consistent with the
strict letter of the statute. Courts will not follow the letter of a statute
when it leads away from the true intent and purpose of the legislature
and to conclusions inconsistent with the general purpose of the
act. Intent is the spirit which gives life to a legislative enactment. In
 construing statutes the proper course is to start out and follow the true
intent of the legislature x x x.[45] (Emphasis supplied.)

As emphasized at the outset, behind every law lies the presumption of

constitutionality.[46] Consequently, to him who would assert the unconstitutionality
of a statute belongs the burden of proving otherwise.Laws will only be declared
invalid if a conflict with the Constitution is beyond reasonable
doubt.[47] Unfortunately for petitioners and petitioners-in-intervention, they failed to
discharge their heavy burden.

It is contended that the deliberations on the cityhood bills and the covering
joint resolution were undertaken in the 11th and/or the 12thCongress. Accordingly,
so the argument goes, such deliberations, more particularly those on the
unapproved resolution exempting from RA 9009 certain municipalities, are without
significance and would not qualify as extrinsic aids in construing the cityhood laws
that were passed during the 13th Congress, Congress not being a continuing body.

The argument is specious and glosses over the reality that the cityhood
billswhich were already being deliberated upon even perhaps before the conception
of RA 9009were again being considered during the 13th Congress after being tossed
around in the two previous Congresses. And specific reference to the cityhood bills
was also made during the deliberations on RA 9009. At the end of the day, it is
really immaterial if Congress is not a continuing legislative body. What is important
is that the debates, deliberations, and proceedings of Congress and the steps taken
in the enactment of the law, in this case the cityhood laws in relation to RA 9009
or vice versa, were part of its legislative history and may be consulted, if
appropriate, as aids in the interpretation of the law.[48] And of course the earlier
cited Drilon-Pimentel exchange on whether or not the 16 municipalities in question
would be covered by RA 9009 is another vital link to the historical chain of the
cityhood bills. This and other proceedings on the bills are spread in the
Congressional journals, which cannot be conveniently reduced to pure rhetoric
without meaning whatsoever, on the simplistic and non-sequitur pretext that
Congress is not a continuing body and that unfinished business in either chamber is
deemed terminated at the end of the term of Congress.
This brings us to the challenge to the constitutionality of cityhood laws on equal
protection grounds.

To the petitioners, the cityhood laws, by granting special treatment to

respondent municipalities/LGUs by way of exemption from the standard PhP 100
million minimum income requirement, violate Sec.1, Art. III of the Constitution,
which in part provides that no person shall be denied the equal protection of the
laws.

Petitioners challenge is not well taken. At its most basic, the equal protection
clause proscribes undue favor as well as hostile discrimination. Hence, a law need
not operate with equal force on all persons or things to be conformable with Sec. 1,
Art. III of the Constitution.

The equal protection guarantee is embraced in the broader and elastic concept of
due process, every unfair discrimination being an offense against the requirements
of justice and fair play. It has nonetheless come as a separate clause in Sec. 1, Art.
III of the Constitution to provide for a more specific protection against any undue
discrimination or antagonism from government. Arbitrariness in general may be
assailed on the basis of the due process clause. But if a particular challenged act
partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it
down is the equal protection clause.[49] This constitutional protection extends to all
persons, natural or artificial, within the territorial jurisdiction. Artificial persons, as
the respondent LGUs herein, are, however, entitled to protection only insofar as
their property is concerned.[50]

In the proceedings at bar, petitioner LCP and the intervenors cannot plausibly
invoke the equal protection clause, precisely because no deprivation of property
results by virtue of the enactment of the cityhood laws. The LCPs claim that the IRA
of its member-cities will be substantially reduced on account of the conversion into
cities of the respondent LGUs would not suffice to bring it within the ambit of the
constitutional guarantee. Indeed, it is presumptuous on the part of the LCP
member-cities to already stake a claim on the IRA, as if it were their property, as
the IRA is yet to be allocated. For the same reason, the municipalities that are not
covered by the uniform exemption clause in the cityhood laws cannot validly invoke
constitutional protection. For, at this point, the conversion of a municipality into a
city will only affect its status as a political unit, but not its property as such.

As a matter of settled legal principle, the fundamental right of equal protection does
not require absolute equality. It is enough that all persons or things similarly
situated should be treated alike, both as to rights or privileges conferred and
responsibilities or obligations imposed. The equal protection clause does not
preclude the state from recognizing and acting upon factual differences between
individuals and classes. It recognizes that inherent in the right to legislate is the
right to classify,[51] necessarily implying that the equality guaranteed is not violated
by a legislation based on reasonable classification. Classification, to be reasonable,
must (1) rest on substantial distinctions; (2) be germane to the purpose of the law;
(3) not be limited to existing conditions only; and (4) apply equally to all members
of the same class.[52] The Court finds that all these requisites have been met by the
laws challenged as arbitrary and discriminatory under the equal protection clause.

As things stand, the favorable treatment accorded the sixteen (16) municipalities
by the cityhood laws rests on substantial distinction. Indeed, respondent LGUs,
which are subjected only to the erstwhile PhP 20 million income criterion instead of
the stringent income requirement prescribed in RA 9009, are substantially different
from other municipalities desirous to be cities. Looking back, we note that
respondent LGUs had pending cityhood bills before the passage of RA 9009. There
lies part of the tipping difference. And years before the enactment of the
amendatory RA 9009, respondents LGUs had already met the income criterion
exacted for cityhood under the LGC of 1991. Due to extraneous circumstances,
however, the bills for their conversion remained unacted upon by Congress. As
aptly observed by then Senator, now Manila Mayor, Alfredo Lim in his speech
sponsoring H. Joint Resolution No. 1, or the cityhood bills, respondent LGUs saw
themselves confronted with the changing of the rules in the middle of the
game.Some excerpts of Senator Lims sponsorship speech:

x x x [D]uring the Eleventh Congress, fifty-seven (57)

municipalities applied for city status, confident that each has met the
requisites for conversion under Section 450 of the [LGC], particularly
the income threshold of P20 million. Of the 57 that filed, thirty-two
(32) were enacted into law; x x x while the rest twenty-four (24) in all
failed to pass through Congress. Shortly before the long recess of
Congress in February 2001, to give way to the May elections x x x,
Senate Bill No. 2157, which eventually became [RA] 9009, was passed
into law, effectively raising the income requirement for creation of
cities to a whooping P100 million x x x. Much as the proponents of the
24 cityhood bills then pending struggled to beat the effectivity of the
law on June 30, 2001, events that then unfolded were swift and
overwhelming that Congress just did not have the time to act on the
measures.

Some of these intervening events were x x x the impeachment

of President Estrada x x x and the May 2001 elections.

The imposition of a much higher income requirement for the

creation of a city x x x was unfair; like any sport changing the rules in
the middle of the game.

Undaunted, they came back during the [12th] Congress x x

x.They filed House Joint Resolution No. 29 seeking exemption from the
higher income requirement of RA 9009. For the second time,
[however], time ran out from them.

For many of the municipalities whose Cityhood Bills are now

under consideration, this year, at the closing days of the [13th]
Congress, marks their ninth year appealing for fairness and justice. x x
x
 I, for one, share their view that fairness dictates that they
should be given a legal remedy by which they could be allowed to
prove that they have all the necessary qualifications for city status
using the criteria set forth under the [LGC] prior to its amendment by
RA 9009. Hence, when House Joint Resolution No. 1 reached the
Senate x x x I immediately set the public hearing x x x. On July 25,
2006, I filed Committee Report No. 84 x x x. On September 6, I
delivered the sponsorship x x x.

x x x By November 14, the measure had reverted to the period

of individual amendments. This was when the then acting majority
leader, x x x informed the Body that Senator Pimentel and the
proponents of House Joint Resolution No. 1 have agreed to the
proposal of the Minority Leader for the House to first approve the
individual Cityhood Bills of the qualified municipalities, along with the
provision exempting each of them from the higher income requirement
of RA 9009. x x x This led to the certification issued by the proponents
short-listing fourteen (14) municipalities deemed to be qualified for
city-status.

Acting on the suggestion of Senator Pimentel, the proponents

lost no time in working for the approval by the House of
Representatives of their individual Cityhood Bills, each containing a
provision of exemption from the higher income requirement of RA
9009. On the last session day of last year, December 21, the House
transmitted to the Senate the Cityhood Bills of twelve out of the 14
pre-qualified municipalities. Your Committee immediately conducted
the public hearing x x x.

The whole process I enumerated [span] three Congresses x x x.

In essence, the Cityhood Bills now under consideration will have

the same effect as that of House Joint Resolution No. 1 because each
of the 12 bills seeks exemption from the higher income requirement of
 RA 9009. The proponents are invoking the exemption on the basis of
justice and fairness.

Each of the 12 municipalities has all the requisites for

conversion into a component city based on the old requirements set
forth under Section 450 of the [LGC], prior to its amendment by RA
9009, namely: x x x[53] (Emphasis supplied.)

In hindsight, the peculiar conditions, as depicted in Senator Lims speech,

which respondent LGUs found themselves in were unsettling. They were
qualified cityhood applicants before the enactment of RA 009. Because of events
they had absolutely nothing to do with, a spoiler in the form of RA 9009
supervened. Now, then, to impose on them the much higher income
requirement after what they have gone through would appear to be
indeed unfair, to borrow from Senator Lim. Thus, the imperatives of fairness
dictate that they should be given a legal remedy by which they would be allowed
to prove that they have all the necessary qualifications for city status, using the
criteria set forth under the LGC of 1991 prior to its amendment by RA
9009. Truly, the peculiar conditions of respondent LGUs, which are actual and
real, provide sufficient grounds for legislative classification.

To be sure, courts, regardless of doubts they might be entertaining, cannot

question the wisdom of the congressional classification, if reasonable, or the
motivation underpinning the classification.[54] By the same token, they do not sit to
determine the propriety or efficacy of the remedies Congress has specifically chosen
to extend. That is its prerogative. The power of the Legislature to make distinctions
and classifications among persons is, to reiterate, neither curtailed nor denied by
the equal protection clause. A law can be violative of the constitutional limitation
only when the classification is without reasonable basis.
The classification is also germane to the purpose of the law. The exemption of
respondent LGUs/municipalities from the PhP 100 million income requirement was
meant to reduce the inequality occasioned by the passage of the amendatory RA
9009. From another perspective, the exemption was unquestionably designed to
insure that fairness and justice would be accorded respondent LGUs. Let it be noted
that what were then the cityhood bills covering respondent LGUs were part and
parcel of the original 57 conversion bills filed in the 11th Congress, 33 of those
became laws before the adjournment of that Congress. The then bills of the
challenged cityhood laws were not acted upon due, inter alia, to the impeachment
of then President Estrada, the related jueteng scandal investigations conducted
before, and the EDSA events that followed the aborted impeachment.

While the equal protection guarantee frowns upon the creation of a privileged
class without justification, inherent in the equality clause is the exhortation for the
Legislature to pass laws promoting equality or reducing existing inequalities. The
enactment of the cityhood laws was in a real sense an attempt on the part of
Congress to address the inequity dealt the respondent LGUs. These laws positively
promoted the equality and eliminated the inequality, doubtless unintended,
between respondent municipalities and the thirty-three (33) other municipalities
whose cityhood bills were enacted during the 11th Congress. Respondent
municipalities and the 33 other municipalities, which had already been elevated to
city status, were all found to be qualified under the old Sec. 450 of the LGC of 1991
during the 11th Congress. As such, both respondent LGUs and the 33 other former
municipalities are under like circumstances and conditions. There is, thus, no rhyme
or reason why an exemption from the PhP 100 million requirement cannot be given
to respondent LGUs. Indeed, to deny respondent LGUs/municipalities the same
rights and privileges accorded to the 33 other municipalities when, at the outset
they were similarly situated, is tantamount to denying the former the protective
mantle of the equal protection clause. In effect, petitioners and petitioners-in-
intervention are creating an absurd situation in which an alleged violation of the
equal protection clause of the Constitution is remedied by another violation of the
same clause. The irony is not lost to the Court.
 Then too the non-retroactive effect of RA 9009 is not limited in application
only to conditions existing at the time of its enactment. It is intended to apply for
all time, as long as the contemplated conditions obtain. To be more precise, the
legislative intent underlying the enactment of RA 9009 to exclude would-be-cities
from the PhP 100 million criterion would hold sway, as long as the corresponding
cityhood bill has been filed before the effectivity of RA 9009 and the concerned
municipality qualifies for conversion into a city under the original version of Sec.
450 of the LGC of 1991.

Viewed in its proper light, the common exemption clause in the cityhood laws
is an application of the non-retroactive effect of RA 9009 on the cityhood bills. It is
not a declaration of certain rights, but a mere declaration of prior qualification
and/or compliance with the non-retroactive effect of RA 9009.

Lastly and in connection with the third requisite, the uniform exemption
clause would apply to municipalities that had pending cityhood bills before the
passage of RA 9009 and were compliant with then Sec. 450 of the LGC of 1991,
which prescribed an income requirement of PhP 20 million. It is hard to imagine,
however, if there are still municipalities out there belonging in context to the same
class as the sixteen (16) respondent LGUs. Municipalities that cannot claim to
belong to the same class as the 16 cannot seek refuge in the cityhood laws. The
former have to comply with the PhP 100 million income requirement imposed by RA
9009.

A final consideration. The existence of the cities consequent to the

approval of the creating, but challenged, cityhood laws in the plebiscites held in
the affected LGUs is now an operative fact. New cities appear to have been
organized and are functioning accordingly, with new sets of officials and
employees. Other resulting events need not be enumerated. The operative fact
doctrine provides another reason for upholding the constitutionality of the
cityhood laws in question.
 In view of the foregoing discussion, the Court ought to abandon as it
hereby abandons and sets aside the Decision of November 18, 2008 subject of
reconsideration. And by way of summing up the main arguments in support of
this disposition, the Court hereby declares the following:

(1) Congress did not intend the increased income requirement in RA 9009 to
apply to the cityhood bills which became the cityhood laws in question. In other
words, Congress intended the subject cityhood laws to be exempted from the
income requirement of PhP 100 million prescribed by RA 9009;

(2) The cityhood laws merely carry out the intent of RA 9009, now Sec. 450
of the LGC of 1991, to exempt respondent LGUs from the PhP 100 million income
requirement;

(3) The deliberations of the 11th or 12th Congress on unapproved bills or

resolutions are extrinsic aids in interpreting a law passed in the 13th Congress. It is
really immaterial if Congress is not a continuing body. The hearings and
deliberations during the 11th and 12th Congress may still be used as extrinsic
reference inasmuch as the same cityhood bills which were filed before the passage
of RA 9009 were being considered during the 13th Congress. Courts may fall back
on the history of a law, as here, as extrinsic aid of statutory construction if the
literal application of the law results in absurdity or injustice.

(4) The exemption accorded the 16 municipalities is based on the fact that
each had pending cityhood bills long before the enactment of RA 9009 that
substantially distinguish them from other municipalities aiming for cityhood. On top
of this, each of the 16 also met the PhP 20 million income level exacted under the
original Sec. 450 of the 1991 LGC.

And to stress the obvious, the cityhood laws are presumed constitutional. As
we see it, petitioners have not overturned the presumptive constitutionality of the
laws in question.

WHEREFORE, respondent LGUs Motion for Reconsideration dated June 2,

2009, their Motion to Amend the Resolution of April 28, 2009 by Declaring Instead

that Respondents Motion for Reconsideration of the Resolution of March 31, 2009

and Motion for Leave to File and to Admit Attached Second Motion for

Reconsideration of the Decision Dated November 18, 2008 Remain Unresolved and

to Conduct Further Proceedings, dated May 14, 2009, and their second Motion for

Reconsideration of the Decision dated November 18, 2008 are GRANTED. The June

2, 2009, the March 31, 2009, and April 31, 2009 Resolutions

are REVERSED and SET ASIDE. The entry of judgment made on May 21, 2009 must

accordingly be RECALLED.

The instant consolidated petitions and petitions-in-intervention

are DISMISSED. The cityhood laws, namely Republic Act Nos. 9389, 9390, 9391,
9392, 9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and

9491 are declared VALID and CONSTITUTIONAL.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

WE CONCUR:

(No part)

REYNATO S. PUNO

Chief Justice
ANTONIO T. CARPIO RENATO C. CORONA

Associate Justice Associate Justice

(No part)

CONCHITA CARPIO MORALES ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION

Associate Justice Associate Justice

DIOSDADO M. PERALTA LUCAS P. BERSAMIN

Associate Justice Associate Justice

(No part)

MARIANO C. DEL CASTILLO ROBERTO A. ABAD

Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR.

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO

Chief Justice

Republic of the Philippines

Supreme Court
Baguio City

EN BANC

LEAGUE OF CITIES OF THE G.R. No. 176951

PHILIPPINES (LCP), represented by
LCP National President Jerry P.
Treas; CITY OF CALBAYOG,
represented by Mayor Mel Senen S.
Sarmiento; and JERRY P. TREAS, in
his personal capacity as Taxpayer,
Petitioners,
- versus -

COMMISSION ON
ELECTIONS; MUNICIPALITY OF
BAYBAY, PROVINCE OF LEYTE;
MUNICIPALITY OF BOGO, PROVINCE
OF CEBU; MUNICIPALITY OF
CATBALOGAN, PROVINCE OF
WESTERN SAMAR; MUNICIPALITY OF
TANDAG, PROVINCE OF SURIGAO
DEL SUR; MUNICIPALITY OF
BORONGAN, PROVINCE OF EASTERN
SAMAR; AND MUNICIPALITY OF
TAYABAS, PROVINCE OF QUEZON,
Respondents.
x----------------------
x
LEAGUE OF CITIES OF THE
PHILIPPINES (LCP), represented by
LCP National President Jerry P.
Treas; CITY OF CALBAYOG, G.R. No. 177499
represented by Mayor Mel Senen S.
Sarmiento; and JERRY P. TREAS, in
his personal capacity as Taxpayer,
Petitioners,

versus

COMMISSION ON ELECTIONS;
MUNICIPALITY OF LAMITAN,
PROVINCE OF BASILAN;
MUNICIPALITY OF TABUK, PROVINCE
OF KALINGA; MUNICIPALITY OF
BAYUGAN, PROVINCE OF AGUSAN
DEL SUR; MUNICIPALITY OF BATAC,
PROVINCE OF ILOCOS NORTE;
MUNICIPALITY OF MATI, PROVINCE
OF DAVAO ORIENTAL; AND
MUNICIPALITY OF GUIHULNGAN,
PROVINCE OF NEGROS ORIENTAL,
Respondents.
x----------------------
x
LEAGUE OF CITIES OF THE
PHILIPPINES (LCP), represented by
LCP National President Jerry P.
Treas; CITY OF CALBAYOG,
represented by Mayor Mel Senen S.
Sarmiento; and JERRY P. TREAS, in
his personal capacity as Taxpayer,
Petitioners, G.R. No. 178056

- versus - Present:

COMMISSION ON ELECTIONS; CORONA, C.J.,

MUNICIPALITY OF CABADBARAN, CARPIO,
PROVINCE OF AGUSAN DEL NORTE; CARPIO MORALES,
MUNICIPALITY OF CARCAR, VELASCO, JR.,
PROVINCE OF CEBU; MUNICIPALITY NACHURA,
OF EL SALVADOR, PROVINCE OF LEONARDO-DE CASTRO,
MISAMIS ORIENTAL; MUNICIPALITY BRION,
OF NAGA, CEBU; and DEPARTMENT PERALTA, and
OF BUDGET AND MANAGEMENT, BERSAMIN,
Respondents. DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO, JJ.

Promulgated:

April 12, 2011

x-----------------------------------------------------------------------------------------x

RESOLUTION

BERSAMIN, J.:

We consider and resolve the Ad Cautelam Motion for Reconsideration filed by

the petitioners vis--vis the Resolution promulgated on February 15, 2011.

To recall, the Resolution promulgated on February 15, 2011 granted

the Motion for Reconsideration of the respondents presented against the Resolution
dated August 24, 2010, reversed the Resolution dated August 24, 2010, and
declared the 16 Cityhood Laws Republic Acts Nos. 9389, 9390, 9391, 9392, 9393,
9394, 9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491
constitutional.
 Now, the petitioners anchor their Ad Cautelam Motion for
Reconsideration upon the primordial ground that the Court could no longer modify,
alter, or amend its judgment declaring the Cityhood Laws unconstitutional due to
such judgment having long become final and executory. They submit that the
Cityhood Laws violated Section 6 and Section 10 of Article X of the Constitution, as
well as the Equal Protection Clause.

The petitioners specifically ascribe to the Court the following errors in its
promulgation of the assailed February 15, 2011 Resolution, to wit:

I. THE HONORABLE COURT HAS NO JURISDICTION TO

PROMULGATE THE RESOLUTION OF 15 FEBRUARY 2011BECAUSE
THERE IS NO LONGER ANY ACTUAL CASE OR CONTROVERSY TO
SETTLE.
II. THE RESOLUTION CONTRAVENES THE 1997 RULES OF CIVIL
PROCEDURE AND RELEVANT SUPREME COURT ISSUANCES.

III. THE RESOLUTION UNDERMINES THE JUDICIAL SYSTEM IN ITS

DISREGARD OF THE PRINCIPLES OF RES JUDICATA AND THE
DOCTRINE OF IMMUTABILITY OF FINAL JUDGMENTS.

IV. THE RESOLUTION ERRONEOUSLY RULED THAT THE SIXTEEN (16)

CITYHOOD BILLS DO NOT VIOLATE ARTICLE X, SECTIONS 6 AND
10 OF THE 1987 CONSTITUTION.

V. THE SIXTEEN (16) CITYHOOD LAWS VIOLATE THE EQUAL

PROTECTION CLAUSE OF THE CONSTITUTION AND THE RIGHT OF
LOCAL GOVERNMENTS TO A JUST SHARE IN THE NATIONAL
TAXES.

Ruling

Upon thorough consideration, we deny the Ad Cautelam Motion for

Reconsideration for its lack of merit.

I.
Procedural Issues

With respect to the first, second, and third assignments of errors, supra, it appears
that the petitioners assail the jurisdiction of the Court in promulgating the February
15, 2011 Resolution, claiming that the decision herein had long become final and
executory. They state that the Court thereby violated rules of procedure, and the
principles of res judicata and immutability of final judgments.

The petitioners posit that the controversy on the Cityhood Laws ended with the
April 28, 2009 Resolution denying the respondents second motion for
reconsideration vis--vis the November 18, 2008 Decision for being a prohibited
pleading, and in view of the issuance of the entry of judgment on May 21, 2009.

The Court disagrees with the petitioners.

In the April 28, 2009 Resolution, the Court ruled:

By a vote of 6-6, the Motion for Reconsideration of the Resolution

of 31 March 2009 is DENIED for lack of merit. The motion is denied
since there is no majority that voted to overturn the Resolution of 31
March 2009.

The Second Motion for Reconsideration of the Decision of 18

November 2008 is DENIED for being a prohibited pleading, and the
Motion for Leave to Admit Attached Petition in Intervention dated 20
April 2009 and the Petition in Intervention dated 20 April 2009 filed by
counsel for Ludivina T. Mas, et al. are also DENIED in view of the
denial of the second motion for reconsideration. No further pleadings
shall be entertained. Let entry of judgment be made in due course.

Justice Presbitero J. Velasco, Jr. wrote a Dissenting Opinion,

joined by Justices Consuelo Ynares-Santiago, Renato C. Corona, Minita
Chico-Nazario, Teresita Leonardo-De Castro, and Lucas P. Bersamin.
Chief Justice Reynato S. Puno and Justice Antonio Eduardo B. Nachura
took no part. Justice Leonardo A. Quisumbing is on leave.[1]

Within 15 days from receipt of the April 28, 2009 Resolution, the respondents
filed a Motion To Amend Resolution Of April 28, 2009 By Declaring Instead That
Respondents Motion for Reconsideration Of the Resolution Of March 31, 2009 And
Motion For Leave To File, And To Admit Attached Second Motion For
Reconsideration Of The Decision Dated November 18, 2008 Remain Unresolved And
To Conduct Further Proceedings Thereon, arguing therein that a determination of
the issue of constitutionality of the 16 Cityhood Laws upon a motion for
reconsideration by an equally divided vote was not binding on the Court as a valid
precedent, citing the separate opinion of then Chief Justice Reynato S. Puno
in Lambino v. Commission on Elections.[2]

Thus, in its June 2, 2009 Resolution, the Court issued the following
clarification of the April 28, 2009 Resolution, viz:

As a rule, a second motion for reconsideration is a prohibited

pleading pursuant to Section 2, Rule 52 of the Rules of Civil Procedure
which provides that: No second motion for reconsideration of a
judgment or final resolution by the same party shall be
entertained. Thus, a decision becomes final and executory after 15
days from receipt of the denial of the first motion for reconsideration.

However, when a motion for leave to file and admit a second

motion for reconsideration is granted by the Court, the Court therefore
allows the filing of the second motion for reconsideration. In such a
case, the second motion for reconsideration is no longer a prohibited
pleading.

In the present case, the Court voted on the second motion for
reconsideration filed by respondent cities. In effect, the Court allowed
the filing of the second motion for reconsideration. Thus, the second
motion for reconsideration was no longer a prohibited
pleading. However, for lack of the required number of votes to
overturn the 18 November 2008 Decision and 31 March 2009
Resolution, the Court denied the second motion for reconsideration in
its 28 April 2009 Resolution.[3]

As the result of the aforecited clarification, the Court resolved to expunge

from the records several pleadings and documents, including respondents Motion
To Amend Resolution Of April 28, 2009 etc.

The respondents thus filed their Motion for Reconsideration of the Resolution
of June 2, 2009, asseverating that their Motion To Amend Resolution Of April 28,
2009 etc. was not another motion for reconsideration of the November 18, 2008
Decision, because it assailed the April 28, 2009 Resolution with respect to the tie-
vote on the respondents Second Motion For Reconsideration. They pointed out that
the Motion To Amend Resolution Of April 28, 2009 etc. was filed on May 14, 2009,
which was within the 15-day period from their receipt of the April 28, 2009
Resolution; thus, the entry of judgment had been prematurely made. They
reiterated their arguments with respect to a tie-vote upon an issue of
constitutionality.

In the September 29, 2009 Resolution,[4] the Court required the petitioners
to comment on the Motion for Reconsideration of the Resolution of June 2,
2009 within 10 days from receipt.

As directed, the petitioners filed their Comment Ad Cautelam With Motion to

Expunge.

The respondents filed their Motion for Leave to File and to Admit Attached
Reply to Petitioners Comment Ad Cautelam With Motion to Expunge, together with
the Reply.

On November 17, 2009, the Court resolved to note the petitioners Comment
Ad Cautelam With Motion to Expunge, to grant the respondents Motion for Leave to
File and Admit Reply to Petitioners Comment Ad Cautelam with Motion to Expunge,
and to note the respondents Reply to Petitioners Comment Ad Cautelam with
Motion to Expunge.

On December 21, 2009, the Court, resolving the Motion To Amend Resolution
Of April 28, 2009 etc. and voting anew on the Second Motion For Reconsideration in
order to reach a concurrence of a majority, promulgated its Decision granting the
motion and declaring the Cityhood Laws as constitutional,[5] disposing thus:

WHEREFORE, respondent LGUs Motion for Reconsideration dated

June 2, 2009, their Motion to Amend the Resolution of April 28, 2009
by Declaring Instead that Respondents Motion for Reconsideration of
the Resolution of March 31, 2009 and Motion for Leave to File and to
Admit Attached Second Motion for Reconsideration of the Decision
Dated November 18, 2008 Remain Unresolved and to Conduct Further
Proceedings, dated May 14, 2009, and their second Motion for
Reconsideration of the Decision dated November 18, 2008
are GRANTED. The June 2, 2009, the March 31, 2009, and April 31,
2009 Resolutions are REVERSED and SET ASIDE. The entry of
judgment made on May 21, 2009 must accordingly be RECALLED.

The instant consolidated petitions and petitions-in-intervention

are DISMISSED. The cityhood laws, namely Republic Act Nos. 9389,
 9390, 9391, 9392, 9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409,
9434, 9435, 9436, and 9491 are
declared VALID and CONSTITUTIONAL.

SO ORDERED.

On January 5, 2010, the petitioners filed an Ad Cautelam Motion for

Reconsideration against the December 21, 2009 Decision.[6] On the same date, the
petitioners also filed a Motion to Annul Decision of 21 December 2009.[7]

On January 12, 2010, the Court directed the respondents to comment on the
motions of the petitioners.[8]

On February 4, 2010, petitioner-intervenors City of Santiago, City of Legazpi,

and City of Iriga filed their separate Manifestations with Supplemental Ad Cautelam
Motions for Reconsideration.[9] Similar manifestations with supplemental motions
for reconsideration were filed by other petitioner-intervenors, specifically: City
of Cadiz on February 15, 2010;[10] City of Batangas on February 17, 2010;[11] and
City of Oroquieta on February 24, 2010.[12] The Court required the adverse parties
to comment on the motions.[13] As directed, the respondents complied.

On August 24, 2010, the Court issued its Resolution reinstating

the November 18, 2008 Decision.[14]

On September 14, 2010, the respondents timely filed a Motion for Reconsideration
of the Resolution Dated August 24, 2010.[15] They followed this by filing
on September 20, 2010 a Motion to Set Motion for Reconsideration of the
Resolution dated August 24, 2010 for Hearing.[16] On November 19, 2010, the
petitioners sent in their Opposition [To the Motion for Reconsideration of Resolution
dated August 24, 2010].[17] On November 30, 2010,[18] the Court noted, among
others, the petitioners Opposition.

On January 18, 2011,[19] the Court denied the respondents Motion to Set
Motion for Reconsideration of the Resolution dated August 24, 2010 for Hearing.
Thereafter, on February 15, 2011, the Court issued the Resolution being now
challenged.

It can be gleaned from the foregoing that, as the June 2, 2009 Resolution clarified,
the respondents Second Motion For Reconsideration was not a prohibited pleading
in view of the Courts voting and acting on it having the effect
of allowing the Second Motion For Reconsideration; and that when the respondents
filed their Motion for Reconsideration of the Resolution of June 2, 2009 questioning
the expunging of their Motion To Amend Resolution Of April 28, 2009 etc. (which
had been filed within the 15-day period from receipt of the April 28, 2009
Resolution), the Court opted to act on the Motion for Reconsideration of the
Resolution of June 2, 2009 by directing the adverse parties through its September
29, 2009 Resolution to comment. The same permitting effect occurred when the
Court, by its November 17, 2009 Resolution, granted the respondents Motion for
Leave to File and Admit Reply to Petitioners Comment Ad Cautelam with Motion to
Expunge, and noted the attached Reply.

Moreover, by issuing the Resolutions dated September 29, 2009 and

November 17, 2009, the Court: (a) rendered ineffective the tie-vote under the
Resolution of April 28, 2009 and the ensuing denial of the Motion for
Reconsideration of the Resolution of March 31, 2009 for lack of a majority to
overturn; (b), re-opened the Decision of November 18, 2008 for a second look
under reconsideration; and (c) lifted the directive that no further pleadings would
be entertained. The Court in fact entertained and acted on the respondents Motion
for Reconsideration of the Resolution of June 2, 2009. Thereafter, the Court
proceeded to deliberate anew on the respondents Second Motion for
Reconsiderationand ended up with the promulgation of the December 21,
2009 Decision (declaring the Cityhood Laws valid and constitutional).

It is also inaccurate for the petitioners to insist that the December 21, 2009
Decision overturned the November 18, 2008 Decision on the basis of the
mere Reflections of the Members of the Court. To be sure, the Reflections were the
legal opinions of the Members and formed part of the deliberations of the Court.
The reference in the December 21, 2009 Decision to the Reflections pointed out
that there was still a pending incident after the April 28, 2009 Resolution that had
been timely filed within 15 days from its receipt,[20] pursuant to Section 10, Rule
51,[21]in relation to Section 1, Rule 52,[22] of the Rules of Court. Again, the Court did
act and deliberate upon this pending incident, leading to the issuance of
the December 21, 2009 Decision (declaring the Cityhood Laws free from
constitutional infirmity). It was thereafter that the Court rendered its August 24,
2010 Resolution (reinstating the November 18, 2008 Decision), to correct which the
respondents Motion for Reconsideration of the Resolution Dated August 24,
2010 was filed. And, finally, the Court issued its February 15, 2011 Resolution,
reversing and setting aside the August 24, 2010 Resolution.

It is worth repeating that the actions taken herein were made by the Court en
banc strictly in accordance with the Rules of Court and its internal procedures.
There has been no irregularity attending or tainting the proceedings.

It also relevant to state that the Court has frequently disencumbered itself under
extraordinary circumstances from the shackles of technicality in order to render just
and equitable relief.[23]

On whether the principle of immutability of judgments and bar by res

judicata apply herein, suffice it to state that the succession of the events recounted
herein indicates that the controversy about the 16 Cityhood Laws has not yet been
resolved with finality. As such, the operation of the principle of immutability of
judgments did not yet come into play. For the same reason is an adherence to the
doctrine of res judicata not yet warranted, especially considering that the
precedential ruling for this case needed to be revisited and set with certainty and
finality.

II.
Substantive Issues
The petitioners reiterate their position that the Cityhood Laws violate Section
6 and Section 10 of Article X of the Constitution, the Equal Protection Clause, and
the right of local governments to a just share in the national taxes.

The Court differs.

Congress clearly intended that the local government units covered by the
Cityhood Laws be exempted from the coverage of R.A. No. 9009.The apprehensions
of the then Senate President with respect to the considerable disparity between the
income requirement of P20 million under the Local Government Code (LGC) prior to
its amendment, and the P100 million under the amendment introduced by R.A. No.
9009 were definitively articulated in his interpellation of Senator Pimentel during
the deliberations on Senate Bill No. 2157. The then Senate President was cognizant
of the fact that there were municipalities that then had pending conversion bills
during the 11th Congress prior to the adoption of Senate Bill No. 2157 as R.A. No.
9009,[24] including the municipalities covered by the Cityhood Laws. It is worthy of
mention that the pertinent deliberations on Senate Bill No. 2157 occurred on
October 5, 2000 while the 11th Congress was in session, and the conversion bills
were then pending in the Senate.Thus, the responses of Senator Pimentel made it
obvious that R.A. No. 9009 would not apply to the conversion bills then pending
deliberation in the Senate during the 11th Congress.

R.A. No. 9009 took effect on June 30, 2001, when the 12thCongress was
incipient. By reason of the clear legislative intent to exempt the
municipalities covered by the conversion bills pending duringthe 11th
Congress, the House of Representatives adopted Joint Resolution No. 29,
entitled Joint Resolution to Exempt Certain Municipalities Embodied in Bills Filed in
Congress before June 30, 2001 from the coverage of Republic Act No.
9009. However, the Senate failed to act on Joint Resolution No. 29. Even so, the
House of Representatives readopted Joint Resolution No. 29 as
Joint Resolution No. 1 during the 12th Congress,[25] and forwarded Joint Resolution
No. 1 to the Senate for approval. Again, the Senate failed to approve Joint
Resolution No. 1.

At this juncture, it is worthwhile to consider the manifestation of Senator

Pimentel with respect to Joint Resolution No. 1, to wit:
MANIFESTATION OF SENATOR PIMENTEL
House Joint Resolution No. 1 seeks to exempt certain municipalities
seeking conversion into cities from the requirement that they must
have at least P100 million in income of locally generated revenue,
exclusive of the internal revenue share that they received from the
central government as required under Republic Act No. 9009.

The procedure followed by the House is questionable, to say the least.

The House wants the Senate to do away with the income requirement
of P100 million so that, en masse, the municipalities they want
exempted could now file bills specifically converting them into
cities.The reason they want the Senate to do it first is that Cong. Dodo
Macias, chair of the House Committee on Local Governments, I am
told, will not entertain any bill for the conversion of municipalities into
cities unless the issue of income requirement is first hurdled. The
House leadership therefore wants to shift the burden of exempting
certain municipalities from the income requirement to the Senate
rather than do it itself.

That is most unusual because, in effect, the House wants the Senate
to pass a blanket resolution that would qualify the municipalities
concerned for conversion into cities on the matter of income
alone.Then, at a later date, the House would pass specific bills
converting the municipalities into cities. However, income is not only
the requirement for municipalities to become cities. There are also the
requirements on population and land area.

In effect, the House wants the Senate to tackle the qualification of the
municipalities they want converted into cities piecemeal and
separately, first is the income under the joint resolution, then the
other requirements when the bills are file to convert specific
municipalities into cities. To repeat, this is a most unusual manner of
creating cities.

My respectful suggestion is for the Senate to request the House to do

what they want to do regarding the applications of certain
municipalities to become cities pursuant to the requirements of the
Local Government Code. If the House wants to exempt certain
municipalities from the requirements of the Local Government Code to
become cities, by all means, let them do their thing. Specifically, they
should act on specific bills to create cities and cite the reasons why the
municipalities concerned are qualified to become cities. Only after the
House shall have completed what they are expected to do under the
law would it be proper for the Senate to act on specific bills creating
cities.

In other words, the House should be requested to finish everything

that needs to be done in the matter of converting municipalities into
cities and not do it piecemeal as they are now trying to do under the
joint resolution.

In my long years in the Senate, this is the first time that a resort to
this subterfuge is being undertaken to favor the creation of certain
cities. I am not saying that they are not qualified. All I am saying is, if
the House wants to pass and create cities out of certain municipalities,
by all means let them do that. But they should do it following the
requirements of the Local Government Code and, if they want to make
certain exceptions, they can also do that too. But they should not use
 the Senate as a ploy to get things done which they themselves should
do.

Incidentally, I have recommended this mode of action verbally to

some leaders of the House. Had they followed the recommendation,
for all I know, the municipalities they had envisioned to be covered by
House Joint Resolution No. 1 would, by now if not all, at least some
have been converted into cities. House Joint Resolution No. 1, the
House, in effect, caused the delay in the approval in the applications
for cityhood of the municipalities concerned.

Lastly, I do not have an amendment to House Joint Resolution No.

1.What I am suggesting is for the Senate to request the House to
follow the procedure outlined in the Local Government Code which has
been respected all through the years. By doing so, we uphold the rule
of law
and minimize the possibilities of power play in the approval of bills
converting municipalities into cities.[26]

Thereafter, the conversion bills of the respondents were individually

filedin the House of Representatives, and were all unanimously and

favorably voted upon by the Members of the House of Representatives.[27] The bills,
when forwarded to the Senate, were likewise unanimously approved by the
Senate.[28] The acts of both Chambers of Congress show that the exemption clauses
ultimately incorporated in the Cityhood Laws are but the express articulations of the
clear legislative intent to exempt the respondents, without exception, from the
coverage of R.A. No. 9009. Thereby, R.A. No. 9009, and, by necessity, the LGC,
were amended, not by repeal but by way of the express exemptions being
embodied in the exemption clauses.

The petitioners further contend that the new income requirement of P100 million
from locally generated sources is not arbitrary because it is not difficult to comply
with; that there are several municipalities that have already complied with the
requirement and have, in fact, been converted into cities, such as Sta. Rosa in
Laguna (R.A. No 9264), Navotas (R.A. No. 9387) and San Juan (R.A. No. 9388) in
Metro Manila, Dasmarias in Cavite (R.A. No. 9723), and Bian in Laguna (R.A. No.
9740); and that several other municipalities have supposedly reached the income
of P100 million from locally generated sources, such as Bauan in Batangas,
Mabalacat in Pampanga, and Bacoor in Cavite.
The contention of the petitioners does not persuade.

As indicated in the Resolution of February 15, 2011, fifty-nine (59) existing

cities had failed as of 2006 to post an average annual income of P100 million based
on the figures contained in the certification dated December 5, 2008 by the Bureau
of Local Government. The large number of existing cities, virtually 50% of them,
still unable to comply with the P100 million threshold income five years after R.A.
No. 9009 took effect renders it fallacious and probably unwarranted for the
petitioners to claim that the P100 million income requirement is not difficult to
comply with.

In this regard, the deliberations on Senate Bill No. 2157 may prove enlightening,
thus:
Senator Osmea III. And could the gentleman help clarify why a
municipality would want to be converted into a city?

Senator Pimentel. There is only one reason, Mr. President, and it is not
hidden. It is the fact that once converted into a city, the municipality
will have roughly more than three times the share that it would be
receiving over the internal revenue allotment than it would have if it
were to remain a municipality. So more or less three times or more.

Senator Osmea III. Is it the additional funding that they will be able to
enjoy from a larger share from the internal revenue allocations?

Senator Pimentel. Yes, Mr. President.

Senator Osmea III. Now, could the gentleman clarify, Mr. President,
why in the original Republic Act No. 7160, known as the Local
Government Code of 1991, such a wide gap was made between a
municipalitywhat a municipality would earnand a city? Because
essentially, to a persons mind, even with this new requirement, if
approved by Congress, if a municipality is earning P100 million and
has a population of more than 150,000 inhabitants but has less than
100 square kilometers, it would not qualify as a city.

Senator Pimentel. Yes.

Senator Osmea III. Now would that not be quite arbitrary on the part
of the municipality?
Senator Pimentel. In fact, Mr. President, the House version restores
the or. So, this is a matter that we can very well take up as a policy
issue. The chair of the committee does not say that we should, as we
know, not listen to arguments for the restoration of the word or in the
population or territorial requirement.

Senator Osmea III. Mr. President, my point is that, I agree with the
gentlemans and, but perhaps we should bring down the area. There
are certainly very crowded places in this country that are less than
10,000 hectares100 square kilometers is 10,000 hectares. There might
only be 9,000 hectares or 8,000 hectares. And it would be unfair if
these municipalities already earning P100,000,000 in locally generated
funds and have a population of over 150,000 would not be qualified
because of the simple fact that the physical area does not cover
10,000 hectares.

Senator Pimentel. Mr. President, in fact, in Metro Manila there are any
number of municipalities. San Juan is a specific example which, if we
apply the present requirements, would not qualify: 100 square
kilometers and a population of not less than 150,000.

But my reply to that, Mr. President, is that they do not have to become
a city?

Senator Osmea III. Because of the income.

Senator Pimentel. But they are already earning a lot, as the gentleman
said. Otherwise, the danger here, if we become lax in the
requirements, is the metropolis-located local governments would have
more priority in terms of funding because they would have more
qualifications to become a city compared to far-flung areas in
Mindanao or in the Cordilleras, or whatever.

Therefore, I think we should not probably ease up on the

requirements. Maybe we can restore the word or so that if they do not
have the 100 square kilometers of territory, then if they qualify in
terms of population and income, that would be all right, Mr. President.

Senator Osmea III. Mr. President, I will not belabor the point at this
time. I know that the distinguished gentleman is considering several
amendments to the Local Government Code. Perhaps this is something
that could be further refined at a later time, with his permission.

So I would like to thank the gentleman for his graciousness in

answering our questions.

Senator Pimentel. I also thank the gentleman, Mr. President.[29]

The Court takes note of the fact that the municipalities cited by the petitioners as
having generated the threshold income of P100 million from local sources, including
those already converted into cities, are either in Metro Manila or in provinces close
to Metro Manila. In comparison, the municipalities covered by the Cityhood Laws
are spread out in the different provinces of the Philippines, including the Cordillera
and Mindanao regions, and are considerably very distant from Metro Manila. This
reality underscores the danger the enactment of R.A. No. 9009 sought to
prevent, i.e., that the metropolis-located local governments would have more
priority in terms of funding because they would have more qualifications to become
a city compared to the far-flung areas in Mindanao or in the Cordilleras, or
whatever, actually resulting from the abrupt increase in the income requirement.
Verily, this result is antithetical to what the Constitution and LGC have nobly
envisioned in favor of countryside development and national growth.Besides, this
result should be arrested early, to avoid the unwanted divisive effect on the entire
country due to the local government units closer to the National Capital Region
being afforded easier access to the bigger share in the national coffers than other
local government units.

There should also be no question that the local government units covered by the
Cityhood Laws belong to a class of their own. They have proven themselves viable
and capable to become component cities of their respective provinces. They are and
have been centers of trade and commerce, points of convergence of transportation,
rich havens of agricultural, mineral, and other natural resources, and flourishing
tourism spots. In his speech delivered on the floor of the Senate to sponsor House
Joint Resolution No. 1, Senator Lim recognized such unique traits,[30]viz:

It must be noted that except for Tandag and Lamitan, which are
both second-class municipalities in terms of income, all the rest are
categorized by the Department of Finance as first-class municipalities
with gross income of at least P70 million as per Commission of Audit
Report for 2005. Moreover, Tandag and Lamitan, together with
Borongan, Catbalogan, and Tabuk, are all provincial capitals.

The more recent income figures of the 12 municipalities, which

would have increased further by this time, indicate their readiness to
take on the responsibilities of cityhood.
 Moreover, the municipalities under consideration are leading
localities in their respective provinces. Borongan, Catbalogan, Tandag,
Batac and Tabuk are ranked number one in terms of income among all
the municipalities in their respective provinces; Baybay and Bayugan
are number two; Bogo and Lamitan are number three; Carcar, number
four; and Tayabas, number seven. Not only are they pacesetters in
their respective provinces, they are also among the frontrunners in
their regions Baybay, Bayugan and Tabuk are number two income-
earners in Regions VIII, XIII, and CAR, respectively; Catbalogan and
Batac are number three in Regions VIII and I, respectively; Bogo,
number five in Region VII; Borongan and Carcar are both number six
in Regions VIII and VII, respectively. This simply shows that these
municipalities are viable.
Petitioner League of Cities argues that there exists no issue with respect to
the cityhood of its member cities, considering that they became cities in full
compliance with the criteria for conversion at the time of their creation.

The Court considers the argument too sweeping. What we pointed out was
that the previous income requirement of P20 million was definitely not insufficient
to provide the essential government facilities, services, and special functions vis--
vis the population of a component city. We also stressed that the increased income
requirement of P100 million was not the only conclusive indicator for any
municipality to survive and remain viable as a component city. These observations
were unerringly reflected in the respective incomes of the fifty-nine (59) members
of the League of Cities that have still failed, remarkably enough, to be compliant
with the new requirement of the P100 million threshold income five years after R.A.
No. 9009 became law.

Undoubtedly, the imposition of the income requirement of P100 million from local
sources under R.A. No. 9009 was arbitrary. When the sponsor of the law chose the
specific figure of P100 million, no research or empirical data buttressed the
figure. Nor was there proof that the proposal took into account the after-effects
that were likely to arise. As already mentioned, even the danger the passage of
R.A. No. 9009 sought to prevent might soon become a reality. While the
Constitution mandates that the creation of local government units must comply
with the criteria laid down in the LGC, it cannot be justified to insist that the
Constitution must have to yield to every amendment to the LGC despite such
amendment imminently producing effects contrary to the original thrusts of the LGC
to promote autonomy, decentralization, countryside development, and the
concomitant national growth.

Moreover, if we were now to adopt the stringent interpretation of the Constitution

the petitioners are espousing, we may have to apply the same restrictive yardstick
against the recently converted cities cited by the petitioners, and find two of them
whose conversion laws have also to be struck down for being unconstitutional. The
two laws are R.A. No. 9387[31] and R.A. No. 9388,[32] respectively converting the
municipalities of San Juan and Navotas into highly urbanized cities. A cursory
reading of the laws indicates that there is no indication of compliance with the
requirements imposed by the LGC, for, although the two local government units
concerned presumably complied with the income requirement of P50 million under
Section 452 of the LGC and the income requirement of P100 million under the
amended Section 450 of the LGC, they obviously did not meet the requirements set
forth under Section 453 of the LGC, to wit:

Section 453. Duty to Declare Highly Urbanized Status.It shall be

the duty of the President to declare a city as highly urbanized within
thirty (30) days after it shall have met the minimum requirements
prescribed in the immediately preceding Section, upon proper
application therefor and ratification in a plebiscite by the qualified
voters therein.

Indeed, R.A. No. 9387 and R.A. No. 9388 evidently show that the President
had not classified San Juan and Navotas as highly urbanized cities upon proper
application and ratification in a plebiscite by the qualified voters therein. A further
perusal of R.A. No. 9387 reveals that San Juan did not qualify as a highly urbanized
city because it had a population of only 125,558, contravening the required
minimum population of 200,000 under Section 452 of the LGC. Such non-
qualification as a component city was conceded even by Senator Pimentel during
the deliberations on Senate Bill No. 2157.

The petitioners contention that the Cityhood Laws violated their right to a
just share in the national taxes is not acceptable.
 In this regard, it suffices to state that the share of local government units is
a matter of percentage under Section 285 of the LGC, not a specific
amount. Specifically, the share of the cities is 23%, determined on the basis of
population (50%), land area (25%), and equal sharing (25%). This share is also
dependent on the number of existing cities, such that when the number of cities
increases, then more will divide and share the allocation for cities. However, we
have to note that the allocation by the National Government is not a constant, and
can either increase or decrease. With every newly converted city becoming entitled
to share the allocation for cities, the percentage of internal revenue allotment (IRA)
entitlement of each city will decrease, although the actual amount received may be
more than that received in the preceding year. That is a necessary consequence of
Section 285 and Section 286 of the LGC.

As elaborated here and in the assailed February 15, 2011 Resolution, the
Cityhood Laws were not violative of the Constitution and the LGC. The respondents
are thus also entitled to their just share in the IRA allocation for cities. They have
demonstrated their viability as component cities of their respective provinces and
are developing continuously, albeit slowly, because they had previously to share the
IRA with about 1,500 municipalities. With their conversion into component cities,
they will have to share with only around 120 cities.

Local government units do not subsist only on locally generated income, but
also depend on the IRA to support their development. They can spur their own
developments and thereby realize their great potential of encouraging trade and
commerce in the far-flung regions of the country. Yet their potential will effectively
be stunted if those already earning more will still receive a bigger share from the
national coffers, and if commercial activity will be more or less concentrated only in
and near Metro Manila.

III.
Conclusion

We should not ever lose sight of the fact that the 16 cities covered by the
Cityhood Laws not only had conversion bills pending during the 11th Congress, but
have also complied with the requirements of the LGC prescribed prior to its
amendment by R.A. No. 9009. Congress undeniably gave these cities all the
 considerations that justice and fair play demanded. Hence, this Court should do no
less by stamping its imprimatur to the clear and unmistakable legislative intent and
by duly recognizing the certain collective wisdom of Congress.

WHEREFORE, the Ad Cautelam Motion for Reconsideration (of the Decision

dated 15 February 2011) is denied with finality.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:

RENATO C. CORONA
Chief Justice

See Dissenting Opinion I maintain my vote, hence, I dissent

ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate Justice

No Part
PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA
Associate Justice Associate Justice

I join the Dissent of J. Carpio

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION
Associate Justice Associate Justice

I join the dissent of J. Carpio (no part)

DIOSDADO M. PERALTA MARIANO C. DEL CASTILLO
Associate Justice Associate Justice
Please see my concurring opinion I join the dissent of J. Carpio
ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.
Associate Justice Associate Justice

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

Associate Justice Associate Justice

I join the dissent of J. Carpio and reserve my right to file a distinct dissenting
opinion
MARIA LOURDES P. A. SERENO
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions
in the above decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court.

RENATO C. CORONA
Chief Justice