Republic of the Philippines RESOLUCION CONFIRMANDO LAS ACTAS DE

SUPREME COURT AQUELLOS DIPUTADOS CONTRA QUIENES NO SE

Manila HA PRESENTADO PROTESTA.

EN BANC Se resuelve: Que las actas de eleccion de los

Diputados contra quienes no se hubiere presentado
debidamente una protesta antes de la adopcion de la
G.R. No. L-45081 July 15, 1936
presente resolucion sean, como por la presente, son
aprobadas y confirmadas.
JOSE A. ANGARA, petitioner,
vs.
Adoptada, 3 de diciembre, 1935.
THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL CASTILLO, and
DIONISIO C. MAYOR,respondents.
(5) That on December 8, 1935, the herein respondent Pedro Ynsua filed
before the Electoral Commission a "Motion of Protest" against the election
Godofredo Reyes for petitioner.
of the herein petitioner, Jose A. Angara, being the only protest filed after the
Office of the Solicitor General Hilado for respondent Electoral Commission.
passage of Resolutions No. 8 aforequoted, and praying, among other-
Pedro Ynsua in his own behalf.
things, that said respondent be declared elected member of the National
No appearance for other respondents.
Assembly for the first district of Tayabas, or that the election of said position
be nullified;
LAUREL, J.:
(6) That on December 9, 1935, the Electoral Commission adopted a
This is an original action instituted in this court by the petitioner, Jose A. Angara, for resolution, paragraph 6 of which provides:
the issuance of a writ of prohibition to restrain and prohibit the Electoral Commission,
one of the respondents, from taking further cognizance of the protest filed by Pedro
6. La Comision no considerara ninguna protesta que no se haya
Ynsua, another respondent, against the election of said petitioner as member of the
presentado en o antes de este dia.
National Assembly for the first assembly district of the Province of Tayabas.

The facts of this case as they appear in the petition and as admitted by the
respondents are as follows:
(1) That in the elections of September 17, 1935, the petitioner, Jose A.
Angara, and the respondents, Pedro Ynsua, Miguel Castillo and Dionisio
Mayor, were candidates voted for the position of member of the National
Assembly for the first district of the Province of Tayabas;
(2) That on October 7, 1935, the provincial board of canvassers, proclaimed
the petitioner as member-elect of the National Assembly for the said district,
for having received the most number of votes;
(3) That on November 15, 1935, the petitioner took his oath of office;
(7) That on December 20, 1935, the herein petitioner, Jose A. Angara, one
of the respondents in the aforesaid protest, filed before the Electoral
Commission a "Motion to Dismiss the Protest", alleging (a) that Resolution
No. 8 of Dismiss the Protest", alleging (a) that Resolution No. 8 of the
National Assembly was adopted in the legitimate exercise of its
constitutional prerogative to prescribe the period during which protests
against the election of its members should be presented; (b) that the
aforesaid resolution has for its object, and is the accepted formula for, the
limitation of said period; and (c) that the protest in question was filed out of
the prescribed period;
(8) That on December 27, 1935, the herein respondent, Pedro Ynsua, filed
an "Answer to the Motion of Dismissal" alleging that there is no legal or
constitutional provision barring the presentation of a protest against the
election of a member of the National Assembly after confirmation;

(4) That on December 3, 1935, the National Assembly in session

(9) That on December 31, 1935, the herein petitioner, Jose A. Angara, filed
assembled, passed the following resolution: a "Reply" to the aforesaid "Answer to the Motion of Dismissal";

[No. 8]
 (10) That the case being submitted for decision, the Electoral Commission
promulgated a resolution on January 23, 1936, denying herein petitioner's
"Motion to Dismiss the Protest."
The application of the petitioner sets forth the following grounds for the issuance of the
writ prayed for:
the same by the fundamental law; that in adopting its resolution of January
23, 1936, overruling the motion of the petitioner to dismiss the election
protest in question, and declaring itself with jurisdiction to take cognizance
of said protest, it acted in the legitimate exercise of its quasi-judicial
functions a an instrumentality of the Legislative Department of the
Commonwealth Government, and hence said act is beyond the judicial
cognizance or control of the Supreme Court;

(a) That the Constitution confers exclusive jurisdiction upon the electoral
(b) That the resolution of the National Assembly of December 3, 1935,
Commission solely as regards the merits of contested elections to the
confirming the election of the members of the National Assembly against
National Assembly;
whom no protest had thus far been filed, could not and did not deprive the
electoral Commission of its jurisdiction to take cognizance of election
(b) That the Constitution excludes from said jurisdiction the power to protests filed within the time that might be set by its own rules:
regulate the proceedings of said election contests, which power has been
reserved to the Legislative Department of the Government or the National
(c) That the Electoral Commission is a body invested with quasi-judicial
Assembly;
functions, created by the Constitution as an instrumentality of the Legislative
Department, and is not an "inferior tribunal, or corporation, or board, or
(c) That like the Supreme Court and other courts created in pursuance of person" within the purview of section 226 and 516 of the Code of Civil
the Constitution, whose exclusive jurisdiction relates solely to deciding the Procedure, against which prohibition would lie.
merits of controversies submitted to them for decision and to matters
involving their internal organization, the Electoral Commission can regulate
The respondent Pedro Ynsua, in his turn, appeared and filed an answer in his own
its proceedings only if the National Assembly has not availed of its primary
behalf on March 2, 1936, setting forth the following as his special defense:
power to so regulate such proceedings;

(d) That Resolution No. 8 of the National Assembly is, therefore, valid and
should be respected and obeyed;
(e) That under paragraph 13 of section 1 of the ordinance appended to the
Constitution and paragraph 6 of article 7 of the Tydings-McDuffie Law (No.
127 of the 73rd Congress of the United States) as well as under section 1
and 3 (should be sections 1 and 2) of article VIII of the Constitution, this
Supreme Court has jurisdiction to pass upon the fundamental question
herein raised because it involves an interpretation of the Constitution of the
Philippines.
(a) That at the time of the approval of the rules of the Electoral Commission
on December 9, 1935, there was no existing law fixing the period within
which protests against the election of members of the National Assembly
should be filed; that in fixing December 9, 1935, as the last day for the filing
of protests against the election of members of the National Assembly, the
Electoral Commission was exercising a power impliedly conferred upon it by
the Constitution, by reason of its quasi-judicial attributes;
(b) That said respondent presented his motion of protest before the
Electoral Commission on December 9, 1935, the last day fixed by
paragraph 6 of the rules of the said Electoral Commission;

On February 25, 1936, the Solicitor-General appeared and filed an answer in behalf of
(c) That therefore the Electoral Commission acquired jurisdiction over the
the respondent Electoral Commission interposing the following special defenses:
protest filed by said respondent and over the parties thereto, and the
resolution of the Electoral Commission of January 23, 1936, denying
(a) That the Electoral Commission has been created by the Constitution as petitioner's motion to dismiss said protest was an act within the jurisdiction
an instrumentality of the Legislative Department invested with the of the said commission, and is not reviewable by means of a writ of
jurisdiction to decide "all contests relating to the election, returns, and prohibition;
qualifications of the members of the National Assembly"; that in adopting its
resolution of December 9, 1935, fixing this date as the last day for the
(d) That neither the law nor the Constitution requires confirmation by the
presentation of protests against the election of any member of the National
National Assembly of the election of its members, and that such
Assembly, it acted within its jurisdiction and in the legitimate exercise of the
confirmation does not operate to limit the period within which protests
implied powers granted it by the Constitution to adopt the rules and
should be filed as to deprive the Electoral Commission of jurisdiction over
regulations essential to carry out the power and functions conferred upon
protest filed subsequent thereto;
 (e) That the Electoral Commission is an independent entity created by the
Constitution, endowed with quasi-judicial functions, whose decision are final
and unappealable;
( f ) That the electoral Commission, as a constitutional creation, is not an
inferior tribunal, corporation, board or person, within the terms of sections
226 and 516 of the Code of Civil Procedure; and that neither under the
provisions of sections 1 and 2 of article II (should be article VIII) of the
Constitution and paragraph 13 of section 1 of the Ordinance appended
thereto could it be subject in the exercise of its quasi-judicial functions to a
writ of prohibition from the Supreme Court;
(g) That paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of
the 73rd Congress of the united States) has no application to the case at
bar.
The case was argued before us on March 13, 1936. Before it was submitted for
decision, the petitioner prayed for the issuance of a preliminary writ of injunction
against the respondent Electoral Commission which petition was denied "without
passing upon the merits of the case" by resolution of this court of March 21, 1936.
There was no appearance for the other respondents.
The issues to be decided in the case at bar may be reduced to the following two
principal propositions:
1. Has the Supreme Court jurisdiction over the Electoral Commission and
the subject matter of the controversy upon the foregoing related facts, and
in the affirmative,
2. Has the said Electoral Commission acted without or in excess of its
jurisdiction in assuming to the cognizance of the protest filed the election of
the herein petitioner notwithstanding the previous confirmation of such
election by resolution of the National Assembly?
We could perhaps dispose of this case by passing directly upon the merits of the
controversy. However, the question of jurisdiction having been presented, we do not
feel justified in evading the issue. Being a case primæ impressionis, it would hardly be
consistent with our sense of duty to overlook the broader aspect of the question and
leave it undecided. Neither would we be doing justice to the industry and vehemence
of counsel were we not to pass upon the question of jurisdiction squarely presented to
our consideration.
The separation of powers is a fundamental principle in our system of government. It
obtains not through express provision but by actual division in our Constitution. Each
department of the government has exclusive cognizance of matters within its
jurisdiction, and is supreme within its own sphere. But it does not follow from the fact
that the three powers are to be kept separate and distinct that the Constitution
intended them to be absolutely unrestrained and independent of each other. The
Constitution has provided for an elaborate system of checks and balances to secure
coordination in the workings of the various departments of the government. For
example, the Chief Executive under our Constitution is so far made a check on the
legislative power that this assent is required in the enactment of laws. This, however,
is subject to the further check that a bill may become a law notwithstanding the refusal
of the President to approve it, by a vote of two-thirds or three-fourths, as the case may
be, of the National Assembly. The President has also the right to convene the
Assembly in special session whenever he chooses. On the other hand, the National
Assembly operates as a check on the Executive in the sense that its consent through
its Commission on Appointments is necessary in the appointments of certain officers;
and the concurrence of a majority of all its members is essential to the conclusion of
treaties. Furthermore, in its power to determine what courts other than the Supreme
Court shall be established, to define their jurisdiction and to appropriate funds for their
support, the National Assembly controls the judicial department to a certain extent.
The Assembly also exercises the judicial power of trying impeachments. And the
judiciary in turn, with the Supreme Court as the final arbiter, effectively checks the
other departments in the exercise of its power to determine the law, and hence to
declare executive and legislative acts void if violative of the Constitution.
But in the main, the Constitution has blocked out with deft strokes and in bold lines,
allotment of power to the executive, the legislative and the judicial departments of the
government. The overlapping and interlacing of functions and duties between the
several departments, however, sometimes makes it hard to say just where the one
leaves off and the other begins. In times of social disquietude or political excitement,
the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely
obliterated. In cases of conflict, the judicial department is the only constitutional organ
which can be called upon to determine the proper allocation of powers between the
several departments and among the integral or constituent units thereof.
As any human production, our Constitution is of course lacking perfection and
perfectibility, but as much as it was within the power of our people, acting through their
delegates to so provide, that instrument which is the expression of their sovereignty
however limited, has established a republican government intended to operate and
function as a harmonious whole, under a system of checks and balances, and subject
to specific limitations and restrictions provided in the said instrument. The Constitution
sets forth in no uncertain language the restrictions and limitations upon governmental
powers and agencies. If these restrictions and limitations are transcended it would be
inconceivable if the Constitution had not provided for a mechanism by which to direct
the course of government along constitutional channels, for then the distribution of
powers would be mere verbiage, the bill of rights mere expressions of sentiment, and
the principles of good government mere political apothegms. Certainly, the limitation
and restrictions embodied in our Constitution are real as they should be in any living
constitution. In the United States where no express constitutional grant is found in
their constitution, the possession of this moderating power of the courts, not to speak
of its historical origin and development there, has been set at rest by popular
acquiescence for a period of more than one and a half centuries. In our case, this
moderating power is granted, if not expressly, by clear implication from section 2 of
article VIII of our constitution.
The Constitution is a definition of the powers of government. Who is to determine the
nature, scope and extent of such powers? The Constitution itself has provided for the
instrumentality of the judiciary as the rational way. And when the judiciary mediates to
allocate constitutional boundaries, it does not assert any superiority over the other
departments; it does not in reality nullify or invalidate an act of the legislature, but only
asserts the solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to establish for the
parties in an actual controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in what is termed "judicial
supremacy" which properly is the power of judicial review under the Constitution. Even
then, this power of judicial review is limited to actual cases and controversies to be
exercised after full opportunity of argument by the parties, and limited further to the
constitutional question raised or the very lis mota presented. Any attempt at
abstraction could only lead to dialectics and barren legal questions and to sterile
conclusions unrelated to actualities. Narrowed as its function is in this manner, the
judiciary does not pass upon questions of wisdom, justice or expediency of legislation.
More than that, courts accord the presumption of constitutionality to legislative
enactments, not only because the legislature is presumed to abide by the Constitution
but also because the judiciary in the determination of actual cases and controversies
must reflect the wisdom and justice of the people as expressed through their
representatives in the executive and legislative departments of the governments of the
government.
But much as we might postulate on the internal checks of power provided in our
Constitution, it ought not the less to be remembered that, in the language of James
Madison, the system itself is not "the chief palladium of constitutional liberty . . . the
people who are authors of this blessing must also be its guardians . . . their eyes must
be ever ready to mark, their voice to pronounce . . . aggression on the authority of
their constitution." In the Last and ultimate analysis, then, must the success of our
government in the unfolding years to come be tested in the crucible of Filipino minds
and hearts than in consultation rooms and court chambers.
In the case at bar, the national Assembly has by resolution (No. 8) of December 3,
1935, confirmed the election of the herein petitioner to the said body. On the other
hand, the Electoral Commission has by resolution adopted on December 9, 1935,
fixed said date as the last day for the filing of protests against the election, returns and
qualifications of members of the National Assembly, notwithstanding the previous
confirmation made by the National Assembly as aforesaid. If, as contended by the
petitioner, the resolution of the National Assembly has the effect of cutting off the
power of the Electoral Commission to entertain protests against the election, returns
and qualifications of members of the National Assembly, submitted after December 3,
1935, then the resolution of the Electoral Commission of December 9, 1935, is mere
surplusage and had no effect. But, if, as contended by the respondents, the Electoral
Commission has the sole power of regulating its proceedings to the exclusion of the
National Assembly, then the resolution of December 9, 1935, by which the Electoral
Commission fixed said date as the last day for filing protests against the election,
returns and qualifications of members of the National Assembly, should be upheld.
Here is then presented an actual controversy involving as it does a conflict of a grave
constitutional nature between the National Assembly on the one hand, and the
Electoral Commission on the other. From the very nature of the republican
government established in our country in the light of American experience and of our
own, upon the judicial department is thrown the solemn and inescapable obligation of
interpreting the Constitution and defining constitutional boundaries. The Electoral
Commission, as we shall have occasion to refer hereafter, is a constitutional organ,
created for a specific purpose, namely to determine all contests relating to the
election, returns and qualifications of the members of the National Assembly. Although
the Electoral Commission may not be interfered with, when and while acting within the
limits of its authority, it does not follow that it is beyond the reach of the constitutional
mechanism adopted by the people and that it is not subject to constitutional
restrictions. The Electoral Commission is not a separate department of the
government, and even if it were, conflicting claims of authority under the fundamental
law between department powers and agencies of the government are necessarily
determined by the judiciary in justifiable and appropriate cases. Discarding the English
type and other European types of constitutional government, the framers of our
constitution adopted the American type where the written constitution is interpreted
and given effect by the judicial department. In some countries which have declined to
follow the American example, provisions have been inserted in their constitutions
prohibiting the courts from exercising the power to interpret the fundamental law. This
is taken as a recognition of what otherwise would be the rule that in the absence of
direct prohibition courts are bound to assume what is logically their function. For
instance, the Constitution of Poland of 1921, expressly provides that courts shall have
no power to examine the validity of statutes (art. 81, chap. IV). The former Austrian
Constitution contained a similar declaration. In countries whose constitutions are silent
in this respect, courts have assumed this power. This is true in Norway, Greece,
Australia and South Africa. Whereas, in Czechoslovakia (arts. 2 and 3, Preliminary
Law to constitutional Charter of the Czechoslovak Republic, February 29, 1920) and
Spain (arts. 121-123, Title IX, Constitutional of the Republic of 1931) especial
constitutional courts are established to pass upon the validity of ordinary laws. In our
case, the nature of the present controversy shows the necessity of a final
constitutional arbiter to determine the conflict of authority between two agencies
created by the Constitution. Were we to decline to take cognizance of the controversy,
who will determine the conflict? And if the conflict were left undecided and
undetermined, would not a void be thus created in our constitutional system which
may be in the long run prove destructive of the entire framework? To ask these
questions is to answer them. Natura vacuum abhorret, so must we avoid exhaustion in
our constitutional system. Upon principle, reason and authority, we are clearly of the
opinion that upon the admitted facts of the present case, this court has jurisdiction
over the Electoral Commission and the subject mater of the present controversy for
the purpose of determining the character, scope and extent of the constitutional grant
to the Electoral Commission as "the sole judge of all contests relating to the election,
returns and qualifications of the members of the National Assembly."
Having disposed of the question of jurisdiction, we shall now proceed to pass upon the representation to four members, that is, two senators to be designated one each from
second proposition and determine whether the Electoral Commission has acted the two major parties in the Senate and two representatives to be designated one
without or in excess of its jurisdiction in adopting its resolution of December 9, 1935, each from the two major parties in the House of Representatives, and in awarding
and in assuming to take cognizance of the protest filed against the election of the representation to the executive department in the persons of two representatives to be
herein petitioner notwithstanding the previous confirmation thereof by the National designated by the President.
Assembly on December 3, 1935. As able counsel for the petitioner has pointed out,
the issue hinges on the interpretation of section 4 of Article VI of the Constitution
Meanwhile, the Committee on Legislative Power was also preparing its report. As
which provides:
submitted to the Convention on September 24, 1934 subsection 5, section 5, of the
proposed Article on the Legislative Department, reads as follows:
"SEC. 4. There shall be an Electoral Commission composed of three Justice of the
Supreme Court designated by the Chief Justice, and of six Members chosen by the
The elections, returns and qualifications of the members of either house and
National Assembly, three of whom shall be nominated by the party having the largest
all cases contesting the election of any of their members shall be judged by
number of votes, and three by the party having the second largest number of votes
an Electoral Commission, constituted, as to each House, by three members
therein. The senior Justice in the Commission shall be its Chairman. The Electoral
elected by the members of the party having the largest number of votes
Commission shall be the sole judge of all contests relating to the election, returns and
therein, three elected by the members of the party having the second
qualifications of the members of the National Assembly." It is imperative, therefore,
largest number of votes, and as to its Chairman, one Justice of the Supreme
that we delve into the origin and history of this constitutional provision and inquire into
Court designated by the Chief Justice.
the intention of its framers and the people who adopted it so that we may properly
appreciate its full meaning, import and significance.
The idea of creating a Tribunal of Constitutional Security with comprehensive
jurisdiction as proposed by the Committee on Constitutional Guarantees which was
The original provision regarding this subject in the Act of Congress of July 1, 1902
probably inspired by the Spanish plan (art. 121, Constitution of the Spanish Republic
(sec. 7, par. 5) laying down the rule that "the assembly shall be the judge of the
of 1931), was soon abandoned in favor of the proposition of the Committee on
elections, returns, and qualifications of its members", was taken from clause 1 of
Legislative Power to create a similar body with reduced powers and with specific and
section 5, Article I of the Constitution of the United States providing that "Each House
limited jurisdiction, to be designated as a Electoral Commission. The Sponsorship
shall be the Judge of the Elections, Returns, and Qualifications of its own Members, . .
Committee modified the proposal of the Committee on Legislative Power with respect
. ." The Act of Congress of August 29, 1916 (sec. 18, par. 1) modified this provision by
to the composition of the Electoral Commission and made further changes in
the insertion of the word "sole" as follows: "That the Senate and House of
phraseology to suit the project of adopting a unicameral instead of a bicameral
Representatives, respectively, shall be the sole judges of the elections, returns, and
legislature. The draft as finally submitted to the Convention on October 26, 1934,
qualifications of their elective members . . ." apparently in order to emphasize the
reads as follows:
exclusive the Legislative over the particular case s therein specified. This court has
had occasion to characterize this grant of power to the Philippine Senate and House
of Representatives, respectively, as "full, clear and complete" (Veloso vs. Boards of (6) The elections, returns and qualifications of the Members of the National
Canvassers of Leyte and Samar [1919], 39 Phil., 886, 888.) Assembly and all cases contesting the election of any of its Members shall
be judged by an Electoral Commission, composed of three members
elected by the party having the largest number of votes in the National
The first step towards the creation of an independent tribunal for the purpose of
Assembly, three elected by the members of the party having the second
deciding contested elections to the legislature was taken by the sub-committee of five
largest number of votes, and three justices of the Supreme Court
appointed by the Committee on Constitutional Guarantees of the Constitutional
designated by the Chief Justice, the Commission to be presided over by one
Convention, which sub-committee submitted a report on August 30, 1934,
of said justices.
recommending the creation of a Tribunal of Constitutional Security empowered to hear
legislature but also against the election of executive officers for whose election the
vote of the whole nation is required, as well as to initiate impeachment proceedings During the discussion of the amendment introduced by Delegates Labrador, Abordo,
against specified executive and judicial officer. For the purpose of hearing legislative and others, proposing to strike out the whole subsection of the foregoing draft and
protests, the tribunal was to be composed of three justices designated by the inserting in lieu thereof the following: "The National Assembly shall be the soled and
Supreme Court and six members of the house of the legislature to which the contest exclusive judge of the elections, returns, and qualifications of the Members", the
corresponds, three members to be designed by the majority party and three by the following illuminating remarks were made on the floor of the Convention in its session
minority, to be presided over by the Senior Justice unless the Chief Justice is also a of December 4, 1934, as to the scope of the said draft:
member in which case the latter shall preside. The foregoing proposal was submitted
by the Committee on Constitutional Guarantees to the Convention on September 15,
xxx xxx xxx
1934, with slight modifications consisting in the reduction of the legislative
Mr. VENTURA. Mr. President, we have a doubt here as to the scope of the
meaning of the first four lines, paragraph 6, page 11 of the draft, reading:
"The elections, returns and qualifications of the Members of the National
Assembly and all cases contesting the election of any of its Members shall
be judged by an Electoral Commission, . . ." I should like to ask from the
gentleman from Capiz whether the election and qualification of the member
whose elections is not contested shall also be judged by the Electoral
Commission.
Mr. ROXAS. If there is no question about the election of the members, there
is nothing to be judged; that is why the word "judge" is used to indicate a
controversy. If there is no question about the election of a member, there is
nothing to be submitted to the Electoral Commission and there is nothing to
be determined.
Mr. VENTURA. But does that carry the idea also that the Electoral
Commission shall confirm also the election of those whose election is not
contested?
Mr. ROXAS. There is no need of confirmation. As the gentleman knows, the
action of the House of Representatives confirming the election of its
members is just a matter of the rules of the assembly. It is not constitutional.
It is not necessary. After a man files his credentials that he has been
elected, that is sufficient, unless his election is contested.
Mr. VENTURA. But I do not believe that that is sufficient, as we have
observed that for purposes of the auditor, in the matter of election of a
member to a legislative body, because he will not authorize his pay.
Mr. ROXAS. Well, what is the case with regards to the municipal president
who is elected? What happens with regards to the councilors of a
municipality? Does anybody confirm their election? The municipal council
does this: it makes a canvass and proclaims — in this case the municipal
council proclaims who has been elected, and it ends there, unless there is a
contest. It is the same case; there is no need on the part of the Electoral
Commission unless there is a contest. The first clause refers to the case
referred to by the gentleman from Cavite where one person tries to be
elected in place of another who was declared elected. From example, in a
case when the residence of the man who has been elected is in question, or
in case the citizenship of the man who has been elected is in question.
However, if the assembly desires to annul the power of the commission, it
may do so by certain maneuvers upon its first meeting when the returns are
submitted to the assembly. The purpose is to give to the Electoral
Commission all the powers exercised by the assembly referring to the
elections, returns and qualifications of the members. When there is no
contest, there is nothing to be judged.
Mr. VENTURA. Then it should be eliminated.
Mr. ROXAS. But that is a different matter, I think Mr. Delegate.
Mr. CINCO. Mr. President, I have a similar question as that propounded by
the gentleman from Ilocos Norte when I arose a while ago. However I want
to ask more questions from the delegate from Capiz. This paragraph 6 on
page 11 of the draft cites cases contesting the election as separate from the
first part of the sections which refers to elections, returns and qualifications.
Mr. ROXAS. That is merely for the sake of clarity. In fact the cases of
contested elections are already included in the phrase "the elections,
returns and qualifications." This phrase "and contested elections" was
inserted merely for the sake of clarity.
Mr. CINCO. Under this paragraph, may not the Electoral Commission, at its
own instance, refuse to confirm the elections of the members."
Mr. ROXAS. I do not think so, unless there is a protest.
Mr. LABRADOR. Mr. President, will the gentleman yield?
THE PRESIDENT. The gentleman may yield, if he so desires.
Mr. ROXAS. Willingly.
Mr. LABRADOR. Does not the gentleman from Capiz believe that unless
this power is granted to the assembly, the assembly on its own motion does
not have the right to contest the election and qualification of its members?
Mr. ROXAS. I have no doubt but that the gentleman is right. If this draft is
retained as it is, even if two-thirds of the assembly believe that a member
has not the qualifications provided by law, they cannot remove him for that
reason.
Mr. LABRADOR. So that the right to remove shall only be retained by the
Electoral Commission.
Mr. ROXAS. By the assembly for misconduct.
Mr. LABRADOR. I mean with respect to the qualifications of the members.
Mr. ROXAS. Yes, by the Electoral Commission.
 Mr. LABRADOR. So that under this draft, no member of the assembly has
the right to question the eligibility of its members?
Mr. ROXAS. Before a member can question the eligibility, he must go to the
Electoral Commission and make the question before the Electoral
Commission.
Mr. LABRADOR. So that the Electoral Commission shall decide whether the
election is contested or not contested.
Mr. ROXAS. Yes, sir: that is the purpose.
Mr. PELAYO. Mr. President, I would like to be informed if the Electoral
Commission has power and authority to pass upon the qualifications of the
members of the National Assembly even though that question has not been
raised.
Mr. ROXAS. I have just said that they have no power, because they can
only judge.
In the same session, the first clause of the aforesaid draft reading "The election,
returns and qualifications of the members of the National Assembly and" was
eliminated by the Sponsorship Committee in response to an amendment introduced
by Delegates Francisco, Ventura, Vinzons, Rafols, Lim, Mumar and others. In
explaining the difference between the original draft and the draft as amended,
Delegate Roxas speaking for the Sponsorship Committee said:
xxx xxx xxx
Sr. ROXAS. La diferencia, señor Presidente, consiste solamente en obviar
la objecion apuntada por varios Delegados al efecto de que la primera
clausula del draft que dice: "The elections, returns and qualifications of the
members of the National Assembly" parece que da a la Comision Electoral
la facultad de determinar tambien la eleccion de los miembros que no ha
sido protestados y para obviar esa dificultad, creemos que la enmienda tien
razon en ese sentido, si enmendamos el draft, de tal modo que se lea como
sigue: "All cases contesting the election", de modo que los jueces de la
Comision Electoral se limitaran solamente a los casos en que haya habido
protesta contra las actas." Before the amendment of Delegate Labrador was
voted upon the following interpellation also took place:
El Sr. CONEJERO. Antes de votarse la enmienda, quisiera
El Sr. PRESIDENTE. ¿Que dice el Comite?
El Sr. ROXAS. Con mucho gusto.
El Sr. CONEJERO. Tal como esta el draft, dando tres miembros a la
mayoria, y otros tres a la minoria y tres a la Corte Suprema, ¿no cree Su
Señoria que esto equivale practicamente a dejar el asunto a los miembros
del Tribunal Supremo?
El Sr. ROXAS. Si y no. Creemos que si el tribunal o la Commission esta
constituido en esa forma, tanto los miembros de la mayoria como los de la
minoria asi como los miembros de la Corte Suprema consideraran la
cuestion sobre la base de sus meritos, sabiendo que el partidismo no es
suficiente para dar el triunfo.
El Sr. CONEJERO. ¿Cree Su Señoria que en un caso como ese,
podriamos hacer que tanto los de la mayoria como los de la minoria
prescindieran del partidismo?
El Sr. ROXAS. Creo que si, porque el partidismo no les daria el triunfo.
xxx xxx xxx
The amendment introduced by Delegates Labrador, Abordo and others seeking to
restore the power to decide contests relating to the election, returns and qualifications
of members of the National Assembly to the National Assembly itself, was defeated by
a vote of ninety-eight (98) against fifty-six (56).
In the same session of December 4, 1934, Delegate Cruz (C.) sought to amend the
draft by reducing the representation of the minority party and the Supreme Court in the
Electoral Commission to two members each, so as to accord more representation to
the majority party. The Convention rejected this amendment by a vote of seventy-six
(76) against forty-six (46), thus maintaining the non-partisan character of the
commission.
As approved on January 31, 1935, the draft was made to read as follows:
(6) All cases contesting the elections, returns and qualifications of the
Members of the National Assembly shall be judged by an Electoral
Commission, composed of three members elected by the party having the
largest number of votes in the National Assembly, three elected by the
members of the party having the second largest number of votes, and three
justices of the Supreme Court designated by the Chief Justice, the
Commission to be presided over by one of said justices.
The Style Committee to which the draft was submitted revised it as follows:
 SEC. 4. There shall be an Electoral Commission composed of three
Justices of the Supreme Court designated by the Chief Justice, and of six
Members chosen by the National Assembly, three of whom shall be
nominated by the party having the largest number of votes, and three by the
party having the second largest number of votes therein. The senior Justice
in the Commission shall be its chairman. The Electoral Commission shall be
the sole judge of the election, returns, and qualifications of the Members of
the National Assembly.
When the foregoing draft was submitted for approval on February 8, 1935, the Style
Committee, through President Recto, to effectuate the original intention of the
Convention, agreed to insert the phrase "All contests relating to" between the phrase
"judge of" and the words "the elections", which was accordingly accepted by the
Convention.
The transfer of the power of determining the election, returns and qualifications of the
members of the legislature long lodged in the legislative body, to an independent,
impartial and non-partisan tribunal, is by no means a mere experiment in the science
of government.
Cushing, in his Law and Practice of Legislative Assemblies (ninth edition, chapter VI,
pages 57, 58), gives a vivid account of the "scandalously notorious" canvassing of
votes by political parties in the disposition of contests by the House of Commons in
the following passages which are partly quoted by the petitioner in his printed
memorandum of March 14, 1936:
153. From the time when the commons established their right to be the
exclusive judges of the elections, returns, and qualifications of their
members, until the year 1770, two modes of proceeding prevailed, in the
determination of controverted elections, and rights of membership. One of
the standing committees appointed at the commencement of each session,
was denominated the committee of privileges and elections, whose
functions was to hear and investigate all questions of this description which
might be referred to them, and to report their proceedings, with their opinion
thereupon, to the house, from time to time. When an election petition was
referred to this committee they heard the parties and their witnesses and
other evidence, and made a report of all the evidence, together with their
opinion thereupon, in the form of resolutions, which were considered and
agreed or disagreed to by the house. The other mode of proceeding was by
a hearing at the bar of the house itself. When this court was adopted, the
case was heard and decided by the house, in substantially the same
manner as by a committee. The committee of privileges and elections
although a select committee. The committee of privileges and elections
although a select committee was usually what is called an open one; that is
to say, in order to constitute the committee, a quorum of the members
named was required to be present, but all the members of the house were
at liberty to attend the committee and vote if they pleased.
154. With the growth of political parties in parliament questions relating to
the right of membership gradually assumed a political character; so that for
many years previous to the year 1770, controverted elections had been tried
and determined by the house of commons, as mere party questions, upon
which the strength of contending factions might be tested. Thus, for
Example, in 1741, Sir Robert Walpole, after repeated attacks upon his
government, resigned his office in consequence of an adverse vote upon
the Chippenham election. Mr. Hatsell remarks, of the trial of election cases,
as conducted under this system, that "Every principle of decency and justice
were notoriously and openly prostituted, from whence the younger part of
the house were insensibly, but too successfully, induced to adopt the same
licentious conduct in more serious matters, and in questions of higher
importance to the public welfare." Mr. George Grenville, a distinguished
member of the house of commons, undertook to propose a remedy for the
evil, and, on the 7th of March, 1770, obtained the unanimous leave of the
house to bring in a bill, "to regulate the trial of controverted elections, or
returns of members to serve in parliament." In his speech to explain his
plan, on the motion for leave, Mr. Grenville alluded to the existing practice in
the following terms: "Instead of trusting to the merits of their respective
causes, the principal dependence of both parties is their private interest
among us; and it is scandalously notorious that we are as earnestly
canvassed to attend in favor of the opposite sides, as if we were wholly self-
elective, and not bound to act by the principles of justice, but by the
discretionary impulse of our own inclinations; nay, it is well known, that in
every contested election, many members of this house, who are ultimately
to judge in a kind of judicial capacity between the competitors, enlist
themselves as parties in the contention, and take upon themselves the
partial management of the very business, upon which they should determine
with the strictest impartiality."
155. It was to put an end to the practices thus described, that Mr. Grenville
brought in a bill which met with the approbation of both houses, and
received the royal assent on the 12th of April, 1770. This was the celebrated
law since known by the name of the Grenville Act; of which Mr. Hatsell
declares, that it "was one of the nobles works, for the honor of the house of
commons, and the security of the constitution, that was ever devised by any
minister or statesman." It is probable, that the magnitude of the evil, or the
apparent success of the remedy, may have led many of the contemporaries
of the measure to the information of a judgement, which was not acquiesced
in by some of the leading statesmen of the day, and has not been entirely
confirmed by subsequent experience. The bill was objected to by Lord
North, Mr. De Grey, afterwards chief justice of the common pleas, Mr. Ellis,
Mr. Dyson, who had been clerk of the house, and Mr. Charles James Fox,
chiefly on the ground, that the introduction of the new system was an
essential alteration of the constitution of parliament, and a total abrogation
of one of the most important rights and jurisdictions of the house of
commons.
As early as 1868, the House of Commons in England solved the problem of insuring the framers of our Constitution were cognizant. Notwithstanding the vigorous
the non-partisan settlement of the controverted elections of its members by abdicating opposition of some members of the Convention to its creation, the plan, as
its prerogative to two judges of the King's Bench of the High Court of Justice selected hereinabove stated, was approved by that body by a vote of 98 against 58. All that can
from a rota in accordance with rules of court made for the purpose. Having proved be said now is that, upon the approval of the constitutional the creation of the Electoral
successful, the practice has become imbedded in English jurisprudence Commission is the expression of the wisdom and "ultimate justice of the people".
(Parliamentary Elections Act, 1868 [31 & 32 Vict. c. 125] as amended by (Abraham Lincoln, First Inaugural Address, March 4, 1861.)
Parliamentary Elections and Corrupt Practices Act. 1879 [42 & 43 Vict. c. 75], s. 2;
Corrupt and Illegal Practices Preventions Act, 1883 [46 & 47 Vict. c. 51;, s. 70;
From the deliberations of our Constitutional Convention it is evident that the purpose
Expiring Laws Continuance Act, 1911 [1 & 2 Geo. 5, c. 22]; Laws of England, vol. XII,
was to transfer in its totality all the powers previously exercised by the legislature in
p. 408, vol. XXI, p. 787). In the Dominion of Canada, election contests which were
matters pertaining to contested elections of its members, to an independent and
originally heard by the Committee of the House of Commons, are since 1922 tried in
impartial tribunal. It was not so much the knowledge and appreciation of contemporary
the courts. Likewise, in the Commonwealth of Australia, election contests which were
constitutional precedents, however, as the long-felt need of determining legislative
originally determined by each house, are since 1922 tried in the High Court. In
contests devoid of partisan considerations which prompted the people, acting through
Hungary, the organic law provides that all protests against the election of members of
their delegates to the Convention, to provide for this body known as the Electoral
the Upper House of the Diet are to be resolved by the Supreme Administrative Court
Commission. With this end in view, a composite body in which both the majority and
(Law 22 of 1916, chap. 2, art. 37, par. 6). The Constitution of Poland of March 17,
minority parties are equally represented to off-set partisan influence in its deliberations
1921 (art. 19) and the Constitution of the Free City of Danzig of May 13, 1922 (art. 10)
was created, and further endowed with judicial temper by including in its membership
vest the authority to decide contested elections to the Diet or National Assembly in the
three justices of the Supreme Court.
Supreme Court. For the purpose of deciding legislative contests, the Constitution of
the German Reich of July 1, 1919 (art. 31), the Constitution of the Czechoslovak
Republic of February 29, 1920 (art. 19) and the Constitution of the Grecian Republic of The Electoral Commission is a constitutional creation, invested with the necessary
June 2, 1927 (art. 43), all provide for an Electoral Commission. authority in the performance and execution of the limited and specific function
assigned to it by the Constitution. Although it is not a power in our tripartite scheme of
government, it is, to all intents and purposes, when acting within the limits of its
The creation of an Electoral Commission whose membership is recruited both from
authority, an independent organ. It is, to be sure, closer to the legislative department
the legislature and the judiciary is by no means unknown in the United States. In the
than to any other. The location of the provision (section 4) creating the Electoral
presidential elections of 1876 there was a dispute as to the number of electoral votes
Commission under Article VI entitled "Legislative Department" of our Constitution is
received by each of the two opposing candidates. As the Constitution made no
very indicative. Its compositions is also significant in that it is constituted by a majority
adequate provision for such a contingency, Congress passed a law on January 29,
of members of the legislature. But it is a body separate from and independent of the
1877 (United States Statutes at Large, vol. 19, chap. 37, pp. 227-229), creating a
legislature.
special Electoral Commission composed of five members elected by the Senate, five
members elected by the House of Representatives, and five justices of the Supreme
Court, the fifth justice to be selected by the four designated in the Act. The decision of The grant of power to the Electoral Commission to judge all contests relating to the
the commission was to be binding unless rejected by the two houses voting election, returns and qualifications of members of the National Assembly, is intended
separately. Although there is not much of a moral lesson to be derived from the to be as complete and unimpaired as if it had remained originally in the legislature.
experience of America in this regard, judging from the observations of Justice Field, The express lodging of that power in the Electoral Commission is an implied denial of
who was a member of that body on the part of the Supreme Court (Countryman, the the exercise of that power by the National Assembly. And this is as effective a
Supreme Court of the United States and its Appellate Power under the Constitution restriction upon the legislative power as an express prohibition in the Constitution (Ex
[Albany, 1913] — Relentless Partisanship of Electoral Commission, p. 25 et seq.), the parte Lewis, 45 Tex. Crim. Rep., 1; State vs.Whisman, 36 S.D., 260; L.R.A., 1917B,
experiment has at least abiding historical interest. 1). If we concede the power claimed in behalf of the National Assembly that said body
may regulate the proceedings of the Electoral Commission and cut off the power of
the commission to lay down the period within which protests should be filed, the grant
The members of the Constitutional Convention who framed our fundamental law were
of power to the commission would be ineffective. The Electoral Commission in such
in their majority men mature in years and experience. To be sure, many of them were
case would be invested with the power to determine contested cases involving the
familiar with the history and political development of other countries of the world.
election, returns and qualifications of the members of the National Assembly but
When , therefore, they deemed it wise to create an Electoral Commission as a
subject at all times to the regulative power of the National Assembly. Not only would
constitutional organ and invested it with the exclusive function of passing upon and
the purpose of the framers of our Constitution of totally transferring this authority from
determining the election, returns and qualifications of the members of the National
the legislative body be frustrated, but a dual authority would be created with the
Assembly, they must have done so not only in the light of their own experience but
resultant inevitable clash of powers from time to time. A sad spectacle would then be
also having in view the experience of other enlightened peoples of the world. The
presented of the Electoral Commission retaining the bare authority of taking
creation of the Electoral Commission was designed to remedy certain evils of which
cognizance of cases referred to, but in reality without the necessary means to render
that authority effective whenever and whenever the National Assembly has chosen to But independently of the legal and constitutional aspects of the present case, there
act, a situation worse than that intended to be remedied by the framers of our are considerations of equitable character that should not be overlooked in the
Constitution. The power to regulate on the part of the National Assembly in procedural appreciation of the intrinsic merits of the controversy. The Commonwealth
matters will inevitably lead to the ultimate control by the Assembly of the entire Government was inaugurated on November 15, 1935, on which date the Constitution,
proceedings of the Electoral Commission, and, by indirection, to the entire abrogation except as to the provisions mentioned in section 6 of Article XV thereof, went into
of the constitutional grant. It is obvious that this result should not be permitted. effect. The new National Assembly convened on November 25th of that year, and the
resolution confirming the election of the petitioner, Jose A. Angara was approved by
that body on December 3, 1935. The protest by the herein respondent Pedro Ynsua
We are not insensible to the impassioned argument or the learned counsel for the
against the election of the petitioner was filed on December 9 of the same year. The
petitioner regarding the importance and necessity of respecting the dignity and
pleadings do not show when the Electoral Commission was formally organized but it
independence of the national Assembly as a coordinate department of the government
does appear that on December 9, 1935, the Electoral Commission met for the first
and of according validity to its acts, to avoid what he characterized would be
time and approved a resolution fixing said date as the last day for the filing of election
practically an unlimited power of the commission in the admission of protests against
protest. When, therefore, the National Assembly passed its resolution of December 3,
members of the National Assembly. But as we have pointed out hereinabove, the
1935, confirming the election of the petitioner to the National Assembly, the Electoral
creation of the Electoral Commission carried with it ex necesitate rei the power
Commission had not yet met; neither does it appear that said body had actually been
regulative in character to limit the time with which protests intrusted to its cognizance
organized. As a mater of fact, according to certified copies of official records on file in
should be filed. It is a settled rule of construction that where a general power is
the archives division of the National Assembly attached to the record of this case upon
conferred or duty enjoined, every particular power necessary for the exercise of the
the petition of the petitioner, the three justices of the Supreme Court the six members
one or the performance of the other is also conferred (Cooley, Constitutional
of the National Assembly constituting the Electoral Commission were respectively
Limitations, eight ed., vol. I, pp. 138, 139). In the absence of any further constitutional
designated only on December 4 and 6, 1935. If Resolution No. 8 of the National
provision relating to the procedure to be followed in filing protests before the Electoral
Assembly confirming non-protested elections of members of the National Assembly
Commission, therefore, the incidental power to promulgate such rules necessary for
had the effect of limiting or tolling the time for the presentation of protests, the result
the proper exercise of its exclusive power to judge all contests relating to the election,
would be that the National Assembly — on the hypothesis that it still retained the
returns and qualifications of members of the National Assembly, must be deemed by
incidental power of regulation in such cases — had already barred the presentation of
necessary implication to have been lodged also in the Electoral Commission.
protests before the Electoral Commission had had time to organize itself and
deliberate on the mode and method to be followed in a matter entrusted to its
It is, indeed, possible that, as suggested by counsel for the petitioner, the Electoral exclusive jurisdiction by the Constitution. This result was not and could not have been
Commission may abuse its regulative authority by admitting protests beyond any contemplated, and should be avoided.
reasonable time, to the disturbance of the tranquillity and peace of mind of the
members of the National Assembly. But the possibility of abuse is not argument
From another angle, Resolution No. 8 of the National Assembly confirming the
against the concession of the power as there is no power that is not susceptible of
election of members against whom no protests had been filed at the time of its
abuse. In the second place, if any mistake has been committed in the creation of an
passage on December 3, 1935, can not be construed as a limitation upon the time for
Electoral Commission and in investing it with exclusive jurisdiction in all cases relating
the initiation of election contests. While there might have been good reason for the
to the election, returns, and qualifications of members of the National Assembly, the
legislative practice of confirmation of the election of members of the legislature at the
remedy is political, not judicial, and must be sought through the ordinary processes of
time when the power to decide election contests was still lodged in the legislature,
democracy. All the possible abuses of the government are not intended to be
confirmation alone by the legislature cannot be construed as depriving the Electoral
corrected by the judiciary. We believe, however, that the people in creating the
Commission of the authority incidental to its constitutional power to be "the sole judge
Electoral Commission reposed as much confidence in this body in the exclusive
of all contest relating to the election, returns, and qualifications of the members of the
determination of the specified cases assigned to it, as they have given to the Supreme
National Assembly", to fix the time for the filing of said election protests. Confirmation
Court in the proper cases entrusted to it for decision. All the agencies of the
by the National Assembly of the returns of its members against whose election no
government were designed by the Constitution to achieve specific purposes, and each
protests have been filed is, to all legal purposes, unnecessary. As contended by the
constitutional organ working within its own particular sphere of discretionary action
Electoral Commission in its resolution of January 23, 1936, overruling the motion of
must be deemed to be animated with the same zeal and honesty in accomplishing the
the herein petitioner to dismiss the protest filed by the respondent Pedro Ynsua,
great ends for which they were created by the sovereign will. That the actuations of
confirmation of the election of any member is not required by the Constitution before
these constitutional agencies might leave much to be desired in given instances, is
he can discharge his duties as such member. As a matter of fact, certification by the
inherent in the perfection of human institutions. In the third place, from the fact that the
proper provincial board of canvassers is sufficient to entitle a member-elect to a seat
Electoral Commission may not be interfered with in the exercise of its legitimate
in the national Assembly and to render him eligible to any office in said body (No. 1,
power, it does not follow that its acts, however illegal or unconstitutional, may not be
par. 1, Rules of the National Assembly, adopted December 6, 1935).
challenge in appropriate cases over which the courts may exercise jurisdiction.
Under the practice prevailing both in the English House of Commons and in the
Congress of the United States, confirmation is neither necessary in order to entitle a
member-elect to take his seat. The return of the proper election officers is sufficient,
and the member-elect presenting such return begins to enjoy the privileges of a
member from the time that he takes his oath of office (Laws of England, vol. 12, pp.
331. 332; vol. 21, pp. 694, 695; U. S. C. A., Title 2, secs. 21, 25, 26). Confirmation is
in order only in cases of contested elections where the decision is adverse to the
claims of the protestant. In England, the judges' decision or report in controverted
elections is certified to the Speaker of the House of Commons, and the House, upon
being informed of such certificate or report by the Speaker, is required to enter the
same upon the Journals, and to give such directions for confirming or altering the
return, or for the issue of a writ for a new election, or for carrying into execution the
determination as circumstances may require (31 & 32 Vict., c. 125, sec. 13). In the
United States, it is believed, the order or decision of the particular house itself is
generally regarded as sufficient, without any actual alternation or amendment of the
return (Cushing, Law and Practice of Legislative Assemblies, 9th ed., sec. 166).
Under the practice prevailing when the Jones Law was still in force, each house of the
Philippine Legislature fixed the time when protests against the election of any of its
members should be filed. This was expressly authorized by section 18 of the Jones
Law making each house the sole judge of the election, return and qualifications of its
members, as well as by a law (sec. 478, Act No. 3387) empowering each house to
respectively prescribe by resolution the time and manner of filing contest in the
election of member of said bodies. As a matter of formality, after the time fixed by its
rules for the filing of protests had already expired, each house passed a resolution
confirming or approving the returns of such members against whose election no
protests had been filed within the prescribed time. This was interpreted as cutting off
the filing of further protests against the election of those members not theretofore
contested (Amistad vs. Claravall [Isabela], Second Philippine Legislature, Record —
First Period, p. 89; Urguello vs. Rama [Third District, Cebu], Sixth Philippine
Legislature; Fetalvero vs. Festin [Romblon], Sixth Philippine Legislature, Record —
First Period, pp. 637-640; Kintanar vs. Aldanese [Fourth District, Cebu], Sixth
Philippine Legislature, Record — First Period, pp. 1121, 1122; Aguilar vs. Corpus
[Masbate], Eighth Philippine Legislature, Record — First Period, vol. III, No. 56, pp.
892, 893). The Constitution has repealed section 18 of the Jones Law. Act No. 3387,
section 478, must be deemed to have been impliedly abrogated also, for the reason
that with the power to determine all contest relating to the election, returns and
qualifications of members of the National Assembly, is inseparably linked the authority
to prescribe regulations for the exercise of that power. There was thus no law nor
constitutional provisions which authorized the National Assembly to fix, as it is alleged
to have fixed on December 3, 1935, the time for the filing of contests against the
election of its members. And what the National Assembly could not do directly, it could
not do by indirection through the medium of confirmation.
Summarizing, we conclude:
(a) That the government established by the Constitution follows
fundamentally the theory of separation of power into the legislative, the
executive and the judicial.
(b) That the system of checks and balances and the overlapping of
functions and duties often makes difficult the delimitation of the powers
granted.
(c) That in cases of conflict between the several departments and among
the agencies thereof, the judiciary, with the Supreme Court as the final
arbiter, is the only constitutional mechanism devised finally to resolve the
conflict and allocate constitutional boundaries.
(d) That judicial supremacy is but the power of judicial review in actual and
appropriate cases and controversies, and is the power and duty to see that
no one branch or agency of the government transcends the Constitution,
which is the source of all authority.
(e) That the Electoral Commission is an independent constitutional creation
with specific powers and functions to execute and perform, closer for
purposes of classification to the legislative than to any of the other two
departments of the governments.
(f ) That the Electoral Commission is the sole judge of all contests relating to
the election, returns and qualifications of members of the National
Assembly.
(g) That under the organic law prevailing before the present Constitution
went into effect, each house of the legislature was respectively the sole
judge of the elections, returns, and qualifications of their elective members.
(h) That the present Constitution has transferred all the powers previously
exercised by the legislature with respect to contests relating to the elections,
returns and qualifications of its members, to the Electoral Commission.
(i) That such transfer of power from the legislature to the Electoral
Commission was full, clear and complete, and carried with it ex necesitate
rei the implied power inter alia to prescribe the rules and regulations as to
the time and manner of filing protests.
( j) That the avowed purpose in creating the Electoral Commission was to
have an independent constitutional organ pass upon all contests relating to
the election, returns and qualifications of members of the National
Assembly, devoid of partisan influence or consideration, which object would
be frustrated if the National Assembly were to retain the power to prescribe
rules and regulations regarding the manner of conducting said contests.
(k) That section 4 of article VI of the Constitution repealed not only section
18 of the Jones Law making each house of the Philippine Legislature
respectively the sole judge of the elections, returns and qualifications of its
 elective members, but also section 478 of Act No. 3387 empowering each
house to prescribe by resolution the time and manner of filing contests
against the election of its members, the time and manner of notifying the
adverse party, and bond or bonds, to be required, if any, and to fix the costs
and expenses of contest.
(l) That confirmation by the National Assembly of the election is contested or
not, is not essential before such member-elect may discharge the duties
and enjoy the privileges of a member of the National Assembly.
(m) That confirmation by the National Assembly of the election of any
member against whom no protest had been filed prior to said confirmation,
does not and cannot deprive the Electoral Commission of its incidental
power to prescribe the time within which protests against the election of any
member of the National Assembly should be filed.
We hold, therefore, that the Electoral Commission was acting within the legitimate
exercise of its constitutional prerogative in assuming to take cognizance of the protest
filed by the respondent Pedro Ynsua against the election of the herein petitioner Jose
A. Angara, and that the resolution of the National Assembly of December 3, 1935 can
not in any manner toll the time for filing protests against the elections, returns and
qualifications of members of the National Assembly, nor prevent the filing of a protest
within such time as the rules of the Electoral Commission might prescribe.
In view of the conclusion reached by us relative to the character of the Electoral
Commission as a constitutional creation and as to the scope and extent of its authority
under the facts of the present controversy, we deem it unnecessary to determine
whether the Electoral Commission is an inferior tribunal, corporation, board or person
within the purview of sections 226 and 516 of the Code of Civil Procedure.
The petition for a writ of prohibition against the Electoral Commission is hereby
denied, with costs against the petitioner. So ordered.
Avanceña, C. J., Diaz, Concepcion, and Horrilleno, JJ., concur.
Separate Opinions
ABAD SANTOS, J., concurring:
I concur in the result and in most of the views so ably expressed in the preceding
opinion. I am, however, constrained to withhold my assent to certain conclusions
therein advanced.
The power vested in the Electoral Commission by the Constitution of judging of all
contests relating to the election, returns, and qualifications of the members of the
National Assembly, is judicial in nature. (Thomas vs. Loney, 134 U.S., 372; 33 Law.
ed., 949, 951.) On the other hand, the power to regulate the time in which notice of a
contested election may be given, is legislative in character. (M'Elmoyle vs. Cohen, 13
Pet., 312; 10 Law. ed., 177; Missouri vs. Illinois, 200 U. S. 496; 50 Law. ed., 572.)
It has been correctly stated that the government established by the Constitution
follows fundamentally the theory of the separation of powers into legislative, executive,
and judicial. Legislative power is vested in the National Assembly. (Article VI, sec. 1.)
In the absence of any clear constitutional provision to the contrary, the power to
regulate the time in which notice of a contested election may be given, must be
deemed to be included in the grant of legislative power to the National Assembly.
The Constitution of the United States contains a provision similar to the that found in
Article VI, section 4, of the Constitution of the Philippines. Article I, section 5, of the
Constitution of the United States provides that each house of the Congress shall be
the judge of the elections, returns, and qualifications of its own members.
Notwithstanding this provision, the Congress has assumed the power to regulate the
time in which notice of a contested election may be given. Thus section 201, Title 2, of
the United States Code Annotated prescribes:
Whenever any person intends to contest an election of any Member of the
House of Representatives of the United States, he shall, within thirty days
after the result of such election shall have been determined by the officer or
board of canvassers authorized by law to determine the same, give notice,
in writing, to the Member whose seat he designs to contest, of his intention
to contest the same, and, in such notice, shall specify particularly the
grounds upon which he relies in the contest. (R. S., par. 105.)
The Philippine Autonomy Act, otherwise known as the Jones Law, also contained a
provision to the effect that the Senate and House of Representatives, respectively,
shall be the sole judges of the elections, returns, and qualifications of their elective
members. Notwithstanding this provision, the Philippine Legislature passed the
Election Law, section 478 of which reads as follows:
The Senate and the House of Representatives shall by resolution
respectively prescribe the time and manner of filing contest in the election of
members of said bodies, the time and manner of notifying the adverse party,
and bond or bonds, to be required, if any, and shall fix the costs and
expenses of contest which may be paid from their respective funds.
The purpose sought to be attained by the creation of the Electoral Commission was
not to erect a body that would be above the law, but to raise legislative elections
contests from the category of political to that of justiciable questions. The purpose was
not to place the commission beyond the reach of the law, but to insure the
determination of such contests with the due process of law.
Section 478 of the Election Law was in force at the time of the adoption of the
Constitution, Article XV, section 2, of which provides that —

All laws of the Philippine Islands shall continue in force until the inauguration
of the Commonwealth of the Philippines; thereafter, such laws shall remain
operative, unless inconsistent with this Constitution, until amended, altered,
modified, or repealed by the National Assembly, and all references in such
laws to the Government or officials of the Philippine Islands shall be
construed, in so far as applicable, to refer to the Government and
corresponding officials under this Constitution.

The manifest purpose of this constitutional provision was to insure the orderly
processes of government, and to prevent any hiatus in its operations after the
inauguration of the Commonwealth of the Philippines. It was thus provided that all
laws of the Philippine Islands shall remain operative even after the inauguration of the
Commonwealth of the Philippines, unless inconsistent with the Constitution, and that
all references in such laws to the government or officials of the Philippine Islands shall
be construed, in so far as applicable, to refer to the government and corresponding
officials under the Constitution. It would seem to be consistent not only with the spirit
but the letter of the Constitution to hold that section 478 of the Election Law remains
operative and should now be construed to refer to the Electoral Commission, which, in
so far as the power to judge election contests is concerned, corresponds to either the
Senate or the House of Representative under the former regime. It is important to
observe in this connection that said section 478 of the Election Law vested the power
to regulate the time and manner in which notice of a contested election may be given,
not in the Philippine Legislature but in the Senate and House of Representatives
singly. In other words, the authority to prescribe the time and manner of filing contests
in the elections of members of the Philippine Legislature was by statute lodged
separately in the bodies clothed with power to decide such contests. Construing
section 478 of the Election Law to refer to the National Assembly, as required by
Article XV, section 2, of the Constitution, it seems reasonable to conclude that the
authority to prescribe the time and manner of filing contests in the election of members
of the National Assembly is vested in the Electoral Commission, which is now the
body clothed with power to decide such contests.

In the light of what has been said, the resolution of the National Assembly of
December 3, 1935, could not have the effect of barring the right of the respondent
Pedro Ynsua to contest the election of the petitioner. By the same token, the Electoral
Commission was authorized by law to adopt its resolution of December 9, 1935, which
fixed the time with in which written contests must be filed with the commission.

Having been filed within the time fixed by its resolutions, the Electoral Commission
has jurisdiction to hear and determine the contest filed by the respondent Pedro
Ynsua against the petitioner Jose A. Angara.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-19650 September 29, 1966
CALTEX (PHILIPPINES), INC., petitioner-appellee,
vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER
GENERAL, respondent-appellant.
Office of the Solicitor General for respondent and appellant.
Ross, Selph and Carrascoso for petitioner and appellee.
CASTRO, J.:
In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex)
conceived and laid the groundwork for a promotional scheme calculated to drum up
patronage for its oil products. Denominated "Caltex Hooded Pump Contest", it calls for
participants therein to estimate the actual number of liters a hooded gas pump at each
Caltex station will dispense during a specified period. Employees of the Caltex
(Philippines) Inc., its dealers and its advertising agency, and their immediate families
excepted, participation is to be open indiscriminately to all "motor vehicle owners
and/or licensed drivers". For the privilege to participate, no fee or consideration is
required to be paid, no purchase of Caltex products required to be made. Entry forms
are to be made available upon request at each Caltex station where a sealed can will
be provided for the deposit of accomplished entry stubs.
A three-staged winner selection system is envisioned. At the station level, called
"Dealer Contest", the contestant whose estimate is closest to the actual number of
liters dispensed by the hooded pump thereat is to be awarded the first prize; the next
closest, the second; and the next, the third. Prizes at this level consist of a 3-burner
kerosene stove for first; a thermos bottle and a Ray-O-Vac hunter lantern for second;
and an Everready Magnet-lite flashlight with batteries and a screwdriver set for third.
The first-prize winner in each station will then be qualified to join in the "Regional
Contest" in seven different regions. The winning stubs of the qualified contestants in
each region will be deposited in a sealed can from which the first-prize, second-prize
and third-prize winners of that region will be drawn. The regional first-prize winners will
be entitled to make a three-day all-expenses-paid round trip to Manila, accompanied
by their respective Caltex dealers, in order to take part in the "National Contest". The
regional second-prize and third-prize winners will receive cash prizes of P500 and
P300, respectively. At the national level, the stubs of the seven regional first-prize
winners will be placed inside a sealed can from which the drawing for the final first-
prize, second-prize and third-prize winners will be made. Cash prizes in store for
winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for third; and
P650 as consolation prize for each of the remaining four participants.
Foreseeing the extensive use of the mails not only as amongst the media for
publicizing the contest but also for the transmission of communications relative
thereto, representations were made by Caltex with the postal authorities for the
contest to be cleared in advance for mailing, having in view sections 1954(a), 1982
and 1983 of the Revised Administrative Code, the pertinent provisions of which read
as follows:
SECTION 1954. Absolutely non-mailable matter. — No matter belonging to
any of the following classes, whether sealed as first-class matter or not,
shall be imported into the Philippines through the mails, or to be deposited
in or carried by the mails of the Philippines, or be delivered to its addressee
by any officer or employee of the Bureau of Posts:
Written or printed matter in any form advertising, describing, or in any
manner pertaining to, or conveying or purporting to convey any information
concerning any lottery, gift enterprise, or similar scheme depending in whole
or in part upon lot or chance, or any scheme, device, or enterprise for
obtaining any money or property of any kind by means of false or fraudulent
pretenses, representations, or promises.
"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any
person or company is engaged in conducting any lottery, gift enterprise, or
scheme for the distribution of money, or of any real or personal property by
lot, chance, or drawing of any kind, or that any person or company is
conducting any scheme, device, or enterprise for obtaining money or
property of any kind through the mails by means of false or fraudulent
pretenses, representations, or promises, the Director of Posts may instruct
any postmaster or other officer or employee of the Bureau to return to the
person, depositing the same in the mails, with the word "fraudulent" plainly
written or stamped upon the outside cover thereof, any mail matter of
whatever class mailed by or addressed to such person or company or the
representative or agent of such person or company.
SECTION 1983. Deprivation of use of money order system and telegraphic
transfer service.—The Director of Posts may, upon evidence satisfactory to
him that any person or company is engaged in conducting any lottery, gift
enterprise or scheme for the distribution of money, or of any real or personal
property by lot, chance, or drawing of any kind, or that any person or
company is conducting any scheme, device, or enterprise for obtaining
money or property of any kind through the mails by means of false or
fraudulent pretenses, representations, or promise, forbid the issue or
payment by any postmaster of any postal money order or telegraphic
 transfer to said person or company or to the agent of any such person or
company, whether such agent is acting as an individual or as a firm, bank,
corporation, or association of any kind, and may provide by regulation for
the return to the remitters of the sums named in money orders or
telegraphic transfers drawn in favor of such person or company or its agent.
The overtures were later formalized in a letter to the Postmaster General, dated
October 31, 1960, in which the Caltex, thru counsel, enclosed a copy of the contest
rules and endeavored to justify its position that the contest does not violate the anti-
lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster
General opined that the scheme falls within the purview of the provisions aforesaid
and declined to grant the requested clearance. In its counsel's letter of December 7,
1960, Caltex sought a reconsideration of the foregoing stand, stressing that there
being involved no consideration in the part of any contestant, the contest was not,
under controlling authorities, condemnable as a lottery. Relying, however, on an
opinion rendered by the Secretary of Justice on an unrelated case seven years before
(Opinion 217, Series of 1953), the Postmaster General maintained his view that the
contest involves consideration, or that, if it does not, it is nevertheless a "gift
enterprise" which is equally banned by the Postal Law, and in his letter of December
10, 1960 not only denied the use of the mails for purposes of the proposed contest but
as well threatened that if the contest was conducted, "a fraud order will have to be
issued against it (Caltex) and all its representatives".
Caltex thereupon invoked judicial intervention by filing the present petition for
declaratory relief against Postmaster General Enrico Palomar, praying "that judgment
be rendered declaring its 'Caltex Hooded Pump Contest' not to be violative of the
Postal Law, and ordering respondent to allow petitioner the use of the mails to bring
the contest to the attention of the public". After issues were joined and upon the
respective memoranda of the parties, the trial court rendered judgment as follows:
In view of the foregoing considerations, the Court holds that the proposed
'Caltex Hooded Pump Contest' announced to be conducted by the petitioner
under the rules marked as Annex B of the petitioner does not violate the
Postal Law and the respondent has no right to bar the public distribution of
said rules by the mails.
The respondent appealed.
The parties are now before us, arrayed against each other upon two basic issues: first,
whether the petition states a sufficient cause of action for declaratory relief;
and second, whether the proposed "Caltex Hooded Pump Contest" violates the Postal
Law. We shall take these up in seriatim.
1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was
the applicable legal basis for the remedy at the time it was invoked, declaratory relief
is available to any person "whose rights are affected by a statute . . . to determine any
question of construction or validity arising under the . . . statute and for a declaration of
his rights thereunder" (now section 1, Rule 64, Revised Rules of Court). In
amplification, this Court, conformably to established jurisprudence on the matter, laid
down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are
adverse; (3) the party seeking declaratory relief must have a legal interest in the
controversy; and (4) the issue involved must be ripe for judicial determination
(Tolentino vs. The Board of Accountancy, et al., G.R. No. L-3062, September 28,
1951; Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2, pp. 576, 578-
579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The gravamen of the
appellant's stand being that the petition herein states no sufficient cause of action for
declaratory relief, our duty is to assay the factual bases thereof upon the foregoing
crucible.
As we look in retrospect at the incidents that generated the present controversy, a
number of significant points stand out in bold relief. The appellee (Caltex), as a
business enterprise of some consequence, concededly has the unquestioned right to
exploit every legitimate means, and to avail of all appropriate media to advertise and
stimulate increased patronage for its products. In contrast, the appellant, as the
authority charged with the enforcement of the Postal Law, admittedly has the power
and the duty to suppress transgressions thereof — particularly thru the issuance of
fraud orders, under Sections 1982 and 1983 of the Revised Administrative Code,
against legally non-mailable schemes. Obviously pursuing its right aforesaid, the
appellee laid out plans for the sales promotion scheme hereinbefore detailed. To
forestall possible difficulties in the dissemination of information thereon thru the mails,
amongst other media, it was found expedient to request the appellant for an advance
clearance therefor. However, likewise by virtue of his jurisdiction in the premises and
construing the pertinent provisions of the Postal Law, the appellant saw a violation
thereof in the proposed scheme and accordingly declined the request. A point of
difference as to the correct construction to be given to the applicable statute was thus
reached. Communications in which the parties expounded on their respective theories
were exchanged. The confidence with which the appellee insisted upon its position
was matched only by the obstinacy with which the appellant stood his ground. And this
impasse was climaxed by the appellant's open warning to the appellee that if the
proposed contest was "conducted, a fraud order will have to be issued against it and
all its representatives."
Against this backdrop, the stage was indeed set for the remedy prayed for. The
appellee's insistent assertion of its claim to the use of the mails for its proposed
contest, and the challenge thereto and consequent denial by the appellant of the
privilege demanded, undoubtedly spawned a live controversy. The justiciability of the
dispute cannot be gainsaid. There is an active antagonistic assertion of a legal right on
one side and a denial thereof on the other, concerning a real — not a mere theoretical
— question or issue. The contenders are as real as their interests are substantial. To
the appellee, the uncertainty occasioned by the divergence of views on the issue of
construction hampers or disturbs its freedom to enhance its business. To the
appellant, the suppression of the appellee's proposed contest believed to transgress a
law he has sworn to uphold and enforce is an unavoidable duty. With the appellee's
bent to hold the contest and the appellant's threat to issue a fraud order therefor if
carried out, the contenders are confronted by the ominous shadow of an imminent and
inevitable litigation unless their differences are settled and stabilized by a tranquilizing
declaration (Pablo y Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April
30, 1955). And, contrary to the insinuation of the appellant, the time is long past when
it can rightly be said that merely the appellee's "desires are thwarted by its own
doubts, or by the fears of others" — which admittedly does not confer a cause of
action. Doubt, if any there was, has ripened into a justiciable controversy when, as in
the case at bar, it was translated into a positive claim of right which is actually
contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing:
Woodward vs. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350).
We cannot hospitably entertain the appellant's pretense that there is here no question
of construction because the said appellant "simply applied the clear provisions of the
law to a given set of facts as embodied in the rules of the contest", hence, there is no
room for declaratory relief. The infirmity of this pose lies in the fact that it proceeds
from the assumption that, if the circumstances here presented, the construction of the
legal provisions can be divorced from the matter of their application to the appellee's
contest. This is not feasible. Construction, verily, is the art or process of discovering
and expounding the meaning and intention of the authors of the law with respect to its
application to a given case, where that intention is rendered doubtful, amongst
others, by reason of the fact that the given case is not explicitly provided for in the
law (Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or
not the scheme proposed by the appellee is within the coverage of the prohibitive
provisions of the Postal Law inescapably requires an inquiry into the intended
meaning of the words used therein. To our mind, this is as much a question of
construction or interpretation as any other.
Nor is it accurate to say, as the appellant intimates, that a pronouncement on the
matter at hand can amount to nothing more than an advisory opinion the handing
down of which is anathema to a declaratory relief action. Of course, no breach of the
Postal Law has as yet been committed. Yet, the disagreement over the construction
thereof is no longer nebulous or contingent. It has taken a fixed and final shape,
presenting clearly defined legal issues susceptible of immediate resolution. With the
battle lines drawn, in a manner of speaking, the propriety — nay, the necessity — of
setting the dispute at rest before it accumulates the asperity distemper, animosity,
passion and violence of a full-blown battle which looms ahead (III Moran, Comments
on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded.
Paraphrasing the language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr.,
800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the
appellee in the situation into which it has been cast, would be to force it to choose
between undesirable alternatives. If it cannot obtain a final and definitive
pronouncement as to whether the anti-lottery provisions of the Postal Law apply to its
proposed contest, it would be faced with these choices: If it launches the contest and
uses the mails for purposes thereof, it not only incurs the risk, but is also actually
threatened with the certain imposition, of a fraud order with its concomitant stigma
which may attach even if the appellee will eventually be vindicated; if it abandons the
contest, it becomes a self-appointed censor, or permits the appellant to put into effect
a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh
these considerations in one equation and in the spirit of liberality with which the Rules
of Court are to be interpreted in order to promote their object (section 1, Rule 1,
Revised Rules of Court) — which, in the instant case, is to settle, and afford relief from
uncertainty and insecurity with respect to, rights and duties under a law — we can see
in the present case any imposition upon our jurisdiction or any futility or prematurity in
our intervention.
The appellant, we apprehend, underrates the force and binding effect of the ruling we
hand down in this case if he believes that it will not have the final and pacifying
function that a declaratory judgment is calculated to subserve. At the very least, the
appellant will be bound. But more than this, he obviously overlooks that in this
jurisdiction, "Judicial decisions applying or interpreting the law shall form a part of the
legal system" (Article 8, Civil Code of the Philippines). In effect, judicial decisions
assume the same authority as the statute itself and, until authoritatively abandoned,
necessarily become, to the extent that they are applicable, the criteria which must
control the actuations not only of those called upon to abide thereby but also of those
in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings
that our resolution of this case will terminate the controversy at hand.
It is not amiss to point out at this juncture that the conclusion we have herein just
reached is not without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117
A. 2d., 487, where a corporation engaged in promotional advertising was advised by
the county prosecutor that its proposed sales promotion plan had the characteristics of
a lottery, and that if such sales promotion were conducted, the corporation would be
subject to criminal prosecution, it was held that the corporation was entitled to
maintain a declaratory relief action against the county prosecutor to determine the
legality of its sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17
App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo, Inc. vs.
Scott, 15 N.J. Super. 124, 82 A. 2d., 903.
In fine, we hold that the appellee has made out a case for declaratory relief.
2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost
identical terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as
absolutely non-mailable, and empowers the Postmaster General to issue fraud orders
against, or otherwise deny the use of the facilities of the postal service to, any
information concerning "any lottery, gift enterprise, or scheme for the distribution of
money, or of any real or personal property by lot, chance, or drawing of any kind".
Upon these words hinges the resolution of the second issue posed in this appeal.
Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El
Debate", Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the
power of the postal authorities under the abovementioned provisions of the Postal
Law, this Court declared that —
While countless definitions of lottery have been attempted, the authoritative
one for this jurisdiction is that of the United States Supreme Court, in
analogous cases having to do with the power of the United States
Postmaster General, viz.: The term "lottery" extends to all schemes for the
 distribution of prizes by chance, such as policy playing, gift exhibitions, prize
concerts, raffles at fairs, etc., and various forms of gambling. The three
essential elements of a lottery are: First, consideration; second, prize; and
third, chance. (Horner vs. States [1892], 147 U.S. 449; Public Clearing
House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915],
30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs.
Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction Company vs.
Carmona, p. 233, ante.)
Unanimity there is in all quarters, and we agree, that the elements of prize and chance
are too obvious in the disputed scheme to be the subject of contention. Consequently
as the appellant himself concedes, the field of inquiry is narrowed down to the
existence of the element of consideration therein. Respecting this matter, our task is
considerably lightened inasmuch as in the same case just cited, this Court has laid
down a definitive yard-stick in the following terms —
In respect to the last element of consideration, the law does not condemn
the gratuitous distribution of property by chance, if no consideration is
derived directly or indirectly from the party receiving the chance, but does
condemn as criminal schemes in which a valuable consideration of some
kind is paid directly or indirectly for the chance to draw a prize.
Reverting to the rules of the proposed contest, we are struck by the clarity of the
language in which the invitation to participate therein is couched. Thus —
No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You
don't have to buy anything? Simply estimate the actual number of liter the
Caltex gas pump with the hood at your favorite Caltex dealer will dispense
from — to —, and win valuable prizes . . . ." .
Nowhere in the said rules is any requirement that any fee be paid, any merchandise
be bought, any service be rendered, or any value whatsoever be given for the
privilege to participate. A prospective contestant has but to go to a Caltex station,
request for the entry form which is available on demand, and accomplish and submit
the same for the drawing of the winner. Viewed from all angles or turned inside out,
the contest fails to exhibit any discernible consideration which would brand it as a
lottery. Indeed, even as we head the stern injunction, "look beyond the fair exterior, to
the substance, in order to unmask the real element and pernicious tendencies which
the law is seeking to prevent" ("El Debate", Inc. vs. Topacio, supra, p. 291), we find
none. In our appraisal, the scheme does not only appear to be, but actually is, a
gratuitous distribution of property by chance.
There is no point to the appellant's insistence that non-Caltex customers who may buy
Caltex products simply to win a prize would actually be indirectly paying a
consideration for the privilege to join the contest. Perhaps this would be tenable if the
purchase of any Caltex product or the use of any Caltex service were a pre-requisite
to participation. But it is not. A contestant, it hardly needs reiterating, does not have to
buy anything or to give anything of value.1awphîl.nèt
Off-tangent, too, is the suggestion that the scheme, being admittedly for sales
promotion, would naturally benefit the sponsor in the way of increased patronage by
those who will be encouraged to prefer Caltex products "if only to get the chance to
draw a prize by securing entry blanks". The required element of consideration does
not consist of the benefit derived by the proponent of the contest. The true test, as laid
down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788, is whether the
participant pays a valuable consideration for the chance, and not whether those
conducting the enterprise receive something of value in return for the distribution of
the prize. Perspective properly oriented, the standpoint of the contestant is all that
matters, not that of the sponsor. The following, culled from Corpus Juris Secundum,
should set the matter at rest:
The fact that the holder of the drawing expects thereby to receive, or in fact
does receive, some benefit in the way of patronage or otherwise, as a result
of the drawing; does not supply the element of consideration. Griffith
Amusement Co. vs. Morgan, Tex. Civ. App., 98 S.W., 2d., 844" (54 C.J.S.,
p. 849).
Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump
Contest" proposed by the appellee is not a lottery that may be administratively and
adversely dealt with under the Postal Law.
But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of
money, or of any real or personal property by lot, chance, or drawing of any kind",
which is equally prescribed? Incidentally, while the appellant's brief appears to have
concentrated on the issue of consideration, this aspect of the case cannot be avoided
if the remedy here invoked is to achieve its tranquilizing effect as an instrument of both
curative and preventive justice. Recalling that the appellant's action was predicated,
amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice,
which opined in effect that a scheme, though not a lottery for want of consideration,
may nevertheless be a gift enterprise in which that element is not essential, the
determination of whether or not the proposed contest — wanting in consideration as
we have found it to be — is a prohibited gift enterprise, cannot be passed over sub
silencio.
While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in
explicit words, there appears to be a consensus among lexicographers and standard
authorities that the term is commonly applied to a sporting artifice of under which
goods are sold for their market value but by way of inducement each purchaser is
given a chance to win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary,
4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed., p. 55; Retail
Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb.
13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507,
509, 5 Sneed, 507, 509). As thus conceived, the term clearly cannot embrace the
scheme at bar. As already noted, there is no sale of anything to which the chance
offered is attached as an inducement to the purchaser. The contest is open to all consideration is paid by the contestant to participate, the reason behind the law can
qualified contestants irrespective of whether or not they buy the appellee's products. hardly be said to obtain. If, as it has been held —

Going a step farther, however, and assuming that the appellee's contest can be
encompassed within the broadest sweep that the term "gift enterprise" is capable of
being extended, we think that the appellant's pose will gain no added comfort. As
stated in the opinion relied upon, rulings there are indeed holding that a gift enterprise
involving an award by chance, even in default of the element of consideration
necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235 Ala 192,
178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex
rel. Stafford vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114
Mont. 52). But this is only one side of the coin. Equally impressive authorities declare
that, like a lottery, a gift enterprise comes within the prohibitive statutes only if it
exhibits the tripartite elements of prize, chance and consideration (E.g.: Bills vs.
People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275 P. 563, 565, 151
Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs.
Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54
C.J.S., 851, citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga. App., 705; 18 Words
and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions is explained
by the fact that the specific statutory provisions relied upon are not identical. In some
cases, as pointed out in 54 C.J.S., 851, the terms "lottery" and "gift enterprise" are
used interchangeably (Bills vs. People, supra); in others, the necessity for the element
of consideration or chance has been specifically eliminated by statute. (54 C.J.S., 351-
352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater
Corporation, supra). The lesson that we derive from this state of the pertinent
jurisprudence is, therefore, that every case must be resolved upon the particular
phraseology of the applicable statutory provision.
Gratuitous distribution of property by lot or chance does not constitute
"lottery", if it is not resorted to as a device to evade the law and no
consideration is derived, directly or indirectly, from the party receiving the
chance, gambling spirit not being cultivated or stimulated thereby. City of
Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words and Phrases,
perm. ed., p. 695, emphasis supplied).
we find no obstacle in saying the same respecting a gift enterprise. In the end, we are
persuaded to hold that, under the prohibitive provisions of the Postal Law which we
have heretofore examined, gift enterprises and similar schemes therein contemplated
are condemnable only if, like lotteries, they involve the element of consideration.
Finding none in the contest here in question, we rule that the appellee may not be
denied the use of the mails for purposes thereof.
Recapitulating, we hold that the petition herein states a sufficient cause of action for
declaratory relief, and that the "Caltex Hooded Pump Contest" as described in the
rules submitted by the appellee does not transgress the provisions of the Postal Law.
ACCORDINGLY, the judgment appealed from is affirmed. No costs.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P.,
Zaldivar and Sanchez, JJ., concur.

Taking this cue, we note that in the Postal Law, the term in question is used in
association with the word "lottery". With the meaning of lottery settled, and consonant
to the well-known principle of legal hermeneutics noscitur a sociis — which Opinion
217 aforesaid also relied upon although only insofar as the element of chance is
concerned — it is only logical that the term under a construction should be accorded
no other meaning than that which is consistent with the nature of the word associated
therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must
the term "gift enterprise" be so construed. Significantly, there is not in the law the
slightest indicium of any intent to eliminate that element of consideration from the "gift
enterprise" therein included.

This conclusion firms up in the light of the mischief sought to be remedied by the law,
resort to the determination thereof being an accepted extrinsic aid in statutory
construction. Mail fraud orders, it is axiomatic, are designed to prevent the use of the
mails as a medium for disseminating printed matters which on grounds of public policy
are declared non-mailable. As applied to lotteries, gift enterprises and similar
schemes, justification lies in the recognized necessity to suppress their tendency to
inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d.,
839, 143 Pa. Super. 208). Since in gambling it is inherent that something of value be
hazarded for a chance to gain a larger amount, it follows ineluctably that where no
 Republic of the Philippines On 23 March 1971, the respondent spouses Antero and Amanda Agonoy filed a
SUPREME COURT petition with the Municipal Court of San Nicolas, Ilocos Norte, seeking the adoption of
Manila the minors Quirino Bonilla and Wilson Marcos. The case, entitled: "In re Adoption of
the Minors Quirino Bonilla and Wilson Marcos, Antero Agonoy and Amanda Ramos-
Agonoy, petitioners", was docketed therein as Spec. Proc. No. 37. 2
SECOND DIVISION

The petition was set for hearing on 24 April 1971 and notices thereof were caused to
G.R. No. L-34568 March 28, 1988
be served upon the office of the Solicitor General and ordered published in the
ILOCOS TIMES, a weekly newspaper of general circulation in the province of Ilocos
RODERICK DAOANG, and ROMMEL DAOANG, assisted by their father, ROMEO Norte, with editorial offices in Laoag City. 3
DAOANG, petitioners,
vs.
On 22 April 1971, the minors Roderick and Rommel Daoang, assisted by their father
THE MUNICIPAL JUDGE, SAN NICOLAS, ILOCOS NORTE, ANTERO AGONOY
and guardian ad litem, the petitioners herein, filed an opposition to the aforementioned
and AMANDA RAMOS-AGONOY, respondents.
petition for adoption, claiming that the spouses Antero and Amanda Agonoy had a
legitimate daughter named Estrella Agonoy, oppositors' mother, who died on 1 March
1971, and therefore, said spouses were disqualified to adopt under Art. 335 of the
Civil Code. 4
PADILLA, J.:
After the required publication of notice had been accomplished, evidence was
presented. Thereafter, the Municipal Court of San Nicolas, Ilocos Norte rendred its
This is a petition for review on certiorari of the decision, dated 30 June 1971, rendered decision, granting the petition for adoption. 5
by the respondent judge * in Spec. Proc. No. 37 of Municipal Court of San Nicolas,
Ilocos Norte, entitled: "In re Adoption of the Minors Quirino Bonilla and Wilson Marcos;
Antero Agonoy and Amanda R. Agonoy, petitioners", the dispositive part of which Hence, the present recourse by the petitioners (oppositors in the lower court).
reads, as follows:
The sole issue for consideration is one of law and it is whether or not the respondent
Wherefore, Court renders judgment declaring that henceforth spouses Antero Agonoy and Amanda Ramos-Agonoy are disqualified to adopt under
Quirino Bonilla and Wilson Marcos be, to all legitimate intents and paragraph (1), Art. 335 of the Civil Code.
purposes, the children by adoption of the joint petitioners Antero
Agonoy and Amanda R. Agonoy and that the former be freed from
The pertinent provision of law reads, as follows:
legal obedience and maintenance by their respective parents,
Miguel Bonilla and Laureana Agonoy for Quirino Bonilla and
Modesto Marcos and Benjamina Gonzales for Wilson Marcos and Art. 335. The following cannot adopt:
their family names 'Bonilla' and 'Marcos' be changed with
"Agonoy", which is the family name of the petitioners.
(1) Those who have legitimate, legitimated, acknowledged natural
children, or children by legal fiction;
Successional rights of the children and that of their adopting
parents shall be governed by the pertinent provisions of the New
xxx xxx xxx
Civil Code.

In overruling the opposition of the herein petitioners, the respondents judge held that
Let copy of this decision be furnished and entered into the records
"to add grandchildren in this article where no grandchil is included would violate to
of the Local Civil Registry of San Nicolas, Ilocos Norte, for its
(sic) the legal maxim that what is expressly included would naturally exclude what is
legal effects at the expense of the petitioners. 1
not included".

The undisputed facts of the case are as follows:

But, it is contended by the petitioners, citing the case of In re Adoption of
Millendez,6 that the adoption of Quirino Bonilla and Wilson Marcos would not only
introduce a foreign element into the family unit, but would result in the reduction of
their legititimes. It would also produce an indirect, permanent and irrevocable
disinheritance which is contrary to the policy of the law that a subsequent
reconciliation between the offender and the offended person deprives the latter of the
right to disinherit and renders ineffectual any disinheritance that may have been made.

We find, however, that the words used in paragraph (1) of Art. 335 of the Civil Code, in
enumerating the persons who cannot adopt, are clear and unambiguous. The children
mentioned therein have a clearly defined meaning in law and, as pointed out by the
respondent judge, do not include grandchildren.

Well known is the rule of statutory construction to the effect that a statute clear and
unambiguous on its face need not be interpreted; stated otherwise, the rule is that only
statutes with an ambiguous or doubtful meaning may be the subject of statutory
construction. 7

Besides, it appears that the legislator, in enacting the Civil Code of the Philippines,
obviously intended that only those persons who have certain classes of children, are
disqualified to adopt. The Civil Code of Spain, which was once in force in the
Philippines, and which served as the pattern for the Civil Code of the Philippines, in its
Article 174, disqualified persons who have legitimate or legitimated descendants from
adopting. Under this article, the spouses Antero and Amanda Agonoy would have
been disqualified to adopt as they have legitimate grandchildren, the petitioners
herein. But, when the Civil Code of the Philippines was adopted, the word
"descendants" was changed to "children", in paragraph (1) of Article 335.

Adoption used to be for the benefit of the adoptor. It was intended to afford to persons
who have no child of their own the consolation of having one, by creating through legal
fiction, the relation of paternity and filiation where none exists by blood
relationship. 8 The present tendency, however, is geared more towards the promotion
of the welfare of the child and the enhancement of his opportunities for a useful and
happy life, and every intendment is sustained to promote that objective. 9 Under the
law now in force, having legitimate, legitimated, acknowledged natural children, or
children by legal fiction, is no longer a ground for disqualification to adopt. 10

WHEREFORE, the petition is DENIED. The judgment of the Municipal Court of San
Nicolas, Ilocos Norte in Spec. Proc. No. 37 is AFFIRMED. Without pronouncement as
to costs in this instance.

SO ORDERED.

Yap, Melencio-Herrera, Paras and Sarmiento, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 111107 January 10, 1997
LOEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional
Executive Director (RED), Region 2 and JOVITO LAYUGAN, JR., in his capacity
as Community Environment and Natural Resources Officer (CENRO), both of the
Department of Environment and Natural Resources (DENR), petitioners,
vs.
COURT OF APPEALS, HON. RICARDO A. BACULI in his capacity as Presiding
Judge of Branch 2, Regional Trial Court at Tuguegarao, Cagayan, and SPOUSES
BIENVENIDO and VICTORIA DE GUZMAN, respondents.
TORRES, JR., J.:
Without violating the principle of exhaustion of administrative remedies, may an action
for replevin prosper to recover a movable property which is the subject matter of an
administrative forfeiture proceeding in the Department of Environment and Natural
Resources pursuant to Section 68-A of P.D. 705, as amended, entitled The Revised
Forestry Code of the Philippines?
Are the Secretary of DENR and his representatives empowered to confiscate and
forfeit conveyances used in transporting illegal forest products in favor of the
government?
These are two fundamental questions presented before us for our resolution.
The controversy on hand had its incipiency on May 19, 1989 when the truck of private
respondent Victoria de Guzman while on its way to Bulacan from San Jose, Baggao,
Cagayan, was seized by the Department of Environment and Natural Resources
(DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the driver could not
produce the required documents for the forest products found concealed in the truck.
Petitioner Jovito Layugan, the Community Environment and Natural Resources Officer
(CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of confiscation of the
truck and gave the owner thereof fifteen (15) days within which to submit an
explanation why the truck should not be forfeited. Private respondents, however, failed
to submit the required explanation. On June 22, 1989,1 Regional Executive Director
Rogelio Baggayan of DENR sustained petitioner Layugan's action of confiscation and
ordered the forfeiture of the truck invoking Section 68-A of Presidential Decree No.
705 as amended by Executive Order No. 277. Private respondents filed a letter of
reconsideration dated June 28, 1989 of the June 22, 1989 order of Executive Director
Baggayan, which was, however, denied in a subsequent order of July 12,
1989.2 Subsequently, the case was brought by the petitioners to the Secretary of
DENR pursuant to private respondents' statement in their letter dated June 28, 1989
that in case their letter for reconsideration would be denied then "this letter should be
considered as an appeal to the Secretary."3 Pending resolution however of the appeal,
a suit for replevin, docketed as Civil Case 4031, was filed by the private respondents
against petitioner Layugan and Executive Director Baggayan4 with the Regional Trial
Court, Branch 2 of Cagayan,5 which issued a writ ordering the return of the truck to
private respondents.6 Petitioner Layugan and Executive Director Baggayan filed a
motion to dismiss with the trial court contending, inter alia, that private respondents
had no cause of action for their failure to exhaust administrative remedies. The trial
court denied the motion to dismiss in an order dated December 28, 1989. 7 Their
motion for reconsideration having been likewise denied, a petition for certiorari was
filed by the petitioners with the respondent Court of Appeals which sustained the trial
court's order ruling that the question involved is purely a legal question. 8 Hence, this
present petition,9 with prayer for temporary restraining order and/or preliminary
injunction, seeking to reverse the decision of the respondent Court of Appeals was
filed by the petitioners on September 9, 1993. By virtue of the Resolution dated
September 27, 1993,10 the prayer for the issuance of temporary restraining order of
petitioners was granted by this Court.
Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that
the trial court could not legally entertain the suit for replevin because the truck was
under administrative seizure proceedings pursuant to Section 68-A of P.D. 705, as
amended by E.O. 277. Private respondents, on the other hand, would seek to avoid
the operation of this principle asserting that the instant case falls within the exception
of the doctrine upon the justification that (1) due process was violated because they
were not given the chance to be heard, and (2) the seizure and forfeiture was unlawful
on the grounds: (a) that the Secretary of DENR and his representatives have no
authority to confiscate and forfeit conveyances utilized in transporting illegal forest
products, and (b) that the truck as admitted by petitioners was not used in the
commission of the crime.
Upon a thorough and delicate scrutiny of the records and relevant jurisprudence on
the matter, we are of the opinion that the plea of petitioners for reversal is in order.
This Court in a long line of cases has consistently held that before a party is allowed to
seek the intervention of the court, it is a pre-condition that he should have availed of
all the means of administrative processes afforded him. Hence, if a remedy within the
administrative machinery can still be resorted to by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his jurisdiction
then such remedy should be exhausted first before court's judicial power can be
sought, The premature invocation of court's intervention is fatal to one's cause of
action.11 Accordingly, absent any finding of waiver or estoppel the case is susceptible
of dismissal for lack of cause of
action.12 This doctrine of exhaustion of administrative remedies was not without its
practical and legal reasons, for one thing, availment of administrative remedy entails
lesser expenses and provides for a speedier disposition of controversies. It is no less
true to state that the courts of justice for reasons of comity and convenience will shy
away from a dispute until the system of administrative redress has been completed
and complied with so as to give the administrative agency concerned every
opportunity to correct its error and to dispose of the case. However, we are not amiss
to reiterate that the principle of exhaustion of administrative remedies as tested by a
battery of cases is not an ironclad rule. This doctrine is a relative one and its flexibility
is called upon by the peculiarity and uniqueness of the factual and circumstantial
settings of a case. Hence, it is disregarded (1) when there is a violation of due
process,13 (2) when the issue involved is purely a legal question,14 (3) when the
administrative action is patently illegal amounting to lack or excess of jurisdiction, 15 (4)
when there is estoppel on the part of the administrative agency concerned,16 (5) when
there is irreparable injury,17 (6) when the respondent is a department secretary whose
acts as an alter ego of the President bears the implied and assumed approval of the
latter,18 (7) when to require exhaustion of administrative remedies would be
unreasonable,19 (8) when it would amount to a nullification of a claim,20 (9) when the
subject matter is a private land in land case proceedings, 21 (10) when the rule does
not provide a plain, speedy and adequate remedy, and (11) when there are
circumstances indicating the urgency of judicial intervention.22
In the case at bar, there is no question that the controversy was pending before the
Secretary of DENR when it was forwarded to him following the denial by the
petitioners of the motion for reconsideration of private respondents through the order
of July 12, 1989. In their letter of reconsideration dated June 28, 1989,23 private
respondents clearly recognize the presence of an administrative forum to which they
seek to avail, as they did avail, in the resolution of their case. The letter, reads, thus:
xxx xxx xxx
If this motion for reconsideration does not merit your favorable
action, then this letter should be considered as an appeal to the
Secretary.24
within its jurisdiction. The assumption by the trial court, therefore, of the replevin suit
filed by private respondents constitutes an unjustified encroachment into the domain
of the administrative agency's prerogative. The doctrine of primary jurisdiction does
not warrant a court to arrogate unto itself the authority to resolve a controversy the
jurisdiction over which is initially lodged with an administrative body of special
competence.25 In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary,26 which
was reiterated in the recent case of Concerned Officials of MWSS vs. Vasquez,27 this
Court held:
Thus, while the administration grapples with the complex and
multifarious problems caused by unbriddled exploitation of these
resources, the judiciary will stand clear. A long line of cases
establish the basic rule that the courts will not interfere in matters
which are addressed to the sound discretion of government
agencies entrusted with the regulation of activities coming under
the special technical knowledge and training of such agencies.
To sustain the claim of private respondents would in effect bring the instant
controversy beyond the pale of the principle of exhaustion of administrative remedies
and fall within the ambit of excepted cases heretofore stated. However, considering
the circumstances prevailing in this case, we can not but rule out these assertions of
private respondents to be without merit. First, they argued that there was violation of
due process because they did not receive the May 23, 1989 order of confiscation of
petitioner Layugan. This contention has no leg to stand on. Due process does not
necessarily mean or require a hearing, but simply an opportunity or right to be
heard.28 One may be heard, not solely by verbal presentation but also, and perhaps
many times more creditably and practicable than oral argument, through
pleadings.29 In administrative proceedings moreover, technical rules of procedure and
evidence are not strictly applied; administrative process cannot be fully equated with
due process in its strict judicial sense.30 Indeed, deprivation of due process cannot be
successfully invoked where a party was given the chance to be heard on his motion
for reconsideration,31 as in the instant case, when private respondents were
undisputedly given the opportunity to present their side when they filed a letter of
reconsideration dated June 28, 1989 which was, however, denied in an order of July
12, 1989 of Executive Director Baggayan, In Navarro III vs. Damasco,32 we ruled that :

It was easy to perceive then that the private respondents looked up to the Secretary
The essence of due process is simply an opportunity to be heard,
for the review and disposition of their case. By appealing to him, they acknowledged
or as applied to administrative proceedings, an opportunity to
the existence of an adequate and plain remedy still available and open to them in the
explain one's side or an opportunity to seek a reconsideration of
ordinary course of the law. Thus, they cannot now, without violating the principle of
the action or ruling complained of. A formal or trial type hearing is
exhaustion of administrative remedies, seek court's intervention by filing an action for
not at all times and in all instances essential. The requirements
replevin for the grant of their relief during the pendency of an administrative
are satisfied when the parties are afforded fair and reasonable
proceedings.
opportunity to explain their side of the controversy at hand. What
is frowned upon is the absolute lack of notice or hearing.
Moreover, it is important to point out that the enforcement of forestry laws, rules and
regulations and the protection, development and management of forest lands fall
Second, private respondents imputed the patent illegality of seizure and forfeiture of
within the primary and special responsibilities of the Department of Environment and
the truck because the administrative officers of the DENR allegedly have no power to
Natural Resources. By the very nature of its function, the DENR should be given a
perform these acts under the law. They insisted that only the court is authorized to
free hand unperturbed by judicial intrusion to determine a controversy which is well
confiscate and forfeit conveyances used in transporting illegal forest products as can
be gleaned from the second paragraph of Section 68 of P.D. 705, as amended by
E.O. 277. The pertinent provision reads as follows:
Sec. 68. . . .
xxx xxx xxx
The court shall further order the confiscation in favor of the
government of the timber or any forest products cut, gathered,
collected, removed, or possessed, as well as
the machinery, equipments, implements and tools illegaly [sic]
used in the area where the timber or forest products are found.
(Emphasis ours)
A reading, however, of the law persuades us not to go along with private respondents'
thinking not only because the aforequoted provision apparently does not mention nor
include "conveyances" that can be the subject of confiscation by the courts, but to a
large extent, due to the fact that private respondents' interpretation of the subject
provision unduly restricts the clear intention of the law and inevitably reduces the other
provision of Section 68-A, which is quoted herein below:
Sec. 68-A. Administrative Authority of the Department or His Duly
Authorized Representative To Order Confiscation. In all cases of
violation of this Code or other forest laws, rules and regulations,
the Department Head or his duly authorized representative,
may order the confiscation of any forest products illegally cut,
gathered, removed, or possessed or abandoned, and all
conveyances used either by land, water or air in the commission
of the offense and to dispose of the same in accordance with
pertinent laws, regulations and policies on the matter. (Emphasis
ours)
It is, thus, clear from the foregoing provision that the Secretary and his duly authorized
representatives are given the authority to confiscate and forfeit any conveyances
utilized in violating the Code or other forest laws, rules and regulations. The phrase "to
dispose of the same" is broad enough to cover the act of forfeiting conveyances in
favor of the government. The only limitation is that it should be made "in accordance
with pertinent laws, regulations or policies on the matter." In the construction of
statutes, it must be read in such a way as to give effect to the purpose projected in the
statute.33 Statutes should be construed in the light of the object to be achieved and the
evil or mischief to be suppressed, and they should be given such construction as will
advance the object, suppress the mischief, and secure the benefits intended.34 In this
wise, the observation of the Solicitor General is significant, thus:
But precisely because of the need to make forestry laws "more
responsive to present situations and realities" and in view of the
"urgency to conserve the remaining resources of the country,"
that the government opted to add Section 68-A. This amendatory
provision is an administrative remedy totally separate and distinct
from criminal proceedings. More than anything else, it is intended
to supplant the inadequacies that characterize enforcement of
forestry laws through criminal actions. The preamble of EO 277-
the law that added Section 68-A to PD 705-is most revealing:
"WHEREAS, there is an urgency to conserve
the remaining forest resources of the country
for the benefit and welfare of the present and
future generations of Filipinos;
WHEREAS, our forest resources may be
effectively conserved and protected through
the vigilant enforcement and implementation
of our forestry laws, rules and regulations;
WHEREAS, the implementation of our
forestry laws suffers from technical
difficulties, due to certain inadequacies in the
penal provisions of the Revised Forestry
Code of the Philippines; and
WHEREAS, to overcome this difficulties,
there is a need to penalize certain acts more
responsive to present situations and
realities;"
It is interesting to note that Section 68-A is a new provision
authorizing the DENR to confiscate, not only "conveyances," but
forest products as well. On the other hand, confiscation of forest
products by the "court" in a criminal action has long been
provided for in Section 68. If as private respondents insist, the
power on confiscation cannot be exercised except only through
the court under Section 68, then Section 68-A would have no
Purpose at all. Simply put, Section 68-A would not have provided
any solution to the problem perceived in EO 277, supra.35
Private respondents, likewise, contend that the seizure was illegal because the
petitioners themselves admitted in the Order dated July 12, 1989 of Executive Director
Baggayan that the truck of private respondents was not used in the commission of the
crime. This order, a copy of which was given to and received by the counsel of private
respondents, reads in part, viz.:
. . . while it is true that the truck of your client was not used by her
in the commission of the crime, we uphold your claim that the
 truck owner is not liable for the crime and in no case could a
criminal case be filed against her as provided under Article 309
and 310 of the Revised Penal Code. . .36
We observed that private respondents misread the content of the aforestated order
and obviously misinterpreted the intention of petitioners. What is contemplated by the
petitioners when they stated that the truck "was not used in the commission of the
crime" is that it was not used in the commission of the crime of theft, hence, in no case
can a criminal action be filed against the owner thereof for violation of Article 309 and
310 of the Revised Penal Code. Petitioners did not eliminate the possibility that the
truck was being used in the commission of another crime, that is, the breach of
Section 68 of P.D. 705 as amended by E.O. 277. In the same order of July 12, 1989,
petitioners pointed out:
. . . However, under Section 68 of P.D. 705 as amended and
further amended by Executive Order No. 277 specifically provides
for the confiscation of the conveyance used in the transport of
forest products not covered by the required legal documents. She
may not have been involved in the cutting and gathering of the
product in question but the fact that she accepted the goods for a
fee or fare the same is therefor liable. . .37
Private respondents, however, contended that there is no crime defined and
punishable under Section 68 other than qualified theft, so that, when petitioners
admitted in the July 12, 1989 order that private respondents could not be charged for
theft as provided for under Articles 309 and 310 of the Revised Penal Code, then
necessarily private respondents could not have committed an act constituting a crime
under Section 68. We disagree. For clarity, the provision of Section 68 of P.D. 705
before its amendment by E.O. 277 and the provision of Section 1 of E.O. No. 277
amending the aforementioned Section 68 are reproduced herein, thus:
Sec. 68. Cutting, gathering and/or collecting timber or other
products without license. — Any person who shall cut, gather,
collect, or remove timber or other forest products from any forest
land, or timber from alienable and disposable public lands, or from
private lands, without any authority under a license agreement,
lease, license or permit, shall be guilty of qualified theft as defined
and punished under Articles 309 and 310 of the Revised Penal
Code . . . (Emphasis ours; Section 68, P.D. 705 before its
amendment by E.O. 277)
Sec. 1. Section 68 of Presidential Decree No. 705, as amended,
is hereby amended to read as follows:
Sec. 68. Cutting, gathering and/or collecting
timber or other forest products without
license. — Any person who
shall cut, gather, collect, remove timber or
other forest products from any forest land, or
timber from alienable or disposable public
land, or from private land, without any
authority, or possess timber or other forest
products without the legal documents as
required under existing forest laws and
regulations, shall be punished with the
penalties imposed under Articles 309 and
310 of the Revised Penal Code . . .
(Emphasis ours; Section 1, E.O. No. 277
amending Section 68, P.D. 705 as amended)
With the introduction of Executive Order No. 277 amending Section 68 of P.D. 705,
the act of cutting, gathering, collecting, removing, or possessing forest products
without authority constitutes a distinct offense independent now from the crime of theft
under Articles 309 and 310 of the Revised Penal Code, but the penalty to be imposed
is that provided for under Article 309 and 310 of the Revised Penal Code. This is clear
from the language of Executive Order No. 277 when it eliminated the phrase "shall be
guilty of qualified theft as defined and punished under Articles 309 and 310 of the
Revised Penal Code" and inserted the words "shall be punished with the penalties
imposed under Article 309 and 310 of the Revised Penal Code". When the statute is
clear and explicit, there is hardly room for any extended court ratiocination or
rationalization of the law.38
From the foregoing disquisition, it is clear that a suit for replevin can not be sustained
against the petitioners for the subject truck taken and retained by them for
administrative forfeiture proceedings in pursuant to Section 68-A of the P.D. 705, as
amended. Dismissal of the replevin suit for lack of cause of action in view of the
private respondents' failure to exhaust administrative remedies should have been the
proper course of action by the lower court instead of assuming jurisdiction over the
case and consequently issuing the writ ordering the return of the truck. Exhaustion of
the remedies in the administrative forum, being a condition precedent prior to one's
recourse to the courts and more importantly, being an element of private respondents'
right of action, is too significant to be waylaid by the lower court.
It is worth stressing at this point, that a suit for replevin is founded solely on the claim
that the defendant wrongfully withholds the property sought to be recovered. It lies to
recover possession of personal chattels that are unlawfully detained.39 "To detain" is
defined as to mean "to hold or keep in custody,"40 and it has been held that there is
tortious taking whenever there is an unlawful meddling with the property, or an
exercise or claim of dominion over it, without any pretense of authority or right; this,
without manual seizing of the property is sufficient.41 Under the Rules of Court, it is
indispensable in replevin proceeding that the plaintiff must show by his own affidavit
that he is entitled to the possession of property, that the property is wrongfully
detained by the defendant, alleging the cause of detention, that the same has not
been taken for tax assessment, or seized under execution, or attachment, or if so
seized, that it is exempt from such seizure, and the actual value of the
property.42 Private respondents miserably failed to convince this Court that a wrongful
detention of the subject truck obtains in the instant case. It should be noted that the
truck was seized by the petitioners because it was transporting forest products without
the required permit of the DENR in manifest contravention of Section 68 of P.D. 705
as amended by E.O 277. Section 68-A of P.D. 705, as amended, unquestionably
warrants the confiscation as well as the disposition by the Secretary of DENR or his
duly authorized representatives of the conveyances used in violating the provision of
forestry laws. Evidently, the continued possession or detention of the truck by the
petitioners for administrative forfeiture proceeding is legally permissible, hence, no
wrongful detention exists in the case at bar.

Moreover, the suit for replevin is never intended as a procedural tool to question the
orders of confiscation and forfeiture issued by the DENR in pursuance to the authority
given under P.D. 705, as amended. Section 8 of the said law is explicit that actions
taken by the Director of the Bureau of Forest Development concerning the
enforcement of the provisions of the said law are subject to review by the Secretary of
DENR and that courts may not review the decisions of the Secretary except through a
special civil action for certiorari or prohibition. It reads:

Sec. 8. REVIEW — All actions and decisions of the Director are

subject to review, motu propio or upon appeal of any person
aggrieved thereby, by the Department Head whose decision shall
be final and executory after the lapse of thirty (30) days from the
receipt of the aggrieved party of said decision, unless appealed to
the President in accordance with Executive Order No. 19, Series
of 1966. The Decision of the Department Head may not be
reviewed by the courts except through a special civil action
for certiorari or prohibition.

WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of

Appeals dated October 16, 1991 and its Resolution dated July 14, 1992 are hereby
SET ASIDE AND REVERSED; the Restraining Order promulgated on September 27,
1993 is hereby made permanent; and the Secretary of DENR is directed to resolve the
controversy with utmost dispatch.

SO ORDERED.

Regalado, Romero, Puno and Mendoza, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-22301 August 30, 1967
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
MARIO MAPA Y MAPULONG, defendant-appellant.
Francisco P. Cabigao for defendant-appellant.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General F. R.
Rosete and Solicitor O. C. Hernandez for plaintiff-appellee.
FERNANDO, J.:
The sole question in this appeal from a judgment of conviction by the lower court is
whether or not the appointment to and holding of the position of a secret agent to the
provincial governor would constitute a sufficient defense to a prosecution for the crime
of illegal possession of firearm and ammunition. We hold that it does not.
The accused in this case was indicted for the above offense in an information dated
August 14, 1962 reading as follows: "The undersized accuses MARIO MAPA Y
MAPULONG of a violation of Section 878 in connection with Section 2692 of the
Revised Administrative Code, as amended by Commonwealth Act No. 56 and as
further amended by Republic Act No. 4, committed as follows: That on or about the
13th day of August, 1962, in the City of Manila, Philippines, the said accused did then
and there wilfully and unlawfully have in his possession and under his custody and
control one home-made revolver (Paltik), Cal. 22, without serial number, with six (6)
rounds of ammunition, without first having secured the necessary license or permit
therefor from the corresponding authorities. Contrary to law."
When the case was called for hearing on September 3, 1963, the lower court at the
outset asked the counsel for the accused: "May counsel stipulate that the accused
was found in possession of the gun involved in this case, that he has neither a permit
or license to possess the same and that we can submit the same on a question of law
whether or not an agent of the governor can hold a firearm without a permit issued by
the Philippine Constabulary." After counsel sought from the fiscal an assurance that
he would not question the authenticity of his exhibits, the understanding being that
only a question of law would be submitted for decision, he explicitly specified such
question to be "whether or not a secret agent is not required to get a license for his
firearm."
Upon the lower court stating that the fiscal should examine the document so that he
could pass on their authenticity, the fiscal asked the following question: "Does the
accused admit that this pistol cal. 22 revolver with six rounds of ammunition
mentioned in the information was found in his possession on August 13, 1962, in the
City of Manila without first having secured the necessary license or permit thereof from
the corresponding authority?" The accused, now the appellant, answered
categorically: "Yes, Your Honor." Upon which, the lower court made a statement: "The
accused admits, Yes, and his counsel Atty. Cabigao also affirms that the accused
admits."
Forthwith, the fiscal announced that he was "willing to submit the same for decision."
Counsel for the accused on his part presented four (4) exhibits consisting of his
appointment "as secret agent of the Hon. Feliciano Leviste," then Governor of
Batangas, dated June 2, 1962;1 another document likewise issued by Gov. Leviste
also addressed to the accused directing him to proceed to Manila, Pasay and Quezon
City on a confidential mission;2 the oath of office of the accused as such secret
agent,3 a certificate dated March 11, 1963, to the effect that the accused "is a secret
agent" of Gov. Leviste.4 Counsel for the accused then stated that with the presentation
of the above exhibits he was "willing to submit the case on the question of whether or
not a secret agent duly appointed and qualified as such of the provincial governor is
exempt from the requirement of having a license of firearm." The exhibits were
admitted and the parties were given time to file their respective
memoranda.1äwphï1.ñët
Thereafter on November 27, 1963, the lower court rendered a decision convicting the
accused "of the crime of illegal possession of firearms and sentenced to an
indeterminate penalty of from one year and one day to two years and to pay the costs.
The firearm and ammunition confiscated from him are forfeited in favor of the
Government."
The only question being one of law, the appeal was taken to this Court. The decision
must be affirmed.
The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for
any person to . . . possess any firearm, detached parts of firearms or ammunition
therefor, or any instrument or implement used or intended to be used in the
manufacture of firearms, parts of firearms, or ammunition."5 The next section provides
that "firearms and ammunition regularly and lawfully issued to officers, soldiers,
sailors, or marines [of the Armed Forces of the Philippines], the Philippine
Constabulary, guards in the employment of the Bureau of Prisons, municipal police,
provincial governors, lieutenant governors, provincial treasurers, municipal treasurers,
municipal mayors, and guards of provincial prisoners and jails," are not covered "when
such firearms are in possession of such officials and public servants for use in the
performance of their official duties."6
The law cannot be any clearer. No provision is made for a secret agent. As such he is
not exempt. Our task is equally clear. The first and fundamental duty of courts is to
apply the law. "Construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them." 7 The
conviction of the accused must stand. It cannot be set aside.

Accused however would rely on People v. Macarandang,8 where a secret agent was
acquitted on appeal on the assumption that the appointment "of the accused as a
secret agent to assist in the maintenance of peace and order campaigns and detection
of crimes, sufficiently put him within the category of a "peace officer" equivalent even
to a member of the municipal police expressly covered by section 879." Such reliance
is misplaced. It is not within the power of this Court to set aside the clear and explicit
mandate of a statutory provision. To the extent therefore that this decision conflicts
with what was held in People v. Macarandang, it no longer speaks with authority.

Wherefore, the judgment appealed from is affirmed.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
Castro and Angeles, JJ., concur.
 EN BANC
G.R. No. 138298 August 24, 2001
RAOUL B. DEL MAR, petitioner,
vs.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION, BELLE JAI-ALAI
CORPORATION, FILIPINAS GAMING ENTERTAINMENT TOTALIZATOR
CORPORATION, respondents.
x---------------------------------------------------------x
G.R. No. 138982 August 24, 2001
FEDERICO S. SANDOVAL II and MICHAEL T. DEFENSOR, petitioners,
vs.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION, respondent.
JUAN MIGUEL ZUBIRI, intervenor.
RESOLUTION
VITUG, J.:
In it's decision, dated 29 November 2000, the Court granted petitions filed by Raoul B.
Del Mar, Federico S. Sandoval 11 and Michael T. Defensor to enjoin the Philippine
Amusement and Gaming Corporation (PAGCOR), Belle Jai-Alai Corporation (BELLE)
and Filipinas Gaming Entertainment Totalizator Corporation (FILGAME) from
operating, maintaining or managing jai-alai games and from enforcing the 17th June
1999 Agreement entered into among said respondents for that purpose. 1
The ponencia penned by Justice Reynato S. Puno, concurred in by Chief Justice
Hilario G. Davide, Jr., and Justices Jose A.R. Melo, Artemio V. Panganiban, Bernardo
P. Pardo, Arturo B. Buena, Minerva P. Gonzaga-Reyes and Consuelo Ynares-
Santiago, enucleated that PAGCOR was bereft of any franchise to operate, maintain
or manage jai-alai games whether by itself alone or in conjunction with its co-
respondents. The dissenting opinion of Justice Sabino R. de Leon, Jr., subscribed to
by Justices Josue N. Bellosillo, Santiago M. Kapunan and Leonardo A. Quisumbing,
stated that PAGCOR had a valid franchise to conduct jai-alai games and had likewise
the authority under that franchise to maintain, operate or manage jai-alai games
through and in association with its co-respondents BELLE and FILGAME pursuant to
their agreement. The separate opinion of Justice Jose c. Vitug, shared by Justice
Vicente V. Mendoza, expressed the view that the franchise accorded to PAGCOR was
broad enough to authorize it to operate sports and gaming pools, inclusive of jai-alai,
that authority, however, did not allow it to contract any part of that franchise to its co-
respondents BELLE and FILGAME.
The subsequent motion for reconsideration were resolved in the Court's resolution of
19 June 2001, in this wise; viz:
"Acting on the motions for reconsideration filed by public respondent
Philippine Amusement and Gaming Corporation (PAGCOR) and private
respondents Belle Jai-Alai Corporation (BELLE), and Filipinas Gaming
Entertainment Totalizator Corporation (FILGAME), seeking to reverse the
court's Decision dated November 29, 2000, only seven (7) justices, namely,
Josue Bellosillo, Jose Melo, Santiago Kapunan, Leonardo Quisumbing,
Consuelo Y. Santiago, Sabino de Leon and Angelina Gutierrez voted to
grant the motions. For lack of required number of votes, the said motions for
reconsideration are denied. The opinions of Justices Puno, Melo, Vitug and
De Leon are herewith made part of this resolution."
Respondents have sought from the Court a clarification of the foregoing resolution.
During the deliberations of the Court culminating in the promulgation of its 19th June
2001 resolution, the justices voted thusly: (a) Chief Justice Hilario G. Davide, Jr., and
Justices Reynato S. Puno, Artemio V. Panganiban, Bernardo P. Pardo and Minerva P.
Gonzaga-Reyes held that PAGCOR had no valid franchise and that, therefore, it had
no authority to operate, maintain or manage jai-alai games, either by itself or in
association with any other entity; (b) Justices Josue N. Bellosillo, Jose A.R. Melo,
Santiago M. Kapunan, Leonardo A. Quisumbing, Consuelo Ynares-Santiago, Sabino
R. de Leon, Jr., and Angelina Sandoval-Gutierrez concluded that PAGCOR had a
valid franchise to conduct jai-alai games and that it could operate, maintain or manage
such games by itself or in association with BELLE and FILGAME conformably with
their agreement; while (c) Justices Jose C. Vitug, Vicente V. Mendoza and Arturo B.
Buena maintained that PAGCOR alone could operate, maintain or manage jai-alai
games but that it could not contract, either directly or indirectly, any of such activities
to entities, including BELLE and FILGAME, which were not themselves holders of a
valid franchise.
In fine, the results of voting on the issues raised in the motions for reconsideration,
can be summed up thusly: On the issue of whether PAGCOR itself has a valid
franchise to conduct jai-alai games, five members of the Court(Chief Justice Hilario
G. Davide, Jr., and Justices Reynato S. Puno, Artemio V. Panganiban, Bernardo P.
Pardo, and Minerva P. Gonzaga-Reyes) have voted in the negative and ten members
of the Court (Justices Josue N. Bellosillo, Jose A. R. Melo, Jose C. Vitug, Vitug,
Vicente V. Mendoza, Santiago M. Kapunan, Leonardo A. Quisumbing, Arturo B.
Buena, Consuelo Ynares-Santiago, Sabino R. De Leon, Jr. and Angelina Sandoval-
Gutierrez) have voted in the affirmative; and on the issue of whether PAGCOR can
operate, maintain or manage jai-alai games in association with Belle and
Filgame according to their assailed agreement, only seven members of the
Court(Justices Josue N. Bellosillo, Jose A. R. Melo, Santiago M. Kapunan, Leonardo
A. Quisumbing, Consuelo Ynares-Santiago, Sabino R. De Leon, Jr., and Angelina
Sandoval-Gutierrez) have voted in the affirmative; while eight members of the
Court have voted in the negative – five justices (Chief Justice Hilario G. Davide, Jr.,
and Justices Reynato S. Puno, Artemio V. Panganiban, Bernardo P. Pardo, and
Minerva P. Gonzaga-Reyes) have voted in the negative on the thesis that PAGCOR
has no franchise to operate, maintain, or manage jai-alai, and three justices(Justices
Jose C. Vitug, Vicente V. Mendoza, and Arturo B. Buena) have voted in the negative
on the ground that only PAGCOR by itself, not with any other person or entity, can
operate, maintain, or manage jai-alai games.

WHEREFORE, acting on the instant motions for clarification filed by respondents and
on the basis of the results of the voting heretofore elucidated, the Court resolves (a) to
partially GRANT the motions for clarification insofar as it is prayed that Philippine
Amusement and Gaming Corporation (PAGCOR) has a valid franchise to, but only
by itself(i.e., not in association with any other person or entity), operate, maintain
and/or manage the game of jai-alai, and (b) to DENY the motions insofar as
respondents would also seek a reconsideration of the Court's decision of 29
November 2000 that has, since then, (i) enjoined the continued operation,
maintenance, and/or management of jai-alai games by PAGCOR in association with
its co-respondents Belle Jai-Alai Corporation and/or Filipinas Gaming Entertainment
Totalizator Corporation and (ii) held to be without force and effect the agreement of 17
June 1999 among said respondents.

SO ORDERED.1âwphi1.nêt

Davide, Jr., C.J., Bellosillo, Melo, Puno, Kapunan, Mendoza, Panganiban,

Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, De Leon, Jr., and
Sandoval-Gutierrez, JJ., concur.

Footnote:

1
The dispositive portion of the decision reads:

"WHEREFORE, the petitions are GRANTED. Respondents

PAGCOR, Belle Jai alai Corporation and Filipinas Gaming
Entertainment Totalizator Corporation are ENJOINED from
managing, maintaining and operating jai-alai games, and from
enforcing the agreement entered into by them for that purpose."
(p. 42, Decision.)
 Republic of the Philippines
SUPREME COURT
Baguio City
EN BANC
G.R. No. 180016 April 29, 2014
LITO CORPUZ, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
PERALTA, J.:
This is to resolve the Petition for Review on Certiorari, under Rule 45 of the Rules of
Court, dated November 5, 2007, of petitioner Lito Corpuz (petitioner), seeking to
reverse and set aside the Decision1 dated March 22, 2007 and Resolution2 dated
September 5, 2007 of the Court of Appeals (CA), which affirmed with modification the
Decision3 dated July 30, 2004 of the Regional Trial Court (RTC), Branch 46, San
Fernando City, finding the petitioner guilty beyond reasonable doubt of the crime of
Estafa under Article 315, paragraph (1), sub-paragraph (b) of the Revised Penal
Code.
The antecedent facts follow.
Private complainant Danilo Tangcoy and petitioner met at the Admiral Royale Casino
in Olongapo City sometime in 1990. Private complainant was then engaged in the
business of lending money to casino players and, upon hearing that the former had
some pieces of jewelry for sale, petitioner approached him on May 2, 1991 at the
same casino and offered to sell the said pieces of jewelry on commission basis.
Private complainant agreed, and as a consequence, he turned over to petitioner the
following items: an 18k diamond ring for men; a woman's bracelet; one (1) men's
necklace and another men's bracelet, with an aggregate value of ₱98,000.00, as
evidenced by a receipt of even date. They both agreed that petitioner shall remit the
proceeds of the sale, and/or, if unsold, to return the same items, within a period of 60
days. The period expired without petitioner remitting the proceeds of the sale or
returning the pieces of jewelry. When private complainant was able to meet petitioner,
the latter promised the former that he will pay the value of the said items entrusted to
him, but to no avail.
Thus, an Information was filed against petitioner for the crime of estafa, which reads
as follows:
That on or about the fifth (5th) day of July 1991, in the City of Olongapo, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, after
having received from one Danilo Tangcoy, one (1) men's diamond ring, 18k, worth
₱45,000.00; one (1) three-baht men's bracelet, 22k, worth ₱25,000.00; one (1) two-
baht ladies' bracelet, 22k, worth ₱12,000.00, or in the total amount of Ninety-Eight
Thousand Pesos (₱98,000.00), Philippine currency, under expressed obligation on the
part of said accused to remit the proceeds of the sale of the said items or to return the
same, if not sold, said accused, once in possession of the said items, with intent to
defraud, and with unfaithfulness and abuse of confidence, and far from complying with
his aforestated obligation, did then and there wilfully, unlawfully and feloniously
misappropriate, misapply and convert to his own personal use and benefit the
aforesaid jewelries (sic) or the proceeds of the sale thereof, and despite repeated
demands, the accused failed and refused to return the said items or to remit the
amount of Ninety- Eight Thousand Pesos (₱98,000.00), Philippine currency, to the
damage and prejudice of said Danilo Tangcoy in the aforementioned amount.
CONTRARY TO LAW.
On January 28, 1992, petitioner, with the assistance of his counsel, entered a plea of
not guilty. Thereafter, trial on the merits ensued.
The prosecution, to prove the above-stated facts, presented the lone testimony of
Danilo Tangcoy. On the other hand, the defense presented the lone testimony of
petitioner, which can be summarized, as follows:
Petitioner and private complainant were collecting agents of Antonio Balajadia, who is
engaged in the financing business of extending loans to Base employees. For every
collection made, they earn a commission. Petitioner denied having transacted any
business with private complainant.
However, he admitted obtaining a loan from Balajadia sometime in 1989 for which he
was made to sign a blank receipt. He claimed that the same receipt was then dated
May 2, 1991 and used as evidence against him for the supposed agreement to sell the
subject pieces of jewelry, which he did not even see.
After trial, the RTC found petitioner guilty beyond reasonable doubt of the crime
charged in the Information. The dispositive portion of the decision states:
WHEREFORE, finding accused LITO CORPUZ GUILTY beyond reasonable doubt of
the felony of Estafa under Article 315, paragraph one (1), subparagraph (b) of the
Revised Penal Code;
there being no offsetting generic aggravating nor ordinary mitigating circumstance/s to
vary the penalty imposable;
accordingly, the accused is hereby sentenced to suffer the penalty of deprivation of
liberty consisting of an imprisonment under the Indeterminate Sentence Law of FOUR
(4) YEARS AND TWO (2) MONTHS of Prision Correccional in its medium period AS
MINIMUM, to FOURTEEN (14) YEARS AND EIGHT (8) MONTHS of Reclusion
Temporal in its minimum period AS MAXIMUM; to indemnify private complainant
Danilo Tangcoy the amount of ₱98,000.00 as actual damages, and to pay the costs of
suit.
SO ORDERED.
The case was elevated to the CA, however, the latter denied the appeal of petitioner
and affirmed the decision of the RTC, thus:
WHEREFORE, the instant appeal is DENIED. The assailed Judgment dated July 30,
2004 of the RTC of San Fernando City (P), Branch 46, is hereby AFFIRMED with
MODIFICATION on the imposable prison term, such that accused-appellant shall
suffer the indeterminate penalty of 4 years and 2 months of prision correccional, as
minimum, to 8 years of prision mayor, as maximum, plus 1 year for each additional
₱10,000.00, or a total of 7 years. The rest of the decision stands.
C. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE LOWER
COURT'S FINDING THAT DEMAND TO RETURN THE SUBJECT [PIECES OF]
JEWELRY, IF UNSOLD, OR REMIT THE PROCEEDS, IF SOLD – AN ELEMENT OF
THE OFFENSE – WAS PROVED;
D. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE LOWER
COURT'S FINDING THAT THE PROSECUTION'S CASE WAS PROVEN BEYOND
REASONABLE DOUBT ALTHOUGH -
1. THE PRIVATE COMPLAINANT TESTIFIED ON TWO (2)
VERSIONS OF THE INCIDENT;
2. THE VERSION OF THE PETITIONER – ACCUSED IS MORE
STRAIGHTFORWARD AND LOGICAL, CONSISTENT WITH
HUMAN EXPERIENCE;
3. THE EQUIPOISE RULE WAS NOT APPRECIATED IN AND
APPLIED TO THIS CASE;

4. PENAL STATUTES ARE STRICTLY CONSTRUED AGAINST

SO ORDERED.
THE STATE.

Petitioner, after the CA denied his motion for reconsideration, filed with this Court the
In its Comment dated May 5, 2008, the Office of the Solicitor General (OSG) stated
present petition stating the following grounds:
the following counter-arguments:

A. THE HONORABLE COURT OF APPEALS ERRED IN CONFIRMING THE

The exhibits were properly admitted inasmuch as petitioner failed to object to their
ADMISSION AND APPRECIATION BY THE LOWER COURT OF PROSECUTION
admissibility.
EVIDENCE, INCLUDING ITS EXHIBITS, WHICH ARE MERE MACHINE COPIES, AS
THIS VIOLATES THE BEST EVIDENCE RULE;
The information was not defective inasmuch as it sufficiently established the
designation of the offense and the acts complained of.
B. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE LOWER
COURT'S FINDING THAT THE CRIMINAL INFORMATION FOR ESTAFA WAS NOT
FATALLY DEFECTIVE ALTHOUGH THE SAME DID NOT CHARGE THE OFFENSE The prosecution sufficiently established all the elements of the crime charged.
UNDER ARTICLE 315 (1) (B) OF THE REVISED PENAL CODE IN THAT -
This Court finds the present petition devoid of any merit.
1. THE INFORMATION DID NOT FIX A PERIOD WITHIN WHICH
THE SUBJECT [PIECES OF] JEWELRY SHOULD BE
RETURNED, IF UNSOLD, OR THE MONEY TO BE REMITTED, The factual findings of the appellate court generally are conclusive, and carry even
IF SOLD; more weight when said court affirms the findings of the trial court, absent any showing
that the findings are totally devoid of support in the records, or that they are so
glaringly erroneous as to constitute grave abuse of discretion.4 Petitioner is of the
2. THE DATE OF THE OCCURRENCE OF THE CRIME opinion that the CA erred in affirming the factual findings of the trial court. He now
ALLEGED IN THE INFORMATION AS OF 05 JULY 1991 WAS comes to this Court raising both procedural and substantive issues.
MATERIALLY DIFFERENT FROM THE ONE TESTIFIED TO BY
THE PRIVATE COMPLAINANT WHICH WAS 02 MAY 1991;
According to petitioner, the CA erred in affirming the ruling of the trial court, admitting
in evidence a receipt dated May 2, 1991 marked as Exhibit "A" and its submarkings,
although the same was merely a photocopy, thus, violating the best evidence rule.
However, the records show that petitioner never objected to the admissibility of the
said evidence at the time it was identified, marked and testified upon in court by
private complainant. The CA also correctly pointed out that petitioner also failed to
raise an objection in his Comment to the prosecution's formal offer of evidence and
even admitted having signed the said receipt. The established doctrine is that when a
party failed to interpose a timely objection to evidence at the time they were offered in
evidence, such objection shall be considered as waived. 5
Another procedural issue raised is, as claimed by petitioner, the formally defective
Information filed against him. He contends that the Information does not contain the
period when the pieces of jewelry were supposed to be returned and that the date
when the crime occurred was different from the one testified to by private complainant.
This argument is untenable. The CA did not err in finding that the Information was
substantially complete and in reiterating that objections as to the matters of form and
substance in the Information cannot be made for the first time on appeal. It is true that
the gravamen of the crime of estafa under Article 315, paragraph 1, subparagraph (b)
of the RPC is the appropriation or conversion of money or property received to the
prejudice of the owner6 and that the time of occurrence is not a material ingredient of
the crime, hence, the exclusion of the period and the wrong date of the occurrence of
the crime, as reflected in the Information, do not make the latter fatally defective. The
CA ruled:
x x x An information is legally viable as long as it distinctly states the statutory
designation of the offense and the acts or omissions constitutive thereof. Then Section
6, Rule 110 of the Rules of Court provides that a complaint or information is sufficient
if it states the name of the accused;
the designation of the offense by the statute; the acts or omissions complained of as
constituting the offense; the name of the offended party; the approximate time of the
commission of the offense, and the place wherein the offense was committed. In the
case at bar, a reading of the subject Information shows compliance with the foregoing
rule. That the time of the commission of the offense was stated as " on or about the
fifth (5th) day of July, 1991" is not likewise fatal to the prosecution's cause considering
that Section 11 of the same Rule requires a statement of the precise time only when
the same is a material ingredient of the offense. The gravamen of the crime of estafa
under Article 315, paragraph 1 (b) of the Revised Penal Code (RPC) is the
appropriation or conversion of money or property received to the prejudice of the
offender. Thus, aside from the fact that the date of the commission thereof is not an
essential element of the crime herein charged, the failure of the prosecution to specify
the exact date does not render the Information ipso facto defective. Moreover, the said
date is also near the due date within which accused-appellant should have delivered
the proceeds or returned the said [pieces of jewelry] as testified upon by Tangkoy,
hence, there was sufficient compliance with the rules. Accused-appellant, therefore,
cannot now be allowed to claim that he was not properly apprised of the charges
proferred against him.7
It must be remembered that petitioner was convicted of the crime of Estafa under
Article 315, paragraph 1 (b) of the RPC, which reads:
ART. 315. Swindling (estafa). – Any person who shall defraud another by any of the
means mentioned hereinbelow.
1. With unfaithfulness or abuse of confidence, namely:
xxxx
(b) By misappropriating or converting, to the prejudice of another, money, goods, or
any other personal property received by the offender in trust or on commission, or for
administration, or under any other obligation involving the duty to make delivery of or
to return the same, even though such obligation be totally or partially guaranteed by a
bond; or by denying having received such money, goods, or other property; x x x
The elements of estafa with abuse of confidence are as follows: (a) that money, goods
or other personal property is received by the offender in trust, or on commission, or for
administration, or under any other obligation involving the duty to make delivery of, or
to return the same; (b) that there be misappropriation or conversion of such money or
property by the offender or denial on his part of such receipt; (c) that such
misappropriation or conversion or denial is to the prejudice of another; and (d) that
there is a demand made by the offended party on the offender.8
Petitioner argues that the last element, which is, that there is a demand by the
offended party on the offender, was not proved. This Court disagrees. In his
testimony, private complainant narrated how he was able to locate petitioner after
almost two (2) months from the time he gave the pieces of jewelry and asked
petitioner about the same items with the latter promising to pay them. Thus:
PROS. MARTINEZ
q Now, Mr. Witness, this was executed on 2 May 1991, and this transaction could
have been finished on 5 July 1991, the question is what happens (sic) when the
deadline came?
a I went looking for him, sir.
q For whom?
a Lito Corpuz, sir.
q Were you able to look (sic) for him?
a I looked for him for a week, sir. With regard to the necessity of demand, we agree with the CA that demand under this
kind of estafa need not be formal or written. The appellate court observed that the law
is silent with regard to the form of demand in estafa under Art. 315 1(b), thus:
q Did you know his residence?

When the law does not qualify, We should not qualify. Should a written demand be
a Yes, sir.
necessary, the law would have stated so. Otherwise, the word "demand" should be
interpreted in its general meaning as to include both written and oral demand. Thus,
q Did you go there? the failure of the prosecution to present a written demand as evidence is not fatal.

a Yes, sir. In Tubb v. People, where the complainant merely verbally inquired about the money
entrusted to the accused, we held that the query was tantamount to a demand, thus:
q Did you find him?
x x x [T]he law does not require a demand as a condition precedent to the existence of
the crime of embezzlement. It so happens only that failure to account, upon demand
a No, sir. for funds or property held in trust, is circumstantial evidence of misappropriation. The
same way, however, be established by other proof, such as that introduced in the
q Were you able to talk to him since 5 July 1991? case at bar.14

a I talked to him, sir. In view of the foregoing and based on the records, the prosecution was able to prove
the existence of all the elements of the crime. Private complainant gave petitioner the
pieces of jewelry in trust, or on commission basis, as shown in the receipt dated May
q How many times? 2, 1991 with an obligation to sell or return the same within sixty (60) days, if unsold.
There was misappropriation when petitioner failed to remit the proceeds of those
a Two times, sir. pieces of jewelry sold, or if no sale took place, failed to return the same pieces of
jewelry within or after the agreed period despite demand from the private complainant,
to the prejudice of the latter.
q What did you talk (sic) to him?

Anent the credibility of the prosecution's sole witness, which is questioned by

a About the items I gave to (sic) him, sir.
q Referring to Exhibit A-2?
a Yes, sir, and according to him he will take his obligation and I asked him where the
items are and he promised me that he will pay these amount, sir.
q Up to this time that you were here, were you able to collect from him partially or full?
petitioner, the same is unmeritorious. Settled is the rule that in assessing the credibility
of witnesses, this Court gives great respect to the evaluation of the trial court for it had
the unique opportunity to observe the demeanor of witnesses and their deportment on
the witness stand, an opportunity denied the appellate courts, which merely rely on the
records of the case.15 The assessment by the trial court is even conclusive and
binding if not tainted with arbitrariness or oversight of some fact or circumstance of
weight and influence, especially when such finding is affirmed by the CA. 16 Truth is
established not by the number of witnesses, but by the quality of their testimonies, for
in determining the value and credibility of evidence, the witnesses are to be weighed
not numbered.17

a No, sir.9
10
No specific type of proof is required to show that there was demand. Demand need
not even be formal; it may be verbal.11 The specific word "demand" need not even be
used to show that it has indeed been made upon the person charged, since even a
mere query as to the whereabouts of the money [in this case, property], would be
tantamount to a demand.12 As expounded in Asejo v. People:13
As regards the penalty, while this Court's Third Division was deliberating on this case,
the question of the continued validity of imposing on persons convicted of crimes
involving property came up. The legislature apparently pegged these penalties to the
value of the money and property in 1930 when it enacted the Revised Penal Code.
Since the members of the division reached no unanimity on this question and since
the issues are of first impression, they decided to refer the case to the Court en banc
for consideration and resolution. Thus, several amici curiae were invited at the behest
of the Court to give their academic opinions on the matter. Among those that
graciously complied were Dean Jose Manuel Diokno, Dean Sedfrey M. Candelaria, In his book, Commentaries on the Revised Penal Code,19 Guillermo B. Guevara
Professor Alfredo F. Tadiar, the Senate President, and the Speaker of the House of opined that in Article 5, the duty of the court is merely to report to the Chief Executive,
Representatives. The parties were later heard on oral arguments before the Court en with a recommendation for an amendment or modification of the legal provisions
banc, with Atty. Mario L. Bautista appearing as counsel de oficio of the petitioner. which it believes to be harsh. Thus:

After a thorough consideration of the arguments presented on the matter, this Court
finds the following:
There seems to be a perceived injustice brought about by the range of penalties that
the courts continue to impose on crimes against property committed today, based on
the amount of damage measured by the value of money eighty years ago in 1932.
However, this Court cannot modify the said range of penalties because that would
constitute judicial legislation. What the legislature's perceived failure in amending the
penalties provided for in the said crimes cannot be remedied through this Court's
decisions, as that would be encroaching upon the power of another branch of the
government. This, however, does not render the whole situation without any remedy. It
can be appropriately presumed that the framers of the Revised Penal Code (RPC) had
anticipated this matter by including Article 5, which reads:
This provision is based under the legal maxim "nullum crimen, nulla poena sige lege,"
that is, that there can exist no punishable act except those previously and specifically
provided for by penal statute.
No matter how reprehensible an act is, if the law-making body does not deem it
necessary to prohibit its perpetration with penal sanction, the Court of justice will be
entirely powerless to punish such act.
Under the provisions of this article the Court cannot suspend the execution of a
sentence on the ground that the strict enforcement of the provisions of this Code
would cause excessive or harsh penalty. All that the Court could do in such eventuality
is to report the matter to the Chief Executive with a recommendation for an
amendment or modification of the legal provisions which it believes to be harsh. 20

ART. 5. Duty of the court in connection with acts which should be repressed but which
Anent the non-suspension of the execution of the sentence, retired Chief Justice
are not covered by the law, and in cases of excessive penalties. - Whenever a court
Ramon C. Aquino and retired Associate Justice Carolina C. Griño-Aquino, in their
has knowledge of any act which it may deem proper to repress and which is not
book, The Revised Penal Code,21 echoed the above-cited commentary, thus:
punishable by law, it shall render the proper decision, and shall report to the Chief
Executive, through the Department of Justice, the reasons which induce the court to
believe that said act should be made the subject of penal legislation. The second paragraph of Art. 5 is an application of the humanitarian principle that
justice must be tempered with mercy. Generally, the courts have nothing to do with the
wisdom or justness of the penalties fixed by law. "Whether or not the penalties
In the same way, the court shall submit to the Chief Executive, through the
prescribed by law upon conviction of violations of particular statutes are too severe or
Department of Justice, such statement as may be deemed proper, without suspending
are not severe enough, are questions as to which commentators on the law may fairly
the execution of the sentence, when a strict enforcement of the provisions of this Code
differ; but it is the duty of the courts to enforce the will of the legislator in all cases
would result in the imposition of a clearly excessive penalty, taking into consideration
unless it clearly appears that a given penalty falls within the prohibited class of
the degree of malice and the injury caused by the offense. 18
excessive fines or cruel and unusual punishment." A petition for clemency should be
addressed to the Chief Executive.22
The first paragraph of the above provision clearly states that for acts bourne out of a
case which is not punishable by law and the court finds it proper to repress, the
There is an opinion that the penalties provided for in crimes against property be based
remedy is to render the proper decision and thereafter, report to the Chief Executive,
on the current inflation rate or at the ratio of ₱1.00 is equal to ₱100.00 . However, it
through the Department of Justice, the reasons why the same act should be the
would be dangerous as this would result in uncertainties, as opposed to the definite
subject of penal legislation. The premise here is that a deplorable act is present but is
imposition of the penalties. It must be remembered that the economy fluctuates and if
not the subject of any penal legislation, thus, the court is tasked to inform the Chief
the proposed imposition of the penalties in crimes against property be adopted, the
Executive of the need to make that act punishable by law through legislation. The
penalties will not cease to change, thus, making the RPC, a self-amending law. Had
second paragraph is similar to the first except for the situation wherein the act is
the framers of the RPC intended that to be so, it should have provided the same,
already punishable by law but the corresponding penalty is deemed by the court as
instead, it included the earlier cited Article 5 as a remedy. It is also improper to
excessive. The remedy therefore, as in the first paragraph is not to suspend the
presume why the present legislature has not made any moves to amend the subject
execution of the sentence but to submit to the Chief Executive the reasons why the
penalties in order to conform with the present times. For all we know, the legislature
court considers the said penalty to be non-commensurate with the act committed.
intends to retain the same penalties in order to deter the further commission of those
Again, the court is tasked to inform the Chief Executive, this time, of the need for a
punishable acts which have increased tremendously through the years. In fact, in
legislation to provide the proper penalty.
recent moves of the legislature, it is apparent that it aims to broaden the coverage of
those who violate penal laws. In the crime of Plunder, from its original minimum
amount of ₱100,000,000.00 plundered, the legislature lowered it to ₱50,000,000.00. In
the same way, the legislature lowered the threshold amount upon which the Anti-
Money Laundering Act may apply, from ₱1,000,000.00 to ₱500,000.00.
It is also worth noting that in the crimes of Theft and Estafa, the present penalties do
not seem to be excessive compared to the proposed imposition of their corresponding
penalties. In Theft, the provisions state that:
Art. 309. Penalties. — Any person guilty of theft shall be punished by:
1. The penalty of prision mayor in its minimum and medium periods, if the
value of the thing stolen is more than 12,000 pesos but does not exceed
22,000 pesos, but if the value of the thing stolen exceeds the latter amount
the penalty shall be the maximum period of the one prescribed in this
paragraph, and one year for each additional ten thousand pesos, but the
total of the penalty which may be imposed shall not exceed twenty years. In
such cases, and in connection with the accessory penalties which may be
imposed and for the purpose of the other provisions of this Code, the
penalty shall be termed prision mayor or reclusion temporal, as the case
may be.
2. The penalty of prision correccional in its medium and maximum periods, if
the value of the thing stolen is more than 6,000 pesos but does not exceed
12,000 pesos.
3. The penalty of prision correccional in its minimum and medium periods, if
the value of the property stolen is more than 200 pesos but does not exceed
6,000 pesos.
4. Arresto mayor in its medium period to prision correccional in its minimum
period, if the value of the property stolen is over 50 pesos but does not
exceed 200 pesos.
5. Arresto mayor to its full extent, if such value is over 5 pesos but does not
exceed 50 pesos.
6. Arresto mayor in its minimum and medium periods, if such value does not
exceed 5 pesos.
7. Arresto menor or a fine not exceeding 200 pesos, if the theft is committed
under the circumstances enumerated in paragraph 3 of the next preceding
article and the value of the thing stolen does not exceed 5 pesos. If such
value exceeds said amount, the provision of any of the five preceding
subdivisions shall be made applicable.
8. Arresto menor in its minimum period or a fine not exceeding 50 pesos,
when the value of the thing stolen is not over 5 pesos, and the offender shall
have acted under the impulse of hunger, poverty, or the difficulty of earning
a livelihood for the support of himself or his family.
In a case wherein the value of the thing stolen is ₱6,000.00, the above-provision
states that the penalty is prision correccional in its minimum and medium periods (6
months and 1 day to 4 years and 2 months). Applying the proposal, if the value of the
thing stolen is ₱6,000.00, the penalty is imprisonment of arresto mayor in its medium
period to prision correccional minimum period (2 months and 1 day to 2 years and 4
months). It would seem that under the present law, the penalty imposed is almost the
same as the penalty proposed. In fact, after the application of the Indeterminate
Sentence Law under the existing law, the minimum penalty is still lowered by one
degree; hence, the minimum penalty is arresto mayor in its medium period to
maximum period (2 months and 1 day to 6 months), making the offender qualified for
pardon or parole after serving the said minimum period and may even apply for
probation. Moreover, under the proposal, the minimum penalty after applying the
Indeterminate Sentence Law is arresto menor in its maximum period to arresto mayor
in its minimum period (21 days to 2 months) is not too far from the minimum period
under the existing law. Thus, it would seem that the present penalty imposed under
the law is not at all excessive. The same is also true in the crime of Estafa. 23
Moreover, if we apply the ratio of 1:100, as suggested to the value of the thing stolen
in the crime of Theft and the damage caused in the crime of Estafa, the gap between
the minimum and the maximum amounts, which is the basis of determining the proper
penalty to be imposed, would be too wide and the penalty imposable would no longer
be commensurate to the act committed and the value of the thing stolen or the
damage caused:
I. Article 309, or the penalties for the crime of Theft, the value would be modified but
the penalties are not changed:
1. ₱12,000.00 to ₱22,000.00 will become ₱1,200,000.00 to ₱2,200,000.00,
punished by prision mayor minimum to prision mayor medium (6 years and
1 day to 10 years).
2. ₱6,000.00 to ₱12,000.00 will become ₱600,000.00 to ₱1,200,000.00,
punished by prision correccional medium and to prision correccional
maximum (2 years, 4 months and 1 day to 6 years).24
3. ₱200.00 to ₱6,000.00 will become ₱20,000.00 to ₱600,000.00,
punishable by prision correccional minimum to prision correccional medium
(6 months and 1 day to 4 years and 2 months).
4. ₱50.00 to ₱200.00 will become ₱5,000.00 to ₱20,000.00, punishable by
arresto mayor medium to prision correccional minimum (2 months and 1 day
to 2 years and 4 months).
 5. ₱5.00 to ₱50.00 will become ₱500.00 to ₱5,000.00, punishable by
arresto mayor (1 month and 1 day to 6 months).
6. ₱5.00 will become ₱500.00, punishable by arresto mayor minimum to
arresto mayor medium.
x x x x.
II. Article 315, or the penalties for the crime of Estafa, the value would also be
modified but the penalties are not changed, as follows:
1st. ₱12,000.00 to ₱22,000.00, will become ₱1,200,000.00 to
₱2,200,000.00, punishable by prision correccional maximum to prision
mayor minimum (4 years, 2 months and 1 day to 8 years).25
2nd. ₱6,000.00 to ₱12,000.00 will become ₱600,000.00 to ₱1,200,000.00,
punishable by prision correccional minimum to prision correccional medium
(6 months and 1 day to 4 years and 2 months).26
3rd. ₱200.00 to ₱6,000.00 will become ₱20,000.00 to ₱600,000.00,
punishable by arresto mayor maximum to prision correccional minimum (4
months and 1 day to 2 years and 4 months).
4th. ₱200.00 will become ₱20,000.00, punishable by arresto mayor
maximum (4 months and 1 day to 6 months).
An argument raised by Dean Jose Manuel I. Diokno, one of our esteemed amici
curiae, is that the incremental penalty provided under Article 315 of the RPC violates
the Equal Protection Clause.
The equal protection clause requires equality among equals, which is determined
according to a valid classification. The test developed by jurisprudence here and
yonder is that of reasonableness,27 which has four requisites:
(1) The classification rests on substantial distinctions;
(2) It is germane to the purposes of the law;
(3) It is not limited to existing conditions only; and
(4) It applies equally to all members of the same class.28
According to Dean Diokno, the Incremental Penalty Rule (IPR) does not rest on
substantial distinctions as ₱10,000.00 may have been substantial in the past, but it is
not so today, which violates the first requisite; the IPR was devised so that those who
commit estafa involving higher amounts would receive heavier penalties; however, this
is no longer achieved, because a person who steals ₱142,000.00 would receive the
same penalty as someone who steals hundreds of millions, which violates the second
requisite; and, the IPR violates requisite no. 3, considering that the IPR is limited to
existing conditions at the time the law was promulgated, conditions that no longer exist
today.
Assuming that the Court submits to the argument of Dean Diokno and declares the
incremental penalty in Article 315 unconstitutional for violating the equal protection
clause, what then is the penalty that should be applied in case the amount of the thing
subject matter of the crime exceeds ₱22,000.00? It seems that the proposition poses
more questions than answers, which leads us even more to conclude that the
appropriate remedy is to refer these matters to Congress for them to exercise their
inherent power to legislate laws.
Even Dean Diokno was of the opinion that if the Court declares the IPR
unconstitutional, the remedy is to go to Congress. Thus:
xxxx
JUSTICE PERALTA:
Now, your position is to declare that the incremental penalty should be struck down as
unconstitutional because it is absurd.
DEAN DIOKNO:
Absurd, it violates equal protection, Your Honor, and cruel and unusual punishment.
JUSTICE PERALTA:
Then what will be the penalty that we are going to impose if the amount is more than
Twenty-Two Thousand (₱22,000.00) Pesos.
DEAN DIOKNO:
Well, that would be for Congress to ... if this Court will declare the incremental penalty
rule unconstitutional, then that would ... the void should be filled by Congress.
JUSTICE PERALTA:
But in your presentation, you were fixing the amount at One Hundred Thousand JUSTICE PERALTA:
(₱100,000.00) Pesos ...
... as the equivalent of one, as an incremental penalty in excess of Twenty-Two
DEAN DIOKNO: Thousand (₱22,000.00) Pesos.

Well, my presen ... (interrupted) DEAN DIOKNO:

JUSTICE PERALTA: No, Your Honor.

For every One Hundred Thousand (₱100,000.00) Pesos in excess of Twenty-Two JUSTICE PERALTA:
Thousand (₱22,000.00) Pesos you were suggesting an additional penalty of one (1)
year, did I get you right?
The Court cannot do that.

DEAN DIOKNO:
DEAN DIOKNO:

Yes, Your Honor, that is, if the court will take the route of statutory interpretation.
Could not be.

JUSTICE PERALTA:
JUSTICE PERALTA:

Ah ...
The only remedy is to go to Congress...

DEAN DIOKNO:
DEAN DIOKNO:

If the Court will say that they can go beyond the literal wording of the law...
Yes, Your Honor.

JUSTICE PERALTA:
JUSTICE PERALTA:

But if we de ... (interrupted)

... and determine the value or the amount.

DEAN DIOKNO:
DEAN DIOKNO:

....then....
Yes, Your Honor.

JUSTICE PERALTA:
JUSTICE PERALTA:

Ah, yeah. But if we declare the incremental penalty as unsconstitutional, the court
That will be equivalent to the incremental penalty of one (1) year in excess of Twenty-
cannot fix the amount ...
Two Thousand (₱22,000.00) Pesos.

DEAN DIOKNO:
DEAN DIOKNO:

No, Your Honor.

Yes, Your Honor.
JUSTICE PERALTA:
The amount in excess of Twenty-Two Thousand (₱22,000.00) Pesos.
Thank you, Dean.
DEAN DIOKNO:
Thank you.
x x x x29
Dean Diokno also contends that Article 315 of the Revised Penal Code constitutes
cruel and unusual punishment. Citing Solem v. Helm, 30 Dean Diokno avers that the
United States Federal Supreme Court has expanded the application of a similar
Constitutional provision prohibiting cruel and unusual punishment, to the duration of
the penalty, and not just its form. The court therein ruled that three things must be
done to decide whether a sentence is proportional to a specific crime, viz.; (1)
Compare the nature and gravity of the offense, and the harshness of the penalty; (2)
Compare the sentences imposed on other criminals in the same jurisdiction, i.e.,
whether more serious crimes are subject to the same penalty or to less serious
penalties; and (3) Compare the sentences imposed for commission of the same crime
in other jurisdictions.
However, the case of Solem v. Helm cannot be applied in the present case, because
in Solem what respondent therein deemed cruel was the penalty imposed by the state
court of South Dakota after it took into account the latter’s recidivist statute and not the
original penalty for uttering a "no account" check. Normally, the maximum punishment
for the crime would have been five years imprisonment and a $5,000.00 fine.
Nonetheless, respondent was sentenced to life imprisonment without the possibility of
parole under South Dakota’s recidivist statute because of his six prior felony
convictions. Surely, the factual antecedents of Solem are different from the present
controversy.
With respect to the crime of Qualified Theft, however, it is true that the imposable
penalty for the offense is high. Nevertheless, the rationale for the imposition of a
higher penalty against a domestic servant is the fact that in the commission of the
crime, the helper will essentially gravely abuse the trust and confidence reposed upon
her by her employer. After accepting and allowing the helper to be a member of the
household, thus entrusting upon such person the protection and safekeeping of the
employer’s loved ones and properties, a subsequent betrayal of that trust is so
repulsive as to warrant the necessity of imposing a higher penalty to deter the
commission of such wrongful acts.
There are other crimes where the penalty of fine and/or imprisonment are dependent
on the subject matter of the crime and which, by adopting the proposal, may create
serious implications. For example, in the crime of Malversation, the penalty imposed
depends on the amount of the money malversed by the public official, thus:
Art. 217. Malversation of public funds or property; Presumption of malversation. —
Any public officer who, by reason of the duties of his office, is accountable for public
funds or property, shall appropriate the same or shall take or misappropriate or shall
consent, through abandonment or negligence, shall permit any other person to take
such public funds, or property, wholly or partially, or shall otherwise be guilty of the
misappropriation or malversation of such funds or property, shall suffer:
1. The penalty of prision correccional in its medium and maximum periods, if
the amount involved in the misappropriation or malversation does not
exceed two hundred pesos.
2. The penalty of prision mayor in its minimum and medium periods, if the
amount involved is more than two hundred pesos but does not exceed six
thousand pesos.
3. The penalty of prision mayor in its maximum period to reclusion temporal
in its minimum period, if the amount involved is more than six thousand
pesos but is less than twelve thousand pesos.
4. The penalty of reclusion temporal, in its medium and maximum periods, if
the amount involved is more than twelve thousand pesos but is less than
twenty-two thousand pesos. If the amount exceeds the latter, the penalty
shall be reclusion temporal in its maximum period to reclusion perpetua.
In all cases, persons guilty of malversation shall also suffer the penalty of perpetual
special disqualification and a fine equal to the amount of the funds malversed or equal
to the total value of the property embezzled.
The failure of a public officer to have duly forthcoming any public funds or property
with which he is chargeable, upon demand by any duly authorized officer, shall be
prima facie evidence that he has put such missing funds or property to personal use.
The above-provisions contemplate a situation wherein the Government loses money
due to the unlawful acts of the offender. Thus, following the proposal, if the amount
malversed is ₱200.00 (under the existing law), the amount now becomes ₱20,000.00
and the penalty is prision correccional in its medium and maximum periods (2 years 4
months and 1 day to 6 years). The penalty may not be commensurate to the act of
embezzlement of ₱20,000.00 compared to the acts committed by public officials
punishable by a special law, i.e., Republic Act No. 3019 or the Anti-Graft and Corrupt
Practices Act, specifically Section 3,31 wherein the injury caused to the government is
not generally defined by any monetary amount, the penalty (6 years and 1 month to 15
years)32 under the Anti-Graft Law will now become higher. This should not be the
case, because in the crime of malversation, the public official takes advantage of his
public position to embezzle the fund or property of the government entrusted to him.
The said inequity is also apparent in the crime of Robbery with force upon things
(inhabited or uninhabited) where the value of the thing unlawfully taken and the act of
unlawful entry are the bases of the penalty imposable, and also, in Malicious Mischief,
where the penalty of imprisonment or fine is dependent on the cost of the damage
caused.
In Robbery with force upon things (inhabited or uninhabited), if we increase the value
of the thing unlawfully taken, as proposed in the ponencia, the sole basis of the
penalty will now be the value of the thing unlawfully taken and no longer the element
of force employed in entering the premises. It may likewise cause an inequity between
the crime of Qualified Trespass to Dwelling under Article 280, and this kind of robbery
because the former is punishable by prision correccional in its medium and maximum
periods (2 years, 4 months and 1 day to 6 years) and a fine not exceeding ₱1,000.00
(₱100,000.00 now if the ratio is 1:100) where entrance to the premises is with violence
or intimidation, which is the main justification of the penalty. Whereas in the crime of
Robbery with force upon things, it is punished with a penalty of prision mayor (6 years
and 1 day to 12 years) if the intruder is unarmed without the penalty of Fine despite
the fact that it is not merely the illegal entry that is the basis of the penalty but likewise
the unlawful taking.
Furthermore, in the crime of Other Mischiefs under Article 329, the highest penalty
that can be imposed is arresto mayor in its medium and maximum periods (2 months
and 1 day to 6 months) if the value of the damage caused exceeds ₱1,000.00, but
under the proposal, the value of the damage will now become ₱100,000.00 (1:100),
and still punishable by arresto mayor (1 month and 1 day to 6 months). And, if the
value of the damaged property does not exceed ₱200.00, the penalty is arresto menor
or a fine of not less than the value of the damage caused and not more than ₱200.00,
if the amount involved does not exceed ₱200.00 or cannot be estimated. Under the
proposal, ₱200.00 will now become ₱20,000.00, which simply means that the fine of
₱200.00 under the existing law will now become ₱20,000.00. The amount of Fine
under this situation will now become excessive and afflictive in nature despite the fact
that the offense is categorized as a light felony penalized with a light penalty under
Article 26 of the RPC.33 Unless we also amend Article 26 of the RPC, there will be
grave implications on the penalty of Fine, but changing the same through Court
decision, either expressly or impliedly, may not be legally and constitutionally feasible.
There are other crimes against property and swindling in the RPC that may also be
affected by the proposal, such as those that impose imprisonment and/or Fine as a
penalty based on the value of the damage caused, to wit: Article 311 (Theft of the
property of the National Library and National Museum), Article 312 (Occupation of real
property or usurpation of real rights in property), Article 313 (Altering boundaries or
landmarks), Article 316 (Other forms of swindling), Article 317 (Swindling a minor),
Article 318 (Other deceits), Article 328 (Special cases of malicious mischief) and
Article 331 (Destroying or damaging statues, public monuments or paintings). Other
crimes that impose Fine as a penalty will also be affected, such as: Article 213
(Frauds against the public treasury and similar offenses), Article 215 (Prohibited
Transactions),
Article 216 (Possession of prohibited interest by a public officer), Article 218 (Failure of
accountable officer to render accounts), Article 219 (Failure of a responsible public
officer to render accounts before leaving the country).
In addition, the proposal will not only affect crimes under the RPC. It will also affect
crimes which are punishable by special penal laws, such as Illegal Logging or
Violation of Section 68 of Presidential Decree No. 705, as amended. 34The law treats
cutting, gathering, collecting and possessing timber or other forest products without
license as an offense as grave as and equivalent to the felony of qualified
theft.35 Under the law, the offender shall be punished with the penalties imposed under
Articles 309 and 31036 of the Revised Penal Code, which means that the penalty
imposable for the offense is, again, based on the value of the timber or forest products
involved in the offense. Now, if we accept the said proposal in the crime of Theft, will
this particular crime of Illegal Logging be amended also in so far as the penalty is
concerned because the penalty is dependent on Articles 309 and 310 of the RPC?
The answer is in the negative because the soundness of this particular law is not in
question.
With the numerous crimes defined and penalized under the Revised Penal Code and
Special Laws, and other related provisions of these laws affected by the proposal, a
thorough study is needed to determine its effectivity and necessity. There may be
some provisions of the law that should be amended; nevertheless, this Court is in no
position to conclude as to the intentions of the framers of the Revised Penal Code by
merely making a study of the applicability of the penalties imposable in the present
times. Such is not within the competence of the Court but of the Legislature which is
empowered to conduct public hearings on the matter, consult legal luminaries and
who, after due proceedings, can decide whether or not to amend or to revise the
questioned law or other laws, or even create a new legislation which will adopt to the
times.
Admittedly, Congress is aware that there is an urgent need to amend the Revised
Penal Code. During the oral arguments, counsel for the Senate informed the Court
that at present, fifty-six (56) bills are now pending in the Senate seeking to amend the
Revised Penal Code,37 each one proposing much needed change and updates to
archaic laws that were promulgated decades ago when the political, socio-economic,
and cultural settings were far different from today’s conditions.
Verily, the primordial duty of the Court is merely to apply the law in such a way that it
shall not usurp legislative powers by judicial legislation and that in the course of such
application or construction, it should not make or supervise legislation, or under the
guise of interpretation, modify, revise, amend, distort, remodel, or rewrite the law, or
give the law a construction which is repugnant to its terms. 38 The Court should apply
the law in a manner that would give effect to their letter and spirit, especially when the
law is clear as to its intent and purpose. Succinctly put, the Court should shy away
from encroaching upon the primary function of a co-equal branch of the Government;
otherwise, this would lead to an inexcusable breach of the doctrine of separation of
powers by means of judicial legislation.
Moreover, it is to be noted that civil indemnity is, technically, not a penalty or a Fine;
hence, it can be increased by the Court when appropriate. Article 2206 of the Civil
Code provides:
Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall
be at least three thousand pesos, even though there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the
deceased, and the indemnity shall be paid to the heirs of the latter; such
indemnity shall in every case be assessed and awarded by the court, unless
the deceased on account of permanent physical disability not caused by the
defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions
of Article 291, the recipient who is not an heir called to the decedent's
inheritance by the law of testate or intestate succession, may demand
support from the person causing the death, for a period not exceeding five
years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of
the deceased may demand moral damages for mental anguish by reason of
the death of the deceased.
In our jurisdiction, civil indemnity is awarded to the offended party as a kind of
monetary restitution or compensation to the victim for the damage or infraction that
was done to the latter by the accused, which in a sense only covers the civil aspect.
Precisely, it is civil indemnity. Thus, in a crime where a person dies, in addition to the
penalty of imprisonment imposed to the offender, the accused is also ordered to pay
the victim a sum of money as restitution. Clearly, this award of civil indemnity due to
the death of the victim could not be contemplated as akin to the value of a thing that is
unlawfully taken which is the basis in the imposition of the proper penalty in certain
crimes. Thus, the reasoning in increasing the value of civil indemnity awarded in some
offense cannot be the same reasoning that would sustain the adoption of the
suggested ratio. Also, it is apparent from Article 2206 that the law only imposes a
minimum amount for awards of civil indemnity, which is ₱3,000.00. The law did not
provide for a ceiling. Thus, although the minimum amount for the award cannot be
changed, increasing the amount awarded as civil indemnity can be validly modified
and increased when the present circumstance warrants it. Corollarily, moral damages
under Article 222039 of the Civil Code also does not fix the amount of damages that
can be awarded. It is discretionary upon the court, depending on the mental anguish
or the suffering of the private offended party. The amount of moral damages can, in
relation to civil indemnity, be adjusted so long as it does not exceed the award of civil
indemnity.
In addition, some may view the penalty provided by law for the offense committed as
tantamount to cruel punishment. However, all penalties are generally harsh, being
punitive in nature. Whether or not they are excessive or amount to cruel punishment is
a matter that should be left to lawmakers. It is the prerogative of the courts to apply
the law, especially when they are clear and not subject to any other interpretation than
that which is plainly written.
Similar to the argument of Dean Diokno, one of Justice Antonio Carpio’s opinions is
that the incremental penalty provision should be declared unconstitutional and that the
courts should only impose the penalty corresponding to the amount of ₱22,000.00,
regardless if the actual amount involved exceeds ₱22,000.00. As suggested, however,
from now until the law is properly amended by Congress, all crimes of Estafa will no
longer be punished by the appropriate penalty. A conundrum in the regular course of
criminal justice would occur when every accused convicted of the crime of estafa will
be meted penalties different from the proper penalty that should be imposed. Such
drastic twist in the application of the law has no legal basis and directly runs counter to
what the law provides.
It should be noted that the death penalty was reintroduced in the dispensation of
criminal justice by the Ramos Administration by virtue of Republic Act No. 765940 in
December 1993. The said law has been questioned before this Court. There is,
arguably, no punishment more cruel than that of death. Yet still, from the time the
death penalty was re-imposed until its lifting in June 2006 by Republic Act No.
9346,41 the Court did not impede the imposition of the death penalty on the ground
that it is a "cruel punishment" within the purview of Section 19 (1), 42 Article III of the
Constitution. Ultimately, it was through an act of Congress suspending the imposition
of the death penalty that led to its non-imposition and not via the intervention of the
Court.
Even if the imposable penalty amounts to cruel punishment, the Court cannot declare
the provision of the law from which the proper penalty emanates unconstitutional in
the present action. Not only is it violative of due process, considering that the State
and the concerned parties were not given the opportunity to comment on the subject
matter, it is settled that the constitutionality of a statute cannot be attacked collaterally
because constitutionality issues must be pleaded directly and not collaterally, 43 more
so in the present controversy wherein the issues never touched upon the
constitutionality of any of the provisions of the Revised Penal Code.
Besides, it has long been held that the prohibition of cruel and unusual punishments is
generally aimed at the form or character of the punishment rather than its severity in
respect of duration or amount, and applies to punishments which public sentiment has
regarded as cruel or obsolete, for instance, those inflicted at the whipping post, or in
the pillory, burning at the stake, breaking on the wheel, disemboweling, and the like.
Fine and imprisonment would not thus be within the prohibition.44
It takes more than merely being harsh, excessive, out of proportion, or severe for a Consumer price index.
penalty to be obnoxious to the Constitution. The fact that the punishment authorized
by the statute is severe does not make it cruel and unusual. Expressed in other terms,
PROFESSOR TADIAR:
it has been held that to come under the ban, the punishment must be "flagrantly and
plainly oppressive," "wholly disproportionate to the nature of the offense as to shock
the moral sense of the community."45 Yeah.

Cruel as it may be, as discussed above, it is for the Congress to amend the law and JUSTICE PERALTA:
adapt it to our modern time.
Inflation ...
The solution to the present controversy could not be solved by merely adjusting the
questioned monetary values to the present value of money based only on the current
inflation rate. There are other factors and variables that need to be taken into PROFESSOR TADIAR:
consideration, researched, and deliberated upon before the said values could be
accurately and properly adjusted. The effects on the society, the injured party, the Yes.
accused, its socio-economic impact, and the likes must be painstakingly evaluated
and weighed upon in order to arrive at a wholistic change that all of us believe should
be made to our existing law. Dejectedly, the Court is ill-equipped, has no resources, JUSTICE PERALTA:
and lacks sufficient personnel to conduct public hearings and sponsor studies and
surveys to validly effect these changes in our Revised Penal Code. This function ... and so on. Is the Supreme Court equipped to determine those factors?
clearly and appropriately belongs to Congress. Even Professor Tadiar concedes to
this conclusion, to wit:
PROFESSOR TADIAR:

xxxx
There are many ways by which the value of the Philippine Peso can be determined
utilizing all of those economic terms.
JUSTICE PERALTA:
JUSTICE PERALTA:
Yeah, Just one question. You are suggesting that in order to determine the value of
Peso you have to take into consideration several factors.
Yeah, but ...

PROFESSOR TADIAR:
PROFESSOR TADIAR:

Yes.
And I don’t think it is within the power of the Supreme Court to pass upon and peg the
value to One Hundred (₱100.00) Pesos to ...
JUSTICE PERALTA:
JUSTICE PERALTA:
Per capita income.
Yeah.
PROFESSOR TADIAR:
PROFESSOR TADIAR:
Per capita income.
... One (₱1.00.00) Peso in 1930.
JUSTICE PERALTA:
JUSTICE PERALTA:
That is legislative in nature.
PROFESSOR TADIAR:
That is my position that the Supreme Court ...
JUSTICE PERALTA:
Yeah, okay.
PROFESSOR TADIAR:
... has no power to utilize the power of judicial review to in order to adjust, to make the
adjustment that is a power that belongs to the legislature.
JUSTICE PERALTA:
Thank you, Professor.
PROFESSOR TADIAR:
Thank you.46
Finally, the opinion advanced by Chief Justice Maria Lourdes P. A. Sereno echoes the
view that the role of the Court is not merely to dispense justice, but also the active
duty to prevent injustice. Thus, in order to prevent injustice in the present controversy,
the Court should not impose an obsolete penalty pegged eighty three years ago, but
consider the proposed ratio of 1:100 as simply compensating for inflation.
Furthermore, the Court has in the past taken into consideration "changed conditions"
or "significant changes in circumstances" in its decisions.
Similarly, the Chief Justice is of the view that the Court is not delving into the validity of
the substance of a statute. The issue is no different from the Court’s adjustment of
indemnity in crimes against persons, which the Court had previously adjusted in light
of current times, like in the case of People v. Pantoja.47 Besides, Article 10 of the Civil
Code mandates a presumption that the lawmaking body intended right and justice to
prevail.
With due respect to the opinions and proposals advanced by the Chief Justice and my
Colleagues, all the proposals ultimately lead to prohibited judicial legislation. Short of
being repetitious and as extensively discussed above, it is truly beyond the powers of
the Court to legislate laws, such immense power belongs to Congress and the Court
should refrain from crossing this clear-cut divide. With regard to civil indemnity, as
elucidated before, this refers to civil liability which is awarded to the offended party as
a kind of monetary restitution. It is truly based on the value of money. The same
cannot be said on penalties because, as earlier stated, penalties are not only based
on the value of money, but on several other factors. Further, since the law is silent as
to the maximum amount that can be awarded and only pegged the minimum sum,
increasing the amount granted as civil indemnity is not proscribed. Thus, it can be
adjusted in light of current conditions.
Now, with regard to the penalty imposed in the present case, the CA modified the
ruling of the RTC. The RTC imposed the indeterminate penalty of four (4) years and
two (2) months of prision correccional in its medium period, as minimum, to fourteen
(14) years and eight (8) months of reclusion temporal in its minimum period, as
maximum. However, the CA imposed the indeterminate penalty of four (4) years and
two (2) months of prision correccional, as minimum, to eight (8) years of prision
mayor, as maximum, plus one (1) year for each additional ₱10,000.00, or a total of
seven (7) years.
In computing the penalty for this type of estafa, this Court's ruling in Cosme, Jr. v.
People48 is highly instructive, thus:
With respect to the imposable penalty, Article 315 of the Revised Penal Code
provides:
ART. 315 Swindling (estafa). - Any person who shall defraud another by any of the
means mentioned hereinbelow shall be punished by:
1st. The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over 12,000 but does not exceed 22,000
pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each
additional 10,000 pesos; but the total penalty which may be imposed shall not exceed
twenty years. In such case, and in connection with the accessory penalties which may
be imposed and for the purpose of the other provisions of this Code, the penalty shall
be termed prision mayor or reclusion temporal, as the case may be.
The penalty prescribed by Article 315 is composed of only two, not three, periods, in
which case, Article 65 of the same Code requires the division of the time included in
the penalty into three equal portions of time included in the penalty prescribed, forming
one period of each of the three portions. Applying the latter provisions, the maximum,
medium and minimum periods of the penalty prescribed are:
Maximum - 6 years, 8 months, 21 days to 8 years
Medium - 5 years, 5 months, 11 days to 6 years, 8 months, 20 days
Minimum - 4 years, 2 months, 1 day to 5 years, 5 months, 10 days 49 Also, let a copy of this Decision be furnished the President of the Senate and the
Speaker of the House of Representatives.
To compute the maximum period of the prescribed penalty, prisión correccional
maximum to prisión mayor minimum should be divided into three equal portions of SO ORDERED.
time each of which portion shall be deemed to form one period in accordance with
Article 6550 of the RPC.51 In the present case, the amount involved is ₱98,000.00,
DIOSDADO M. PERALTA
which exceeds ₱22,000.00, thus, the maximum penalty imposable should be within
Associate Justice
the maximum period of 6 years, 8 months and 21 days to 8 years of prision mayor.
Article 315 also states that a period of one year shall be added to the penalty for every
additional ₱10,000.00 defrauded in excess of ₱22,000.00, but in no case shall the WE CONCUR:
total penalty which may be imposed exceed 20 years.
See Concurring and Dissenting Opinion
Considering that the amount of ₱98,000.00 is ₱76,000.00 more than the ₱22,000.00 MARIA LOURDES P.A. SERENO
ceiling set by law, then, adding one year for each additional ₱10,000.00, the maximum Chief Justice
period of 6 years, 8 months and 21 days to 8 years of prision mayor minimum would
be increased by 7 years. Taking the maximum of the prescribed penalty, which is 8
years, plus an additional 7 years, the maximum of the indeterminate penalty is 15
See Dissenting Opinion
years. PRESBITERO J. VELASCO, JR.
ANTONIO T. CARPIO
Associate Justice
Associate Justice
Applying the Indeterminate Sentence Law, since the penalty prescribed by law for the
estafa charge against petitioner is prision correccional maximum to prision mayor
minimum, the penalty next lower would then be prision correccional in its minimum TERESITA J. LEONARDO-DE See: Concurring Opinion
and medium periods. CASTRO ARTURO D. BRION
Associate Justice Associate Justice
Thus, the minimum term of the indeterminate sentence should be anywhere from 6
months and 1 day to 4 years and 2 months. I take no part due to prior action in
I join the Dissent of J. Abad
the CA
MARIANO C. DEL CASTILLO
LUCAS P. BERSAMIN*
One final note, the Court should give Congress a chance to perform its primordial duty Associate Justice
Associate Justice
of lawmaking. The Court should not pre-empt Congress and usurp its inherent powers
of making and enacting laws. While it may be the most expeditious approach, a short
cut by judicial fiat is a dangerous proposition, lest the Court dare trespass on See Dissenting Opinion
prohibited judicial legislation. MARTIN S. VILLARAMA, JR.
ROBERTO A. ABAD
Associate Justice
Associate Justice
WHEREFORE, the Petition for Review on Certiorari dated November 5, 2007 of
petitioner Lito Corpuz is hereby DENIED. Consequently, the Decision dated March 22,
2007 and Resolution dated September 5, 2007 of the Court of Appeals, which affirmed JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA
with modification the Decision dated July 30, 2004 of the Regional Trial Court, Branch Associate Justice Associate Justice
46, San Fernando City, finding petitioner guilty beyond reasonable doubt of the crime
of Estafa under Article 315, paragraph (1), sub-paragraph (b) of the Revised Penal No Part
Code, are hereby AFFIRMED with MODIFICATION that the penalty imposed is the BVIENVENIDO L. REYES
ESTELA M. PERLAS-BERNABE*
indeterminate penalty of imprisonment ranging from THREE (3) YEARS, TWO (2) Associate Justice
Associate Justice
MONTHS and ELEVEN DAYS of prision correccional, as minimum, to FIFTEEN (15)
YEARS of reclusion temporal as maximum.

MARVIC MARIO VICTOR F. LEONEN

Pursuant to Article 5 of the Revised Penal Code, let a Copy of this Decision be Associate Justice
furnished the President of the Republic of the Philippines, through the Department of
Justice.
 12
CERTIFICATION Id.

13
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in 555 Phil. 106 (2007).
the above Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court. 14
Id. at 114. (Citations omitted.)

MARIA LOURDES P. A. SERENO 15

Cosme, Jr. v. People, 538 Phil. 52, 66 (2006), citing People v. Garillo, 446
Chief Justice
Phil. 163, 174-175 (2003).

16
Id., citing Sullon v. People, 500 Phil. 39, 45 (2005) ; People v. Bulan, 498
Phil. 586, 598 (2005).

Footnotes 17
Id. at 67, citing People v. Gaspar, 376 Phil. 762, 779 (1999).

* No part. 18
Emphasis supplied.
1
Penned by Associate Justice Estela M. Perlas-Bernabe (now a member of 19
Third Edition, 1940.
the Supreme Court), with Associate Justices Rodrigo V. Cosico and Lucas
P. Bersamin (now a member of the Supreme Court), concurring; rollo, pp.
20
31-41. Id. at 16. (Emphasis supplied)

2 21
Rollo, p. 43. 1997 Edition.

3 22
Id. at 48-52. Id. at 93, citing United States v. Valera Ang Y, 26 Phil. 598 (1914); People
v. Salazar y Gabriel, 102 Phil. 1184 (1958); Tiu Ua, 51 O.G. 1863; Limaco,
4 99 Phil. 35 (1956), and People v. Del Rosario y Natividad, 62 Phil. 824
Libuit v. People, 506 Phil. 591, 599 (2005).
(1936). (Emphasis supplied.)
5
Blas v. Angeles- Hutalla, 482 Phil. 485, 501 (2004). 23
Art. 315. Swindling (estafa). — Any person who shall defraud another by
any of the means mentioned hereinbelow shall be punished by:
6
Quinto v. People, 365 Phil. 259, 270 (1999).
1st. The penalty of prision correccional in its maximum
7
Rollo, p. 37. (Citations omitted.) period to prision mayor in its minimum period, if the
amount of the fraud is over 12,000 pesos but does not
8 exceed 22,000 pesos, and if such amount exceeds the
Diaz v. People, 585 Phil. 318, 332 (2008), citing Pangilinan v. Court of
latter sum, the penalty provided in this paragraph shall
Appeals, 378 Phil. 670, 675 (1999).
be imposed in its maximum period, adding one year for
each additional 10,000 pesos; but the total penalty
9
TSN, December 17, 1992, pp. 9-10. (Emphasis supplied.) which may be imposed shall not exceed twenty years.
In such cases, and in connection with the accessory
10 penalties which may be imposed under the provisions
Tan v. People, 542 Phil. 188, 201 (2007). of this Code, the penalty shall be termed prision mayor
or reclusion temporal, as the case may be.
11
Id., citing Lee v. People, 495 Phil. 239, 250 (2005).
 2nd. The penalty of prision correccional in its minimum
and medium periods, if the amount of the fraud is over
6,000 pesos but does not exceed 12,000 pesos;
3rd. The penalty of arresto mayor in its maximum
period to prision correccional in its minimum period if
such amount is over 200 pesos but does not exceed
6,000 pesos; and
4th. By arresto mayor in its maximum period, if such
amount does not exceed 200 pesos, provided that in
the four cases mentioned, the fraud be committed by
any of the following means:
1. With unfaithfulness or abuse of confidence, namely:
(a) By altering the substance, quantity, or quality or
anything of value which the offender shall deliver by
virtue of an obligation to do so, even though such
obligation be based on an immoral or illegal
consideration.
(b) By misappropriating or converting, to the prejudice
of another, money, goods, or any other personal
property received by the offender in trust or on
commission, or for administration, or under any other
obligation involving the duty to make delivery of or to
return the same, even though such obligation be totally
or partially guaranteed by a bond; or by denying having
received such money, goods, or other property.
(c) By taking undue advantage of the signature of the
offended party in blank, and by writing any document
above such signature in blank, to the prejudice of the
offended party or of any third person.
2. By means of any of the following false pretenses or fraudulent
acts executed prior to or simultaneously with the commission of
the fraud:
(a) By using fictitious name, or falsely pretending to
possess power, influence, qualifications, property,
credit, agency, business or imaginary transactions, or
by means of other similar deceits.
(b) By altering the quality, fineness or weight of
anything pertaining to his art or business.
(c) By pretending to have bribed any Government
employee, without prejudice to the action for calumny
which the offended party may deem proper to bring
against the offender. In this case, the offender shall be
punished by the maximum period of the penalty.
(d) [By post-dating a check, or issuing a check in
payment of an obligation when the offender therein
were not sufficient to cover the amount of the check.
The failure of the drawer of the check to deposit the
amount necessary to cover his check within three (3)
days from receipt of notice from the bank and/or the
payee or holder that said check has been dishonored
for lack of insufficiency of funds shall be prima facie
evidence of deceit constituting false pretense or
fraudulent act. (As amended by R.A. 4885, approved
June 17, 1967.)]
(e) By obtaining any food, refreshment or
accommodation at a hotel, inn, restaurant, boarding
house, lodging house, or apartment house and the like
without paying therefor, with intent to defraud the
proprietor or manager thereof, or by obtaining credit at
hotel, inn, restaurant, boarding house, lodging house,
or apartment house by the use of any false pretense, or
by abandoning or surreptitiously removing any part of
his baggage from a hotel, inn, restaurant, boarding
house, lodging house or apartment house after
obtaining credit, food, refreshment or accommodation
therein without paying for his food, refreshment or
accommodation.
3. Through any of the following fraudulent means:
(a) By inducing another, by means of deceit, to sign any
document.
(b) By resorting to some fraudulent practice to insure
success in a gambling game.
(c) By removing, concealing or destroying, in whole or
in part, any court record, office files, document or any
other papers.
24
May be entitled to Probation.
25
May be entitled to Probation if the maximum penalty imposed is 6 years.
26
May be entitled to Probation.
27
Quinto v. Commission on Elections, G.R. No. 189698, February 22, 2010,
613 SCRA 385, 414.
28
People v. Cayat, 68 Phil. 12, 18 (1939).
29
TSN, Oral Arguments, February 25, 2014, pp. 192-195.
30
463 U.S. 277 (1983)
31
Section 3. Corrupt practices of public officers. - In addition to acts or
omissions of public officers already penalized by existing law, the following
shall constitute corrupt practices of any public officer and are hereby
declared to be unlawful:
(a) Persuading, inducing or influencing another public officer to
perform an act constituting a violation of rules and regulations
duly promulgated by competent authority or an offense in
connection with the official duties of the latter, or allowing himself
to be persuaded, induced, or influenced to commit such violation
or offense.
(b) Directly or indirectly requesting or receiving any gift, present,
share, percentage, or benefit, for himself or for any other person,
in connection with any contract or transaction between the
Government and any other part, wherein the public officer in his
official capacity has to intervene under the law.
(c) Directly or indirectly requesting or receiving any gift, present or
other pecuniary or material benefit, for himself or for another, from
any person for whom the public officer, in any manner or capacity,
has secured or obtained, or will secure or obtain, any Government
permit or license, in consideration for the help given or to be
given, without prejudice to Section thirteen of this Act.
(d) Accepting or having any member of his family accept
employment in a private enterprise which has pending official
business with him during the pendency thereof or within one year
after its termination.
(e) Causing any undue injury to any party, including the
Government, or giving any private party any unwarranted
benefits, advantage or preference in the discharge of his official
administrative or judicial functions through manifest partiality,
evident bad faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices or government
corporations charged with the grant of licenses or permits or other
concessions.
(f) Neglecting or refusing, after due demand or request, without
sufficient justification, to act within a reasonable time on any
matter pending before him for the purpose of obtaining, directly or
indirectly, from any person interested in the matter some
pecuniary or material benefit or advantage, or for the purpose of
favoring his own interest or giving undue advantage in favor of or
discriminating against any other interested party.
(g) Entering, on behalf of the Government, into any contract or
transaction manifestly and grossly disadvantageous to the same,
whether or not the public officer profited or will profit thereby.
(h) Director or indirectly having financing or pecuniary interest in
any business, contract or transaction in connection with which he
intervenes or takes part in his official capacity, or in which he is
prohibited by the Constitution or by any law from having any
interest.
(i) Directly or indirectly becoming interested, for personal gain, or
having a material interest in any transaction or act requiring the
approval of a board, panel or group of which he is a member, and
which exercises discretion in such approval, even if he votes
against the same or does not participate in the action of the
board, committee, panel or group.
Interest for personal gain shall be presumed against those public
officers responsible for the approval of manifestly unlawful,
inequitable, or irregular transaction or acts by the board, panel or
group to which they belong.
(j) Knowingly approving or granting any license, permit, privilege
or benefit in favor of any person not qualified for or not legally
entitled to such license, permit, privilege or advantage, or of a
mere representative or dummy of one who is not so qualified or
entitled.
(k) Divulging valuable information of a confidential character,
acquired by his office or by him on account of his official position
 to unauthorized persons, or releasing such information in advance LAWS, AS AMENDED, OTHER SPECIAL PENAL LAWS, AND FOR
of its authorized release date. OTHER PURPOSES.

41
The person giving the gift, present, share, percentage or benefit AN ACT PROHIBITING THE IMPOSITION OF DEATH PENALTY IN THE
referred to in subparagraphs (b) and (c); or offering or giving to PHILIPPINES.
the public officer the employment mentioned in subparagraph (d);
or urging the divulging or untimely release of the confidential 42
Section 19.
information referred to in subparagraph (k) of this section shall,
together with the offending public officer, be punished under
Section nine of this Act and shall be permanently or temporarily 1. Excessive fines shall not be imposed, nor cruel, degrading or
disqualified in the discretion of the Court, from transacting inhuman punishment inflicted. x x x.
business in any form with the Government.
43
Gutierrez v. Department of Budget and Management, G.R. No. 153266,
32
R.A. No. 3019, Sec. 9. 159007, 159029, 170084, 172713, 173119, 176477, 177990, A.M. No. 06-4-
02-SB, March 18, 2010, 616 SCRA 1, 25.
33
Art. 26. When afflictive, correctional, or light penalty. — A fine, whether
44
imposed as a single of as an alternative penalty, shall be considered an People v. De la Cruz, 92 Phil. 906, 908 (1953); People v. Tongko, 353
afflictive penalty, if it exceeds 6,000 pesos; a correctional penalty, if it does Phil. 37, 43 (1998).
not exceed 6,000 pesos but is not less than 200 pesos; and a light penalty if
it less than 200 pesos. 45
People v. Estoista, 93 Phil. 647, 655 (1953); People v. Dionisio, No. L-
15513, March 27, 1968, 22 SCRA 1299, 1301-1302.
34
Revised Forestry Code, as amended by E.O. No. 277, Series of 1987.
46
TSN, Oral Arguments, February 25, 2014, pp. 183-185.
35
Taopa v. People, 592 Phil. 341, 345 (2005).
47
No. L-18793, October 11, 1968, 25 SCRA 468.
36
Art. 310. Qualified theft. — The crime of theft shall be punished by the
penalties next higher by two degrees than those respectively specified in the 48
next preceding article, if committed by a domestic servant, or with grave Supra note 15.
abuse of confidence, or if the property stolen is motor vehicle, mail matter or
large cattle or consists of coconuts taken from the premises of the plantation 49
Id. at 71-72.
or fish taken from a fishpond or fishery, or if property is taken on the
occasion of fire, earthquake, typhoon, volcanic erruption, or any other 50
calamity, vehicular accident or civil disturbance. ART. 65. Rule in Cases in Which the Penalty is Not Composed of Three
Periods. – In cases in which the penalty prescribed by law is not composed
of three periods, the courts shall apply the rules contained in the foregoing
37
TSN, Oral Arguments, February 25, 2014, p. 167. articles, dividing into three equal portions the time included in the penalty
prescribed, and forming one period of each of the three portions.
38
People v. Quijada, 328 Phil. 505, 548 (1996).

39
Art. 2220. Willful injury to property may be a legal ground for awarding
moral damages if the court should find that, under the circumstances, such
damages are justly due. The same rule applies to breaches of contract
where the defendant acted fraudulently or in bad faith.

40
AN ACT TO IMPOSE THE DEATH PENALTY ON CERTAIN HEINOUS
CRIMES, AMENDING FOR THAT PURPOSE THE REVISED PENAL
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-19190 November 29, 1922
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,
vs.
VENANCIO CONCEPCION, defendant-appellant.
Recaredo Ma. Calvo for appellant.
Attorney-General Villa-Real for appellee.
MALCOLM, J.:
By telegrams and a letter of confirmation to the manager of the Aparri branch of the
Philippine National Bank, Venancio Concepcion, President of the Philippine National
Bank, between April 10, 1919, and May 7, 1919, authorized an extension of credit in
favor of "Puno y Concepcion, S. en C." in the amount of P300,000. This special
authorization was essential in view of the memorandum order of President
Concepcion dated May 17, 1918, limiting the discretional power of the local manager
at Aparri, Cagayan, to grant loans and discount negotiable documents to P5,000,
which, in certain cases, could be increased to P10,000. Pursuant to this authorization,
credit aggregating P300,000, was granted the firm of "Puno y Concepcion, S. en C.,"
the only security required consisting of six demand notes. The notes, together with the
interest, were taken up and paid by July 17, 1919.
"Puno y Concepcion, S. en C." was a copartnership capitalized at P100,000. Anacleto
Concepcion contributed P5,000; Clara Vda. de Concepcion, P5,000; Miguel S.
Concepcion, P20,000; Clemente Puno, P20,000; and Rosario San Agustin, "casada
con Gral. Venancio Concepcion," P50,000. Member Miguel S. Concepcion was the
administrator of the company.
On the facts recounted, Venancio Concepcion, as President of the Philippine National
Bank and as member of the board of directors of this bank, was charged in the Court
of First Instance of Cagayan with a violation of section 35 of Act No. 2747. He was
found guilty by the Honorable Enrique V. Filamor, Judge of First Instance, and was
sentenced to imprisonment for one year and six months, to pay a fine of P3,000, with
subsidiary imprisonment in case of insolvency, and the costs.
Section 35 of Act No. 2747, effective on February 20, 1918, just mentioned, to which
reference must hereafter repeatedly be made, reads as follows: "The National Bank
shall not, directly or indirectly, grant loans to any of the members of the board of
directors of the bank nor to agents of the branch banks." Section 49 of the same Act
provides: "Any person who shall violate any of the provisions of this Act shall be
punished by a fine not to exceed ten thousand pesos, or by imprisonment not to
exceed five years, or by both such fine and imprisonment." These two sections were
in effect in 1919 when the alleged unlawful acts took place, but were repealed by Act
No. 2938, approved on January 30, 1921.
Counsel for the defense assign ten errors as having been committed by the trial court.
These errors they have argued adroitly and exhaustively in their printed brief, and
again in oral argument. Attorney-General Villa-Real, in an exceptionally accurate and
comprehensive brief, answers the proposition of appellant one by one.
The question presented are reduced to their simplest elements in the opinion which
follows:
I. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion,
S. en C." by Venancio Concepcion, President of the Philippine National Bank, a "loan"
within the meaning of section 35 of Act No. 2747?
Counsel argue that the documents of record do not prove that authority to make a loan
was given, but only show the concession of a credit. In this statement of fact, counsel
is correct, for the exhibits in question speak of a "credito" (credit) and not of a
" prestamo" (loan).
The "credit" of an individual means his ability to borrow money by virtue of the
confidence or trust reposed by a lender that he will pay what he may promise.
(Donnell vs. Jones [1848], 13 Ala., 490; Bouvier's Law Dictionary.) A "loan" means the
delivery by one party and the receipt by the other party of a given sum of money, upon
an agreement, express or implied, to repay the sum loaned, with or without interest.
(Payne vs. Gardiner [1864], 29 N. Y., 146, 167.) The concession of a "credit"
necessarily involves the granting of "loans" up to the limit of the amount fixed in the
"credit,"
II. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion,
S. en C.," by Venancio Concepcion, President of the Philippine National Bank, a
"loan" or a "discount"?
Counsel argue that while section 35 of Act No. 2747 prohibits the granting of a "loan,"
it does not prohibit what is commonly known as a "discount."
In a letter dated August 7, 1916, H. Parker Willis, then President of the National Bank,
inquired of the Insular Auditor whether section 37 of Act No. 2612 was intended to
apply to discounts as well as to loans. The ruling of the Acting Insular Auditor, dated
August 11, 1916, was to the effect that said section referred to loans alone, and
placed no restriction upon discount transactions. It becomes material, therefore, to
discover the distinction between a "loan" and a "discount," and to ascertain if the
instant transaction comes under the first or the latter denomination.
Discounts are favored by bankers because of their liquid nature, growing, as they do,
out of an actual, live, transaction. But in its last analysis, to discount a paper is only a
mode of loaning money, with, however, these distinctions: (1) In a discount, interest is
deducted in advance, while in a loan, interest is taken at the expiration of a credit; (2)
a discount is always on double-name paper; a loan is generally on single-name paper.
Conceding, without deciding, that, as ruled by the Insular Auditor, the law covers loans
and not discounts, yet the conclusion is inevitable that the demand notes signed by
the firm "Puno y Concepcion, S. en C." were not discount paper but were mere
evidences of indebtedness, because (1) interest was not deducted from the face of the
notes, but was paid when the notes fell due; and (2) they were single-name and not
double-name paper.
The facts of the instant case having relation to this phase of the argument are not
essentially different from the facts in the Binalbagan Estate case. Just as there it was
declared that the operations constituted a loan and not a discount, so should we here
lay down the same ruling.
III. Was the granting of a credit of P300,000 to the copartnership, "Puno y
Concepcion, S. en C." by Venancio Concepcion, President of the Philippine National
Bank, an "indirect loan" within the meaning of section 35 of Act No. 2747?
Counsel argue that a loan to the partnership "Puno y Concepcion, S. en C." was not
an "indirect loan." In this connection, it should be recalled that the wife of the
defendant held one-half of the capital of this partnership.
In the interpretation and construction of statutes, the primary rule is to ascertain and
give effect to the intention of the Legislature. In this instance, the purpose of the
Legislature is plainly to erect a wall of safety against temptation for a director of the
bank. The prohibition against indirect loans is a recognition of the familiar maxim that
no man may serve two masters — that where personal interest clashes with fidelity to
duty the latter almost always suffers. If, therefore, it is shown that the husband is
financially interested in the success or failure of his wife's business venture, a loan to
partnership of which the wife of a director is a member, falls within the prohibition.
Various provisions of the Civil serve to establish the familiar relationship called a
conjugal partnership. (Articles 1315, 1393, 1401, 1407, 1408, and 1412 can be
specially noted.) A loan, therefore, to a partnership of which the wife of a director of a
bank is a member, is an indirect loan to such director.
That it was the intention of the Legislature to prohibit exactly such an occurrence is
shown by the acknowledged fact that in this instance the defendant was tempted to
mingle his personal and family affairs with his official duties, and to permit the loan
P300,000 to a partnership of no established reputation and without asking for
collateral security.
In the case of Lester and Wife vs. Howard Bank ([1870], 33 Md., 558; 3 Am. Rep.,
211), the Supreme Court of Maryland said:
What then was the purpose of the law when it declared that no director or
officer should borrow of the bank, and "if any director," etc., "shall be
convicted," etc., "of directly or indirectly violating this section he shall be
punished by fine and imprisonment?" We say to protect the stockholders,
depositors and creditors of the bank, against the temptation to which the
directors and officers might be exposed, and the power which as such they
must necessarily possess in the control and management of the bank, and
the legislature unwilling to rely upon the implied understanding that in
assuming this relation they would not acquire any interest hostile or adverse
to the most exact and faithful discharge of duty, declared in express terms
that they should not borrow, etc., of the bank.
In the case of People vs. Knapp ([1912], 206 N. Y., 373), relied upon in the
Binalbagan Estate decision, it was said:
We are of opinion the statute forbade the loan to his copartnership firm as
well as to himself directly. The loan was made indirectly to him through his
firm.
IV. Could Venancio Concepcion, President of the Philippine National Bank, be
convicted of a violation of section 35 of Act No. 2747 in relation with section 49 of the
same Act, when these portions of Act No. 2747 were repealed by Act No. 2938, prior
to the finding of the information and the rendition of the judgment?
As noted along toward the beginning of this opinion, section 49 of Act No. 2747, in
relation to section 35 of the same Act, provides a punishment for any person who shall
violate any of the provisions of the Act. It is contended, however, by the appellant, that
the repeal of these sections of Act No. 2747 by Act No. 2938 has served to take away
the basis for criminal prosecution.
This same question has been previously submitted and has received an answer
adverse to such contention in the cases of United Stated vs. Cuna ([1908], 12 Phil.,
241); People vs. Concepcion ([1922], 43 Phil., 653); and Ong Chang Wing and Kwong
Fok vs. United States ([1910], 218 U. S., 272; 40 Phil., 1046). In other words, it has
been the holding, and it must again be the holding, that where an Act of the
Legislature which penalizes an offense, such repeals a former Act which penalized the
same offense, such repeal does not have the effect of thereafter depriving the courts
of jurisdiction to try, convict, and sentenced offenders charged with violations of the been proved guilty beyond a reasonable doubt of the crime charged in the information.
old law. The penalty imposed by the trial judge falls within the limits of the punitive provisions
of the law.
V. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion,
S. en C." by Venancio Concepcion, President of the Philippine National Bank, in Judgment is affirmed, with the costs of this instance against the appellant. So ordered.
violation of section 35 of Act No. 2747, penalized by this law?
Araullo, C. J., Johnson, Street, Avanceña, Villamor, Ostrand, Johns, and Romualdez,
Counsel argue that since the prohibition contained in section 35 of Act No. 2747 is on JJ., concur.
the bank, and since section 49 of said Act provides a punishment not on the bank
when it violates any provisions of the law, but on a personviolating any provisions of
the same, and imposing imprisonment as a part of the penalty, the prohibition
contained in said section 35 is without penal sanction.lawph!l.net

The answer is that when the corporation itself is forbidden to do an act, the prohibition
extends to the board of directors, and to each director separately and individually.
(People vs. Concepcion, supra.)

VI. Does the alleged good faith of Venancio Concepcion, President of the Philippine
National Bank, in extending the credit of P300,000 to the copartnership "Puno y
Concepcion, S. en C." constitute a legal defense?

Counsel argue that if defendant committed the acts of which he was convicted, it was
because he was misled by rulings coming from the Insular Auditor. It is furthermore
stated that since the loans made to the copartnership "Puno y Concepcion, S. en C."
have been paid, no loss has been suffered by the Philippine National Bank.

Neither argument, even if conceded to be true, is conclusive. Under the statute which
the defendant has violated, criminal intent is not necessarily material. The doing of the
inhibited act, inhibited on account of public policy and public interest, constitutes the
crime. And, in this instance, as previously demonstrated, the acts of the President of
the Philippine National Bank do not fall within the purview of the rulings of the Insular
Auditor, even conceding that such rulings have controlling effect.

Morse, in his work, Banks and Banking, section 125, says:

It is fraud for directors to secure by means of their trust, and advantage not
common to the other stockholders. The law will not allow private profit from
a trust, and will not listen to any proof of honest intent.

JUDGMENT

On a review of the evidence of record, with reference to the decision of the trial court,
and the errors assigned by the appellant, and with reference to previous decisions of
this court on the same subject, we are irresistibly led to the conclusion that no
reversible error was committed in the trial of this case, and that the defendant has
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-43575 May 31, 1935
JUAN TAÑADA, petitioner,
vs.
JOSE YULO, Secretary of Justice,
EDUARDO GUTIERREZ DAVID, Judge of First Instance of the Thirteenth Judicial
District,
and SANTIAGO TAÑADA, Justice of the Peace of Alabat, Tayabas, respondents.
Pedro Ynsua for petitioner.
Office of the Solicitor-General Hilado for respondents.
MALCOLM, J.:
For the second time the court is called upon to determine the right of a justice of the
peace appointed prior to the approval of Act No. 3899, but who completed sixty-five
years of age subsequent to the approval of the Act and to the date, January 1, 1933,
specified in the Act, to continue in office. The answer of the Solicitor-General presents
two questions, the first predicated on the contention that Act No. 3899 applies to all
justices of the peace who reach the age of sixty-five years, and the second on the
acceptance of a transfer by the petitioner as denoting a new appointment bringing him
within the purview of the cited law.
Juan Tañada, the petitioner, was appointed justice of the peace of Alabat, Tayabas,
by the Governor-General with the advice and consent of the Philippine Commission on
December 4, 1911. He continued in that position until September 8, 1934, when at his
own request, "Pursuant to the provisions of section 206 of the Revised Administrative
Code", he was "transferred from the position of justice of the peace for the municipality
of Alabat, Province of Tayabas, of the same position in the municipality of Perez,
same province", by a communication signed by the Governor-General from which the
foregoing is quoted. Tañada completed the age of sixty-five years on October 5, 1934.
Thereupon the Judge of First Instance of Tayabas, acting in accordance with
instructions from the Department of Justice, directed Tañada to cease to act as justice
of the peace of Perez, Tayabas. Tañada surrendered his office under protest, and
thereafter instituted this original action of quo warranto.
The applicable law is found in the last proviso to section 203 of the Administrative
Code, as inserted by Act No. 3899, and in the proviso to section 206 of the same
Code as last amended by Act No. 2768, which read as follows:
SEC. 203. Appointment and distribution of justices of the peace. — * *
* Provided, further, That the present justice and auxiliary justice of the
peace who shall, at the time this Act takes effect, have completed sixty-five
years of age, shall cease to hold office on January first, nineteen hundred
and thirty-three; and the Governor-General, with the advise and consent of
the Philippine Senate, shall make new appointments to cover the vacancies
occurring by operation of this Act.
SEC 206. Tenure of office — Transfer from one municipality of another. —
A justice of the peace having the requisite legal qualifications shall hold
office during good behavior unless his office be lawfully abolished or
merged in the jurisdiction of some other justice: Provided, That in case the
public interest requires it, a justice of the peace of one municipality may be
transferred to another.
The first question raised by the Solicitor-General was considered in the recent case
of Felipe Regalado, petitioner, vs. Jose Yulo, Secretary of Justice, Juan G. Lesaca,
Judge of First Instance of Albay, and Esteban T. Villar, respondents (page 173, ante).
It was there decided that the natural and reasonable meaning of the language used in
Act No. 3899, leaves room for no other deducting than that a justice of the peace
appointed prior to the approval of the Act and who completed sixty-five years of age
on September 13, 1934, subsequent to the approval of the Act, which was on
November 16, 1931, and to the date fixed for cessation from office which was on
January 1, 1933, is not affected by the said Act. The law officer of the Government
has indicated that the above cited decision came from a Division of Five and has
requested a reconsideration of the issue therein resolved.
Acceding to this petition, we have again examined microscopically word for word the
terminology used in Act No. 3899. Having done so, all of us are agreed that a justice
of the peace like the petitioner who became sixty-five years of age on October 5,
1934, was not included in a law which required justice of the peace sixty-five years of
age to cease to hold office on January 1, 1933. That result is now arrived at in banc.
In substantiation of what has just been said, it is of course fundamental that the
determination of the legislative intent is the primary consideration. However, it is
equally fundamental that that legislative intent must be determined from the language
of the statute itself. This principle must be adhered to even though the court be
convinced by extraneous circumstances that the Legislature intended to enact
something very different from that which it did enact. An obscurity cannot be created
to be cleared up by construction and hidden meanings at variance with the language
used cannot be sought out. To attempt to do so is a perilous undertaking, and is quite
apt to lead to an amendment of a law by judicial construction. To depart from the
meaning expressed by the words is to alter the statute, is to legislate not to interpret.
As corroborative authority it is only necessary to advert to a decision coming from the
United States Supreme Court, in which the court was asked to insert the word
"lawfully", but the court declined to do so, saying that there is no authority to import a
word into a statute in order to change its meaning. (Newhall vs. Sanger, 92, U.S.,
761.) The thought was expressed by the same court in another case, when it said that
court are bound to follow the plain words of a statute as to which there is no room for
construction regardless of the consequences. (Commissioner of Immigration vs.
Gottlieb, 265 U.S., 310; see 25 R.C.L., 961 et seq.)
Counsel in effect urges us to adopt a liberal construction of the statute. That in this
instance, as in the past, we aim to do. But counsel in his memorandum concedes "that
the language of the proviso in question is somewhat defective and does not clearly
convey the legislative intent", and at the hearing in response to questions was finally
forced to admit that what the Government desired was for the court to insert words
and phrases in the law in order to supply an intention for the legislature. That we
cannot do. By liberal construction of statutes, courts from the language use, the
subject matter, and the purposes of those framing them are able to find their true
meaning. There is a sharp distinction, however, between construction of this nature
and the act of a court in engrafting upon a law something that has been omitted which
someone believes ought to have been embraced. The former is liberal construction
and is a legitimate exercise of judicial power. The latter is judicial legislation forbidden
by the tripartite division of powers among the three departments of government, the
executive, the legislative, and the judicial.
We give application to the decision of this court in Regalado vs. Yulo, supra, and as a
result overrule the first defense of the Government.
Passing to the second phase of the case, counsel has endeavoured to draw a
distinction between the Regalado case above cited and the present case. On the facts
there is admittedly one difference. In the Regalado case the petitioner had not been
transferred from one municipality to another, while in the present case, Tañada
accepted a transfer from one municipality to another. Did the transfer amount to a new
appointment bringing Tañada under the purview of the law relating to relinquishment
of office on attaining the age of sixty-five?
The effect of the Organic Act is that an appointment of a justice of the peace by the
Governor-General must be consented to by the Philippine Senate. In consonance with
this provision, the method of appointment and distribution of justices of the peace are
outlined in section 203 of the Administrative Code, a portion of which is hereinbefore
quoted. The transfer from one municipality to another, however, is accomplished by
the Governor-General without the advise and consent of the Philippine Senate, in
accordance with codal section 206.
In the case of Nicolas vs. Alberto (51 Phil., 370), the issue was the legal right of the
Governor-General to transfer a justice of the peace from one municipality to another,
without the consent of the Philippine Senate. This court held that the consent of the
Philippine Senate was a necessary attribute of the transfer. As the basis for this
holding, it was stated that the appointing power consists of the Governor-General
acting in conjunction with the Philippine Senate. But that case was taken to the United
States Supreme Court, and there is was held that the consent of the Senate was
unnecessary to make the transfer legal. (Alberto vs. Nicolas, 279 U.S., 139.) The
holding of the higher court, to follow the language of the syllabus, was that in view of
the plenary legislative powers of the Philippine Legislature regarding justice of the
peace, Act No. 2768 of the Philippine Legislature is valid as applied to justice of the
peace whose appointment was made by the Governor-General, and confirmed by the
Senate, after its enactment. In the body of the decision appeared the following:
. . . When the Senate confirmed Severino Alberto to be a justice of the
peace for San Jose del Monte, sec. 206, with the proviso, was in force; and
when the Senate confirmed him, it confirmed him with the knowledge of the
possibility declared in the law that his power and his functions as a justice of
the peace upon designation of the Governor-General might be performed
and exercised in another jurisdiction, if the Governor-General should think it
wise in the public interest in his regulation of the conduct of justice of the
peace. There is no such necessary difference between the duties of a
justice of the peace in one part of the Islands and those to be performed in
another part as to make such enlargement or change of his jurisdiction
already provided for in existing law unreasonably beyond the scope of the
consent to the original appointment.
It is to be deduced from what has been stated above that according to the United
States Supreme Court, the transfer simply amounted to an enlargement or change of
jurisdiction grounded on the original appointment and thus did not require a new
appointment. Whatever our view s might have been to the contrary, it now becomes
out duty to follow the decision of the higher court. It also seems evident that a transfer
as applied to officers amounts merely to a change of position or to another grade of
service. (Cliff vs. Wentworth, 220 Mass., 393.)
We give application to the decision of the Supreme Court of the United States
in Nicolas vs. Alberto, supra, and as a result overrule the second defense of the
Government.
Before closing it is incumbent upon us to observe that this case was heard in
banc because of the suggestion of the Solicitor-General that the principal issue raised
by the pleadings is the validity of Act No. 3899 of the Philippine Legislature. Our
review of the case has convinced us that this allegation overstates the matter. It is
unnecessary to discuss petitioner's contention that Act No. 3899 is unconstitutional
because of a defective title. On the other hand, the allegation in the answer that the
law is discriminatory and class legislation, and, consequently, unconstitutional has
apparently been abandoned. Finally it is to be observed that the fear of disorder in the
affairs of the Department of Justice and the Office of the Governor-General on
account of the displacement of incumbent justices of the peace, is unfounded, for as is
well known, acquiescence or voluntary surrender of an office precludes the
maintenance of a quo warranto proceeding.
Giving effect to the decisions of this court in the Regalado case and of the Supreme
Court of the United States in the Alberto vs. Nicolas case, and as a consequence
ruling that Act No. 3899 does not apply to a justice of the peace appointed prior to the
approval of the Act who completed sixty-five years of age after January 1, 1933, and
that a transfer of a justice of the peace does not amount to an appointment, we reach
the conclusion that the special defenses interposed by the Solicitor-General must be
overruled. Accordingly, the writ will be granted and the petitioner Juan Tañada will be
placed in possession of the office of justice of the peace of Perez, Tayabas. So
ordered, without special pronouncement as to the costs.

Abad Santos, Hull, Vickers, Butte, Goddard, and Diaz, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6355-56 August 31, 1953
PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-appellees,
vs.
SATURNINO DAVID, as Collector of Internal Revenue, defendant-appellant.
Office of the Solicitor General Juan R. Liwag and Solicitor Jose P. Alejandro for
appellant.
Manuel O. Chan for appellees.
MONTEMAYOR, J.:
This is a joint appeal from the decision of the Court of First Instance of Manila
declaring section 13 of Republic Act No. 590 unconstitutional, and ordering the
appellant Saturnino David as Collector of Internal Revenue to re-fund to Justice Pastor
M. Endencia the sum of P1,744.45, representing the income tax collected on his
salary as Associate Justice of the Court of Appeals in 1951, and to Justice Fernando
Jugo the amount of P2,345.46, representing the income tax collected on his salary
from January 1,1950 to October 19, 1950, as Presiding Justice of the Court of
Appeals, and from October 20, 1950 to December 31,1950, as Associate Justice of
the Supreme Court, without special pronouncement as to costs.
Because of the similarity of the two cases, involving as they do the same question of
law, they were jointly submitted for determination in the lower court. Judge Higinio B.
Macadaeg presiding, in a rather exhaustive and well considered decision found and
held that under the doctrine laid down by this Court in the case of Perfecto vs. Meer,
85 Phil., 552, the collection of income taxes from the salaries of Justice Jugo and
Justice Endencia was a diminution of their compensation and therefore was in
violation of the Constitution of the Philippines, and so ordered the refund of said taxes.
We see no profit and necessity in again discussing and considering the proposition
and the arguments pro and cons involved in the case of Perfecto vs. Meer, supra,
which are raised, brought up and presented here. In that case, we have held despite
the ruling enunciated by the United States Federal Supreme Court in the case of O
'Malley vs. Woodrought 307 U. S., 277, that taxing the salary of a judicial officer in the
Philippines is a diminution of such salary and so violates the Constitution. We shall
now confine our-selves to a discussion and determination of the remaining question of
whether or not Republic Act No. 590, particularly section 13, can justify and legalize
the collection of income tax on the salary of judicial officers.
According to the brief of the Solicitor General on behalf of appellant Collector of
Internal Revenue, our decision in the case of Perfecto vs. Meer, supra, was not
received favorably by Congress, because immediately after its promulgation,
Congress enacted Republic Act No. 590. To bring home his point, the Solicitor
General reproduced what he considers the pertinent discussion in the Lower House of
House Bill No. 1127 which became Republic Act No. 590.
For purposes of reference, we are reproducing section 9, Article VIII of our
Constitution:.
SEC. 9. The members of the Supreme Court and all judges of inferior courts
shall hold office during good behavior, until they reach the age of seventy
years, or become incapacitated to discharge the duties of their office. They
shall receive such compensation as may be fixed by law, which shall not be
diminished during their continuance in office. Until the Congress shall
provide otherwise, the Chief Justice of the Supreme Court shall receive an
annual compensation of sixteen thousand pesos, and each Associate
Justice, fifteen thousand pesos.
As already stated construing and applying the above constitutional provision, we held
in the Perfecto case that judicial officers are exempt from the payment of income tax
on their salaries, because the collection thereof by the Government was a decrease or
diminution of their salaries during their continuance in office, a thing which is expressly
prohibited by the Constitution. Thereafter, according to the Solicitor General, because
Congress did not favorably receive the decision in the Perfecto case, Congress
promulgated Republic Act No. 590, if not to counteract the ruling in that decision, at
least now to authorize and legalize the collection of income tax on the salaries of
judicial officers. We quote section 13 of Republic Act No. 590:
SEC 13. No salary wherever received by any public officer of the Republic
of the Philippines shall be considered as exempt from the income tax,
payment of which is hereby declared not to be dimunition of his
compensation fixed by the Constitution or by law.
So we have this situation. The Supreme Court in a decision interpreting the
Constitution, particularly section 9, Article VIII, has held that judicial officers are
exempt from payment of income tax on their salaries, because the collection thereof
was a diminution of such salaries, specifically prohibited by the Constitution. Now
comes the Legislature and in section 13, Republic Act No. 590, says that "no salary
wherever received by any public officer of the Republic (naturally including a judicial
officer) shall be considered as exempt from the income tax," and proceeds to declare
that payment of said income tax is not a diminution of his compensation. Can the
Legislature validly do this? May the Legislature lawfully declare the collection of
income tax on the salary of a public official, specially a judicial officer, not a decrease
of his salary, after the Supreme Court has found and decided otherwise? To
determine this question, we shall have to go back to the fundamental principles
regarding separation of powers.
Under our system of constitutional government, the Legislative department is assigned
the power to make and enact laws. The Executive department is charged with the
execution of carrying out of the provisions of said laws. But the interpretation and
application of said laws belong exclusively to the Judicial department. And this
authority to interpret and apply the laws extends to the Constitution. Before the courts
can determine whether a law is constitutional or not, it will have to interpret and
ascertain the meaning not only of said law, but also of the pertinent portion of the
Constitution in order to decide whether there is a conflict between the two, because if
there is, then the law will have to give way and has to be declared invalid and
unconstitutional.
Defining and interpreting the law is a judicial function and the legislative
branch may not limit or restrict the power granted to the courts by the
Constitution. (Bandy vs. Mickelson et al., 44N. W., 2nd 341, 342.)
When it is clear that a statute transgresses the authority vested in the
legislature by the Constitution, it is the duty of the courts to declare the act
unconstitutional because they cannot shrink from it without violating their
oaths of office. This duty of the courts to maintain the Constitution as the
fundamental law of the state is imperative and unceasing; and, as Chief
Justice Marshall said, whenever a statute is in violation of the fundamental
law, the courts must so adjudge and thereby give effect to the Constitution.
Any other course would lead to the destruction of the Constitution. Since the
question as to the constitutionality of a statute is a judicial matter, the courts
will not decline the exercise of jurisdiction upon the suggestion that action
might be taken by political agencies in disregard of the judgment of the
judicial tribunals. (11 Am. Jur., 714-715.)
Under the American system of constitutional government, among the most
important functions in trusted to the judiciary are the interpreting of
Constitutions and, as a closely connected power, the determination of
whether laws and acts of the legislature are or are not contrary to the
provisions of the Federal and State Constitutions. (11 Am. Jur., 905.).
By legislative fiat as enunciated in section 13, Republic Act NO. 590, Congress says
that taxing the salary of a judicial officer is not a decrease of compensation. This is a
clear example of interpretation or ascertainment of the meaning of the phrase "which
shall not be diminished during their continuance in office," found in section 9, Article
VIII of the Constitution, referring to the salaries of judicial officers. This act of
interpreting the Constitution or any part thereof by the Legislature is an invasion of the
well-defined and established province and jurisdiction of the Judiciary.
The rule is recognized elsewhere that the legislature cannot pass any
declaratory act, or act declaratory of what the law was before its passage,
so as to give it any binding weight with the courts. A legislative definition of
a word as used in a statute is not conclusive of its meaning as used
elsewhere; otherwise, the legislature would be usurping a judicial function in
defining a term. (11 Am. Jur., 914, emphasis supplied)
The legislature cannot, upon passing a law which violates a constitutional
provision, validate it so as to prevent an attack thereon in the courts, by a
declaration that it shall be so construed as not to violate the constitutional
inhibition. (11 Am. Jur., 919, emphasis supplied)
We have already said that the Legislature under our form of government is assigned
the task and the power to make and enact laws, but not to interpret them. This is more
true with regard to the interpretation of the basic law, the Constitution, which is not
within the sphere of the Legislative department. If the Legislature may declare what a
law means, or what a specific portion of the Constitution means, especially after the
courts have in actual case ascertain its meaning by interpretation and applied it in a
decision, this would surely cause confusion and instability in judicial processes and
court decisions. Under such a system, a final court determination of a case based on a
judicial interpretation of the law of the Constitution may be undermined or even
annulled by a subsequent and different interpretation of the law or of the Constitution
by the Legislative department. That would be neither wise nor desirable, besides
being clearly violative of the fundamental, principles of our constitutional system of
government, particularly those governing the separation of powers.
So much for the constitutional aspect of the case. Considering the practical side
thereof, we believe that the collection of income tax on a salary is an actual and
evident diminution thereof. Under the old system where the in-come tax was paid at
the end of the year or sometime thereafter, the decrease may not be so apparent and
clear. All that the official who had previously received his full salary was called upon to
do, was to fulfill his obligation and to exercise his privilege of paying his income tax on
his salary. His salary fixed by law was received by him in the amount of said tax
comes from his other sources of income, he may not fully realize the fact that his
salary had been decreased in the amount of said income tax. But under the present
system of withholding the income tax at the source, where the full amount of the
income tax corresponding to his salary is computed in advance and divided into equal
portions corresponding to the number of pay-days during the year and actually
deducted from his salary corresponding to each payday, said official actually does not
receive his salary in full, because the income tax is deducted therefrom every payday,
that is to say, twice a month. Let us take the case of Justice Endencia. As Associate
Justice of the Court of Appeals, his salary is fixed at p12,000 a year, that is to say, he
should receive P1,000 a month or P500 every payday, — fifteenth and end of month.
In the present case, the amount collected by the Collector of Internal Revenue on said
salary is P1,744.45 for one year. Divided by twelve (months) we shall have P145.37 a
month. And further dividing it by two paydays will bring it down to P72.685, which is
the income tax deducted form the collected on his salary each half month. So, if
Justice Endencia's salary as a judicial officer were not exempt from payment of the
income tax, instead of receiving P500 every payday, he would be actually receiving
P427.31 only, and instead of receiving P12,000 a year, he would be receiving but
P10,255.55. Is it not therefor clear that every payday, his salary is actually decreased
by P72.685 and every year is decreased by P1,744.45?
Reading the discussion in the lower House in connection with House Bill No. 1127,
which became Republic Act No. 590, it would seem that one of the main reasons
behind the enactment of the law was the feeling among certain legislators that
members of the Supreme Court should not enjoy any exemption and that as citizens,
out of patriotism and love for their country, they should pay income tax on their
salaries. It might be stated in this connection that the exemption is not enjoyed by the
members of the Supreme Court alone but also by all judicial officers including Justices
of the Court of Appeals and judges of inferior courts. The exemption also extends to
other constitutional officers, like the President of the Republic, the Auditor General, the
members of the Commission on Elections, and possibly members of the Board of Tax
Appeals, commissioners of the Public Service Commission, and judges of the Court of
Industrial Relations. Compares to the number of all these officials, that of the Supreme
Court Justices is relatively insignificant. There are more than 990 other judicial officers
enjoying the exemption, including 15 Justices of the Court of Appeals, about 107
Judges of First Instance, 38 Municipal Judges and about 830 Justices of the Peace.
The reason behind the exemption in the Constitution, as interpreted by the United
States Federal Supreme Court and this Court, is to preserve the independence of the
Judiciary, not only of this High Tribunal but of the other courts, whose present
membership number more than 990 judicial officials.
The exemption was not primarily intended to benefit judicial officers, but was grounded
on public policy. As said by Justice Van Devanter of the United States Supreme Court
in the case of Evans vs. Gore (253 U. S., 245):
The primary purpose of the prohibition against diminution was not to benefit
the judges, but, like the clause in respect of tenure, to attract good and
competent men to the bench and to promote that independence of action
and judgment which is essential to the maintenance of the guaranties,
limitations and pervading principles of the Constitution and to the
administration of justice without respect to person and with equal concern
for the poor and the rich. Such being its purpose, it is to be construed, not
as a private grant, but as a limitation imposed in the public interest; in other
words, not restrictively, but in accord with its spirit and the principle on which
it proceeds.
Having in mind the limited number of judicial officers in the Philippines enjoying this
exemption, especially when the great bulk thereof are justices of the peace, many of
them receiving as low as P200 a month, and considering further the other exemptions
allowed by the income tax law, such as P3,000 for a married person and P600 for
each dependent, the amount of national revenue to be derived from income tax on the
salaries of judicial officers, were if not for the constitutional exemption, could not be
large or substantial. But even if it were otherwise, it should not affect, much less
outweigh the purpose and the considerations that prompted the establishment of the
constitutional exemption. In the same case of Evans vs. Gore, supra, the Federal
Supreme Court declared "that they (fathers of the Constitution) regarded the
independence of the judges as far as greater importance than any revenue that could
come from taxing their salaries.
When a judicial officer assumed office, he does not exactly ask for exemption from
payment of income tax on his salary, as a privilege . It is already attached to his office,
provided and secured by the fundamental law, not primarily for his benefit, but based
on public interest, to secure and preserve his independence of judicial thought and
action. When we come to the members of the Supreme Court, this excemption to
them is relatively of short duration. Because of the limited membership in this High
Tribunal, eleven, and due to the high standards of experience, practice and training
required, one generally enters its portals and comes to join its membership quite late
in life, on the aver-age, around his sixtieth year, and being required to retire at
seventy, assuming that he does not die or become incapacitated earlier, naturally he
is not in a position to receive the benefit of exemption for long. It is rather to the
justices of the peace that the exemption can give more benefit. They are relatively
more numerous, and because of the meager salary they receive, they can less afford
to pay the income tax on it and its diminution by the amount of the income tax if paid
would be real, substantial and onerous.
Considering exemption in the abstract, there is nothing unusual or abhorrent in it, as
long as it is based on public policy or public interest. While all other citizens are
subject to arrest when charged with the commission of a crime, members of the
Senate and House of Representatives except in cases of treason, felony and breach
of the peace are exempt from arrest, during their attendance in the session of the
Legislature; and while all other citizens are generally liable for any speech, remark or
statement, oral or written, tending to cause the dishonor, discredit or contempt of a
natural or juridical person or to blacken the memory of one who is dead, Senators and
Congressmen in making such statements during their sessions are extended immunity
and exemption.
And as to tax exemption, there are not a few citizens who enjoy this exemption.
Persons, natural and juridical, are exempt from taxes on their lands, buildings and
improvements thereon when used exclusively for educational purposes, even if they
derive income therefrom. (Art. VI, Sec. 22 [3].) Holders of government bonds are
exempted from the payment of taxes on the income or interest they receive therefrom
(sec. 29 (b) [4], National Internal Revenue Code as amended by Republic Act No.
566). Payments or income received by any person residing in the Philippines under
the laws of the United States administered by the United States Veterans
Administration are exempt from taxation. (Republic Act No. 360). Funds received by
officers and enlisted men of the Philippine Army who served in the Armed Forces of
the United States, allowances earned by virtue of such services corresponding to the
taxable years 1942 to 1945, inclusive, are exempted from income tax. (Republic Act
No. 210). The payment of wages and allowances of officers and enlisted men of the
Army Forces of the Philippines sent to Korea are also exempted from taxation.
(Republic Act No. 35). In other words, for reasons of public policy and public interest,
a citizen may justifiably by constitutional provision or statute be exempted from his
ordinary obligation of paying taxes on his income. Under the same public policy and
perhaps for the same it not higher considerations, the framers of the Constitution
deemed it wise and necessary to exempt judicial officers from paying taxes on their
salaries so as not to decrease their compensation, thereby insuring the independence
of the Judiciary.
In conclusion we reiterate the doctrine laid down in the case of Perfecto vs. Meer,
supra, to the effect that the collection of income tax on the salary of a judicial officer is
a diminution thereof and so violates the Constitution. We further hold that the
interpretation and application of the Constitution and of statutes is within the exclusive
province and jurisdiction of the Judicial department, and that in enacting a law, the
Legislature may not legally provide therein that it be interpreted in such a way that it
may not violate a Constitutional prohibition, thereby tying the hands of the courts in
their task of later interpreting said statute, specially when the interpretation sought and
provided in said statute runs counter to a previous interpretation already given in a
case by the highest court of the land.

In the views of the foregoing considerations, the decision appealed from is hereby
affirmed, with no pronouncement as to costs.

Pablo, Bengzon, Padilla, Tuason, Reyes, and Labrador, JJ., concur.

Separate Opinions

BAUTISTA ANGELO, J., concurring:

Without expressing any opinion on the doctrine laid down by this Court in the case of
Perfecto vs. Meer, G. R. No. L-2314, in view of the part I had in that case as former
Solicitor General, I wish however to state that I concur in the opinion of the majority to
the effect that section 13, Republic Act No. 590, in so far as it provides that taxing of
the salary of a judicial officer shall be considered "not to be a diminution of his
compensation fixed by the Constitution or by law", constitutes an invasion of the
province and jurisdiction of the judiciary. In this sense, I am of the opinion that said
section is null and void, it being a transgression of the fundamental principle
underlying the separation of powers.

PARAS, C.J., concurring and dissenting:

I dissent for the same reasons stated in the dissenting opinion of Mr. Justice Ozaeta in
Perfecto vs. Meer, 85 Phil., 552, in which I concurred. But I disagree with the majority
in ruling that no legislation may provide that it be held valid although against a
provision of the Constitution.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 96700 November 19, 1996
NATIONAL POWER CORPORATION, petitioner,
vs.
PROVINCE OF LANAO DEL SUR, LANAO DEL SUR GOVERNOR SAIDAMEN B.
PANGARUNGAN and LANAO DEL SUR PROVINCIAL TREASURER HADJI
MACMOD L. DALIDIG, respondents.
PANGANIBAN, J.:
Is petitioner National Power Corporation liable for real property taxes for the period
June 14, 1984 to December 31, 1989 amounting to more than P154 million? To
compel payment of petitioner's alleged delinquency in its realty taxes, did respondents
act correctly in selling at publication petitioner's real properties on which is situated its
hydroelectric power plant complex?
Petitioner filed the instant special civil action for prohibition to (1) perpetually prohibit
and enjoin respondents from disposing and selling, (2) annul the auction sale of, and
(3) cancel the registration of the certificate of sale involving the aforesaid real
properties of the petitioner.
The Facts
Petitioner National Power Corporation is the owner of certain real properties situated
in Saguiaran, Lanao del Sur, more particularly described in Tax Declarations Nos. D-
802-A, D-803-A, D-804-A, D-805-A, D-806 and D-807 issued by the Office of the
Provincial Assessor of Lanao del Sur. Said properties comprise petitioner's Agus II
Hydroelectric Power Plant Complex. Petitioner was assessed real estate taxes on said
properties in the amount of one hundred fifty four million one hundred fourteen
thousand eight hundred fifty four pesos and eighty two centavos (P154,114,854.82)
covering the period from June 14, 1984 to December 31, 1989, 1 allegedly because
petitioner's exemption from realty taxes had been withdrawn.
On August 7, 1990, a demand letter was sent by respondent provincial treasurer to the
petitioner for the payment of real property taxes due on the abovementioned
properties. On August 21, 1990, a second demand letter2 from respondent provincial
treasurer was sent to petitioner with a warning that unless the obligation was settled,
legal remedies would be resorted to by the respondent province. On December 14,
1990, a Notice of Auction (Sale) covering the subject properties was served on
petitioner.3 A copy of said notice was posted for one month from December 17, 1990
to January 17, 1991 at the main entrance of the provincial capitol building in Marawi
City and at the plant site in Saguiaran, Lanao del Sur. It was also published in the
December 17 and 24, 1990 and January 5, 19914 issues of the Philippine Daily
Inquirer and the December 17 and 24, 1990 issues of the Lake Lanao Times. The
auction sale was scheduled to be held at 10:00 A.M. of January 22, 1991 at the Office
of the Provincial Treasurer in Marawi City.
On January 18, 1991, petitioner filed directly with this Court the instant petition for
prohibition with prayer for a writ of preliminary injunction and/or temporary restraining
order. On January 21, 1991, this Court issued a temporary restraining order5 enjoining
respondents from proceeding with and conducting the auction sale of the subject
properties.
The auction sale was however held as scheduled with the Province of Lanao del Sur
as the sole bidder. A certificate of sale was immediately issued and registered with the
Register of Deeds of the province at 1:30 p.m. of the same
day. 6
At 2:30 and 3:00 p.m. of the same day, respondents provincial governor and provincial
treasurer respectively 7received telegraphic notices of this Court's restraining order.
Respondents submitted their comment on February 14, 1991 to which petitioner filed
its reply on April 29, 1991. Rejoinder was submitted on October 25, 1993. Thereafter,
this Court gave due course to the petition and the parties thus filed their respective
memoranda.
Anent the tax exempt status of petitioner for the period up to December 31, 1989, the
following are the relevant laws and resolutions:
(1) Commonwealth Act No. 120, which became effective on November 3, 1936,
created the petitioner as a non-profit public corporation wholly owned by the
government of the Republic of the Philippines tacked to undertake the development of
hydraulic power and the production of power from other sources. 8 Section 13 thereof
exempted it from the payment of all forms of taxes, duties, fees, imposts as well as
costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any
court or administrative proceedings "to enable the Corporation to pay its indebtedness
and obligations."
(2) Section 2 of Republic Act No. 358, which took effect on June 4, 1949, exempted
petitioner "from all taxes, duties, fees, imposts, charges and restrictions of the
Republic of the Philippines, its provinces, cities and municipalities" in order to facilitate
payment of its indebtedness.
(3) Republic Act No. 6395, which took effect on September 10, 1971, revised the
charter of the petitioner. To quote the Solicitor General:
Congress declared as a national policy the total electrification of
the Philippines through the development of power from all
sources to meet the needs of industrial development and rural
electrification. The corporate existence of NAPOCOR was
extended to carry out this policy, specifically to undertake the
development of hydroelectric generation of power and the
production of electricity from nuclear, geothermal and other
sources, as well as the transmission of electric power on a
nationwide basis. And having been declared by legislative fiat as
a non-profit public corporation with a responsibility of devoting all
its returns from its capital investment as well as excess revenues
from its operation for expansion, petitioner was granted
exemption from the payment of all forms of taxes, duties, fees,
imposts and other charges by the government and its
instrumentalities. Thus, Section 13 of RA 6395 provides in detail
such exemptions, to wit:
Sec. 13. Non-profit Character of the
Corporation; Exemption from All Taxes,
Duties, Fees, Imposts and Other Charges by
Government and Governmental
Instrumentalities. — The Corporation shall be
non-profit and shall devote all its returns from
its capital investments, as well as excess
revenues from its operation, for expansion.
To enable the Corporation to pay its
indebtedness and obligations and in
furtherance and effective implementation of
the policy enunciated in Section One of this
Act, the Corporation is hereby declared
exempt:
(a) From the payment of all taxes, duties,
fees, imposts, charges, costs and service
fees in any court or administrative
proceedings in which it may be a party,
restrictions and duties to the Republic of the
Philippines, its provinces, cities,
municipalities and other government
agencies and instrumentalities;
(b) From all income taxes, franchise taxes
and realty taxes to be paid to the National
Government, its provinces, cities,
municipalities and other government
agencies and instrumentalities;
(c) From all import duties, compensating
taxes and advanced sales tax, and wharfage
fees on import of foreign goods required for
its operations' and projects; and
(d) From all taxes, duties, fees, imposts, and
all other charges imposed by the Republic of
the Philippines, its provinces, cities,
municipalities and other government
agencies and instrumentalities on all
petroleum products used by the Corporation
in the generation, transmission, utilization,
and sale of electric power. (emphasis
supplied).
(4) On January 22, 1974, Presidential Decree No. 380 amended Section 13,
paragraphs (a) and (d), of RA 6395 by specifying, among others, the exemption of
petitioner from taxes, duties, fees, imposts and other charges imposed, "directly or
indirectly", on all petroleum products used by petitioner in its operations.
(5) On June 1, 1974, Presidential Decree No. 464, also known as the Real Property
Tax Code, was enacted into law. Section 40(a) thereof provides:
Sec. 40. Exemptions from Real Property Tax. — The exemption
shall be as follows:
(a) Real property owned by the Republic of the Philippines or any
of its political subdivisions and any government-owned
corporation so exempt by its charter; . . .
(6) On August 24, 1975, Presidential Decree No. 776 was promulgated, creating the
Fiscal Incentives Review Board (FIRB). Among other things, the Board was tasked as
follows:
Sec. 2. A Fiscal Incentives Review Board is hereby created for
the purpose of determining what subsidies and tax exemptions
should be modified, withdrawn, revoked or suspended, which
shall be composed of the following officials:
Chairman — Secretary of Finance
Members — Secretary of Industry
— Director General of the National
Economic and Development Authority
 — Commissioner of Internal Revenue
— Commissioner of Customs
The Board may recommend to the President of the Philippines
and for reasons of compatibility with the declared economic
policy, the withdrawal, modification, revocation or suspension of
the enforceability of any of the above-cited statutory subsidies or
tax exemption grants, except those granted by the Constitution.
To attain its objectives, the Board may require the assistance of
any appropriate government agency or entity. The Board shall
meet once a month, or oftener at the call of the Secretary of
Finance.
(7) Section 10 of Presidential Decree No. 938, dated May 27, 1976, further amended
the aforestated provisions of Section 13 of RA 6395 by integrating the various tax
exemptions therein into a general exemption from "all forms of taxes, duties," etc.
under one paragraph, making said on Section 13 read as follows:
Sec. 13. Non-profit Character of the Corporation; Exemption from
All Taxes, Duties, Fees, Imposts and Other Charges by the
Government and Government Instrumentalities. — The
Corporation shall be non-profit and shall devote all its returns from
its capital investment as well as excess revenues from its
operation for expansion. To enable the Corporation to pay its
indebtedness and obligations and in furtherance and effective
implementation of the policy enunciated in Section One of this
Act, the Corporation, including its subsidiaries, is hereby declared
exempt from the payment of all forms of taxes, duties, fees,
imposts as well as costs and service fees including filing fees,
appeal bonds, supersedeas bonds, in any court or administrative
proceedings. (Emphasis supplied).
8 On June 11, 1984, Presidential Decree No. 1931, in its Section 2 withdrew all tax
exemption privileges granted to government-owned or controlled corporations.
However, Section 2 thereof provided:
The President of the Philippines and/or the Minister of Finance,
upon the recommendation of the Fiscal Incentives Review Board
(FIRB) . . . is hereby empowered to restore, partially or totally, the
exemptions withdrawn by Section 1 . . .
(9) Pursuant to Sec. 2 of PD 1931, on February 7, 1985, the FIRB issued Resolution
No. 10-859 restoring petitioner's tax and duty exemption privileges enjoyed by it under
CA 120 as amended, effective from June 11, 1984 up to June 30, 1985. And,
subsequently, FIRB Resolution No. 1-86 10 extended the said tax and duty exemption
privileges of petitioner from July 1, 1985 onwards indefinitely.
(10) On December 17, 1986, President Corazon Aquino promulgated Executive Order
No. 93 effective March 10, 1987, once again withdrawing all tax and duty incentives of
government and private entities. But Section 2 thereof gave FIRB the authority to
"restore tax and/or duty exemptions withdrawn hereunder."
(11) On June 24, 1987, the FIRB issued Resolution No. 17-87 11 once again restoring
petitioner's tax and duty exemption privileges, effective as of March 10, 1987 (the
effectivity date of E.O. 93).
(12) Finally, in a Memorandum dated October 5, 1987 addressed to the Chairman,
FIRB, then Acting Executive Secretary Catalino Macaraig,
Jr. confirmed and approved, by authority of the President, FIRB Resolution No. 17-87.
The Issues
The main issue in this petition is whether or not respondent province and provincial
officials can validly and lawfully assess real property taxes for the period June 14,
1984 to December 31, 1989 against, and thereafter sell at public auction, the subject
properties of petitioner to effect collection of alleged deficiencies in the payment of
such taxes.
The preliminary but pivotal issue however is whether or not petitioner has ceased to
enjoy its tax and duty exemption privileges, including its exemption from payment of
real property taxes.
Petitioner's position, simply put, is that it has never been effectively deprived of its tax
and duty exemption privileges granted under CA 120, as amended, and RA 6395, as
amended, and which, although temporarily withdrawn, were just as quickly restored,
such that at no time did it lose its tax-exempt status. Hence, never did it become liable
for realty taxes, and therefore, the subject properties were wrongfully levied upon and
sold at auction.
On the other hand, respondents' position is that the petitioner's exemption from
payment of realty taxes had been withdrawn or revoked by virtue of PD 1931, and had
never been validly restored by the FIRB Resolutions aforementioned, nor by the
memorandum of Exec. Sec. Macaraig, Jr., thereby rendering petitioner liable for realty
taxes for the period June 14, 1984 up to December 31, 1989. Relying on National
Power Corporation vs. Province of Albay, 12 which they claim is based on analogous
facts, respondents contend that, under Sec. 2 of PD 776 (promulgated August 24,
1975) which created the FIRB, and in line with Sec. 2 of PD 1931, the FIRB is given or
granted only a recommendatory power, and is devoid of authority to impose taxes or
revoke existing ones, which under the Constitution, only the legislature may do.
Neither could it validly prescribe exemptions nor restore taxability by itself.
Respondents argue that FIRB Resolutions No. 10-85 and 1-86 were issued in excess
of authority, and constitute an undue delegation of taxing power. Thus, they are
constitutionally defective and therefore null and void; and given the same rationale EO
93, insofar as it authorizes, in its Section 2, the FIRB to inter alia restore tax and/or
duty exemptions withdrawn under Section 1 thereof, is similarly void and of no force (a) restore tax and/or duty exemptions withdrawn hereunder in
and effect. Respondents also assail the said FIRB resolutions as invalid and whole or in part;
ineffective; firstly, because in each case, there was only one signatory thereof (viz.,
then Acting Minister of Finance Alfredo Pio de Roda, Jr. and then Minister of Finance
(b) revise the scope and coverage of tax and/or duty exemption
Cesar E.A. Virata, respectively), emphasizing that the FIRB is not a one-man body;
that may be restored;
and secondly, because two separate and distinct acts were required — a
recommendation and an approval — which could not be combined and performed by
a single person acting both as head of the FIRB and as minister of finance. (c) impose conditions for the restoration of tax and/or duty
exemption;
The Court's Ruling
(d) prescribe the date or period of effectivity of the restoration of
tax and/or duty exemption;
Preliminary Issue: Valid Restoration of Tax Exemptions

(e) formulate and submit to the President for approval, a complete

Although Section 1 of PD 1931 withdrew all tax exemptions presumably including
system for the grant of subsidies to deserving beneficiaries, in lieu
those of petitioner, Section 2 thereof authorized and empowered the President and/or
of or in combination with the restoration of tax and duty
the Minister of Finance to restore the same to deserving entities. In order to reinstate
exemptions or preferential treatment in taxation, indicating the
the petitioner's tax exemptions, Hon. De Roda, Jr., in his concurrent capacities as
source of funding therefor, eligible beneficiaries and the terms
Acting Minister of Finance and as Acting Chairman of FIRB, signed FIRB Resolution
and conditions for the grant thereof, taking into consideration the
No. 10-85 which was made effective as of June 11, 1984, the promulgation date of PD
international commitments of the Philippines and the necessary
1931, until June 30, 1985. On the other hand, by virtue of FIRB Resolution No. 1-86,
precautions such that the grant of subsidies does not become the
Hon. Virata fully restored the tax exemption as of July 1, 1985, to continue for an
basis for countervailing action. (emphasis supplied)
indefinite period. He also signed the same in his dual capacities as Minister of Finance
and as Chairman of the FIRB. The resolution specifically provided that:
Pursuant thereto, FIRB Resolution No. 17-87 restored the tax exemption privileges of
the petitioner effective March 10, 1987. Again, the resolution was signed by De Roda,
2. The NPC as a government corporation is exempt from the real
Jr. in his dual capacities as Acting Secretary of Finance and as Chairman, FIRB. This
property tax on land and improvements owned by it . . . pursuant
resolution was confirmed and approved by then Acting Executive Secretary Macaraig,
to the provisions of Section 40 (a) of the Real Property Tax Code,
by the authority of the President.
as amended.

Considering the entire chain of events, it is clear that petitioner's tax exemptions for
While EO 93 again withdrew the tax exemption of petitioner, through its Section 1, as
the period in question (1984-1989) had effectively been preserved intact by virtue of
follows:
their restoration through FIRB resolutions.

Sec. 1. The provisions of any general or special law to the

contrary notwithstanding, all tax and duty incentives granted to
government and private entities are hereby withdrawn, except:
xxx xxx xxx
f) those approved by the President upon the recommendation of
the Fiscal Incentives Review Board.
nevertheless, it also stated:
Sec. 2. The Fiscal Incentives Review Board created under PD
776, as amended, is hereby authorized to:
Respondents however vigorously argue that the FIRB, through the above-mentioned
resolutions, arrogated unto itself the power to restore tax exemptions which it never
possessed under PD 776 and EO 93. Respondents insist that FIRB effectively
exercised not merely the power to recommend exemptions but the very authority
to grant the same, which was lodged in the Minister of Finance and the President. As
proof of this, it did not secure any recommendation from any other body or office.
Instead, one and the same individual recommended — in his capacity as FIRB
chairman — and then approved — in his capacity as Minister of Finance — the grant
of the exemption. For this reason, FIRB Resolution Nos. 10-85 and 1-86 were held by
this Court in the Albay case to be null and void:
. . . , the FIRB, under its charter, Presidential Decree No. 776, had
been empowered merely to "recommend" tax exemptions. By
itself, it could not have validly prescribed exemptions or restore
 taxability. Hence, as of June 11, 1984 (promulgation of
Presidential Decree No. 1931), NAPOCOR had ceased to enjoy
tax exemption privileges. 13
Such arguments are no longer tenable. Albay has since been modified and
superseded by Maceda vs. Macaraig, Jr., 14 where this Court En Banc expressly ruled
that FIRB Resolution Nos. 10-85 and 1-86 are valid:
. . . FIRB Resolution Nos. 10-85 and 1-86 . . . were issued in
compliance with the requirement of Section 2, P.D. No. 1931,
whereby the FIRB should make the recommendation subject to
the approval of "the President of the Philippines and/or the
Minister of Finance." While said Resolutions do not appear to
have been approved by the President, they were nevertheless
approved by the Minister of Finance who is also duly authorized
to approve the same. In fact it was the Minister of Finance who
signed and promulgated said resolutions.
The observation of Mr. Justice Sarmiento in the dissenting opinion
that FIRB Resolution Nos. 10-85 and 1-86 which were
promulgated by then Acting Minister of Finance Alfredo de Roda,
Jr. and Minister of Finance Cesar E. A. Virata, as Chairman of
FIRB, respectively, should be separately approved by said
Minister of Finance as required by P.D. 1931 is, a superfluity. An
examination of the said resolutions . . . show that the said officials
signed said resolutions in the dual capacity of Chairman of FIRB
and Minister of Finance.
Mr. Justice Sarmiento also makes reference to the case National
Power Corporation vs. Province of Albay, wherein the Court
observed that under P.D. No. 776 the power of the FIRB was only
recommendatory and requires the approval of the President to be
valid. Thus, in said case the Court held that FIRB Resolutions
Nos. 10-85 and 1-86 not having been approved by the President
were not valid and effective while the validity of FIRB (Resolution
No.) 17-87 was upheld as it was duly approved by the Office of
the President on October 5, 1987.
However, under Section 2 of P.D. No. 1931 of June 11, 1984,
hereinabove reproduced, which amended P.D. No. 776, it is
clearly provided for that such FIRB resolution, may be approved
by the "President of the Philippines and/or the Minister of
Finance." To repeat, as FIRB Resolutions Nos. 10-85 and 1-86
were duly approved by the Minister of Finance, hence they are
valid and effective. To this extent, this decision modifies or
supersedes the Court's earlier decision in Albay afore-referred to.
(emphasis supplied)
There can thus be no question that petitioner's tax exemptions withdrawn by PD 1931
were validly restored by FIRB Resolutions Nos. 10-85 and 1-86. Again withdrawn by
EO 93, they were once more restored by FIRB Resolution No. 17-87, effective as of
March 10, 1987. Moreover, this Court, in the same case of Maceda vs. Macaraig,
Jr., reaffirmed the determination in Albay that EO 93 along with PDs 776 and were
1931 were all valid, and that FIRB Resolution No. 17-87 and the tax exemptions
restored thereunder were "valid and effective." 15 The Court in Macedaalso held —
True it is that the then Secretary of Justice in Opinion No. 77,
dated August 6, 1977 was of the view that the powers conferred
upon the FIRB by Sections 2(a), (b), (c) and (d) of Executive
Order No. 93 constitute undue delegation of legislative power and
is therefore unconstitutional. However, he was overruled by the
respondent Executive Secretary in a letter to the Secretary of
Finance dated March 30, 1989. The Executive Secretary, by
authority of the President, has the power to modify, alter or
reverse the construction of a statute given by a department
secretary.
and laid emphasis on the fact that EO 93 constituted a valid delegation of
legislative power to the FIRB, thus: 16
The latest in our jurisprudence indicates that delegation of
legislative power has become the rule and its non-delegation the
exception. The reason is the increasing complexity of modern life
and many technical fields of governmental functions as in matters
pertaining to tax exemptions. This is coupled by the growing
inability of the legislature to cope directly with the many problems
demanding its attention. The growth of society has ramified its
activities and created peculiar and sophisticated problems that the
legislature cannot be expected reasonably to comprehend.
Specialization even in legislation has become necessary. To
many of the problems attendant upon present day undertakings,
the legislature may not have the competence, let alone the
interest and the time, to provide the required direct and
efficacious, not to say specific solutions.
The inescapable conclusion is that the tax exemption privileges of petitioner had been
validly restored and preserved by said FIRB resolutions.
In passing, since we have delved into Maceda (which happens to involve indirect
taxes), we also make mention of the fact that one of the key issues raised in the
dissenting opinions (in Maceda) was the fact that the ultimate beneficiaries of
that ponencia's affirmance of the tax-exempt status of the National Power Corporation
would have been the oil companies, to which the NPC would assign whatever tax
refund or credit it became entitled to as a result of such ponencia, and not the NPC
itself, nor the government or the public. In fact, it was even anticipated by Mr. Justice
Sarmiento in his dissent that the majority ruling in Maceda would set a precedent not
only for the oil companies but also for the NPC's other suppliers, importers and
contractors. In contrast, the instant case involves direct — taxes — real property taxes
— and any tax exemption with respect thereto will obviously not be transmissible nor
beneficial to any other entity but only to petitioner NPC and, rightfully, the electricity-
consuming public.
Respondents further contend that PD 1177, which was issued for the formulation and
implementation of a national budget, repealed the tax exemption privilege granted the
petitioner under RA 6395, by virtue of the PD's general repealing clause, worded as
follows: 17
(A)ll laws, decrees, executive orders, rules and regulations or
parts thereof which are inconsistent with the provisions of the
Decree are hereby repealed and/or modified accordingly.
This argument is likewise bereft of merit. It will be noted from the foregoing
chronological presentation that Section 10 of PD 938 amended Section 13 of RA
6395, the petitioner's charter, by converting the various tax exemptions therein into a
general exemption from all forms of taxes, direct and indirect. This state of exemption
from taxes subsisted even with the enactment of PD 1931 in 1984. It cannot then be
successfully argued that petitioner's tax-exempt status was revoked in 1977 by PD
1177. Besides, this Court has consistently held that "(r)epeals by implication are not
favored, and will not be decreed, unless it is manifest that the legislature so intended.
As laws are presumed to be passed with deliberation and with full knowledge of all
existing ones on the subject, it is but reasonable to conclude that in passing a statute
it was not intended to interfere with or abrogate any former law relating to same
matter, unless the repugnancy between the two is not only irreconcilable, but also
clear and convincing, and flowing necessarily from the language used, unless the later
act fully embraces the subject matter of the earlier, or unless the reason for the earlier
act is beyond peradventure removed. Hence, every effort must be used to make all
acts stand and if, by any reasonable construction, they can be reconciled, the later act
will not operate as a repeal of the earlier." 18
Main Issue: Subject Properties
Exempt From Realty Taxes
Aside from the FIRB Resolutions above discussed, there is yet another cogent reason
why the properties in question are not subject to realty tax. Section 40 (a) of the Real
Property Tax Code, PD 464, as amended, expressly exempts them from such tax.
Said section provides:
Exemptions from Real Property Tax. — The exemption shall be
as follows:
(a) Real property owned by the Republic of the Philippines or any
of its political subdivisions and any government-owned
corporation so exempt by its charter. Provided, however, that this
exemption shall not apply to real property of the abovenamed
entities the beneficial use of which has been granted, for
consideration or otherwise, to a taxable person.
xxx xxx xxx
The exemption is not only legally defensible, but also logically unassailable. The
properties in question comprise the site of the entire Agus II Hydroelectric Power Plant
Complex, which generates and supplies relatively cheap electricity to the island of
Mindanao. These are government properties, wholly owned by petitioner and devoted
directly and solely for public service and utilized in the implementation of the state
policy of bringing about the total electrification of the country at the least cost to the
public, through the development of power from all sources to meet the needs of
industrial development and rural electrification. It can be noted, from RA 6395, PD 380
and PD 938, that petitioner's non-profit character has been maintained throughout its
existence, and that petitioner is mandated to devote all its returns from capital
investment and excess revenues from operations to its expansion. 19On account
thereof, and to enable petitioner to pay its indebtedness and obligations and in
furtherance of the state policy on electrification and power generation, petitioner has
always been exempted from taxes.
Consequently, the assessment and levy on (as well as the sale of) the properties of
petitioner by respondents were null and void for having been in made in violation of
Section 10 of P.D. 938 and Section 40 (a) of the Real Property Tax Code.
At this juncture, we hasten to point out that the foregoing ruling is solely with respect
to the purported realty tax liabilities of petitioner for the period from June 14, 1984 to
December 31, 1989. We shall not, in this Decision, rule upon the effect (if any) of
Republic Act No. 7160, otherwise) known as the Local Government Code of 1991,
upon petitioner's tax-exempt status; we merely make mention of the fact that the
exemption claimed by petitioner is partly based on PD 464 which, though repealed by
the Local Government Code in its paragraph (c), Section 534, Title Four of Book
IV, 20 was still good law during the period the exemption was being claimed in the
instant case. 21
Nullity of the Auction Sale
of Petitioner's Properties
Inasmuch as the realty tax assessment levied against and auction sale of petitioner's
properties had been premised on respondents' erroneous belief that FIRB Resolutions
Nos. 10-85, 1-86 and 17-87 are void, the judicial declaration of the validity of said
resolutions ipso jure renders such assessment and sale void.
The assessment of realty tax being void, petitioner never became delinquent in the
payment of said taxes to respondent province, and the latter never acquired any right
to sell nor to purchase the said properties at auction. In short, there were never any
taxes, delinquent or otherwise, to satisfy. This is borne out by Section 65 of the Real
Property Tax Code, by virtue of which respondent Provincial Treasurer was authorized
to sell real property at auction:
Sec. 65. Notice of delinquency in the payment of the real property
tax. — Upon the real property tax or any installment thereof
becoming delinquent, the provincial or city treasurer shall
immediately cause notice of the fact to be posted . . .
Such notice shall specify the date upon which the tax became
delinquent, and shall state . . . that unless the tax and penalties
be paid before the expiration of the year for which the tax is due,
or the tax shall have been judicially set aside, the entire
delinquent real property will be sold at public auction, and that
thereafter the full title to the property will be and remain with the
purchaser, subject only to the right of the delinquent taxpayer or
any other person in his behalf to redeem the sold property within
one year from the date of sale.
As clearly spelled out above, the power to sell at public auction is premised
on the real property tax or any portion thereof first becoming delinquent. The
properties in this case being exempt from payment of realty taxes, no such
delinquency was possible to begin with.
Further, Section 73 of the Real Property Tax Code, as amended, excludes properties
of the petitioner from advertisement of real properties to be sold at public auction.
Section 73 provides in part:
Sec. 73. Advertisement of sale of real property at public auction.
— After the expiration of the year for which the tax is due, the
province or city treasurer shall advertise the sale at public auction
of the entire delinquent real property, except real property
mentioned in subsection (a) of Section forty hereof , to satisfy all
the taxes and penalties due and the costs of sale. . . .
The fact that the telegraphic temporary restraining order issued by this Court was
received by the respondent governor of Lanao del Sur at 2:30 p.m. and by respondent
provincial treasurer at 3:00 p.m. 22 of January 22, 1991, or an hour and an hour and a
half, respectively, after the registration of the sale with the Register of Deeds of the
province, and several hours after the close of the auction sale, is of no moment.
Ordinarily, this Court would have been overjoyed to hear about said Register of Deeds
(or any government functionary for that matter) moving with blinding speed, except
that in this case, it is more than patent that such precipitate action was prompted not
in the least by respondents' anticipation that this Court was about to act on petitioner's
application for a writ of preliminary injunction and/or temporary restraining order. The
respondents' all-too-obvious attempt at rendering nugatory and inutile any injunctive
relief this Court may grant is useless and brings them only rebuke and condemnation.
Clearly, legally and equitably rooted in and proceeding from the foregoing discussion
is the ineludible conclusion that the auction sale and registration of subject properties
are totally bereft of any legal basis and therefore null and void, and cannot vest title
over the said real properties nor the hydroelectric power plant complex built upon
them, in favor of respondent province.
Re: Mr. Justice Davide's Dissent
Mr. Justice Hilario G. Davide, Jr. is suggesting in his Dissenting Opinion that we
reexamine Maceda vs. Macaraig 23and revert back to the old doctrine in National
Power Corp. vs. Albay. 24 Basically, he is reiterating Mr. Justice Sarmiento's own
dissent in Maceda that Resolutions 10-85 and 1-86 were not valid acts of the FIRB
and thus could not confer any tax exemption on NPC. As these arguments were
extensively passed upon by this Court and sufficiently rebutted by Mr. Justice Emilio
A. Gancayco in his ponencia therein, we shall no longer answer them point by point
here. 25
In any event, Mr. Justice Gancayco's 7-5-2 ponencia was strengthened
two years later by what could be termed as "Maceda — Part II." This was the
Resolution 26 penned by Mr. Justice Rodolfo A. Nocon and concurred in by Chief
Justice Narvasa and Justices Feliciano, Bidin, Regalado, Romero, Bellosillo and Melo.
Promulgated on June 8, 1993, it denied the Motion for Reconsideration of petitioner
Maceda for lack of merit, and effectively affirmed the earlier Decision promulgated on
May 31, 1991. Among the most significant holdings in the said Resolution are the
following:
1. A chronological review of the relevant NPC laws, particularly
those affecting its tax exemption privileges, will demonstrate that
it has been the lawmaker's intention all throughout that the NPC
be made completely tax exempt from all forms of taxes — direct
and indirect. Such exemption was deemed necessary to enable it
to pay its indebtedness, an indebtedness which mushroomed to
P12 billion in total domestic indebtedness and US$4 billion in total
foreign loans as of the time of the issuance of PD 938.
2. It is clear that NPC had been granted tax exemption privileges
for both direct and indirect taxes under PD 938.
3. While the NPC lost its duty and tax exemptions as a result of
the enactment of PD 1177 on July 30, 1977, the same were
effectively restored by the Minister of Finance upon
recommendation of the FIRB (via Resolutions Nos. 10-85 and 1-
86) pursuant to Sec. 2 of PD 1931 issued on June 11, 1984. FIRB
Resolutions Nos. 10-85 and 1-86 were both legally and validly
issued by the FIRB pursuant to PD 1931. The FIRB did not create
NPC's tax exemption status but merely restored it.
 4. Under Amendment No. 6, former President Marcos could issue
decrees not only when, for any reason, the Interim Batasang
Pambansa failed or was unable to act adequately on any matter
which required immediate action, but also when there existed a
grave emergency or a threat thereof, such as the economic crisis
triggered by the loss of confidence in the Philippine government
as a result of the Aquino assassination, which led to the
moratorium on and rescheduling of foreign debt payments. NPC,
for one, had US$2.1 billion in foreign debt as a result of the
construction of the Bataan Nuclear Power Plant. In the context of
the serious debt-rescheduling emergency, Marcos was compelled
to issue PD 1931 using his Amendment 6 powers. Clearly then,
there was no violation of the rule under the 1973 Constitution that
"no law granting a tax exemption shall be passed without the
concurrence of a majority of all the members of the Batasang
Pambansa", inasmuch as PD 1931 was not passed by the said
legislative body but by then President Marcos under his
Amendment 6 powers. In brief, then, PD 1931 was validly and
properly issued.
5. There is no problem of "violation of due process" when FIRB
Resolutions Nos. 10-85 and 1-86 were approved by the Minister
of Finance after the same were recommended by him in his
capacity as Chairman of FIRB. This was so since NPC was not
asking to be granted tax exemption privileges for the first time, but
merely to have its previous tax exemptions restored. Thus the
same person acting in a dual capacity recommending and
approving said tax exemption restorations cannot be deemed to
violate procedural due process.
6. When EO 93 (series of 1986) was issued by President Aquino,
she was exercising both executive and legislative powers. Thus,
there was no power delegated to her; rather, it was she
delegating her power to the FIRB, which for purposes of EO 93 is
a delegate of the legislature. Indubitably, there was no problem of
former President Aquino sub-delegating her power. Moreover, EO
93 as a delegating law was complete in itself and met the
standards set in Pelaez vs. Auditor General (15 SCRA 569
[1965]).
7. After all has been said and done, it is clear that the NPC had its
tax exemption privileges restored from June 11, 1984 up to the
present.
"Maceda Part II", as mentioned earlier, was passed by a majority of eight justices. Two
justices (JJ. Padilla and Quiason) took no part, while J. Cruz maintained his original
dissent, and JJ. Griño-Aquino and Davide, Jr. joined J. Sarmiento in his original
dissent. That makes eight in favor, four against, with two abstaining. This is certainly
stronger than the seven-five-two vote in the original Maceda decision. Undoubtedly,
the said Decision, as affirmed by the aforementioned Resolution, can no longer be
considered to "carry no persuasive weight".
Epilogue
Quite apart from resolving the legal merits of this case, this Court to wishes to
emphasize — as a matter of judicial policy — the necessity of upholding the
authoritativeness and stability of its pronouncements. While in Albay, we ruled the
subject FIRB Resolutions to be null and void, we reversed ourselves in Maceda I and
fortified such reversal through Maceda II. While we are not necessarily averse to
arguments against, or even criticisms of, our pronouncements, we deem it more
important to stress that the decisions of this Court are reached after due deliberation
upon and consideration of all relevant issues. Thus it would be apropos to quote Mr.
Justice Douglas of the United States Supreme Court:
But beyond that is the problem of stare decisis. The construction
given Section 20 (of the Criminal Code) in the Classic Case
(supra note 128, No. 11) formulated a rule of law which has
become the basis of federal enforcement in this important field.
The rule adopted in that case was formulated after mature
consideration. It should be good for more than one day only. We
do not have a situation here comparable to Mahnich vs. Southern
S. S. Co., 321 U.S., 96; 88 Law. ed., 561; 64 Sup. Ct., 455 (1944)
(supra note 123, No. 19) where we overuled a decision
demonstrated to be a sport in the law and inconsistent with what
preceded and what followed. The Classic case was not the
product of hasty action or inadvertence. We add only to the
instability and uncertainty of the law if we revise the meaning of
Section 20 to meet the exigencies of each case coming before us.
(Screws vs. United States, 325 U.S., 112.) 27
Consistent with the above, we frowned upon needless flipflops in Cabagnot
vs. Comelec, 28 where we chided the public respondent, thus:
. . . We take this occasion to remind the Commission to be more
judicious in its actions and decisions and avoid imprudent volte
face moves that the undermine the public's faith and confidence
in it.
A denial of the tax-exempt status of NPC, as sought by respondents, would not only
be legally untenable and subversive of doctrinal stability but would also lead to
disastrous practical consequences. It should be noted that in this case, respondent
province has already auctioned off, purchased and caused to be registered in its name
the subject real properties of petitioner on which the Agus II Hydroelectric Power Plant
Complex is built. Thus, should the FIRB resolutions be deemed void, then the
ownership of the auctioned properties including the hydro-electric plant would be
legally vested in respondent province. Additionally, other local government entities
might even be induced to covet and grab other properties of the NPC in the guise of
collecting local taxes. The far-reaching consequence of such eventuality would not be
difficult to imagine. Definitely, it would seriously impair the capacity of the National
Power Corporation to fulfill its statutory mandate to carry out the "total electrification of
the Philippines through the development of power from all sources to meet the needs
of industrial development and rural electrification."
In the end, the Supreme Court has the constitutional duty not only of interpreting and
applying the law in accordance with prior doctrines but also of protecting society from
the improvidence and wantonness wrought by needless upheavals in such
interpretations and applications. Interest rei publicae ut finis sit litium. 29
WHEREFORE, the petition is hereby GRANTED. Judgment is hereby rendered:
a) ENJOINING respondents and their agents from selling and disposing of the subject
properties of petitioner;
b) DECLARING the auction sale conducted on January 22, 1991 and the registration
of the same as NULL AND VOID;
c) ORDERING the Register of Deeds of Lanao del Sur to CANCEL the registration of
the auction sale in favor of respondent province; and
d) HOLDING that said properties including the hydroelectric power plant complex
thereat remain in petitioner's ownership and control as if the assessment and auction
sale never took place.
SO ORDERED.
Narvasa, C.J., Romero, Bellosillo, Melo, Puno, Kapunan, Francisco, Hermosisima, Jr.
and Torres, Jr., JJ., concur.
Regalado and Mendoza, JJ., concur in the result.
Separate Opinions
DAVIDE, JR., J., dissenting:
I regret I cannot join in the majority opinion. The lapse of more than five (5) years
since Maceda vs. Macaraig (197 SCRA 771 [1991]), where I unqualifiedly joined Mr.
Justice Abraham Sarmiento in his dissent, has not a convinced me that FIRB
Resolutions Nos. 10-85 and No. 1-86 validly restored be withdrawn tax exemption
privileges of the National Power Corporation (NPC). I also submit that FIRB
Resolution No. 17-87 did not validly restore the tax exemption privileges of the NPC
which were withdrawn by Executive Order No. 93.
A reexamination of Maceda vs. Macaraig is hereby respectfully suggested. It may be
stated that the decision in National Power Corp. vs. Albay (186 SCRA 198 [1990])
declaring void FIRB Resolutions Nos. 10-85 and 1-86 was by an overwhelming vote of
eleven, (Sarmiento, J., ponente, with the concurrence of Fernan, C.J., Narvasa
(now C.J.) Melencio-Herrera, Gutierrez, Cruz, Paras, Padilla, Bidin, Cortes,
Medialdea, and Feliciano, JJ., with the latter only in the result) without any dissent
(although Gancayco and Griño-Aquino, JJ., were on leave, and Regalado, J., took no
part). Upon the other hand, the Court was sharply divided in Maceda vs. Macaraig.
Seven (Gancayco, J.,ponente, with Narvasa (now C.J.), Melencio-Herrera, Feliciano,
Bidin, Medialdea, and Regalado, JJ., concurring) voted to sustain the validity of the
resolutions. Five (Gutierrez, Cruz, Paras, Sarmiento, and Davide, Jr., JJ.) dissented.
Two of those who concurred with Justice Sarmiento in National Power Corporation
vs. Albay (Fernan, C.J., and Padilla, J.) took no part for the reasons stated therein.
Thus, the latter case carries no persuasive weight.
I
In his dissent in Maceda, Mr. Justice Sarmiento held the view that FIRB Resolutions
Nos. 10-85 and 1086 are null and void because they were not valid acts of the FIRB,
considering that the former was signed only by Alfredo Pio de Roda, Jr., in his
concurrent capacities as Acting Minister (Secretary) of Finance and Acting
Chairman of the FIRB, while the latter was signed only by Cesar E.A. Virata in his
concurrent capacities as Minister (Secretary) of Finance and Chairman of the FIRB.
An amplification thereon is in order.
Section 2 of P.D. No. 776 provides for the creation, composition, and functions of the
FIRB, thus:
Sec. 2. A Fiscal Incentives Review Board is hereby created for
the purpose of determining what subsidies and tax exemptions
should be modified, withdrawn, revoked or suspended, which
shall be composed of the following officials:
 Chairman — Secretary of Finance
Members — Secretary of Industry
Director of the National Economic
and Development Authority
Commissioner of Internal Revenue
Commissioner of Customs
The Board may recommend to the President of the Philippines
and for reasons of compatibility with the declared economic
policy, the withdrawal, modification, revocation or suspension of
the enforceability of any of the abovecited statutory subsidies or
tax exemption grants, except those granted by the Constitution.
To attain its objectives, the Board may require the assistance of
any appropriate government agency or entity. The Board shall
meet once a month, or oftener at the call of the Secretary of
Finance.
Section 1 thereof grants the FIRB the power to modify any and all tax exemption
benefits and privileges except those enumerated therein. It reads:
Sec. 1. Any and all tax exemption benefits and privileges validly
acquired, exercised and granted to individuals, associations,
corporations and entities, and all laws, decrees, orders or
ordinances giving rise thereto, may now be modified by the Fiscal
Incentives Review Board except those embraced and expressly
provided hereunder, to wit:
1. Constitutional provisions
2. International comity or treaty
3. National Internal Revenue Code as of its
amendment by PD 34
4. Tariff and Customs Code as of its
amendment by PD 426
5. Local Tax Code as of its amendment by
PD 426
6. Statutory prescriptions bearing on —
a. Export Processing
Zone Authority
b. BOI Registered
industries
c. Multi-national
corporations
d. Service contracts on
oil explorations
From these provisions, it is obvious that the FIRB must act as a board in the exercise
of its powers or in the performance of its functions. The board, which is composed of
five members, with the Secretary of Finance as the Chairman, can validly transact
business only at a meeting attended by the required quorum (which is presumed to be
the majority of the members, i.e., three), and a vote of the majority of those
constituting the quorum would be necessary for the validity of any and all board acts
or resolutions. Also, since the chairmanship of the FIRB is vested in a specific person
— the Secretary of Finance — and the decree provides for no alternate for him, i.e.,
any one acting as such, then no one else other than the duly appointed Secretary of
Finance can sit and act as Chairman of the FIRB. Clearly, Resolution No. 10-85 is null
and void for having been signed only by Alfredo Pio de Roda, Jr., in his concurrent
capacities as merely Acting Minister (Secretary) of Finance and Acting Chairman of
the FIRB, and not by the board itself . Resolution No. 1-86 attained no better status,
considering that it is not a board resolution, although signed by the duly appointed
Minister (Secretary) of Finance. Neither Mr. De Roda nor Mr. Virata could pretend,
even if seriously, to be the FIRB.
Resolutions Nos. 10-85 and 1-86 were presumably enacted pursuant to FIRB's
authority under Section 2 of P.D. No. 1931, which provides:
Sec. 2. The President of the Philippines and/or the Minister of
Finance, upon recommendation of the Fiscal Incentives Review
Board created under Presidential Decree No. 776, is hereby
empowered to restore, partially or totally, the exemptions
withdrawn by Section 1 above, or otherwise revise the scope of
coverage of any applicable tax and duty . . . .
Any restoration of the tax exemption privilege would, in effect, be a new grant of the
privilege, since the earlier withdrawal thereof was by virtue of a complete law of
withdrawal and not merely by one suspending the effects of the prior exemption.
The authority granted to the President in Section 2 of P.D. No. 1931 to restore the tax
exemption privilege is unnecessary or a surplusage. At the time P.D. No. 1931 was
enacted, then President Marcos could exercise legislative power under the
unlamented Amendment No. 6 of the 1973 Constitution. Paragraph 4 of Section 17,
Article VIII of said Constitution provided as follows:
 (4) No law granting any tax exemption shall be passed without the
concurrence of a majority of all the Members of the Batasang
Pambansa.
Because then President Marcos exercised legislative power, he could, as he
did several times, act as the Batasang Pambansa and grant anew tax
exemptions.
However, the grant to the Minister (Secretary) of Finance of the authority or power to
restore tax exemption under the same Section 2 of P.D. 1931 is an invalid delegation
of a legislative power. I agree, in this connection, with the thesis of Mr. Justice Cruz in
his dissent in Maceda vs. Macaraig.
The aforequoted paragraph 4 of Section 17, Article VIII of the 1973 Constitution,
reproduced in paragraph 4 of Section 28 of Article VI of the present Constitution,
leaves no room for doubt that it is mandatory in character. It requires
an absolute majority of ALL the Members of the Batasang Pambansa to grant tax
exemption. The power to grant tax exemption, being merely corollary to the
legislature's inherent power to tax, cannot be delegated except to those to whom
the power to tax has been granted or delegated. It is said:
The power to exempt may be delegated by the legislature to the
same extent it may itself exercise the power to exempt. Thus, the
legislature, where the Constitution does not forbid, has authority
to delegate to municipalities the power to exempt property from
taxation to the same extent the legislature has power to exempt
(COOLEY, The Law on Taxation, vol. II [1924], Section 669, p.
1398).
Under Section 5, Article XI of the 1973 Constitution, only local government
units were granted the power to create their own sources of revenue and to
levy taxes, but subject to such limitations as may be provided by law.
Section 5, Article X of the present Constitution strengthens further the power
of local government units to tax by mandating that the guidelines and
limitations which Congress may impose must be consistent with the basic
policy of local autonomy and that the taxes, fees, and charges levied by the
local government units shall accrue exclusively to them. Section 192 of the
Local Government Code of 1991 specifically empowers local government
units to grant, through ordinances duly approved, tax exemptions,
incentives, or reliefs under such terms and conditions as they may deem
necessary. It has thus been said that.
The power of taxation is inherent in the State. Primarily vested in
the national legislature, it may now also be exercised by the local
legislative bodies, no longer by virtue of a valid delegation as
before but pursuant to a direct authority conferred by Article X,
Section 5, of the Constitution. . . (CRUZ, Isagani, A.,
Constitutional Law [1991], 84).
No one dares argue that the Minister (Secretary) of Finance was ever constituted as a
local government unit or given the powers, prestige, and ascendancy of a local
government unit to be able to exercise the power to tax or the corollary power to grant
tax exemptions.
II
I shall now turn to FIRB No. 17-87, which purports to restore the tax exemption
privileges of NPC that were withdrawn by Executive Order No. 93 of President
Corazon C. Aquino dated 17 December 1986. The said withdrawal took effect on 10
March 1987. FIRB Resolution No. 17-87 was issued on 24 June 1987 under FIRB's
authority conferred by Section 2 of EO No. 93, which pertinently provides as follows:
Sec. 2. The Fiscal Incentives Review Board created under
Presidential Decree No. 776, as amended, is hereby authorized
to:
(a) Restore tax and/or duty exemptions withdrawn hereunder in
whole or in part;
xxx xxx xxx
Then Secretary Macaraig approved on 5 October 1987 FIRB Resolution No.
17-87.
Under EO No. 93 the FIRB cannot, by itself, restore tax exemptions. Section 2 thereof
should be read together with the preceding Section 1(f), which reads:
Sec. 1. The provisions of any general or special law to the
contrary notwithstanding, all tax and duty incentives granted to
government and private entities are hereby withdrawn, except:
xxx xxx xxx
(f) those approved by the President upon the recommendation of
the Fiscal Incentives Review Board.
The last paragraph of Section 2 of P.D. No. 776 earlier quoted should also
be considered. Taken together, the FIRB can only recommend. It was
precisely for this reason that FIRB Res. No. 17-87 was confirmed and
approved by the President through Acting Executive Secretary Macaraig.
 Without the approval, FIRB Res. No. 17-87 would be absolutely ineffective.
It is the Presidential approval which could give life then to the Resolution as
a restoration of tax exemption privilege or, more correctly, as a new grant of
Separate Opinions
tax exemptions.

DAVIDE, JR., J., dissenting:

But, was the Presidential approval valid?

I regret I cannot join in the majority opinion. The lapse of more than five (5) years
I respectfully submit that it was not. At the time FIRB Res. No. 17-87 was approved,
since Maceda vs. Macaraig (197 SCRA 771 [1991]), where I unqualifiedly joined Mr.
the first Congress under the 1987 Constitution was already convened and in session.
Justice Abraham Sarmiento in his dissent, has not a convinced me that FIRB
It was convened on the fourth Monday of July 1987 Sec. 15, Article VI, Constitution)
Resolutions Nos. 10-85 and No. 1-86 validly restored be withdrawn tax exemption
following the first election under the constitution of the Members of Congress (Sec. 1,
privileges of the National Power Corporation (NPC). I also submit that FIRB
Article XVIII). Only Congress then could have validly restored tax exemption privileges
Resolution No. 17-87 did not validly restore the tax exemption privileges of the NPC
pursuant to Section 28 (4), Article VI of the Constitution. It would have been entirely
which were withdrawn by Executive Order No. 93.
different if the Presidential approval of FIRB Res. No. 17-87 was made before the
convening of the first Congress, because, by then, President Aquino could still
exercise legislative powers pursuant to Section 6 Article XVIII of the Constitution, A reexamination of Maceda vs. Macaraig is hereby respectfully suggested. It may be
which provides: stated that the decision in National Power Corp. vs. Albay (186 SCRA 198 [1990])
declaring void FIRB Resolutions Nos. 10-85 and 1-86 was by an overwhelming vote of
eleven, (Sarmiento, J., ponente, with the concurrence of Fernan, C.J., Narvasa
Sec. 6. The incumbent President shall continue to exercise
(now C.J.) Melencio-Herrera, Gutierrez, Cruz, Paras, Padilla, Bidin, Cortes,
legislative powers until the first Congress convened.
Medialdea, and Feliciano, JJ., with the latter only in the result) without any dissent
(although Gancayco and Griño-Aquino, JJ., were on leave, and Regalado, J., took no
III part). Upon the other hand, the Court was sharply divided in Maceda vs. Macaraig.
Seven (Gancayco, J.,ponente, with Narvasa (now C.J.), Melencio-Herrera, Feliciano,
Bidin, Medialdea, and Regalado, JJ., concurring) voted to sustain the validity of the
Resort to Section 40(a) of Real Property Tax Code (P.D. No. 464), another ground
resolutions. Five (Gutierrez, Cruz, Paras, Sarmiento, and Davide, Jr., JJ.) dissented.
relied upon in the ponencia why the properties in question are not subject to real
Two of those who concurred with Justice Sarmiento in National Power Corporation
property tax, provides no relief to petitioner. The tax exemption privilege granted by
vs. Albay (Fernan, C.J., and Padilla, J.) took no part for the reasons stated therein.
the said Code was among those withdrawn by P.D. No. 1931. Section 1 of the latter
Thus, the latter case carries no persuasive weight.
expressly provides:

I
The provisions of special or general law to the contrary
notwithstanding, all exemptions from the payment of duties, taxes,
fees, imposts and other charges heretofore granted in favor of In his dissent in Maceda, Mr. Justice Sarmiento held the view that FIRB Resolutions
government-owned or controlled corporations including their Nos. 10-85 and 1086 are null and void because they were not valid acts of the FIRB,
subsidiaries, are hereby withdrawn. considering that the former was signed only by Alfredo Pio de Roda, Jr., in his
concurrent capacities as Acting Minister (Secretary) of Finance and Acting
Chairman of the FIRB, while the latter was signed only by Cesar E.A. Virata in his
Its repealing clause, paragraph 5, provides as follows:
concurrent capacities as Minister (Secretary) of Finance and Chairman of the FIRB.
An amplification thereon is in order.
The provisions of President Decree No. 1177 as well as all other
laws, decrees, executive orders, administrative orders, rules,
Section 2 of P.D. No. 776 provides for the creation, composition, and functions of the
regulations or parts thereof which are inconsistent with this
FIRB, thus:
Decree are hereby repealed, amended or modified accordingly.

Sec. 2. A Fiscal Incentives Review Board is hereby created for

I vote then to DENY the instant petition.
the purpose of determining what subsidies and tax exemptions
should be modified, withdrawn, revoked or suspended, which
Padilla and Vitug, JJ., concur. shall be composed of the following officials:
 Chairman — Secretary of Finance
Members — Secretary of Industry
Director of the National Economic
and Development Authority
Commissioner of Internal Revenue
Commissioner of Customs
The Board may recommend to the President of the Philippines
and for reasons of compatibility with the declared economic
policy, the withdrawal, modification, revocation or suspension of
the enforceability of any of the abovecited statutory subsidies or
tax exemption grants, except those granted by the Constitution.
To attain its objectives, the Board may require the assistance of
any appropriate government agency or entity. The Board shall
meet once a month, or oftener at the call of the Secretary of
Finance.
Section 1 thereof grants the FIRB the power to modify any and all tax exemption
benefits and privileges except those enumerated therein. It reads:
Sec. 1. Any and all tax exemption benefits and privileges validly
acquired, exercised and granted to individuals, associations,
corporations and entities, and all laws, decrees, orders or
ordinances giving rise thereto, may now be modified by the Fiscal
Incentives Review Board except those embraced and expressly
provided hereunder, to wit:
1. Constitutional provisions
2. International comity or treaty
3. National Internal Revenue Code as of its
amendment by PD 34
4. Tariff and Customs Code as of its
amendment by PD 426
5. Local Tax Code as of its amendment by
PD 426
6. Statutory prescriptions bearing on —
a. Export Processing
Zone Authority
b. BOI Registered
industries
c. Multi-national
corporations
d. Service contracts on
oil explorations
From these provisions, it is obvious that the FIRB must act as a board in the exercise
of its powers or in the performance of its functions. The board, which is composed of
five members, with the Secretary of Finance as the Chairman, can validly transact
business only at a meeting attended by the required quorum (which is presumed to be
the majority of the members, i.e., three), and a vote of the majority of those
constituting the quorum would be necessary for the validity of any and all board acts
or resolutions. Also, since the chairmanship of the FIRB is vested in a specific person
— the Secretary of Finance — and the decree provides for no alternate for him, i.e.,
any one acting as such, then no one else other than the duly appointed Secretary of
Finance can sit and act as Chairman of the FIRB. Clearly, Resolution No. 10-85 is null
and void for having been signed only by Alfredo Pio de Roda, Jr., in his concurrent
capacities as merely Acting Minister (Secretary) of Finance and Acting Chairman of
the FIRB, and not by the board itself . Resolution No. 1-86 attained no better status,
considering that it is not a board resolution, although signed by the duly appointed
Minister (Secretary) of Finance. Neither Mr. De Roda nor Mr. Virata could pretend,
even if seriously, to be the FIRB.
Resolutions Nos. 10-85 and 1-86 were presumably enacted pursuant to FIRB's
authority under Section 2 of P.D. No. 1931, which provides:
Sec. 2. The President of the Philippines and/or the Minister of
Finance, upon recommendation of the Fiscal Incentives Review
Board created under Presidential Decree No. 776, is hereby
empowered to restore, partially or totally, the exemptions
withdrawn by Section 1 above, or otherwise revise the scope of
coverage of any applicable tax and duty . . . .
Any restoration of the tax exemption privilege would, in effect, be a new grant of the
privilege, since the earlier withdrawal thereof was by virtue of a complete law of
withdrawal and not merely by one suspending the effects of the prior exemption.
The authority granted to the President in Section 2 of P.D. No. 1931 to restore the tax
exemption privilege is unnecessary or a surplusage. At the time P.D. No. 1931 was
enacted, then President Marcos could exercise legislative power under the
unlamented Amendment No. 6 of the 1973 Constitution. Paragraph 4 of Section 17,
Article VIII of said Constitution provided as follows:
 (4) No law granting any tax exemption shall be passed without the
concurrence of a majority of all the Members of the Batasang
Pambansa.
Because then President Marcos exercised legislative power, he could, as he
did several times, act as the Batasang Pambansa and grant anew tax
exemptions.
However, the grant to the Minister (Secretary) of Finance of the authority or power to
restore tax exemption under the same Section 2 of P.D. 1931 is an invalid delegation
of a legislative power. I agree, in this connection, with the thesis of Mr. Justice Cruz in
his dissent in Maceda vs. Macaraig.
The aforequoted paragraph 4 of Section 17, Article VIII of the 1973 Constitution,
reproduced in paragraph 4 of Section 28 of Article VI of the present Constitution,
leaves no room for doubt that it is mandatory in character. It requires
an absolute majority of ALL the Members of the Batasang Pambansa to grant tax
exemption. The power to grant tax exemption, being merely corollary to the
legislature's inherent power to tax, cannot be delegated except to those to whom
the power to tax has been granted or delegated. It is said:
The power to exempt may be delegated by the legislature to the
same extent it may itself exercise the power to exempt. Thus, the
legislature, where the Constitution does not forbid, has authority
to delegate to municipalities the power to exempt property from
taxation to the same extent the legislature has power to exempt
(COOLEY, The Law on Taxation, vol. II [1924], Section 669, p.
1398).
Under Section 5, Article XI of the 1973 Constitution, only local government
units were granted the power to create their own sources of revenue and to
levy taxes, but subject to such limitations as may be provided by law.
Section 5, Article X of the present Constitution strengthens further the power
of local government units to tax by mandating that the guidelines and
limitations which Congress may impose must be consistent with the basic
policy of local autonomy and that the taxes, fees, and charges levied by the
local government units shall accrue exclusively to them. Section 192 of the
Local Government Code of 1991 specifically empowers local government
units to grant, through ordinances duly approved, tax exemptions,
incentives, or reliefs under such terms and conditions as they may deem
necessary. It has thus been said that.
The power of taxation is inherent in the State. Primarily vested in
the national legislature, it may now also be exercised by the local
legislative bodies, no longer by virtue of a valid delegation as
before but pursuant to a direct authority conferred by Article X,
Section 5, of the Constitution. . . (CRUZ, Isagani, A.,
Constitutional Law [1991], 84).
No one dares argue that the Minister (Secretary) of Finance was ever constituted as a
local government unit or given the powers, prestige, and ascendancy of a local
government unit to be able to exercise the power to tax or the corollary power to grant
tax exemptions.
II
I shall now turn to FIRB No. 17-87, which purports to restore the tax exemption
privileges of NPC that were withdrawn by Executive Order No. 93 of President
Corazon C. Aquino dated 17 December 1986. The said withdrawal took effect on 10
March 1987. FIRB Resolution No. 17-87 was issued on 24 June 1987 under FIRB's
authority conferred by Section 2 of EO No. 93, which pertinently provides as follows:
Sec. 2. The Fiscal Incentives Review Board created under
Presidential Decree No. 776, as amended, is hereby authorized
to:
(a) Restore tax and/or duty exemptions withdrawn hereunder in
whole or in part;
xxx xxx xxx
Then Secretary Macaraig approved on 5 October 1987 FIRB Resolution No.
17-87.
Under EO No. 93 the FIRB cannot, by itself, restore tax exemptions. Section 2 thereof
should be read together with the preceding Section 1(f), which reads:
Sec. 1. The provisions of any general or special law to the
contrary notwithstanding, all tax and duty incentives granted to
government and private entities are hereby withdrawn, except:
xxx xxx xxx
(f) those approved by the President upon the recommendation of
the Fiscal Incentives Review Board.
The last paragraph of Section 2 of P.D. No. 776 earlier quoted should also
be considered. Taken together, the FIRB can only recommend. It was
precisely for this reason that FIRB Res. No. 17-87 was confirmed and
approved by the President through Acting Executive Secretary Macaraig.
 Without the approval, FIRB Res. No. 17-87 would be absolutely ineffective.
It is the Presidential approval which could give life then to the Resolution as
a restoration of tax exemption privilege or, more correctly, as a new grant of
tax exemptions.

But, was the Presidential approval valid?

I respectfully submit that it was not. At the time FIRB Res. No. 17-87 was approved,
the first Congress under the 1987 Constitution was already convened and in session.
It was convened on the fourth Monday of July 1987 Sec. 15, Article VI, Constitution)
following the first election under the constitution of the Members of Congress (Sec. 1,
Article XVIII). Only Congress then could have validly restored tax exemption privileges
pursuant to Section 28 (4), Article VI of the Constitution. It would have been entirely
different if the Presidential approval of FIRB Res. No. 17-87 was made before the
convening of the first Congress, because, by then, President Aquino could still
exercise legislative powers pursuant to Section 6 Article XVIII of the Constitution,
which provides:

Sec. 6. The incumbent President shall continue to exercise

legislative powers until the first Congress convened.

III

Resort to Section 40(a) of Real Property Tax Code (P.D. No. 464), another ground
relied upon in the ponencia why the properties in question are not subject to real
property tax, provides no relief to petitioner. The tax exemption privilege granted by
the said Code was among those withdrawn by P.D. No. 1931. Section 1 of the latter
expressly provides:

The provisions of special or general law to the contrary

notwithstanding, all exemptions from the payment of duties, taxes,
fees, imposts and other charges heretofore granted in favor of
government-owned or controlled corporations including their
subsidiaries, are hereby withdrawn.

Its repealing clause, paragraph 5, provides as follows:

The provisions of President Decree No. 1177 as well as all other

laws, decrees, executive orders, administrative orders, rules,
regulations or parts thereof which are inconsistent with this
Decree are hereby repealed, amended or modified accordingly.

I vote then to DENY the instant petition.

Padilla and Vitug, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Baguio City
EN BANC
G.R. No. 179334 April 21, 2015
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and
DISTRICT ENGINEER CELESTINO R. CONTRERAS, Petitioners,
vs.
SPOUSES HERACLEO and RAMONA TECSON, Respondents.
RESOLUTION
PERALTA, J.:
For resolution is the Motion for Reconsideration1 filed by respondents-movants
spouses Heracleo and Ramona Tecson imploring the Court to take a second look at
its July 1, 2013 Decision, the dispositive portion of which reads:
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The
Court of Appeals Decision dated July 31, 2007 in CAG.R. CV No. 77997 is
MODIFIED, in that the valuation of the subject property owned by respondents shall
be P0.70 instead of ₱1,500.00 per square meter, with interest at six percent (6%) per
annum from the date of taking in 1940 instead of March 17, 1995, until full payment. 2
In view of the contrasting opinions of the members of the Third Division on the instant
motion, and the transcendental importance of the issue raised herein, the members of
the Third Division opted to refer the issue to the En Banc for resolution.
For a proper perspective, we briefly state the factual background of the case.
In 1940, the Department of Public Works and Highways (DPWH) took respondents-
movants' subject property without the benefit of expropriation proceedings for the
construction of the MacArthur Highway. In a letter dated December 15,
1994,respondents-movants demanded the payment of the fair market value of the
subject parcel of land. Celestino R. Contreras (Contreras), then District Engineer of
the First Bulacan Engineering District of the DPWH, offered to pay for the subject land
at the rate of Seventy Centavos (P0.70) per square meter, per Resolution of the
Provincial Appraisal Committee (PAC) of Bulacan. Unsatisfied with the offer,
respondents-movants demanded the return of their property, or the payment of
compensation at the current fair market value.3 Hence, the complaint for recovery of
possession with damages filed by respondents-movants. Respondents-movants were
able to obtain favorable decisions in the Regional Trial Court (RTC) and the Court of
Appeals (CA), with the subject property valued at One Thousand Five Hundred Pesos
(₱1,500.00) per square meter, with interest at six percent (6%) per annum.
Petitioners thus elevated the matter to this Court in a petition for review on certiorari.
The only issue resolved by the Court in the assailed decision is the amount of just
compensation which respondents-movants are entitled to receive from the
government for the taking of their property. Both the RTC and the CA valued the
property at One Thousand Five Hundred Pesos (₱1,500.00) per square meter, plus
six percent (6%) interest from the time of the filing of the complaint until full payment.
We, however, did not agree with both courts and ruled instead that just compensation
should be based on the value of the property at the time of taking in 1940, which is
Seventy Centavos (P0.70) per square meter.4 In addition, and by way of
compensation, we likewise awarded an interest of six percent (6%) per annum from
1940 until full payment.5
Aggrieved, respondents-movants hereby move for the reconsideration of said decision
on the following grounds:
A. THE HONORABLE COURT MAY LOOK INTO THE "JUSTNESS" OF
THE MISERABLE AMOUNT OF COMPENSATION BEING AWARDED TO
THE HEREIN RESPONDENTS; and
B. THE HONORABLE COURT MAY SETTLE FOR A HAPPY MIDDLE
GROUND IN THE NAME OF DOCTRINAL PRECISION AND
SUBSTANTIAL JUSTICE.6
Citing the views of Justices Presbitero J. Velasco, Jr. and Marvic Mario Victor F.
Leonen in their Dissenting and Concurring Opinion and Separate Opinion,
respectively, respondents-movants insist that gross injustice will result if the amount
that will be awarded today will be based simply on the value of the property at the time
of the actual taking. Hence, as proposed by Justice Leonen, they suggest that a happy
middle ground be achieved by meeting the need for doctrinal precision and the thirst
for substantial justice.7
We maintain our conclusions in the assailed July 1, 2013 Decision with modification
on the amount of interest awarded, as well as the additional grant of exemplary
damages and attorney's fees.
At the outset, it should be stressed that the matter of the validity of the State's
exercise of the power of eminent domain has long been settled. In fact, in our assailed
decision, We have affirmed the ruling of the CA that the pre-trial order issued on May
17, 2001 has limited the issues as follows: (1) whether or not the respondents-
movants are entitled to just compensation; (2) whether or not the valuation would be
based on the corresponding value at the time of the taking or at the time of the filing of
the action; and (3) whether or not the respondents-movants are entitled to
damages.8 Moreover, it was held that for failure of respondents-movants to question
the lack of expropriation proceedings for a long period of time, they are deemed to
have waived and are estopped from assailing the power of the government to
expropriate or the public use for which the power was exercised. 9 What is, therefore,
left for determination in the instant Motion for Reconsideration, in accordance with our
Decision dated July 1, 2013, is the propriety of the amount awarded to respondents as
just compensation.
At this juncture, We hold that the reckoning date for property valuation in determining
the amount of just compensation had already been addressed and squarely answered
in the assailed decision. To be sure, the justness of the award had been taken into
consideration in arriving at our earlier conclusion.
We have in the past been confronted with the same issues under similar factual and
procedural circumstances. We find no reason to depart from the doctrines laid down in
the earlier cases as we adopted in the assailed decision. In this regard, we reiterate
the doctrines laid down in the cases of Forfom Development Corporation (Forfom) v.
Philippine National Railways (PNR),10 Eusebio v. Luis,11 Manila International Airport
Authority v. Rodriguez,12 and Republic v. Sarabia.13
In Forfom, PNR entered the property of Forfom in January 1973 for railroad tracks,
facilities and appurtenances for use of the Carmona Commuter Service without
initiating expropriation proceedings. In 1990, Forfom filed a complaint for recovery of
possession of real property and/or damages against PNR. In Eusebio, respondent's
parcel of land was taken in 1980 by the City of Pasig and used as a municipal road
without the appropriate expropriation proceedings. In1996, respondent filed a
complaint for reconveyance and/or damages against the city government and the
mayor. In MIAA, in the early 1970s, petitioner implemented expansion programs for its
runway, necessitating the acquisition and occupation of some of the properties
surrounding its premises. As to respondent's property, no expropriation proceedings
were initiated. In 1997, respondent initiated a case for accion reivindicatoriawith
damages against petitioner. In Republic, sometime in 1956, the Air Transportation
Office (ATO) took possession and control of a portion of a lot situated in Aklan,
registered in the name of respondent, without initiating expropriation proceedings.
Several structures were erected thereon, including the control tower, the Kalibo crash
fire rescue station, the Kalibo airport terminal, and the Headquarters of the PNP
Aviation Security Group. In 1995,several stores and restaurants were constructed on
the remaining portion of the lot. In 1997, respondent filed a complaint for recovery of
possession with damages against the storeowners wherein ATO intervened claiming
that the storeowners were its lessees.
These cases stemmed from similar background, that is, government took control and
possession of the subject properties for public use without initiating expropriation
proceedings and without payment of just compensation; while the landowners failed
for a long period of time to question such government act and later instituted actions
for recovery of possession with damages. In these cases, the Court has uniformly
ruled that the fair market value of the property at the time of taking is controlling for
purposes of computing just compensation.
In Forfom, the payment of just compensation was reckoned from the time of taking in
1973; in Eusebio, the Court fixed the just compensation by determining the value of
the property at the time of taking in 1980; in MIAA, the value of the lot at the time of
taking in 1972 served as basis for the award of compensation to the owner; and,
in Republic,the Court was convinced that the taking occurred in 1956 and was thus
the basis in fixing just compensation.
As in the aforementioned cases, just compensation due respondents-movants in this
case should, therefore, be fixed not as of the time of payment but at the time of taking
in 1940 which is Seventy Centavos (P0.70) per square meter, and not One Thousand
Five Hundred Pesos (₱1,500.00) per square meter, as valued by the RTC and CA.
While disparity in the above amounts is obvious and may appear inequitable to
respondents-movants as they would be receiving such outdated valuation after a very
long period, it should be noted that the purpose of just compensation is not to reward
the owner for the property taken but to compensate him for the loss thereof. As such,
the true measure of the property, as upheld by a plethora of cases, is the market value
at the time of the taking, when the loss resulted. This principle was plainly laid down
in Apo Fruits Corporation and Hijo Plantation, Inc. v. Land Bank of the Philippines,14 to
wit:
x x x In Land Bank of the Philippines v. Orilla, a valuation case under our agrarian
reform law, this Court had occasion to state:
Constitutionally, "just compensation" is the sum equivalent to the market value of the
property, broadly described as the price fixed by the seller in open market in the usual
and ordinary course of legal action and competition, or the fair value of the property as
between the one who receives and the one who desires to sell, it being fixed at the
time of the actual taking by the government. Just compensation is defined as
the full and fair equivalent of the property taken from its owner by the
expropriator. It has been repeatedly stressed by this Court that the true measure
is not the taker's gain but the owner's loss. The word "just" is used to modify the
meaning of the word "compensation" to convey the idea that the equivalent to be
given for the property to be taken shall be real, substantial, full and
ample. [Emphasis supplied.]15
Indeed, the State is not obliged to pay premium to the property owner for appropriating
the latter's property; it is only bound to make good the loss sustained by the
landowner, with due consideration of the circumstances availing at the time the
property was taken. More, the concept of just compensation does not imply fairness to
the property owner alone. Compensation must also be just to the public, which
ultimately bears the cost of expropriation.16
Notwithstanding the foregoing, we recognize that the owner's loss is not only his
property but also its income-generating potential.17 Thus, when property is taken, full
compensation of its value must immediately be paid to achieve a fair exchange for the
property and the potential income lost.18 Accordingly, in Apo, we held that the rationale
for imposing the interest is to compensate the petitioners for the income they would
have made had they been properly compensated for their properties at the time of the
taking.19 Thus:
We recognized in Republic v. Court of Appeals the need for prompt payment and the
necessity of the payment of interest to compensate for any delay in the payment of
compensation for property already taken. We ruled in this case that:
The constitutional limitation of "just compensation" is considered to be the sum
equivalent to the market value of the property, broadly described to be the price fixed
by the seller in open market in the usual and ordinary course of legal action and
competition or the fair value of the property as between one who receives, and one
who desires to sell, i[f] fixed at the time of the actual taking by the government.
Thus, if property is taken for public use before compensation is deposited with
the court having jurisdiction over the case, the final compensation must include
interest[s] on its just value to be computed from the time the property is taken
to the time when compensation is actually paid or deposited with the court. In
fine, between the taking of the property and the actual payment, legal interest[s]
accrue in order to place the owner in a position as good as (but not better than)
the position he was in before the taking occurred.[Emphasis supplied]20
In other words, the just compensation due to the landowners amounts to an effective
forbearance on the part of the State-a proper subject of interest computed from the
time the property was taken until the full amount of just compensation is paid-in order
to eradicate the issue of the constant variability of the value of the currency over
time.21 In the Court's own words:
The Bulacan trial court, in its 1979 decision, was correct in imposing interests on the
zonal value of the property to be computed from the time petitioner instituted
condemnation proceedings and "took" the property in September 1969. This
allowance of interest on the amount found to be the value of the property as of
the time of the taking computed, being an effective forbearance, at 12% per
annum should help eliminate the issue of the constant fluctuation and inflation
of the value of the currency over time x x x.22
On this score, a review of the history of the pertinent laws, rules and regulations, as
well as the issuances of the Central Bank (CB)or Bangko Sentral ng Pilipinas (BSP)is
imperative in arriving at the proper amount of interest to be awarded herein.
On May 1, 1916, Act No. 265523 took effect prescribing an interest rate of six percent
(6%) or such rate as may be prescribed by the Central Bank Monetary Board (CB-
MB)for loans or forbearance of money, in the absence of express stipulation as to
such rate of interest, to wit:
Section 1. The rate of interest for the loan or forbearance of any money goods, or
credits and the rate allowed in judgments, in the absence of express contract as to
such rate of interest, shall be six per centum per annum or such rate as may be
prescribed by the Monetary Board of the Central Bank of the Philippines for that
purpose in accordance with the authority hereby granted.
Sec. 1-a. The Monetary Board is hereby authorized to prescribe the maximum rate or
rates of interest for the loan or renewal thereof or the forbearance of any money,
goods or credits, and to change such rate or rates whenever warranted by prevailing
economic and social conditions.
In the exercise of the authority herein granted, the Monetary Board may prescribe
higher maximum rates for loans of low priority, such as consumer loans or renewals
thereof as well as such loans made by pawnshops finance companies and other
similar credit institutions although the rates prescribed for these institutions need not
necessarily be uniform. The Monetary Board is also authorized to prescribe different
maximum rate or rates for different types of borrowings, including deposits and deposit
substitutes, or loans of financial intermediaries.24
Under the aforesaid law, any amount of interest paid or stipulated to be paid in excess
of that fixed by law is considered usurious, therefore unlawful.25
On July 29, 1974, the CB-MB, pursuant to the authority granted to it under the
aforequoted provision, issued Resolution No. 1622.1âwphi1 On even date, Circular
No. 416 was issued, implementing MB Resolution No. 1622, increasing the rate of
interest for loans and forbearance of money to twelve percent (12%) per annum, thus:
By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended,
otherwise known as the "Usury Law," the Monetary Board, in its Resolution No. 1622
dated July 29, 1974, has prescribed that the rate of interest for the loan or
forbearance of any money, goods or credits and the rate allowed in judgments,
in the absence of express contract as to such rate of interest, shall be twelve
per cent (12%) per annum.26
The foregoing rate was sustained in CB Circular No. 90527 which took effect on
December 22, 1982, particularly Section 2 thereof, which states:
Sec. 2. The rate of interest for the loan or forbearance of any money, goods or credits
and the rate allowed in judgments, in the absence of express contract as to such rate
of interest, shall continue to be twelve per cent (12%) per annum.28
Recently, the BSP Monetary Board (BSP-MB),in its Resolution No. 796 dated May 16,
2013, approved the amendment of Section 2 of Circular No. 905, Series of 1982, and
accordingly, issued Circular No. 799, Series of 2013, effective July 1, 2013, the
pertinent portion of which reads:
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the
following revisions governing the rate of interest in the absence of stipulation in loan
contracts, thereby amending Section 2 of Circular No. 905, Series of 1982:
 Section 1. The rate of interest for the loan or forbearance of any money, goods Hundred Forty-Eight Pesos and Thirty-Two Centavos (₱1,718,848.32) as of
or credits and the rate allowed in judgments, in the absence of an express September 30, 2014,34 computed as follows:
contract as to such rate of interest, shall be six percent (6%) per annum.

Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for January 1, 194035 to July 28, 1974 P 10,553.4937
Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for
July 29, 1974 to March 16, 1995 26,126.3138
Non-Bank Financial Institutions are hereby amended accordingly.
March 17, 199536to June 30, 2013 232,070.3339
This Circular shall take effect on 01 July 2013.29
July 1, 2013 to September 30, 2014 250,098.1940
Accordingly, the prevailing interest rate for loans and forbearance of money is six
percent (6%) per annum, in the absence of an express contract as to such rate of
Market Value of the Property at the time of
interest.
taking including interest P 518,848.32

In summary, the interest rates applicable to loans and forbearance of money, in the
absence of an express contract as to such rate of interest, for the period of 1940 to Market value of the property at the time of
present are as follows: taking including interest P 518,848.32

Add: Exemplary damages 1,000.000.00

Law, Rule and Regulations, Date of Effectivity Interest Rate
BSP Issuance Attorney's fees 200,000.00
Act No. 2655 May 1, 1916 6% Total Amount of Interest due to Respondents-

CB Circular No. 416 July 29, 1974 12% Movants as of September 30, 2014 ₱1,718,848.16

CB Circular No. 905 December 22, 1982 12%

CB Circular No. 799 July 1, 2013 6%

It is important to note, however, that interest shall be compounded at the time judicial
demand is made pursuant to Article 221230 of the Civil Code of the Philippines, and
sustained in Eastern Shipping Lines v. Court of Appeals,31then later on in Nacar v.
Gallery Frames,32 save for the reduction of interest rate to 6% for loans or forbearance
of money, thus:
1. When the obligation is breached, and it consists in the payment of a sum
of money, i.e., a loan or forbearance of money, the interest due should be
that which may have been stipulated in writing. Furthermore, the interest
due shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest shall be 6%
per annum to be computed from default, i.e., from judicial or extrajudicial
demand under and subject to the provisions of Article 1169 of the Civil
Code.33
Applying the foregoing law and jurisprudence, respondents-movants are entitled to
interest in the amount of One Million Seven Hundred Eighteen Thousand Eight
Considering that respondents-movants only resorted to judicial demand for the
payment of the fair market value of the land on March 17, 1995, it is only then that the
interest earned shall itself earn interest.
Lastly, from finality of the Court's Resolution on reconsideration until full payment, the
total amount due to respondents-movants shall earn a straight six percent (6%) legal
interest, pursuant to Circular No. 799 and the case of Nacar. Such interest is imposed
by reason of the Court's decision and takes the nature of a judicial debt.
Clearly, the award of interest on the value of the land at the time of taking in 1940 until
full payment is adequate compensation to respondents-movants for the deprivation of
their property without the benefit of expropriation proceedings. Such interest, however
meager or enormous it may be, cannot be inequitable and unconscionable because it
resulted directly from the application of law and jurisprudence-standards that have
taken into account fairness and equity insetting the interest rates due for the use or
forbearance of money.41 Thus, adding the interest computed to the market value of the
property at the time of taking signifies the real, substantial, full and ample value of the
property. Verily, the same constitutes due compliance with the constitutional mandate
on eminent domain and serves as a basic measure of fairness. In addition to the
foregoing interest, additional compensation shall be awarded to respondents-movants
by way of exemplary damages and attorney's fees in view of the government's taking We hold that Rodriguez is entitled only to ₱200,000.00 as exemplary damages, and
without the benefit of expropriation proceedings. As held in Eusebio v. Luis,42 an attorney's fees equivalent to one percent (1%) of the amount due.43
irregularity in an expropriation proceeding cannot ensue without consequence. Thus,
the Court held that the government agency's illegal occupation of the owner's property
Similarly, in Republic v. CA,44 We held that the failure of the government to initiate an
for a very long period of time surely resulted in pecuniary loss to the owner, to wit:
expropriation proceeding to the prejudice of the landowner may be corrected with the
awarding of exemplary damages, attorney's fees and costs of litigation. Thus:
However, in taking respondents' property without the benefit of expropriation
proceedings and without payment of just compensation, the City of Pasig clearly acted
The Court will not award attorney's fees in light of respondent's choice not to appeal
in utter disregard of respondents' proprietary rights. Such conduct cannot be
the CA Decision striking down the award. However, we find it proper to award
countenanced by the Court. For said illegal taking, the City of Pasig should
temperate and exemplary damages in light of NIA's misuse of its power of
definitely be held liable for damages to respondents. Again, in Manila International
eminent domain. Any arm of the State that exercises the delegated power of eminent
Airport Authority v. Rodriguez, the Court held that the government agency's illegal
domain must wield that power with circumspection and utmost regard for procedural
occupation of the owner's property for a very long period of time surely resulted in
requirements. A government instrumentality that fails to observe the constitutional
pecuniary loss to the owner. The Court held as follows:
guarantees of just compensation and due process abuses the authority delegated to it,
and is liable to the property owner for damages.
Such pecuniary loss entitles him to adequate compensation in the form
of actual or compensatory damages, which in this case should be the legal
Temperate or moderate damages may be recovered if pecuniary loss has been
interest (6%) on the value of the land at the time of taking, from said point up to
suffered but the amount cannot be proved with certainty from the nature of the
full payment by the MIAA. This is based on the principle that interest "runs as a
case.1âwphi1 Here, the trial and appellate courts found that the owners were unable
matter of law and follows from the right of the landowner to be placed in as good
to plant palay on 96,655 square meters of the Property for an unspecified period
position as money can accomplish, as of the date of the taking."
during and after NIA's construction of the canals in 1972. The passage of time,
however, has made it impossible to determine these losses with any certainty. NIA
The award of interest renders unwarranted the grant of back rentals as extended also deprived the owners of the Property of possession of a substantial portion of their
by the courts below. In Republic v. Lara, et al., the Court ruled that the indemnity for land since 1972. Considering the particular circumstances of this case, an award of
rentals is inconsistent with a property owner's right to be paid legal interest on the ₱150,000 as temperate damages is reasonable.
value of the property, for if the condemn or is to pay the compensation due to the
owners from the time of the actual taking of their property, the payment of such
NIA's irresponsible exercise of its eminent domain powers also deserves censure. For
compensation is deemed to retro act to the actual taking of the property; and, hence,
more than three decades, NIA has been charging irrigation fees from respondent and
there is no basis for claiming rentals from the time of actual taking. More explicitly, the
other landowners for the use of the canals built on the Property, without reimbursing
Court held in Republic v. Garcellano that:
respondent a single cent for the loss and damage. NIA exhibits a disturbingly cavalier
attitude towards respondent's property rights, rights to due process of law and to equal
The uniform rule of this Court, however, is that this compensation must be, not protection of the laws. Worse, this is not the first time NIA has disregarded the rights
in the form of rentals, but by way of 'interest from the date that the company [or of private property owners by refusing to pay just compensation promptly. To dissuade
entity] exercising the right of eminent domain take possession of the NIA from continuing this practice and to set an example for other agencies exercising
condemned lands, and the amounts granted by the court shall cease to earn eminent domain powers, NIA is directed to pay respondent exemplary damages of
interest only from the moment they are paid to the owners or deposited in ₱250,000.45
court x x x.
Applying the aforequoted doctrines to the present case, considering that respondents-
xxxx movants were deprived of beneficial ownership over their property for more than
seventy (70) years without the benefit of a timely expropriation proceedings, and to
serve as a deterrent to the State from failing to institute such proceedings within the
For more than twenty (20) years, the MIAA occupied the subject lot without the benefit
prescribed period under the law, a grant of exemplary damages in the amount of One
of expropriation proceedings and without the MIAA exerting efforts to ascertain
Million Pesos (₱1,000,000.00) is fair and reasonable. Moreover, an award for
ownership of the lot and negotiating with any of the owners of the property. To our
attorney's fees in the amount of Two Hundred Thousand Pesos (₱200,000.00) in favor
mind, these are wanton and irresponsible acts which should be suppressed and
of respondents-movants is in order.
corrected. Hence, the award of exemplary damages and attorneys fees is in
order. However, while Rodriguez is entitled to such exemplary damages and
attorney's fees, the award granted by the courts below should be equitably reduced.
In sum, respondents-movants shall be entitled to an aggregate amount of One Million
Seven Hundred Eighteen Thousand Eight Hundred Forty-Eight Pesos and
Thirty-Two Centavos (₱1,718,848.32) as just compensation as of September 30,
2014, computed as follows:
Market value of the property at the time P 518,848.32
of taking in 1940 including interest
Add: Exemplary Damages 1,000,000.00
Attorney's fees 200,000.00
Total Amount due to Respondents-
movants as of September 30, 2014 ₱1,718,848.32
This Court is not unaware that at present, stringent laws and rules are put in place to
ensure that owners of real property acquired for national government infrastructure
projects are promptly paid just compensation. Specifically, Section 4 of Republic Act
No. 8974 (R.A. 8974),46 which took effect on November 26, 2000, provides sufficient
guidelines for implementing an expropriation proceeding, to wit:
Section 4. Guidelines for Expropriation Proceedings. - Whenever it is necessary to
acquire real property for the right-of-way or location for any national government
infrastructure project through expropriation, the appropriate implementing agency shall
initiate the expropriation proceedings before the proper court under the following
guidelines:
(a) Upon the filing of the complaint, and after due notice to the defendant,
the implementing agency shall immediately pay the owner of the property
the amount equivalent to the sum of (1) one hundred percent (100%) of the
value of the property based on the current relevant zonal valuation of the
Bureau of Internal Revenue (BIR); and (2) the value of the improvements
and/or structures as determined under Section 7 hereof;
(b) In provinces, cities, municipalities and other areas where there is no
zonal valuation, the BIR is hereby mandated within the period of sixty (60)
days from the date of the expropriation case, to come up with a zonal
valuation for said area; and
(c) In case the completion of a government infrastructure project is of utmost
urgency and importance, and there is no existing valuation of the area
concerned, the implementing agency shall immediately pay the owner of the
property its proffered value taking into consideration the standards
prescribed in Section 5 hereof.
Upon compliance with the guidelines abovementioned, the court shall immediately
issue to the implementing agency an order to take possession of the property and
start the implementation of the project.
Before the court can issue a Writ of Possession, the implementing agency shall
present to the court a certificate of availability of funds from the proper official
concerned.
In the event that the owner of the property contests the implementing agency's
proffered value, the court shall determine the just compensation to be paid the owner
within sixty (60) days from the date of filing of the expropriation case. When the
decision of the court becomes final and executory, the implementing agency shall pay
the owner the difference between the amount already paid and the just compensation
as determined by the court.
Failure to comply with the foregoing directives shall subject the government official or
employee concerned to administrative, civil and/or criminal sanctions, thus:
Section 11. Sanctions. - Violation of any provisions of this Act shall subject the
government official or employee concerned to appropriate administrative, civil and/or
criminal sanctions, including suspension and/or dismissal from the government service
and forfeiture of benefits. While the foregoing provisions, being substantive in nature
or disturbs substantive rights, cannot be retroactively applied to the present case, We
trust that this established mechanism will surely deter hasty acquisition of private
properties in the future without the benefit of immediate payment of the value of the
property in accordance with Section 4 of R.A. 8974. This effectively addresses J.
Velasco's concerns that sustaining our earlier rulings on the matter would be licensing
the government to dispense with constitutional requirements in taking private
properties. Moreover, any gap on the procedural aspect of the expropriation
proceedings will be remedied by the aforequoted provisions.
In effect, R.A. 8974 enshrines a new approach towards eminent domain that
reconciles the inherent unease attending expropriation proceedings with a position of
fundamental equity.47
Despite the foregoing developments, however, We emphasize that the government's
failure, to initiate the necessary expropriation proceedings prior to actual taking cannot
simply invalidate the State's exercise of its eminent domain power, given that the
property subject of expropriation is indubitably devoted for public use, and public
policy imposes upon the public utility the obligation to continue its services to the
public. To hastily nullify said expropriation in the guise of lack of due process would
certainly diminish or weaken one of the State's inherent powers, the ultimate objective
of which is to serve the greater good. Thus, the non-filing of the case for expropriation
will not necessarily lead to the return of the property to the landowner. What is left to
the landowner is the right of compensation.48
All told, We hold that putting to rest the issue on the validity of the exercise of eminent
domain is neither tantamount to condoning the acts of the DPWH in disregarding the JOSE CATRAL MENDOZA BIENVENIDO L. REYES
property rights of respondents-movants nor giving premium to the government's failure Associate Justice Associate Justice
to institute an expropriation proceeding. This Court had steadfastly adhered to the
doctrine that its first and fundamental duty is the application of the law according to its
express terms, interpretation being called for only when such literal application is No part due to prior participation in
See dissenting opinion
impossible.49 To entertain other formula for computing just compensation, contrary to the CA
MARVIC M.V.F. LEONEN
those established by law and jurisprudence, would open varying interpretation of ESTELA M. PERLAS-BERNABE*
Associate Justice
economic policies - a matter which this Court has no competence to take cognizance Associate Justice
of. Time and again, we have held that no process of interpretation or construction
need be resorted to where a provision of law peremptorily calls for
application.50 Equity and equitable principles only come into full play when a gap FRANCIS H. JARDELEZA
exists in the law and jurisprudence.51 As we have shown above, established rulings of Associate Justice
this Court are in place for full application to the case at bar, hence, should be upheld.
CERTIFICATION
WHEREFORE, the motion for reconsideration is hereby DENIED for lack of merit.
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in
SO ORDERED. the above Resolution were reached in consultation before the case was assigned to
the writer of the opinion of the Court.
DIOSDADO M. PERALTA
Associate Justice MARIA LOURDES P.A. SERENO
Chief Justice
WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice

(Pls. See Dissenting Opinion)

ANTONIO T. CARPIO
PRESBITERO J. VELASCO, JR.
Associate Justice
Associate Justice

Pls. See Separate Concurring

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

No part due to prior participation in

the CA MARIANO C. DEL CASTILLO
LUCAS P. BERSAMIN* Associate Justice
Associate Justice

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

Associate Justice Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 123169 November 4, 1996
DANILO E. PARAS, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
RESOLUTION
FRANCISCO, J.:
Petitioner Danilo E. Paras is the incumbent Punong Barangay of Pula, Cabanatuan
City who won during the last regular barangay election in 1994. A petition for his recall
as Punong Barangay was filed by the registered voters of the barangay. Acting on the
petition for recall, public respondent Commission on Elections (COMELEC) resolved
to approve the petition, scheduled the petition signing on October 14, 1995, and set
the recall election on November 13,
1995.1 At least 29.30% of the registered voters signed the petition, well above the
25% requirement provided by law. The COMELEC, however, deferred the recall
election in view of petitioner's opposition. On December 6, 1995, the COMELEC set
anew the recall election, this time on December 16, 1995. To prevent the holding of
the recall election, petitioner filed before the Regional Trial Court of Cabanatuan City a
petition for injunction, docketed as SP Civil Action No. 2254-AF, with the trial court
issuing a temporary restraining order. After conducting a summary hearing, the trial
court lifted the restraining order, dismissed the petition and required petitioner and his
counsel to explain why they should not be cited for contempt for misrepresenting that
the barangay recall election was without COMELEC approval.2
In a resolution dated January 5, 1996, the COMELEC, for the third time, re-scheduled
the recall election an January 13, 1996; hence, the instant petition for certiorari with
urgent prayer for injunction. On January 12, 1996, the Court issued a temporary
restraining order and required the Office of the Solicitor General, in behalf of public
respondent, to comment on the petition. In view of the Office of the Solicitor General's
manifestation maintaining an opinion adverse to that of the COMELEC, the latter
through its law department filed the required comment. Petitioner thereafter filed a
reply.3
Petitioner's argument is simple and to the point. Citing Section 74 (b) of Republic Act
No. 7160, otherwise known as the Local Government Code, which states that "no
recall shall take place within one (1) year from the date of the official's assumption to
office or one (1) year immediately preceding a regular local election", petitioner insists
that the scheduled January 13, 1996 recall election is now barred as the Sangguniang
Kabataan (SK) election was set by Republic Act No. 7808 on the first Monday of May
1996, and every three years thereafter. In support thereof, petitioner cites Associated
Labor Union v. Letrondo-Montejo, 237 SCRA 621, where the Court considered the SK
election as a regular local election. Petitioner maintains that as the SK election is a
regular local election, hence no recall election can be had for barely four months
separate the SK election from the recall election. We do not agree.
The subject provision of the Local Government Code provides:
Sec. 74. Limitations on Recall. — (a) Any elective local official
may be the subject of a recall election only once during his term
of office for loss of confidence.
(b) No recall shall take place within one (1) year from the date of
the official's assumption to office or one (1) year immediately
preceding a regular local election.
[Emphasis added]
It is a rule in statutory construction that every part of the statute must be interpreted
with reference to the context, i.e., that every part of the statute must be considered
together with the other parts, and kept subservient to the general intent of the whole
enactment.4 The evident intent of Section 74 is to subject an elective local official to
recall election once during his term of office. Paragraph (b) construed together with
paragraph (a) merely designates the period when such elective local official may be
subject of a recall election, that is, during the second year of his term of office. Thus,
subscribing to petitioner's interpretation of the phrase regular local election to include
the SK election will unduly circumscribe the novel provision of the Local Government
Code on recall, a mode of removal of public officers by initiation of the people before
the end of his term. And if the SK election which is set by R.A No. 7808 to be held
every three years from May 1996 were to be deemed within the purview of the phrase
"regular local election", as erroneously insisted by petitioner, then no recall election
can be conducted rendering inutile the recall provision of the Local Government Code.
In the interpretation of a statute, the Court should start with the assumption that the
legislature intended to enact an effective law, and the legislature is not presumed to
have done a vain thing in the enactment of a statute.5 An interpretation should, if
possible, be avoided under which a statute or provision being construed is defeated,
or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained
away, or rendered insignificant, meaningless, inoperative or nugatory.6
It is likewise a basic precept in statutory construction that a statute should be
interpreted in harmony with the Constitution.7 Thus, the interpretation of Section 74 of
the Local Government Code, specifically paragraph (b) thereof, should not be in
conflict with the Constitutional mandate of Section 3 of Article X of the Constitution to
"enact a local government code which shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization Separate Opinions
with effective mechanism of recall, initiative, and referendum . . . ."

Moreover, petitioner's too literal interpretation of the law leads to absurdity which we
cannot countenance. Thus, in a case, the Court made the following admonition:
DAVIDE, JR., J., concurring:

We admonish against a too-literal reading of the law as this is apt

to constrict rather than fulfill its purpose and defeat the intention of
its authors. That intention is usually found not in "the letter that
killeth but in the spirit that vivifieth". . .8
The spirit, rather than the letter of a law determines its construction; hence,
a statute, as in this case, must be read according to its spirit and intent.
Finally, recall election is potentially disruptive of the normal working of the local
government unit necessitating additional expenses, hence the prohibition against the
conduct of recall election one year immediately preceding the regular local election.
The proscription is due to the proximity of the next regular election for the office of the
local elective official concerned. The electorate could choose the official's replacement
in the said election who certainly has a longer tenure in office than a successor
elected through a recall election. It would, therefore, be more in keeping with the intent
of the recall provision of the Code to construe regular local election as one referring to
an election where the office held by the local elective official sought to be recalled will
be contested and be filled by the electorate.
Nevertheless, recall at this time is no longer possible because of the limitation stated
under Section 74 (b) of the Code considering that the next regular election involving
the barangay office concerned is barely seven (7) months away, the same having
been scheduled on May 1997. 9
ACCORDINGLY, the petition is hereby dismissed for having become moot and
academic. The temporary restraining order issued by the Court on January 12, 1996,
enjoining the recall election should be as it is hereby made permanent.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado, Romero, Bellosillo, Melo, Puno, Vitug, Kapunan,
Mendoza, Hermosisima, Jr., Panganiban and Torres, Jr., JJ., concur.
I concur with Mr. Justice Ricardo J. Francisco in his ponencia.
However, I wish to add another reason as to why the SK election cannot be
considered a "regular local election" for purposes of recall under Section 74 of the
Local Government Code of 1991.
The term "regular local election" must be confined to the regular election of elective
local officials, as distinguished from the regular election of national officials. The
elective national officials are the President, Vice-President, Senators and
Congressmen. The elective local officials are Provincial Governors, Vice-Governors of
provinces, Mayors and Vice-Mayors of cities and municipalities, Members of
the Sanggunians of provinces, cities and municipalities, punong barangays and
members of the sangguniang barangays, and the elective regional officials of the
Autonomous Region of Muslim Mindanao. These are the only local elective officials
deemed recognized by Section 2(2) of Article IX-C of the Constitution, which provides:
Sec. 2. The Commission on Elections shall exercise the following
powers and functions:
xxx xxx xxx
(2) Exercise exclusive original jurisdiction over all contests
relating to the elections, returns, and qualifications of all elective
regional, provincial, and city officials, and appellate jurisdiction
over all contests involving elective municipal officials decided by
trial courts of general jurisdiction, or involving elective barangay
officials decided by trial courts of limited jurisdiction.
A regular election, whether national or local, can only refer to an election participated
in by those who possess the right of suffrage, are not otherwise disqualified by law,
and who are registered voters. One of the requirements for the exercise of suffrage
under Section 1, Article V of the Constitution is that the person must be at least 18
years of age, and one requisite before he can vote is that he be a registered voter
pursuant to the rules on registration prescribed in the Omnibus Election Code (Section
113-118).
Under the law, the SK includes the youth with ages ranging from 15 to 21 (Sec. 424,
Local Government Code of 1991). Accordingly, they include many who are not
qualified to vote in a regular election, viz., those from ages 15 to less than 18. In no
manner then may SK elections be considered a regular election (whether national or
local).
Indeed the Sangguniang Kabataan is nothing more than a youth organization, and
although fully recognized in the Local Government Code and vested with certain
powers and functions, its elective officials have not attained the status of local elective
officials. So, in Mercado vs. Board of Election Supervisors (243 SCRA 422 [1995]),
this Court ruled that although the SK Chairman is an ex-officio member of
the sangguniang barangay — an elective body — that fact does not make him "an
elective barangay official," since the law specifically provides who comprise
the elective officials of the sangguniang barangay, viz., the punong barangay and the
seven (7) regular sangguniang barangay members elected at large by those qualified
to exercise the right of suffrage under Article V of the Constitution, who are likewise
registered voters of the barangay. This shows further that the SK election is not a
regular local election for purposes of recall under Section 74 of the Local Government
Code.
Separate Opinions
DAVIDE, JR., J., concurring:
I concur with Mr. Justice Ricardo J. Francisco in his ponencia.
However, I wish to add another reason as to why the SK election cannot be
considered a "regular local election" for purposes of recall under Section 74 of the
Local Government Code of 1991.
The term "regular local election" must be confined to the regular election of elective
local officials, as distinguished from the regular election of national officials. The
elective national officials are the President, Vice-President, Senators and
Congressmen. The elective local officials are Provincial Governors, Vice-Governors of
provinces, Mayors and Vice-Mayors of cities and municipalities, Members of
the Sanggunians of provinces, cities and municipalities, punong barangays and
members of the sangguniang barangays, and the elective regional officials of the
Autonomous Region of Muslim Mindanao. These are the only local elective officials
deemed recognized by Section 2(2) of Article IX-C of the Constitution, which provides:
Sec. 2. The Commission on Elections shall exercise the following
powers and functions:
xxx xxx xxx
(2) Exercise exclusive original jurisdiction over all contests
relating to the elections, returns, and qualifications of all elective
regional, provincial, and city officials, and appellate jurisdiction
over all contests involving elective municipal officials decided by
trial courts of general jurisdiction, or involving elective barangay
officials decided by trial courts of limited jurisdiction.
A regular election, whether national or local, can only refer to an election participated
in by those who possess the right of suffrage, are not otherwise disqualified by law,
and who are registered voters. One of the requirements for the exercise of suffrage
under Section 1, Article V of the Constitution is that the person must be at least 18
years of age, and one requisite before he can vote is that he be a registered voter
pursuant to the rules on registration prescribed in the Omnibus Election Code (Section
113-118).
Under the law, the SK includes the youth with ages ranging from 15 to 21 (Sec. 424,
Local Government Code of 1991). Accordingly, they include many who are not
qualified to vote in a regular election, viz., those from ages 15 to less than 18. In no
manner then may SK elections be considered a regular election (whether national or
local).
Indeed the Sangguniang Kabataan is nothing more than a youth organization, and
although fully recognized in the Local Government Code and vested with certain
powers and functions, its elective officials have not attained the status of local elective
officials. So, in Mercado vs. Board of Election Supervisors (243 SCRA 422 [1995]),
this Court ruled that although the SK Chairman is an ex-officio member of
the sangguniang barangay — an elective body — that fact does not make him "an
elective barangay official," since the law specifically provides who comprise
the elective officials of the sangguniang barangay, viz., the punong barangay and the
seven (7) regular sangguniang barangay members elected at large by those qualified
to exercise the right of suffrage under Article V of the Constitution, who are likewise
registered voters of the barangay. This shows further that the SK election is not a
regular local election for purposes of recall under Section 74 of the Local Government
Code.
Narvasa, C.J., Padilla, Regalado, Bellosillo, Vitug and Mendoza, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 100776 October 28, 1993
ALBINO S. CO, petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
Antonio P. Barredo for petitioner.
The Solicitor General for the people.
NARVASA, C.J.:
In connection with an agreement to salvage and refloat asunken vessel — and in
payment of his share of the expenses of the salvage operations therein stipulated —
petitioner Albino Co delivered to the salvaging firm on September 1, 1983 a check
drawn against the Associated Citizens' Bank, postdated November 30, 1983 in the
sum of P361,528.00.1 The check was deposited on January 3, 1984. It was
dishonored two days later, the tersely-stated reason given by the bank being:
"CLOSED ACCOUNT."
A criminal complaint for violation of Batas Pambansa Bilang 222 was filed by the
salvage company against Albino Co with the Regional Trial Court of Pasay City. The
case eventuated in Co's conviction of the crime charged, and his being sentenced to
suffer a term of imprisonment of sixty (60) days and to indemnify the salvage company
in the sum of P361,528.00.
Co appealed to the Court of Appeals. There he sought exoneration upon the theory
that it was reversible error for the Regional Trial Court to have relied, as basis for its
verdict of conviction, on the ruling rendered on September 21, 1987 by this Court
in Que v. People, 154 SCRA 160 (1987)3 — i.e., that a check issued merely to
guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22.
This was because at the time of the issuance of the check on September 1, 1983,
some four (4) years prior to the promulgation of the judgment in Que v. Peopleon
September 21, 1987, the delivery of a "rubber" or "bouncing" check as guarantee for
an obligation was not considered a punishable offense, an official pronouncement
made in a Circular of the Ministry of Justice. That Circular (No. 4), dated December
15, 1981, pertinently provided as follows:
2.3.4. Where issuance of bouncing check is neither estafa nor
violation of B.P. Blg. 22.
Where the check is issued as part of an arrangement to
guarantee or secure the payment of an obligation, whether pre-
existing or not, the drawer is not criminally liable for either estafa
or violation of B.P. Blg. 22 (Res. No. 438, s. 1981, Virginia
Montano vs. Josefino Galvez, June 19, 1981; Res. No. 707, s.
1989; Alice Quizon vs. Lydia Calingo, October 23, 1981, Res. No.
769, s. 1981, Alfredo Guido vs. Miguel A. Mateo, et. al.,
November 17, 1981; Res. No. 589, s. 1981, Zenaida Lazaro vs.
Maria Aquino, August 7, 1981).
This administrative circular was subsequently reversed by another issued on August
8, 1984 (Ministry Circular No. 12) — almost one (1) year after Albino Co had delivered
the "bouncing" check to the complainant on September 1, 1983. Said Circular No. 12,
after observing inter alia that Circular No. 4 of December 15, 1981 appeared to have
been based on "a misapplication of the deliberation in the Batasang Pambansa, . . .
(or) the explanatory note on the original bill, i.e. that the intention was not to penalize
the issuance of a check to secure or guarantee the payment of an obligation," as
follows:4
Henceforth, conforming with the rule that an administrative
agency having interpreting authority may reverse its
administration interpretation of a statute, but that its review
interpretation applies only prospectively (Waterbury Savings Bank
vs. Danaher, 128 Conn., 476; 20 a2d 455 (1941), in all cases
involving violation of Batas Pambansa Blg. 22 where the check in
question is issued after this date, the claim that the check is
issued as a guarantee or part of an arrangement to secure an
obligation collection will no longer be considered a valid defense.
Co's theory was rejected by the Court of Appeals which affirmed his conviction.
Citing Senarillos v. Hermosisima, 101 Phil. 561, the Appellate Court opined that
the Que doctrine did not amount to the passage of new law but was merely a
construction or interpretation of a pre-existing one, i.e., BP 22, enacted on April 3,
1979.
From this adverse judgment of the Court of Appeals, Albino Co appealed to this Court
on certiorari under Rule 45 of the Rules of Court. By Resolution dated September 9,
1991, the Court dismissed his appeal. Co moved for reconsideration under date of
October 2, 1991. The Court required comment thereon by the Office of the Solicitor
General. The latter complied and, in its comment dated December 13, 1991,
extensively argued against the merits of Albino Co's theory on appeal, which was
substantially that proffered by him in the Court of Appeals. To this comment, Albino Co The principle of prospectivity has also been applied to judicial decisions which,
filed a reply dated February 14, 1992. After deliberating on the parties' arguments and "although in themselves not laws, are nevertheless evidence of what the laws mean, .
contentions, the Court resolved, in the interests of justice, to reinstate Albino Co's . . (this being) the reason whyunder Article 8 of the New Civil Code, 'Judicial decisions
appeal and adjudicate the same on its merits. applying or interpreting the laws or the Constitution shall form a part of the legal
system . . .'"
Judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system of the So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:
Philippines," according to Article 8 of the Civil Code. "Laws shall
have no retroactive effect, unless the contrary is provided,"
It will be noted that when appellant was appointed Secret Agent
declares Article 4 of the same Code, a declaration that is echoed
by the Provincial Government in 1962, and Confidential Agent by
by Article 22 of the Revised Penal Code: "Penal laws shall have,
the Provincial commander in 1964, the prevailing doctrine on the
a retroactive effect insofar as they favor the person guilty of a
matter was that laid down by Us in People v. Macarandang (1959)
felony, who is not a habitual criminal . . .5
and People v. Lucero (1958).6 Our decision in People
v. Mapa,7 reversing the aforesaid doctrine, came only in 1967.
The principle of prospectivity of statutes, original or amendatory, has been applied in The sole question in this appeal is: should appellant be acquitted
many cases. These include: Buyco v. PNB, 961 2 SCRA 682 (June 30, 1961), holding on the basis of Our rulings in Macarandang and Lucero, or should
that Republic Act No. 1576 which divested the Philippine National Bank of authority to his conviction stand in view of the complete reverse of the
accept back pay certificates in payment of loans, does not apply to an offer of Macarandang and Lucero doctrine in Mapa? . . .
payment made before effectivity of the act; Largado v. Masaganda, et al., 5 SCRA 522
(June 30, 1962), ruling that RA 2613, s amended by RA 3090 on June, 1961, granting
Decisions of this Court, although in themselves not laws, are
to inferior courts jurisdiction over guardianship cases, could not be given retroactive
nevertheless evidence of what the laws mean, and this is the
effect, in the absence of a saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the
reason why under Article 8 of the New Civil Code, "Judicial
effect that Sections 9 and 10 of Executive Order No. 90, amending Section 4 of PD
decisions applying or interpreting the laws or the Constitution
1752, could have no retroactive application; People v. Que Po Lay, 94 Phil. 640,
shall form a part of the legal system . . ."The interpretation upon a
holding that a person cannot be convicted of violating Circular No. 20 of the Central,
law by this Court constitutes, in a way, a part of the law as of the
when the alleged violation occurred before publication of the Circular in the Official
date that law was originally passed, since this Court's
Gazette; Baltazar v. C.A., 104 SCRA 619, denying retroactive application to P.D. No.
construction merely establishes the contemporaneous legislative
27 decreeing the emancipation of tenants from the bondage of the soil, and P.D. No.
intent that the law thus construed intends to effectuate. The
316 prohibiting ejectment of tenants from rice and corn farmholdings, pending the
settled rule supported by numerous authorities is a restatement of
promulgation of rules and regulations implementing P.D. No. 27; Nilo v. Court of
the legal maxim "legis interpretation legis vim obtinet" — the
Appeals, 128 SCRA 519, adjudging that RA 6389 whichremoved "personal cultivation"
interpretation placed upon the written law by a competent court
as a ground for the ejectment of a tenant cannot be given retroactive effect in the
has the force of law. The doctrine laid down
absence of a statutory statement for retroactivity; Tac-An v. CA, 129 SCRA 319, ruling
in Lucero and Macarandang was part of the jurisprudence, hence,
that the repeal of the old Administrative Code by RA 4252 could not be accorded
of the law, of the land, at the time appellant was found in
retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding that RA 6389 should
possession of the firearm in question and where he was arraigned
have only prospective application; (see also Bonifacio v. Dizon, 177 SCRA 294 and
by the trial court. It is true that the doctrine was overruled in the
Balatbat v. CA, 205 SCRA 419).
Mapa case in 1967, but when a doctrine of this Court is overruled
and a different view is adopted, the new doctrine should be
The prospectivity principle has also been made to apply to administrative rulings and applied prospectively, and should not apply to parties who had
circulars, to wit: ABS-CBN Broadcasting Corporation v. CTA, Oct. 12, 1981, 108 relied on, the old doctrine and acted on the faith thereof. This is
SCRA 142, holding that a circular or ruling of the Commissioner of Internal Revenue especially true in the construction and application of criminal laws,
may not be given retroactive effect adversely to a taxpayer: Sanchez v.COMELEC, where it is necessary that the punishment of an act be reasonably
193 SCRA 317, ruling that Resolution No. 90-0590 of the Commission on Elections, foreseen for the guidance of society.
which directed the holding of recall proceedings, had no retroactive
application; Romualdez v. CSC, 197 SCRA 168, where it was ruled that CSC
So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v. Court of
Memorandum Circular No. 29, s. 1989 cannot be given retrospective effect so as to
Appeals, et al. (G.R. No. 97973) and Development Bank of the Philippines v. Court of
entitle to permanent appointment an employee whose temporary appointment had
Appeals, et al (G.R. No 97998), Jan. 27, 1992, 205 SCRA 515, 527-528:8
expired before the Circular was issued.
 We sustain the petitioners' position, It is undisputed that the The courts below have proceeded on the theory that the Act of
subject lot was mortgaged to DBP on February 24, 1970. It was Congress, having found to be unconstitutional, was not a law; that
acquired by DBP as the highest bidder at a foreclosure sale on it was inoperative, conferring no rights and imposing no duties,
June 18, 1977, and then sold to the petitioners on September 29, and hence affording no basis for the challenged decree. Norton
1979. vs. Shelby County, 118 US 425, 442; Chicago, I. & L. Ry. Co. v.
Hackett, 228 U. S. 559, 566. It is quite clear, however, that such
broad statements as to the effect of a determination of
At that time, the prevailing jurisprudence interpreting section 119
unconstitutionality must be taken with qualifications. The actual
of R.A. 141 as amended was that enunciated
existence of a statute, prior to such a determination, is an
in Monge and Tupas cited above. The petitioners Benzonan and
operative fact and may have consequences which cannot justly
respondent Pe and the DBP are bound by these decisions for
be ignored. The past cannot always be erased by a new judicial
pursuant to Article 8 of the Civil Code "judicial decisions applying
declaration. The effect of the subsequent ruling as to invalidity
or interpreting the laws or the Constitution shall form a part of the
may have to be considered in various aspects — with respect to
legal system of the Philippines." But while our decisions form part
particular conduct, private and official. Questions of rights claimed
of the law of the land, they are also subject to Article 4 of the Civil
to have become vested, of status, of prior determinations deemed
Code which provides that "laws shall have no retroactive effect
to have finality and acted upon accordingly, of public policy in the
unless the contrary is provided." This is expressed in the familiar
light of the nature both of the statute and of its previous
legal maxim lex prospicit, non respicit, the law looks forward not
application, demand examination. These questions are among the
backward. The rationale against retroactivity is easy to perceive.
most difficult of those who have engaged the attention of courts,
The retroactive application of a law usually divests rights that
state and federal, and it is manifest from numerous decisions that
have already become vested or impairs the obligations of contract
an all-inclusive statement of a principle of absolute retroactive
and hence, is unconstitutional (Francisco vs. Certeza, 3 SCRA
invalidity cannot be justified.
565 [1061]).

Much earlier, in De Agbayani v. PNB, 38 SCRA 429 — concerning the effects of the
The same consideration underlies our rulings giving only
invalidation of "Republic Act No. 342, the moratorium legislation, which continued
prospective effect to decisions enunciating new doctrines. Thus,
Executive Order No. 32, issued by the then President Osmeña, suspending the
we emphasized in People v. Jabinal, 55 SCRA 607 [1974]" . . .
enforcement of payment of all debts and other monetary obligations payable by war
when a doctrine of this Court is overruled and a different view is
sufferers," and which had been "explicitly held in Rutter v. Esteban (93 Phil. 68
adopted, the new doctrine should be applied prospectively and
[1953] 10 . . . (to be) in 1953 'unreasonable and oppressive, and should not be
should not apply to parties who had relied on the old doctrine and
prolonged a minute longer . . ." — the Court made substantially the same
acted on the faith thereof.
observations, to wit:11

A compelling rationalization of the prospectivity principle of judicial decisions is well

set forth in the oft-cited case of Chicot County Drainage Dist. v. Baxter States Bank,
308 US 371, 374 [1940]. The Chicot doctrine advocates the imperative necessity to
take account of the actual existence of a statute prior to its nullification, as an
operative fact negating acceptance of "a principle of absolute retroactive invalidity.
Thus, in this Court's decision in Tañada v. Tuvera,9 promulgated on April 24, 1985 —
which declared "that presidential issuances of general application, which have not
been published,shall have no force and effect," and as regards which declaration
some members of the Court appeared "quite apprehensive about the possible
unsettling effect . . . (the) decision might have on acts done in reliance on the validity
of these presidential decrees . . ." — the Court said:
. . . . The answer is all too familiar. In similar situation is in the
past this Court, had taken the pragmatic and realistic course set
forth in Chicot County Drainage District vs. Baxter Bank (308 U.S.
371, 374) to wit:
. . . . The decision now on appeal reflects the orthodox view that
an unconstitutional act, for that matter an executive order or a
municipal ordinance likewise suffering from that infirmity, cannot
be the source of any legal rights or duties. Nor can it justify any
official act taken under it. Its repugnancy to the fundamental law
once judicially declared results in its being to all intents and
purposes amere scrap of paper. . . . It is understandable why it
should be so, the Constitution being supreme and paramount.
Any legislative or executive act contrary to its terms cannot
survive.
Such a view has support in logic and possesses the merit of
simplicity. lt may not however be sufficiently realistic. It does not
admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force
and had to be compiled with. This is so as until after the judiciary,
in an appropriate case, declares its invalidity,, it is entitled to
 obedience and respect. Parties may have acted under it and may
have changed theirpositions, what could be more fitting than that
in a subsequent litigation regard be had to what has been done
while such legislative or executive act was in operation and
presumed to be valid in all respects. It is now accepted as a
doctrine that prior to its being nullified, its existence is a fact must
be reckoned with. This is merely to reflect awareness that
precisely because the judiciary is the governmental organ which
has the final say on whether or not a legislative or executive
measure is valid, a, period of time may have elapsed before it can
exercise the power of judicial review that may lead to a
declaration of nullity. It would be to deprive the law of its quality of
fairness and justice then, if there be no recognition of what had
transpired prior to such adjudication.
In the language of an American Supreme Court decision: 'The
actual existence of a statute, prior to such a determination [of
unconstitutionality], is an operative fact and may have
consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in
various aspects, — with respect to particular relations, individual
and corporate, and particular conduct, private and official (Chicot
County Drainage Dist. v. Baxter States Bank, 308 US 371, 374
[1940]). This language has been quoted with approval in a
resolution in Araneta v. Hill (93 Phil. 1002 [1953]) and the
decision in Manila Motor Co. Inc. v. Flores (99 Phil. 738 [1956]).
An even more recent instance is the opinion of Justice Zaldivar
speaking for the Court in Fernandez v. Cuerva and Co. (L-21114,
Nov. 28, 1967, 21 SCRA 1095).
Again, treating of the effect that should be given to its decision in Olaguer v. Military
Commission No 34, 12 — declaring invalid criminal proceedings conducted during the
martial law regime against civilians, which had resulted in the conviction and
incarceration of numerous persons — this Court, in Tan vs. Barrios, 190 SCRA 686, at
p. 700, ruled as follows:
In the interest of justice and consistently, we hold that Olaguer
should, in principle, be applied prospectively only to future cases
and cases still ongoing or not yet final when that decision was
promulgated. Hence, there should be no retroactive nullification of
final judgments, whether of conviction or acquittal, rendered by
military courts against civilians before the promulgation of the
Olaguer decision. Such final sentences should not be disturbed
by the State. Only in particular cases where the convicted person
or the State shows that there was serious denial of constitutional
rights of the accused, should the nullity of the sentence be
declared and a retrial be ordered based on the violation of the
constitutional rights of the accused and not on the Olaguer
doctrine. If a retrial is no longer possible, the accused should be
released since judgment against him is null on account of the
violation of his constitutional rights and denial of due process.
xxx xxx xxx
The trial of thousands of civilians for common crimes before the
military tribunals and commissions during the ten-year period of
martial rule (1971-1981) which were created under general orders
issued by President Marcos in the exercise of his legislative
powers is an operative fact that may not just be ignored. The
belated declaration in 1987 of the unconstitutionality and invalidity
of those proceedings did not erase the reality of their
consequences which occurred long before our decision in
Olaguer was promulgated and which now prevent us from
carrying Olaguer to the limit of its logic. Thus did this Court rule in
Municipality of Malabang v. Benito, 27 SCRA 533, where the
question arose as to whether the nullity of creation of a
municipality by executive order wiped out all the acts of the local
government abolished. 13
It would seem then, that the weight of authority is decidedly in favor of the proposition
that the Court's decision of September 21, 1987 in Que v. People, 154 SCRA 160
(1987) 14 that a check issued merely to guarantee the performance of an obligation is
nevertheless covered by B.P. Blg. 22 — should not be given retrospective effect to the
prejudice of the petitioner and other persons situated, who relied on the official opinion
of the Minister of Justice that such a check did not fall within the scope of B.P. Blg. 22.
Inveighing against this proposition, the Solicitor General invokes U.S. v. Go Chico, 14
Phil. 128, applying the familiar doctrine that in crimes mala prohibita, the intent or
motive of the offender is inconsequential, the only relevant inquiry being, "has the law
been violated?" The facts in Go Chico are substantially different from those in the
case at bar. In the former, there was no official issuance by the Secretary of Justice or
other government officer construing the special law violated; 15 and it was there
observed, among others, that "the defense . . . (of) an honest misconstruction of the
law under legal advice" 16 could not be appreciated as a valid defense. In the present
case on the other hand, the defense is that reliance was placed, not on the opinion of
a private lawyer but upon an official pronouncement of no less than the attorney of the
Government, the Secretary of Justice, whose opinions, though not law, are entitled to
great weight and on which reliance may be placed by private individuals is reflective of
the correct interpretation of a constitutional or statutory provision; this, particularly in
the case of penal statutes, by the very nature and scope of the authority that resides in
as regards prosecutions for their violation.17 Senarillos vs.Hermosisima, supra, relied
upon by the respondent Court of Appeals, is crucially different in that in said case, as
in U.S. v. Go Chico, supra, no administrative interpretation antedated the contrary
construction placed by the Court on the law invoked.
This is after all a criminal action all doubts in which, pursuant to familiar, fundamental
doctrine, must be resolved in favor of the accused. Everything considered, the Court
sees no compelling reason why the doctrine of mala prohibita should override the
principle of prospectivity, and its clear implications as herein above set out and
discussed, negating criminal liability.
WHEREFORE, the assailed decisions of the Court of Appeals and of the Regional
Trial Court are reversed and set aside, and the criminal prosecution against the
accused-petitioner is DISMISSED, with costs de oficio.
SO ORDERED.
Padilla, Regalado, Nocon and Puno, JJ., concur.
# Footnotes
1 As found by the Court of Appeals, the agreement was between
Co, representing Mayflower Shipping Corporation, and Geronimo
B. Bella, representing Tans-Pacific Towage, Inc. The expenses
for refloating were apportioned chiefly between FGU Insurance
and Development Bank of the Philippines, which respectively
contributed P2,329,022.00 and P1,579,000.00. SEE Rollo, pp. 9,
20-21.
2 Otherwise known as the "Bouncing Checks Law".
3 The ruling is contained in an extended resolution on a motion
for reconsideration, promulgated by the Special Former Second
Division of the Court on September 21, 1987, written for the
division by Paras,J., with whom concurred Fernan, Gutierrez, Jr.,
Padilla, Bidin and Cortes, JJ. In that resolution, the Court gave
its "stamp of approval" on the decision of the Court of Appeals
holding inter alia that "It is now settled that Batas Pambansa
Bilang 22 applies even in cases where dishonored checks are
issued merely in the form of a deposit or a guarantee."
4 Emphasis supplied.
5 Exceptions to the rule of prospectivity are collated, e.g., in the
textbook of retired Justice Edgardo A. Paras (Civil Code of the
Philippines Annotated, 1984 ed., Vol. 1, pp. 22-23) viz : 1) laws
remedial in nature; 2) penal law favorable to accused, if ; after not
habitual delinquent; 3) laws of emergency nature under police
power : e.g., tenancy relations (Vda. de Ongsiako v. Gamboa, 47
O.G. 4259, Valencia et al. v. Surtida et al., May 31, 1961); 4)
curative laws; 5) substantive right declared for first time unless
vested rights impaired (Unson v. del Rosario, Jan. 29, 1953;
Belen v. Belen, 49 O.G. 997; Peo v. Alejaga, 49 OG 2833).
6 106 Phil. 713 and 103 Phil. 500, respectively, both involving
prosecutions for illegal possession of firearms, and both holding
that appointment by the Provincial Governor or Provincial
Commander of a person as a "secret agent" or "confidential
agent" "sufficiently placed him under the category of a 'peace
officer' . . . who under section 879 of the Revised Administrative
Code is exempted from the requirements relating to the issuance
of license to possess firearm.
7 SEE Ilagan v. People, Jan. 29, 1974, 55 SCRA 361.
8 The title of the cited Monge case is Monge, et al. v. Angeles, et
al., and is reported in 101 Phil., 563 [1957], while that of the cited
Tupas case is Tupas v. Damasco, et al., reported in 132 SCRA
593 [1984].
9 136 SCRA 27, 40-41.
10 And several other rulings set forth in a corresponding footnote
in the text of the decision.
11 SEE also Olaguer v. Military Commission No. 34, 150 SCRA
144 (1987) (Citing Municipality of Malabang v. Benito, 27 SCRA
533 where the question arose as to whether the judicial
nullification of an executive order creating a municipality wiped
out all the acts of the local government abolished); Tan v. Barrios,
190 SCRA 686 (1990); Drilon v. Court of Appeals, 202 SCRA 378
(1991); Union of Filipino Employees v. Vivar, Jr., 205 SCRA 200
(1992); Peralta v. Civil Service Commission, 212 SCRA 425.
12 150 SCRA 144 (1987).
13 SEE also Cruz v. Enrile, 160 SCRA 700 [1988] and Res. of
February 26, 1991; and Drilon v. Court of Appeals, 202 SCRA
378 [1991].
14 SEE footnote 3, supra.
15 Act No. 1696 of the Philippine Commission punishing any
person who shall expose, or cause or permit to be exposed, to
public view . . . any flag, banner, emblem, or device used during
the late insurrection in the Philippine Islands to designate or
identify those in armed rebellion against the United States, . . .
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 147097 June 5, 2009
CARMELO F. LAZATIN, MARINO A. MORALES, TEODORO L. DAVID and
ANGELITO A. PELAYO, Petitioner,
vs.
HON. ANIANO A. DESIERTO as OMBUDSMAN, and SANDIGANBAYAN, THIRD
DIVISION, Respondents.
DECISION
PERALTA, J.:
This resolves the petition for certiorari under Rule 65 of the Rules of Court, praying
that the Ombudsman's disapproval of the Office of the Special Prosecutor's (OSP)
Resolution1 dated September 18, 2000, recommending dismissal of the criminal cases
filed against herein petitioners, be reversed and set aside.
The antecedent facts are as follows.
On July 22, 1998, the Fact-Finding and Intelligence Bureau of the Office of the
Ombudsman filed a Complaint-Affidavit docketed as OMB-0-98-1500, charging herein
petitioners with Illegal Use of Public Funds as defined and penalized under Article 220
of the Revised Penal Code and violation of Section 3, paragraphs (a) and (e) of
Republic Act (R.A.) No. 3019, as amended.
The complaint alleged that there were irregularities in the use by then Congressman
Carmello F. Lazatin of his Countrywide Development Fund (CDF) for the calendar
year 1996, i.e., he was both proponent and implementer of the projects funded from
his CDF; he signed vouchers and supporting papers pertinent to the disbursement as
Disbursing Officer; and he received, as claimant, eighteen (18) checks amounting to
₱4,868,277.08. Thus, petitioner Lazatin, with the help of petitioners Marino A.
Morales, Angelito A. Pelayo and Teodoro L. David, was allegedly able to convert his
CDF into cash.
A preliminary investigation was conducted and, thereafter, the Evaluation and
Preliminary Investigation Bureau (EPIB) issued a Resolution2 dated May 29, 2000
recommending the filing against herein petitioners of fourteen (14) counts each of
Malversation of Public Funds and violation of Section 3 (e) of R.A. No. 3019. Said
Resolution was approved by the Ombudsman; hence, twenty-eight (28) Informations
docketed as Criminal Case Nos. 26087 to 26114 were filed against herein petitioners
before the Sandiganbayan.
Petitioner Lazatin and his co-petitioners then filed their respective Motions for
Reconsideration/Reinvestigation, which motions were granted by the Sandiganbayan
(Third Division). The Sandiganbayan also ordered the prosecution to re-evaluate the
cases against petitioners.
Subsequently, the OSP submitted to the Ombudsman its Resolution3 dated
September 18, 2000. It recommended the dismissal of the cases against petitioners
for lack or insufficiency of evidence.
The Ombudsman, however, ordered the Office of the Legal Affairs (OLA) to review the
OSP Resolution. In a Memorandum4 dated October 24, 2000, the OLA recommended
that the OSP Resolution be disapproved and the OSP be directed to proceed with the
trial of the cases against petitioners. On October 27, 2000, the Ombudsman adopted
the OLA Memorandum, thereby disapproving the OSP Resolution dated September
18, 2000 and ordering the aggressive prosecution of the subject cases. The cases
were then returned to the Sandiganbayan for continuation of criminal proceedings.
Thus, petitioners filed the instant petition.
Petitioners allege that:
I.
THE OMBUDSMAN ACTED WITH GRAVE ABUSE OF DISCRETION OR ACTED
WITHOUT OR IN EXCESS OF HIS JURISDICTION.
II.
THE QUESTIONED RESOLUTION WAS BASED ON MISAPPREHENSION OF
FACTS, SPECULATIONS, SURMISES AND CONJECTURES.5
Amplifying their arguments, petitioners asseverate that the Ombudsman had no
authority to overturn the OSP's Resolution dismissing the cases against petitioners
because, under Section 13, Article XI of the 1987 Constitution, the Ombudsman is
clothed only with the power to watch, investigate and recommend the filing of proper
cases against erring officials, but it was not granted the power to prosecute. They
point out that under the Constitution, the power to prosecute belongs to the OSP
(formerly the Tanodbayan), which was intended by the framers to be a separate and
distinct entity from the Office of the Ombudsman. Petitioners conclude that, as
provided by the Constitution, the OSP being a separate and distinct entity, the
Ombudsman should have no power and authority over the OSP. Thus, petitioners
maintain that R.A. No. 6770 (The Ombudsman Act of 1989), which made the OSP an
organic component of the Office of the Ombudsman, should be struck down for being Precisely, I am coming to that. The last of the enumerated functions of the
unconstitutional. Ombudsman is: "to exercise such powers or perform such functions or
duties as may be provided by law." So, the legislature may vest him with
powers taken away from the Tanodbayan, may it not?
Next, petitioners insist that they should be absolved from any liability because the
checks were issued to petitioner Lazatin allegedly as reimbursement for the advances
he made from his personal funds for expenses incurred to ensure the immediate MR. COLAYCO:
implementation of projects that are badly needed by the Pinatubo victims.
Yes.
The Court finds the petition unmeritorious.
MR. MONSOD:
Petitioners' attack against the constitutionality of R.A. No. 6770 is stale. It has long
been settled that the provisions of R.A. No. 6770 granting the Office of the
Yes.
Ombudsman prosecutorial powers and placing the OSP under said office have no
constitutional infirmity. The issue of whether said provisions of R.A. No. 6770 violated
the Constitution had been fully dissected as far back as 1995 in Acop v. Office of the xxxx
Ombudsman.6
MR. RODRIGO:
Therein, the Court held that giving prosecutorial powers to the Ombudsman is in
accordance with the Constitution as paragraph 8, Section 13, Article XI provides that
Madam President. Section 5 reads: "The Tanodbayan shall continue to
the Ombudsman shall "exercise such other functions or duties as may be provided by
law." Elucidating on this matter, the Court stated: function and exercise its powers as provided by law."

MR. COLAYCO:
x x x While the intention to withhold prosecutorial powers from the Ombudsman was
indeed present, the Commission [referring to the Constitutional Commission of 1986]
did not hesitate to recommend that the Legislature could, through statute, prescribe That is correct, because it is under P.D. No. 1630.
such other powers, functions, and duties to the Ombudsman. x x x As finally approved
by the Commission after several amendments, this is now embodied in paragraph 8,
Section 13, Article XI (Accountability of Public Officers) of the Constitution, which MR. RODRIGO:
provides:
So, if it is provided by law, it can be taken away by law, I suppose.
Sec.13. The Office of the Ombudsman shall have the following powers, functions, and
duties: MR. COLAYCO:

xxxx That is correct.

Promulgate its rules and procedure and exercise such other functions or duties as MR. RODRIGO:
may be provided by law.
And precisely, Section 12(6) says that among the functions that can be
Expounding on this power of Congress to prescribe other powers, functions, and performed by the Ombudsman are "such functions or duties as may be
duties to the Ombudsman, we quote Commissioners Colayco and Monsod during provided by law." The sponsors admitted that the legislature later on might
interpellation by Commissioner Rodrigo: remove some powers from the Tanodbayan and transfer these to the
Ombudsman.
xxxx
MR. COLAYCO:
MR. RODRIGO:
 Madam President, that is correct.
xxxx
MR. RODRIGO:
Madam President, what I am worried about is, if we create a constitutional
body which has neither punitive nor prosecutory powers but only persuasive
powers, we might be raising the hopes of our people too much and then
disappoint them.
MR. MONSOD:
I agree with the Commissioner.
MR. RODRIGO:
Anyway, since we state that the powers of the Ombudsman can later on be
implemented by the legislature, why not leave this to the legislature?
xxxx
MR. MONSOD: (reacting to statements of Commissioner Blas Ople):
xxxx
With respect to the argument that he is a toothless animal, we would like to say that
we are promoting the concept in its form at the present, but we are also saying that he
can exercise such powers and functions as may be provided by law in accordance
with the direction of the thinking of Commissioner Rodrigo. We do not think that at this
time we should prescribe this, but we leave it up to Congress at some future time if it
feels that it may need to designate what powers the Ombudsman need in order that
he be more effective.1awphi1 This is not foreclosed.
So, this is a reversible disability, unlike that of a eunuch; it is not an irreversible
disability.7
The constitutionality of Section 3 of R.A. No. 6770, which subsumed the OSP under
the Office of the Ombudsman, was likewise upheld by the Court in Acop. It was
explained, thus:
x x x the petitioners conclude that the inclusion of the Office of the Special Prosecutor
as among the offices under the Office of the Ombudsman in Section 3 of R.A. No.
6770 ("An Act Providing for the Functional and Structural Organization of the Office of
the Ombudsman and for Other Purposes") is unconstitutional and void.
The contention is not impressed with merit. x x x
xxxx
x x x Section 7 of Article XI expressly provides that the then existing Tanodbayan, to
be henceforth known as the Office of the Special Prosecutor, "shall continue to
function and exercise its powers as now or hereafter may be provided by law, except
those conferred on the Office of the Ombudsman created under this Constitution." The
underscored phrase evidently refers to the Tanodbayan's powers under P.D. No. 1630
or subsequent amendatory legislation. It follows then that Congress may remove any
of the Tanodbayan's/Special Prosecutor's powers under P.D. No. 1630 or grant it
other powers, except those powers conferred by the Constitution on the Office of the
Ombudsman.
Pursuing the present line of reasoning, when one considers that by express mandate
of paragraph 8, Section 13, Article XI of the Constitution, the Ombudsman may
"exercise such other powers or perform functions or duties as may be provided by
law," it is indubitable then that Congress has the power to place the Office of the
Special Prosecutor under the Office of the Ombudsman. In the same vein, Congress
may remove some of the powers granted to the Tanodbayan by P.D. No. 1630 and
transfer them to the Ombudsman; or grant the Office of the Special Prosecutor such
other powers and functions and duties as Congress may deem fit and wise. This
Congress did through the passage of R.A. No. 6770.8
The foregoing ruling of the Court has been reiterated in Camanag v. Guerrero.9 More
recently, in Office of the Ombudsman v. Valera,10 the Court, basing its ratio
decidendi on its ruling in Acop and Camanag, declared that the OSP is "merely a
component of the Office of the Ombudsman and may only act under the supervision
and control, and upon authority of the Ombudsman" and ruled that under R.A. No.
6770, the power to preventively suspend is lodged only with the Ombudsman and
Deputy Ombudsman.11 The Court's ruling in Acop that the authority of the
Ombudsman to prosecute based on R.A. No. 6770 was authorized by the Constitution
was also made the foundation for the decision in Perez v. Sandiganbayan,12 where it
was held that the power to prosecute carries with it the power to authorize the filing of
informations, which power had not been delegated to the OSP. It is, therefore, beyond
cavil that under the Constitution, Congress was not proscribed from legislating the
grant of additional powers to the Ombudsman or placing the OSP under the Office of
the Ombudsman.
Petitioners now assert that the Court's ruling on the constitutionality of the provisions
of R.A. No. 6770 should be revisited and the principle of stare decisis set aside. Again,
this contention deserves scant consideration.
The doctrine of stare decisis et non quieta movere (to adhere to precedents and not to
unsettle things which are established) is embodied in Article 8 of the Civil Code of the
Philippines which provides, thus:
ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall
form a part of the legal system of the Philippines.
It was further explained in Fermin v. People13 as follows:
The doctrine of stare decisis enjoins adherence to judicial precedents. It requires
courts in a country to follow the rule established in a decision of the Supreme
Court thereof. That decision becomes a judicial precedent to be followed in
subsequent cases by all courts in the land. The doctrine of stare decisis is based on
the principle that once a question of law has been examined and decided, it should be
deemed settled and closed to further argument.141avvphi1
In Chinese Young Men's Christian Association of the Philippine Islands v. Remington
Steel Corporation,15 the Court expounded on the importance of the foregoing doctrine,
stating that:
The doctrine of stare decisis is one of policy grounded on the necessity for securing
certainty and stability of judicial decisions, thus:
Time and again, the court has held that it is a very desirable and necessary judicial
practice that when a court has laid down a principle of law as applicable to a certain
state of facts, it will adhere to that principle and apply it to all future cases in which the
facts are substantially the same. Stare decisis et non quieta movere. Stand by the
decisions and disturb not what is settled. Stare decisis simply means that for the sake
of certainty, a conclusion reached in one case should be applied to those that
follow if the facts are substantially the same, even though the parties may be
different. It proceeds from the first principle of justice that, absent any powerful
countervailing considerations, like cases ought to be decided alike. Thus, where
the same questions relating to the same event have been put forward by the parties
similarly situated as in a previous case litigated and decided by a competent court, the
rule of stare decisis is a bar to any attempt to relitigate the same issue.16
The doctrine has assumed such value in our judicial system that the Court has ruled
that "[a]bandonment thereof must be based only on strong and compelling
reasons, otherwise, the becoming virtue of predictability which is expected from this
Court would be immeasurably affected and the public's confidence in the stability of
the solemn pronouncements diminished."17 Verily, only upon showing that
circumstances attendant in a particular case override the great benefits derived by our
judicial system from the doctrine of stare decisis, can the courts be justified in setting
aside the same.
In this case, petitioners have not shown any strong, compelling reason to convince the
Court that the doctrine of stare decisis should not be applied to this case. They have
not successfully demonstrated how or why it would be grave abuse of discretion for
the Ombudsman, who has been validly conferred by law with the power of control and
supervision over the OSP, to disapprove or overturn any resolution issued by the
latter.
The second issue advanced by petitioners is that the Ombudsman's disapproval of the
OSP Resolution recommending dismissal of the cases is based on misapprehension
of facts, speculations, surmises and conjectures. The question is really whether the
Ombudsman correctly ruled that there was enough evidence to support a finding of
probable cause. That issue, however, pertains to a mere error of judgment. It must be
stressed that certiorari is a remedy meant to correct only errors of jurisdiction, not
errors of judgment. This has been emphasized in First Corporation v. Former Sixth
Division of the Court of Appeals,18 to wit:
It is a fundamental aphorism in law that a review of facts and evidence is not the
province of the extraordinary remedy of certiorari, which is extra ordinem - beyond the
ambit of appeal. In certiorari proceedings, judicial review does not go as far as to
examine and assess the evidence of the parties and to weigh the probative
value thereof. It does not include an inquiry as to the correctness of the
evaluation of evidence. Any error committed in the evaluation of evidence is
merely an error of judgment that cannot be remedied by certiorari. An error of
judgment is one which the court may commit in the exercise of its jurisdiction. An error
of jurisdiction is one where the act complained of was issued by the court without or in
excess of jurisdiction, or with grave abuse of discretion, which is tantamount to lack or
in excess of jurisdiction and which error is correctible only by the extraordinary writ of
certiorari. Certiorari will not be issued to cure errors of the trial court in its
appreciation of the evidence of the parties, or its conclusions anchored on the
said findings and its conclusions of law. It is not for this Court to re-examine
conflicting evidence, re-evaluate the credibility of the witnesses or substitute
the findings of fact of the court a quo.19
Evidently, the issue of whether the evidence indeed supports a finding of probable
cause would necessitate an examination and re-evaluation of the evidence upon
which the Ombudsman based its disapproval of the OSP Resolution. Hence, the
Petition for Certiorari should not be given due course.
Likewise noteworthy is the holding of the Court in Presidential Ad Hoc Fact-Finding
Committee on Behest Loans v. Desierto,20 imparting the value of the Ombudsman's
independence, stating thus:
Under Sections 12 and 13, Article XI of the 1987 Constitution and RA 6770 (The
Ombudsman Act of 1989), the Ombudsman has the power to investigate and
prosecute any act or omission of a public officer or employee when such act or
omission appears to be illegal, unjust, improper or inefficient. It has been the
consistent ruling of the Court not to interfere with the Ombudsman's exercise of
his investigatory and prosecutory powers as long as his rulings are supported
by substantial evidence. Envisioned as the champion of the people and preserver of ATTESTATION
the integrity of public service, he has wide latitude in exercising his powers and is
free from intervention from the three branches of government. This is to ensure
I attest that the conclusions in the above Decision had been reached in consultation
that his Office is insulated from any outside pressure and improper influence.21
before the case was assigned to the writer of the opinion of the Court’s Division.

Indeed, for the Court to overturn the Ombudsman's finding of probable cause, it is
CONSUELO YNARES-SANTIAGO
imperative for petitioners to clearly prove that said public official acted with grave
Associate Justice
abuse of discretion. In Presidential Commission on Good Government v.
Third Division, Chairperson
Desierto,22 the Court elaborated on what constitutes such abuse, to wit:

CERTIFICATION
Grave abuse of discretion implies a capricious and whimsical exercise of judgment
tantamount to lack of jurisdiction. The Ombudsman's exercise of power must have
been done in an arbitrary or despotic manner which must be so patent and gross as to Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s
amount to an evasion of a positive duty or a virtual refusal to perform the duty Attestation, I certify that the conclusions in the above Decision were reached in
enjoined or to act at all in contemplation of law. x x x23 consultation before the case was assigned to the writer of the opinion of the Court’s
Division.
In this case, petitioners failed to demonstrate that the Ombudsman acted in a manner
described above. Clearly, the Ombudsman was acting in accordance with R.A. No. REYNATO S. PUNO
6770 and properly exercised its power of control and supervision over the OSP when Chief Justice
it disapproved the Resolution dated September 18, 2000.

It should also be noted that the petition does not question any order or action of the
Sandiganbayan Third Division; hence, it should not have been included as a
respondent in this petition.

IN VIEW OF THE FOREGOING, the petition is DISMISSED for lack of merit. No costs.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

ANTONIO T. CARPIO* RENATO C. CORONA**

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice
G.R. No. 171396 May 3, 2006 KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON ELMER C.
LABOG AND SECRETARY GENERAL JOEL MAGLUNSOD, NATIONAL
FEDERATION OF LABOR UNIONS – KILUSANG MAYO UNO (NAFLU-KMU),
PROF. RANDOLF S. DAVID, LORENZO TAÑADA III, RONALD LLAMAS, H.
REPRESENTED BY ITS NATIONAL PRESIDENT, JOSELITO V. USTAREZ,
HARRY L. ROQUE, JR., JOEL RUIZ BUTUYAN, ROGER R. RAYEL, GARY S.
ANTONIO C. PASCUAL, SALVADOR T. CARRANZA, EMILIA P. DAPULANG,
MALLARI, ROMEL REGALADO BAGARES, CHRISTOPHER F.C.
MARTIN CUSTODIO, JR., AND ROQUE M. TAN, Petitioners,
BOLASTIG, Petitioners,
vs.
vs.
HER EXCELLENCY, PRESIDENT GLORIA MACAPAGAL-ARROYO, THE
GLORIA MACAPAGAL-ARROYO, AS PRESIDENT AND COMMANDER-IN-CHIEF,
HONORABLE EXECUTIVE SECRETARY, EDUARDO ERMITA, THE CHIEF OF
EXECUTIVE SECRETARY EDUARDO ERMITA, HON. AVELINO CRUZ II,
STAFF, ARMED FORCES OF THE PHILIPPINES, GENEROSO SENGA, AND THE
SECRETARY OF NATIONAL DEFENSE, GENERAL GENEROSO SENGA, CHIEF
PNP DIRECTOR GENERAL, ARTURO LOMIBAO, Respondents.
OF STAFF, ARMED FORCES OF THE PHILIPPINES, DIRECTOR GENERAL
ARTURO LOMIBAO, CHIEF, PHILIPPINE NATIONAL POLICE, Respondents.
x-------------------------------------x
x-------------------------------------x
G.R. No. 171400 May 3, 2006
G.R. No. 171409 May 3, 2006
ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner,
vs.
NIÑEZ CACHO-OLIVARES AND TRIBUNE PUBLISHING CO., INC., Petitioners,
EXECUTIVE SECRETARY EDUARDO R. ERMITA, LT. GEN. GENEROSO SENGA,
vs.
AND DIRECTOR GENERAL ARTURO LOMIBAO, Respondents.
HONORABLE SECRETARY EDUARDO ERMITA AND HONORABLE DIRECTOR
GENERAL ARTURO C. LOMIBAO, Respondents.
G.R. No. 171489 May 3, 2006
x-------------------------------------x
JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA,
JOSE AMOR M. AMORADO, ALICIA A. RISOS-VIDAL, FELIMON C. ABELITA III,
G.R. No. 171485 May 3, 2006
MANUEL P. LEGASPI, J.B. JOVY C. BERNABE, BERNARD L. DAGCUTA,
ROGELIO V. GARCIA AND INTEGRATED BAR OF THE PHILIPPINES
FRANCIS JOSEPH G. ESCUDERO, JOSEPH A. SANTIAGO, TEODORO A. (IBP), Petitioners,
CASINO, AGAPITO A. AQUINO, MARIO J. AGUJA, SATUR C. OCAMPO, MUJIV S. vs.
HATAMAN, JUAN EDGARDO ANGARA, TEOFISTO DL. GUINGONA III, HON. EXECUTIVE SECRETARY EDUARDO ERMITA, GENERAL GENEROSO
EMMANUEL JOSEL J. VILLANUEVA, LIZA L. MAZA, IMEE R. MARCOS, RENATO SENGA, IN HIS CAPACITY AS AFP CHIEF OF STAFF, AND DIRECTOR GENERAL
B. MAGTUBO, JUSTIN MARC SB. CHIPECO, ROILO GOLEZ, DARLENE ARTURO LOMIBAO, IN HIS CAPACITY AS PNP CHIEF, Respondents.
ANTONINO-CUSTODIO, LORETTA ANN P. ROSALES, JOSEL G. VIRADOR,
RAFAEL V. MARIANO, GILBERT C. REMULLA, FLORENCIO G. NOEL, ANA
x-------------------------------------x
THERESIA HONTIVEROS-BARAQUEL, IMELDA C. NICOLAS, MARVIC M.V.F.
LEONEN, NERI JAVIER COLMENARES, MOVEMENT OF CONCERNED CITIZENS
FOR CIVIL LIBERTIES REPRESENTED BY AMADO GAT INCIONG, Petitioners, G.R. No. 171424 May 3, 2006
vs.
EDUARDO R. ERMITA, EXECUTIVE SECRETARY, AVELINO J. CRUZ, JR.,
LOREN B. LEGARDA, Petitioner,
SECRETARY, DND RONALDO V. PUNO, SECRETARY, DILG, GENEROSO
vs.
SENGA, AFP CHIEF OF STAFF, ARTURO LOMIBAO, CHIEF PNP, Respondents.
GLORIA MACAPAGAL-ARROYO, IN HER CAPACITY AS PRESIDENT AND
COMMANDER-IN-CHIEF; ARTURO LOMIBAO, IN HIS CAPACITY AS DIRECTOR-
x-------------------------------------x GENERAL OF THE PHILIPPINE NATIONAL POLICE (PNP); GENEROSO SENGA,
IN HIS CAPACITY AS CHIEF OF STAFF OF THE ARMED FORCES OF THE
PHILIPPINES (AFP); AND EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE
G.R. No. 171483 May 3, 2006
SECRETARY, Respondents.
 DECISION
SANDOVAL-GUTIERREZ, J.:
All powers need some restraint; practical adjustments rather than rigid formula are
necessary.1 Superior strength – the use of force – cannot make wrongs into rights. In
this regard, the courts should be vigilant in safeguarding the constitutional rights of the
citizens, specifically their liberty.
WHEREAS, over these past months, elements in the political opposition have
conspired with authoritarians of the extreme Left represented by the NDF-CPP-
NPA and the extreme Right, represented by military adventurists – the historical
enemies of the democratic Philippine State – who are now in a tactical alliance and
engaged in a concerted and systematic conspiracy, over a broad front, to bring down
the duly constituted Government elected in May 2004;
WHEREAS, these conspirators have repeatedly tried to bring down the President;

WHEREAS, the claims of these elements have been recklessly magnified by

Chief Justice Artemio V. Panganiban’s philosophy of liberty is thus most relevant. He
certain segments of the national media;
said: "In cases involving liberty, the scales of justice should weigh heavily
against government and in favor of the poor, the oppressed, the marginalized,
the dispossessed and the weak." Laws and actions that restrict fundamental rights WHEREAS, this series of actions is hurting the Philippine State – by obstructing
come to the courts "with a heavy presumption against their constitutional validity."2 governance including hindering the growth of the economy and sabotaging the
people’s confidence in government and their faith in the future of this country;
These seven (7) consolidated petitions for certiorari and prohibition allege that in
issuing Presidential Proclamation No. 1017 (PP 1017) and General Order No. 5 (G.O. WHEREAS, these actions are adversely affecting the economy;
No. 5), President Gloria Macapagal-Arroyo committed grave abuse of discretion.
Petitioners contend that respondent officials of the Government, in their professed
WHEREAS, these activities give totalitarian forces of both the extreme Left and
efforts to defend and preserve democratic institutions, are actually trampling upon the
extreme Right the opening to intensify their avowed aims to bring down the
very freedom guaranteed and protected by the Constitution. Hence, such issuances
democratic Philippine State;
are void for being unconstitutional.

WHEREAS, Article 2, Section 4 of the our Constitution makes the defense and
Once again, the Court is faced with an age-old but persistently modern problem. How
preservation of the democratic institutions and the State the primary duty of
does the Constitution of a free people combine the degree of liberty, without which,
Government;
law becomes tyranny, with the degree of law, without which, liberty becomes license?3

WHEREAS, the activities above-described, their consequences, ramifications and

On February 24, 2006, as the nation celebrated the 20th Anniversary of the Edsa
collateral effects constitute a clear and present danger to the safety and the integrity
People Power I, President Arroyo issued PP 1017 declaring a state of national
of the Philippine State and of the Filipino people;
emergency, thus:

NOW, THEREFORE, I, Gloria Macapagal-Arroyo, President of the Republic of the
Philippines and Commander-in-Chief of the Armed Forces of the Philippines, by virtue
of the powers vested upon me by Section 18, Article 7 of the Philippine Constitution
which states that: "The President. . . whenever it becomes necessary, . . . may call out
(the) armed forces to prevent or suppress. . .rebellion. . .," and in my capacity as their
Commander-in-Chief, do hereby command the Armed Forces of the Philippines,
to maintain law and order throughout the Philippines, prevent or suppress all
forms of lawless violence as well as any act of insurrection or rebellion and to
enforce obedience to all the laws and to all decrees, orders and regulations
promulgated by me personally or upon my direction; and as provided in Section
17, Article 12 of the Constitution do hereby declare a State of National
Emergency.
On the same day, the President issued G. O. No. 5 implementing PP 1017, thus:
WHEREAS, over these past months, elements in the political opposition have
conspired with authoritarians of the extreme Left, represented by the NDF-CPP-NPA
and the extreme Right, represented by military adventurists - the historical enemies of
the democratic Philippine State – and who are now in a tactical alliance and engaged
in a concerted and systematic conspiracy, over a broad front, to bring down the duly-
constituted Government elected in May 2004;
WHEREAS, these conspirators have repeatedly tried to bring down our republican
government;

WHEREAS, the claims of these elements have been recklessly magnified by certain
She cited the following facts as bases:
segments of the national media;
WHEREAS, these series of actions is hurting the Philippine State by obstructing
governance, including hindering the growth of the economy and sabotaging the
people’s confidence in the government and their faith in the future of this country;
WHEREAS, these actions are adversely affecting the economy;
WHEREAS, these activities give totalitarian forces; of both the extreme Left and
extreme Right the opening to intensify their avowed aims to bring down the democratic
Philippine State;
WHEREAS, Article 2, Section 4 of our Constitution makes the defense and
preservation of the democratic institutions and the State the primary duty of
Government;
WHEREAS, the activities above-described, their consequences, ramifications and
collateral effects constitute a clear and present danger to the safety and the integrity of
the Philippine State and of the Filipino people;
WHEREAS, Proclamation 1017 date February 24, 2006 has been issued declaring a
State of National Emergency;
NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, by virtue of the powers
vested in me under the Constitution as President of the Republic of the Philippines,
and Commander-in-Chief of the Republic of the Philippines, and pursuant to
Proclamation No. 1017 dated February 24, 2006, do hereby call upon the Armed
Forces of the Philippines (AFP) and the Philippine National Police (PNP), to prevent
and suppress acts of terrorism and lawless violence in the country;
I hereby direct the Chief of Staff of the AFP and the Chief of the PNP, as well as the
officers and men of the AFP and PNP, to immediately carry out the necessary and
appropriate actions and measures to suppress and prevent acts of terrorism
and lawless violence.
On March 3, 2006, exactly one week after the declaration of a state of national
emergency and after all these petitions had been filed, the President lifted PP 1017.
She issued Proclamation No. 1021 which reads:
WHEREAS, pursuant to Section 18, Article VII and Section 17, Article XII of the
Constitution, Proclamation No. 1017 dated February 24, 2006, was issued declaring a
state of national emergency;
WHEREAS, by virtue of General Order No.5 and No.6 dated February 24, 2006,
which were issued on the basis of Proclamation No. 1017, the Armed Forces of the
Philippines (AFP) and the Philippine National Police (PNP), were directed to maintain
law and order throughout the Philippines, prevent and suppress all form of lawless
violence as well as any act of rebellion and to undertake such action as may be
necessary;
WHEREAS, the AFP and PNP have effectively prevented, suppressed and quelled
the acts lawless violence and rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic
of the Philippines, by virtue of the powers vested in me by law, hereby declare that
the state of national emergency has ceased to exist.
In their presentation of the factual bases of PP 1017 and G.O. No. 5, respondents
stated that the proximate cause behind the executive issuances was the conspiracy
among some military officers, leftist insurgents of the New People’s Army (NPA), and
some members of the political opposition in a plot to unseat or assassinate President
Arroyo.4 They considered the aim to oust or assassinate the President and take-over
the reigns of government as a clear and present danger.
During the oral arguments held on March 7, 2006, the Solicitor General specified the
facts leading to the issuance of PP 1017 and G.O. No. 5. Significantly, there was no
refutation from petitioners’ counsels.
The Solicitor General argued that the intent of the Constitution is to give
full discretionary powers to the President in determining the necessity of calling out
the armed forces. He emphasized that none of the petitioners has shown that PP 1017
was without factual bases. While he explained that it is not respondents’ task to state
the facts behind the questioned Proclamation, however, they are presenting the same,
narrated hereunder, for the elucidation of the issues.
On January 17, 2006, Captain Nathaniel Rabonza and First Lieutenants Sonny
Sarmiento, Lawrence San Juan and Patricio Bumidang, members of the Magdalo
Group indicted in the Oakwood mutiny, escaped their detention cell in Fort Bonifacio,
Taguig City. In a public statement, they vowed to remain defiant and to elude arrest at
all costs. They called upon the people to "show and proclaim our displeasure at the
sham regime. Let us demonstrate our disgust, not only by going to the streets in
protest, but also by wearing red bands on our left arms." 5
On February 17, 2006, the authorities got hold of a document entitled "Oplan Hackle
I " which detailed plans for bombings and attacks during the Philippine Military
Academy Alumni Homecoming in Baguio City. The plot was to assassinate selected
targets including some cabinet members and President Arroyo herself.6 Upon the
advice of her security, President Arroyo decided not to attend the Alumni
Homecoming. The next day, at the height of the celebration, a bomb was found and
detonated at the PMA parade ground.
On February 21, 2006, Lt. San Juan was recaptured in a communist safehouse in
Batangas province. Found in his possession were two (2) flash disks containing
minutes of the meetings between members of the Magdalo Group and the National the groups that have been reinforcing since June 2005, it is probable that the
People’s Army (NPA), a tape recorder, audio cassette cartridges, diskettes, and President’s ouster is nearing its concluding stage in the first half of 2006.
copies of subversive documents.7 Prior to his arrest, Lt. San Juan announced through
DZRH that the "Magdalo’s D-Day would be on February 24, 2006, the 20th
Respondents further claimed that the bombing of telecommunication towers and cell
Anniversary of Edsa I."
sites in Bulacan and Bataan was also considered as additional factual basis for the
issuance of PP 1017 and G.O. No. 5. So is the raid of an army outpost in Benguet
On February 23, 2006, PNP Chief Arturo Lomibao intercepted information that resulting in the death of three (3) soldiers. And also the directive of the Communist
members of the PNP- Special Action Force were planning to defect. Thus, he Party of the Philippines ordering its front organizations to join 5,000 Metro Manila
immediately ordered SAF Commanding General Marcelino Franco, Jr. radicals and 25,000 more from the provinces in mass protests.10
to "disavow" any defection. The latter promptly obeyed and issued a public statement:
"All SAF units are under the effective control of responsible and trustworthy officers
By midnight of February 23, 2006, the President convened her security advisers and
with proven integrity and unquestionable loyalty."
several cabinet members to assess the gravity of the fermenting peace and order
situation. She directed both the AFP and the PNP to account for all their men and
On the same day, at the house of former Congressman Peping Cojuangco, President ensure that the chain of command remains solid and undivided. To protect the young
Cory Aquino’s brother, businessmen and mid-level government officials plotted moves students from any possible trouble that might break loose on the streets, the President
to bring down the Arroyo administration. Nelly Sindayen of TIME Magazine reported suspended classes in all levels in the entire National Capital Region.
that Pastor Saycon, longtime Arroyo critic, called a U.S. government official about his
group’s plans if President Arroyo is ousted. Saycon also phoned a man code-named
For their part, petitioners cited the events that followed after the issuance of PP
Delta. Saycon identified him as B/Gen. Danilo Lim, Commander of the Army’s elite
1017 and G.O. No. 5.
Scout Ranger. Lim said "it was all systems go for the planned movement against
Arroyo."8
Immediately, the Office of the President announced the cancellation of all programs
and activities related to the 20th anniversary celebration of Edsa People Power I; and
B/Gen. Danilo Lim and Brigade Commander Col. Ariel Querubin confided to Gen.
revoked the permits to hold rallies issued earlier by the local governments. Justice
Generoso Senga, Chief of Staff of the Armed Forces of the Philippines (AFP), that a
Secretary Raul Gonzales stated that political rallies, which to the President’s mind
huge number of soldiers would join the rallies to provide a critical mass and armed
were organized for purposes of destabilization, are cancelled.Presidential Chief of
component to the Anti-Arroyo protests to be held on February 24, 2005. According to
Staff Michael Defensor announced that "warrantless arrests and take-over of facilities,
these two (2) officers, there was no way they could possibly stop the soldiers because
including media, can already be implemented."11
they too, were breaking the chain of command to join the forces foist to unseat the
President. However, Gen. Senga has remained faithful to his Commander-in-Chief
and to the chain of command. He immediately took custody of B/Gen. Lim and Undeterred by the announcements that rallies and public assemblies would not be
directed Col. Querubin to return to the Philippine Marines Headquarters in Fort allowed, groups of protesters (members of Kilusang Mayo Uno [KMU] and National
Bonifacio. Federation of Labor Unions-Kilusang Mayo Uno [NAFLU-KMU]), marched from
various parts of Metro Manila with the intention of converging at the EDSA shrine.
Those who were already near the EDSA site were violently dispersed by huge clusters
Earlier, the CPP-NPA called for intensification of political and revolutionary work within
of anti-riot police. The well-trained policemen used truncheons, big fiber glass shields,
the military and the police establishments in order to forge alliances with its members
water cannons, and tear gas to stop and break up the marching groups, and scatter
and key officials. NPA spokesman Gregorio "Ka Roger" Rosal declared: "The
the massed participants. The same police action was used against the protesters
Communist Party and revolutionary movement and the entire people look forward to
marching forward to Cubao, Quezon City and to the corner of Santolan Street and
the possibility in the coming year of accomplishing its immediate task of bringing down
EDSA. That same evening, hundreds of riot policemen broke up an EDSA celebration
the Arroyo regime; of rendering it to weaken and unable to rule that it will not take
rally held along Ayala Avenue and Paseo de Roxas Street in Makati City.12
much longer to end it."9

On the other hand, Cesar Renerio, spokesman for the National Democratic Front
(NDF) at North Central Mindanao, publicly announced: "Anti-Arroyo groups within the
military and police are growing rapidly, hastened by the economic difficulties suffered
by the families of AFP officers and enlisted personnel who undertake counter-
insurgency operations in the field." He claimed that with the forces of the national
democratic movement, the anti-Arroyo conservative political parties, coalitions, plus
According to petitioner Kilusang Mayo Uno, the police cited PP 1017 as the ground for
the dispersal of their assemblies.
During the dispersal of the rallyists along EDSA, police arrested (without warrant)
petitioner Randolf S. David, a professor at the University of the Philippines and
newspaper columnist. Also arrested was his companion, Ronald Llamas, president of
party-list Akbayan.
At around 12:20 in the early morning of February 25, 2006, operatives of the Criminal
Investigation and Detection Group (CIDG) of the PNP, on the basis of PP 1017 and
G.O. No. 5, raided the Daily Tribune offices in Manila. The raiding team confiscated
news stories by reporters, documents, pictures, and mock-ups of the Saturday issue.
Policemen from Camp Crame in Quezon City were stationed inside the editorial and
business offices of the newspaper; while policemen from the Manila Police District
were stationed outside the building.13
A few minutes after the search and seizure at the Daily Tribune offices, the police
surrounded the premises of another pro-opposition paper, Malaya, and its sister
publication, the tabloid Abante.
The raid, according to Presidential Chief of Staff Michael Defensor, is "meant to show
a ‘strong presence,’ to tell media outlets not to connive or do anything that would help
the rebels in bringing down this government." The PNP warned that it would take over
any media organization that would not follow "standards set by the government during
the state of national emergency." Director General Lomibao stated that "if they do not
follow the standards – and the standards are - if they would contribute to instability in
the government, or if they do not subscribe to what is in General Order No. 5 and
Proc. No. 1017 – we will recommend a ‘takeover.’" National Telecommunications’
Commissioner Ronald Solis urged television and radio networks to "cooperate" with
the government for the duration of the state of national emergency. He asked
for "balanced reporting" from broadcasters when covering the events surrounding the
coup attempt foiled by the government. He warned that his agency will not hesitate to
recommend the closure of any broadcast outfit that violates rules set out for media
coverage when the national security is threatened.14
Also, on February 25, 2006, the police arrested Congressman Crispin Beltran,
representing the Anakpawis Party and Chairman of Kilusang Mayo Uno (KMU), while
leaving his farmhouse in Bulacan. The police showed a warrant for his arrest dated
1985. Beltran’s lawyer explained that the warrant, which stemmed from a case of
inciting to rebellion filed during the Marcos regime, had long been quashed. Beltran,
however, is not a party in any of these petitions.
When members of petitioner KMU went to Camp Crame to visit Beltran, they were told
they could not be admitted because of PP 1017 and G.O. No. 5. Two members were
arrested and detained, while the rest were dispersed by the police.
Bayan Muna Representative Satur Ocampo eluded arrest when the police went after
him during a public forum at the Sulo Hotel in Quezon City. But his two drivers,
identified as Roel and Art, were taken into custody.
Retired Major General Ramon Montaño, former head of the Philippine Constabulary,
was arrested while with his wife and golfmates at the Orchard Golf and Country Club
in Dasmariñas, Cavite.
Attempts were made to arrest Anakpawis Representative Satur Ocampo,
Representative Rafael Mariano, Bayan Muna Representative Teodoro Casiño and
Gabriela Representative Liza Maza. Bayan Muna Representative Josel Virador was
arrested at the PAL Ticket Office in Davao City. Later, he was turned over to the
custody of the House of Representatives where the "Batasan 5" decided to stay
indefinitely.
Let it be stressed at this point that the alleged violations of the rights of
Representatives Beltran, Satur Ocampo, et al., are not being raised in these petitions.
On March 3, 2006, President Arroyo issued PP 1021 declaring that the state of
national emergency has ceased to exist.
In the interim, these seven (7) petitions challenging the constitutionality of PP 1017
and G.O. No. 5 were filed with this Court against the above-named respondents.
Three (3) of these petitions impleaded President Arroyo as respondent.
In G.R. No. 171396, petitioners Randolf S. David, et al. assailed PP 1017 on the
grounds that (1) it encroaches on the emergency powers of Congress; (2) itis a
subterfuge to avoid the constitutional requirements for the imposition of martial law;
and (3) it violates the constitutional guarantees of freedom of the press, of speech and
of assembly.
In G.R. No. 171409, petitioners Ninez Cacho-Olivares and Tribune Publishing Co.,
Inc. challenged the CIDG’s act of raiding the Daily Tribune offices as a clear case of
"censorship" or "prior restraint." They also claimed that the term "emergency" refers
only to tsunami, typhoon, hurricane and similar occurrences, hence, there is
"absolutely no emergency" that warrants the issuance of PP 1017.
In G.R. No. 171485, petitioners herein are Representative Francis Joseph G.
Escudero, and twenty one (21) other members of the House of Representatives,
including Representatives Satur Ocampo, Rafael Mariano, Teodoro Casiño, Liza
Maza, and Josel Virador. They asserted that PP 1017 and G.O. No. 5 constitute
"usurpation of legislative powers"; "violation of freedom of expression" and "a
declaration of martial law." They alleged that President Arroyo "gravely abused her
discretion in calling out the armed forces without clear and verifiable factual basis of
the possibility of lawless violence and a showing that there is necessity to do so."
In G.R. No. 171483,petitioners KMU, NAFLU-KMU, and their members averred that
PP 1017 and G.O. No. 5 are unconstitutional because (1) they arrogate unto President
Arroyo the power to enact laws and decrees; (2) their issuance was without factual
basis; and (3) they violate freedom of expression and the right of the people to
peaceably assemble to redress their grievances.
In G.R. No. 171400, petitioner Alternative Law Groups, Inc. (ALGI) alleged that PP
1017 and G.O. No. 5 are unconstitutional because they violate (a) Section 415 of
Article II, (b) Sections 1,16 2,17 and 418 of Article III, (c)Section 2319 of Article VI,
and (d) Section 1720 of Article XII of the Constitution.
In G.R. No. 171489, petitioners Jose Anselmo I. Cadiz et al., alleged that PP 1017 is
an "arbitrary and unlawful exercise by the President of her Martial Law powers." And
assuming that PP 1017 is not really a declaration of Martial Law, petitioners argued
that "it amounts to an exercise by the President of emergency powers without
congressional approval." In addition, petitioners asserted that PP 1017 "goes beyond
the nature and function of a proclamation as defined under the Revised Administrative
Code."
And lastly, in G.R. No. 171424,petitionerLoren B. Legarda maintained that PP 1017
and G.O. No. 5 are "unconstitutional for being violative of the freedom of expression,
including its cognate rights such as freedom of the press and the right to access to
information on matters of public concern, all guaranteed under Article III, Section 4 of
the 1987 Constitution." In this regard, she stated that these issuances prevented her
from fully prosecuting her election protest pending before the Presidential Electoral
Tribunal.
In respondents’ Consolidated Comment, the Solicitor General countered that: first, the
petitions should be dismissed for being moot; second,petitioners in G.R. Nos. 171400
(ALGI), 171424 (Legarda), 171483 (KMU et al.), 171485 (Escudero et al.) and 171489
(Cadiz et al.) have no legal standing; third, it is not necessary for petitioners to implead
President Arroyo as respondent; fourth, PP 1017 has constitutional and legal basis;
and fifth, PP 1017 does not violate the people’s right to free expression and redress of
grievances.
On March 7, 2006, the Court conducted oral arguments and heard the parties on the
above interlocking issues which may be summarized as follows:
A. PROCEDURAL:
1) Whether the issuance of PP 1021 renders the petitions moot and
academic.
2) Whether petitioners in 171485 (Escudero et al.), G.R. Nos.
171400 (ALGI), 171483 (KMU et al.), 171489(Cadiz et al.),
and 171424 (Legarda) have legal standing.
B. SUBSTANTIVE:
1) Whetherthe Supreme Court can review the factual bases of PP 1017.
2) Whether PP 1017 and G.O. No. 5 are unconstitutional.
a. Facial Challenge
b. Constitutional Basis
c. As Applied Challenge
A. PROCEDURAL
First, we must resolve the procedural roadblocks.
I- Moot and Academic Principle
One of the greatest contributions of the American system to this country is the concept
of judicial review enunciated in Marbury v. Madison.21 This concept rests on the
extraordinary simple foundation --
The Constitution is the supreme law. It was ordained by the people, the ultimate
source of all political authority. It confers limited powers on the national government. x
x x If the government consciously or unconsciously oversteps these limitations
there must be some authority competent to hold it in control, to thwart its
unconstitutional attempt, and thus to vindicate and preserve inviolate the will of
the people as expressed in the Constitution. This power the courts exercise.
This is the beginning and the end of the theory of judicial review.22
But the power of judicial review does not repose upon the courts a "self-starting
capacity."23 Courts may exercise such power only when the following requisites are
present: first, there must be an actual case or controversy; second, petitioners have to
raise a question of constitutionality; third, the constitutional question must be raised at
the earliest opportunity; and fourth, the decision of the constitutional question must be
necessary to the determination of the case itself.24
Respondents maintain that the first and second requisites are absent, hence, we shall
limit our discussion thereon.
An actual case or controversy involves a conflict of legal right, an opposite legal claims
susceptible of judicial resolution. It is "definite and concrete, touching the legal
relations of parties having adverse legal interest;" a real and substantial controversy
admitting of specific relief.25 The Solicitor General refutes the existence of such actual
case or controversy, contending that the present petitions were rendered "moot and
academic" by President Arroyo’s issuance of PP 1021.
Such contention lacks merit.
A moot and academic case is one that ceases to present a justiciable controversy by
virtue of supervening events,26so that a declaration thereon would be of no practical
use or value.27 Generally, courts decline jurisdiction over such case28 or dismiss it on
ground of mootness.29
The Court holds that President Arroyo’s issuance of PP 1021 did not render the
present petitions moot and academic. During the eight (8) days that PP 1017 was
operative, the police officers, according to petitioners, committed illegal acts in
implementing it. Are PP 1017 and G.O. No. 5 constitutional or valid? Do they
justify these alleged illegal acts? These are the vital issues that must be resolved in
the present petitions. It must be stressed that "an unconstitutional act is not a law,
it confers no rights, it imposes no duties, it affords no protection; it is in legal
contemplation, inoperative."30
The "moot and academic" principle is not a magical formula that can automatically
dissuade the courts in resolving a case. Courts will decide cases, otherwise moot and
academic, if: first, there is a grave violation of the Constitution;31second, the
exceptional character of the situation and the paramount public interest is
involved;32 third, when constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar, and the public;33and fourth, the case is capable
of repetition yet evading review.34
All the foregoing exceptions are present here and justify this Court’s assumption of
jurisdiction over the instant petitions. Petitioners alleged that the issuance of PP 1017
and G.O. No. 5 violates the Constitution. There is no question that the issues being
raised affect the public’s interest, involving as they do the people’s basic rights to
freedom of expression, of assembly and of the press. Moreover, the Court has the
duty to formulate guiding and controlling constitutional precepts, doctrines or rules. It
has the symbolic function of educating the bench and the bar, and in the present
petitions, the military and the police, on the extent of the protection given by
constitutional guarantees.35 And lastly, respondents’ contested actions are capable of
repetition. Certainly, the petitions are subject to judicial review.
In their attempt to prove the alleged mootness of this case, respondents cited Chief
Justice Artemio V. Panganiban’s Separate Opinion in Sanlakas v. Executive
Secretary.36 However, they failed to take into account the Chief Justice’s very
statement that an otherwise "moot" case may still be decided "provided the party
raising it in a proper case has been and/or continues to be prejudiced or damaged as
a direct result of its issuance." The present case falls right within this exception to the
mootness rule pointed out by the Chief Justice.
II- Legal Standing
In view of the number of petitioners suing in various personalities, the Court deems it
imperative to have a more than passing discussion on legal standing or locus standi.
Locus standi is defined as "a right of appearance in a court of justice on a given
question."37 In private suits, standing is governed by the "real-parties-in interest" rule
as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It
provides that "every action must be prosecuted or defended in the name of the
real party in interest." Accordingly, the "real-party-in interest" is "the party who
stands to be benefited or injured by the judgment in the suit or the party entitled
to the avails of the suit."38 Succinctly put, the plaintiff’s standing is based on his own
right to the relief sought.
The difficulty of determining locus standi arises in public suits. Here, the plaintiff who
asserts a "public right" in assailing an allegedly illegal official action, does so as a
representative of the general public. He may be a person who is affected no differently
from any other person. He could be suing as a "stranger," or in the category of a
"citizen," or ‘taxpayer." In either case, he has to adequately show that he is entitled to
seek judicial protection. In other words, he has to make out a sufficient interest in the
vindication of the public order and the securing of relief as a "citizen" or "taxpayer.
Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in
public actions. The distinction was first laid down in Beauchamp v. Silk,39 where it was
held that the plaintiff in a taxpayer’s suit is in a different category from the plaintiff in a
citizen’s suit. In the former, the plaintiff is affected by the expenditure of public
funds, while in the latter, he is but the mere instrument of the public concern. As
held by the New York Supreme Court in People ex rel Case v. Collins:40 "In matter of
mere public right, however…the people are the real parties…It is at least the
right, if not the duty, of every citizen to interfere and see that a public offence be
properly pursued and punished, and that a public grievance be remedied." With
respect to taxpayer’s suits, Terr v. Jordan41 held that "the right of a citizen and a
taxpayer to maintain an action in courts to restrain the unlawful use of public
funds to his injury cannot be denied."
However, to prevent just about any person from seeking judicial interference in any
official policy or act with which he disagreed with, and thus hinders the activities of
governmental agencies engaged in public service, the United State Supreme Court
laid down the more stringent "direct injury" test in Ex Parte Levitt,42 later reaffirmed
in Tileston v. Ullman.43 The same Court ruled that for a private individual to invoke the
judicial power to determine the validity of an executive or legislative action, he must
show that he has sustained a direct injury as a result of that action, and it is not
sufficient that he has a general interest common to all members of the public.
This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera,44 it
held that the person who impugns the validity of a statute must have "a personal and
substantial interest in the case such that he has sustained, or will sustain direct
injury as a result." The Vera doctrine was upheld in a litany of cases, such
as, Custodio v. President of the Senate,45 Manila Race Horse Trainers’ Association v.
De la Fuente,46 Pascual v. Secretary of Public Works47 and Anti-Chinese League of
the Philippines v. Felix.48
However, being a mere procedural technicality, the requirement of locus standi may
be waived by the Court in the exercise of its discretion. This was done in the 1949
Emergency Powers Cases, Araneta v. Dinglasan,49 where the "transcendental
importance" of the cases prompted the Court to act liberally. Such liberality was
neither a rarity nor accidental. In Aquino v. Comelec,50 this Court resolved to pass
upon the issues raised due to the "far-reaching implications" of the petition
notwithstanding its categorical statement that petitioner therein had no personality to
file the suit. Indeed, there is a chain of cases where this liberal policy has been
observed, allowing ordinary citizens, members of Congress, and civic organizations to
prosecute actions involving the constitutionality or validity of laws, regulations and
rulings.51
Thus, the Court has adopted a rule that even where the petitioners have failed to show
direct injury, they have been allowed to sue under the principle of "transcendental
importance." Pertinent are the following cases:
(1) Chavez v. Public Estates Authority,52 where the Court ruled that the
enforcement of the constitutional right to information and the
equitable diffusion of natural resources are matters of transcendental
importance which clothe the petitioner with locus standi;
(2) Bagong Alyansang Makabayan v. Zamora,53 wherein the Court held
that "given the transcendental importance of the issues involved, the
Court may relax the standing requirements and allow the suit to
prosper despite the lack of direct injury to the parties seeking judicial
review" of the Visiting Forces Agreement;
(3) Lim v. Executive Secretary,54 while the Court noted that the petitioners
may not file suit in their capacity as taxpayers absent a showing that
"Balikatan 02-01" involves the exercise of Congress’ taxing or spending
powers, it reiterated its ruling in Bagong Alyansang Makabayan v.
Zamora,55that in cases of transcendental importance, the cases must
be settled promptly and definitely and standing requirements may be
relaxed.
By way of summary, the following rules may be culled from the cases decided by this
Court. Taxpayers, voters, concerned citizens, and legislators may be accorded
standing to sue, provided that the following requirements are met:
(1) the cases involve constitutional issues;
(2) for taxpayers, there must be a claim of illegal disbursement of public
funds or that the tax measure is unconstitutional;
(3) for voters, there must be a showing of obvious interest in the validity of
the election law in question;
(4) for concerned citizens, there must be a showing that the issues raised
are of transcendental importance which must be settled early; and
(5) for legislators, there must be a claim that the official action complained
of infringes upon their prerogatives as legislators.
Significantly, recent decisions show a certain toughening in the Court’s attitude toward
legal standing.
In Kilosbayan, Inc. v. Morato,56 the Court ruled that the status of Kilosbayan as a
people’s organization does not give it the requisite personality to question the validity
of the on-line lottery contract, more so where it does not raise any issue of
constitutionality. Moreover, it cannot sue as a taxpayer absent any allegation that
public funds are being misused. Nor can it sue as a concerned citizen as it does not
allege any specific injury it has suffered.
In Telecommunications and Broadcast Attorneys of the Philippines, Inc. v.
Comelec,57 the Court reiterated the "direct injury" test with respect to concerned
citizens’ cases involving constitutional issues. It held that "there must be a showing
that the citizen personally suffered some actual or threatened injury arising from the
alleged illegal official act."
In Lacson v. Perez,58 the Court ruled that one of the petitioners, Laban ng
Demokratikong Pilipino (LDP), is not a real party-in-interest as it had not demonstrated
any injury to itself or to its leaders, members or supporters.
In Sanlakas v. Executive Secretary,59 the Court ruled that only the petitioners who are
members of Congress have standing to sue, as they claim that the President’s
declaration of a state of rebellion is a usurpation of the emergency powers of
Congress, thus impairing their legislative powers. As to petitioners Sanlakas,
Partido Manggagawa, and Social Justice Society, the Court declared them to be
devoid of standing, equating them with the LDP in Lacson.
Now, the application of the above principles to the present petitions.
The locus standi of petitioners in G.R. No. 171396, particularly David and Llamas, is
beyond doubt. The same holds true with petitioners in G.R. No. 171409, Cacho-
Olivares and Tribune Publishing Co. Inc. They alleged "direct injury" resulting from
"illegal arrest" and "unlawful search" committed by police operatives pursuant to PP
1017. Rightly so, the Solicitor General does not question their legal standing.
In G.R. No. 171485, the opposition Congressmen alleged there was usurpation of
legislative powers. They also raised the issue of whether or not the concurrence of
Congress is necessary whenever the alarming powers incident to Martial Law are
used. Moreover, it is in the interest of justice that those affected by PP 1017 can be
represented by their Congressmen in bringing to the attention of the Court the alleged
violations of their basic rights.
In G.R. No. 171400, (ALGI), this Court applied the liberality rule in Philconsa v.
Enriquez,60 Kapatiran Ng Mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v.
Tan,61 Association of Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform,62 Basco v. Philippine Amusement and Gaming
Corporation,63 and Tañada v. Tuvera,64 that when the issue concerns a public right, it
is sufficient that the petitioner is a citizen and has an interest in the execution of the
laws.
In G.R. No. 171483, KMU’s assertion that PP 1017 and G.O. No. 5 violated its right to
peaceful assembly may be deemed sufficient to give it legal standing. Organizations
may be granted standing to assert the rights of their members.65 We take judicial
notice of the announcement by the Office of the President banning all rallies and
canceling all permits for public assemblies following the issuance of PP 1017 and
G.O. No. 5.
In G.R. No. 171489, petitioners, Cadiz et al., who are national officers of the
Integrated Bar of the Philippines (IBP) have no legal standing, having failed to allege
any direct or potential injury which the IBP as an institution or its members may suffer
as a consequence of the issuance of PP No. 1017 and G.O. No. 5. In Integrated Bar
of the Philippines v. Zamora,66 the Court held that the mere invocation by the IBP of its
duty to preserve the rule of law and nothing more, while undoubtedly true, is not
sufficient to clothe it with standing in this case. This is too general an interest which is
shared by other groups and the whole citizenry. However, in view of the
transcendental importance of the issue, this Court declares that petitioner have locus
standi.
In G.R. No. 171424, Loren Legarda has no personality as a taxpayer to file the instant
petition as there are no allegations of illegal disbursement of public funds. The fact
that she is a former Senator is of no consequence. She can no longer sue as a
legislator on the allegation that her prerogatives as a lawmaker have been impaired by
PP 1017 and G.O. No. 5. Her claim that she is a media personality will not likewise aid
her because there was no showing that the enforcement of these issuances prevented
her from pursuing her occupation. Her submission that she has pending electoral
protest before the Presidential Electoral Tribunal is likewise of no relevance. She has
not sufficiently shown that PP 1017 will affect the proceedings or result of her case.
But considering once more the transcendental importance of the issue involved, this
Court may relax the standing rules.
It must always be borne in mind that the question of locus standi is but corollary to the
bigger question of proper exercise of judicial power. This is the underlying legal tenet
of the "liberality doctrine" on legal standing. It cannot be doubted that the validity of PP
No. 1017 and G.O. No. 5 is a judicial question which is of paramount importance to
the Filipino people. To paraphrase Justice Laurel, the whole of Philippine society now
waits with bated breath the ruling of this Court on this very critical matter. The petitions
thus call for the application of the "transcendental importance" doctrine, a relaxation
of the standing requirements for the petitioners in the "PP 1017 cases."1avvphil.net
This Court holds that all the petitioners herein have locus standi.
Incidentally, it is not proper to implead President Arroyo as respondent. Settled is the
doctrine that the President, during his tenure of office or actual incumbency, 67 may not
be sued in any civil or criminal case, and there is no need to provide for it in the
Constitution or law. It will degrade the dignity of the high office of the President, the
Head of State, if he can be dragged into court litigations while serving as such.
Furthermore, it is important that he be freed from any form of harassment, hindrance
or distraction to enable him to fully attend to the performance of his official duties and
functions. Unlike the legislative and judicial branch, only one constitutes the executive
branch and anything which impairs his usefulness in the discharge of the many great
and important duties imposed upon him by the Constitution necessarily impairs the
operation of the Government. However, this does not mean that the President is not
accountable to anyone. Like any other official, he remains accountable to the
people68 but he may be removed from office only in the mode provided by law and that
is by impeachment.69
B. SUBSTANTIVE
I. Review of Factual Bases
Petitioners maintain that PP 1017 has no factual basis. Hence, it was not "necessary"
for President Arroyo to issue such Proclamation.
The issue of whether the Court may review the factual bases of the President’s
exercise of his Commander-in-Chief power has reached its distilled point - from the
indulgent days of Barcelon v. Baker70 and Montenegro v. Castaneda71 to the volatile
era of Lansang v. Garcia,72 Aquino, Jr. v. Enrile,73 and Garcia-Padilla v. Enrile.74 The
tug-of-war always cuts across the line defining "political questions," particularly those
questions "in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government."75 Barcelon and Montenegro were
in unison in declaring that the authority to decide whether an exigency has arisen
belongs to the President and his decision is final and conclusive on the
courts. Lansang took the opposite view. There, the members of the Court were
unanimous in the conviction that the Court has the authority to inquire into the
existence of factual bases in order to determine their constitutional sufficiency. From
the principle of separation of powers, it shifted the focus to the system of
checks and balances, "under which the President is supreme, x x x
only if and when he acts within the sphere allotted to him by the Basic Law, and
the authority to determine whether or not he has so acted is vested in the
Judicial Department, which in this respect, is, in turn,
constitutionally supreme."76 In 1973, the unanimous Court of Lansang was divided
in Aquino v. Enrile.77 There, the Court was almost evenly divided on the issue of
whether the validity of the imposition of Martial Law is a political or justiciable
question.78 Then came Garcia-Padilla v. Enrile which greatly diluted Lansang. It
declared that there is a need to re-examine the latter case, ratiocinating that "in times
of war or national emergency, the President must be given absolute control for
the very life of the nation and the government is in great peril. The President, it
intoned, is answerable only to his conscience, the People, and God."79
The Integrated Bar of the Philippines v. Zamora80 -- a recent case most pertinent to
these cases at bar -- echoed a principle similar to Lansang. While the Court
considered the President’s "calling-out" power as a discretionary power solely vested
in his wisdom, it stressed that "this does not prevent an examination of whether
such power was exercised within permissible constitutional limits or whether it
was exercised in a manner constituting grave abuse of discretion."This ruling is
mainly a result of the Court’s reliance on Section 1, Article VIII of 1987 Constitution
which fortifies the authority of the courts to determine in an appropriate action the
validity of the acts of the political departments. Under the new definition of judicial
power, the courts are authorized not only "to settle actual controversies involving
rights which are legally demandable and enforceable," but also "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." The latter part of the authority represents a broadening of judicial
power to enable the courts of justice to review what was before a forbidden territory, to
wit, the discretion of the political departments of the government. 81 It speaks of judicial
prerogative not only in terms of power but also of duty.82
As to how the Court may inquire into the President’s exercise of
power, Lansang adopted the test that "judicial inquiry can go no further than to satisfy
the Court not that the President’s decision is correct," but that "the President did not
act arbitrarily." Thus, the standard laid down is not correctness, but
arbitrariness.83 In Integrated Bar of the Philippines, this Court further ruled that "it is
incumbent upon the petitioner to show that the President’s decision is totally
bereft of factual basis" and that if he fails, by way of proof, to support his assertion,
then "this Court cannot undertake an independent investigation beyond the
pleadings."
Petitioners failed to show that President Arroyo’s exercise of the calling-out power, by
issuing PP 1017, is totally bereft of factual basis. A reading of the Solicitor General’s
Consolidated Comment and Memorandum shows a detailed narration of the events
leading to the issuance of PP 1017, with supporting reports forming part of the
records. Mentioned are the escape of the Magdalo Group, their audacious threat of
the Magdalo D-Day, the defections in the military, particularly in the Philippine
Marines, and the reproving statements from the communist leaders. There was also
the Minutes of the Intelligence Report and Security Group of the Philippine Army
showing the growing alliance between the NPA and the military. Petitioners presented
nothing to refute such events. Thus, absent any contrary allegations, the Court is
convinced that the President was justified in issuing PP 1017 calling for military aid.
Indeed, judging the seriousness of the incidents, President Arroyo was not expected
to simply fold her arms and do nothing to prevent or suppress what she believed was
lawless violence, invasion or rebellion. However, the exercise of such power or duty
must not stifle liberty.
II. Constitutionality of PP 1017 and G.O. No. 5
Doctrines of Several Political Theorists
on the Power of the President in Times of Emergency
This case brings to fore a contentious subject -- the power of the President in times of
emergency. A glimpse at the various political theories relating to this subject provides
an adequate backdrop for our ensuing discussion.
John Locke, describing the architecture of civil government, called upon the English
doctrine of prerogative to cope with the problem of emergency. In times of danger to
the nation, positive law enacted by the legislature might be inadequate or even a fatal
obstacle to the promptness of action necessary to avert catastrophe. In these
situations, the Crown retained a prerogative "power to act according to discretion
for the public good, without the proscription of the law and sometimes even
against it."84 But Locke recognized that this moral restraint might not suffice to avoid
abuse of prerogative powers. Who shall judge the need for resorting to the
prerogative and how may its abuse be avoided? Here, Locke readily admitted
defeat, suggesting that "the people have no other remedy in this, as in all other
cases where they have no judge on earth, but to appeal to Heaven."85
Jean-Jacques Rousseau also assumed the need for temporary suspension of
democratic processes of government in time of emergency. According to him:
The inflexibility of the laws, which prevents them from adopting themselves to
circumstances, may, in certain cases, render them disastrous and make them bring
about, at a time of crisis, the ruin of the State…
It is wrong therefore to wish to make political institutions as strong as to render it
impossible to suspend their operation. Even Sparta allowed its law to lapse...
If the peril is of such a kind that the paraphernalia of the laws are an obstacle to their
preservation, the method is to nominate a supreme lawyer, who shall silence all the
laws and suspend for a moment the sovereign authority. In such a case, there is no
doubt about the general will, and it clear that the people’s first intention is that the
State shall not perish.86
Rosseau did not fear the abuse of the emergency dictatorship or "supreme
magistracy" as he termed it. For him, it would more likely be cheapened by
"indiscreet use." He was unwilling to rely upon an "appeal to heaven." Instead, he
relied upon a tenure of office of prescribed duration to avoid perpetuation of the
dictatorship.87
John Stuart Mill concluded his ardent defense of representative government: "I am far
from condemning, in cases of extreme necessity, the assumption of absolute
power in the form of a temporary dictatorship."88
Nicollo Machiavelli’s view of emergency powers, as one element in the whole scheme
of limited government, furnished an ironic contrast to the Lockean theory of
prerogative. He recognized and attempted to bridge this chasm in democratic political
theory, thus:
Now, in a well-ordered society, it should never be necessary to resort to extra –
constitutional measures; for although they may for a time be beneficial, yet the
precedent is pernicious, for if the practice is once established for good objects, they
will in a little while be disregarded under that pretext but for evil purposes. Thus, no
republic will ever be perfect if she has not by law provided for everything, having a
remedy for every emergency and fixed rules for applying it.89
Machiavelli – in contrast to Locke, Rosseau and Mill – sought to incorporate into the
constitution a regularized system of standby emergency powers to be invoked with
suitable checks and controls in time of national danger. He attempted forthrightly to
meet the problem of combining a capacious reserve of power and speed and vigor in
its application in time of emergency, with effective constitutional restraints. 90
Contemporary political theorists, addressing themselves to the problem of response to
emergency by constitutional democracies, have employed the doctrine of
constitutional dictatorship.91 Frederick M. Watkins saw "no reason why absolutism
should not be used as a means for the defense of liberal institutions," provided it
"serves to protect established institutions from the danger of permanent injury
in a period of temporary emergency and is followed by a prompt return to the
previous forms of political life."92 He recognized the two (2) key elements of the
problem of emergency governance, as well as all constitutional
governance: increasing administrative powers of the executive, while at the
same time "imposing limitation upon that power."93Watkins placed his real faith in
a scheme of constitutional dictatorship. These are the conditions of success of such a
dictatorship: "The period of dictatorship must be relatively short…Dictatorship
should always be strictly legitimate in character…Final authority to determine
the need for dictatorship in any given case must never rest with the dictator
himself…"94 and the objective of such an emergency dictatorship should be "strict
political conservatism."
Carl J. Friedrich cast his analysis in terms similar to those of Watkins. 95 "It is a
problem of concentrating power – in a government where power has consciously been
divided – to cope with… situations of unprecedented magnitude and gravity. There
must be a broad grant of powers, subject to equally strong limitations as to who shall
exercise such powers, when, for how long, and to what end."96 Friedrich, too, offered
criteria for judging the adequacy of any of scheme of emergency powers, to wit: "The
emergency executive must be appointed by constitutional means – i.e., he must
be legitimate; he should not enjoy power to determine the existence of an
emergency; emergency powers should be exercised under a strict time
limitation; and last, the objective of emergency action must be the defense of
the constitutional order."97
Clinton L. Rossiter, after surveying the history of the employment of emergency
powers in Great Britain, France, Weimar, Germany and the United States, reverted to
a description of a scheme of "constitutional dictatorship" as solution to the vexing
problems presented by emergency.98 Like Watkins and Friedrich, he stated a priori the
conditions of success of the "constitutional dictatorship," thus:
1) No general regime or particular institution of constitutional dictatorship
should be initiated unless it is necessary or even indispensable to the
preservation of the State and its constitutional order…
2) …the decision to institute a constitutional dictatorship should never be in
the hands of the man or men who will constitute the dictator…
3) No government should initiate a constitutional dictatorship without making
specific provisions for its termination…
4) …all uses of emergency powers and all readjustments in the organization
of the government should be effected in pursuit of constitutional or legal
requirements…
5) … no dictatorial institution should be adopted, no right invaded, no
regular procedure altered any more than is absolutely necessary for the
conquest of the particular crisis . . .
6) The measures adopted in the prosecution of the a constitutional
dictatorship should never be permanent in character or effect…
7) The dictatorship should be carried on by persons representative of every
part of the citizenry interested in the defense of the existing constitutional
order. . .
8) Ultimate responsibility should be maintained for every action taken under
a constitutional dictatorship. . .
9) The decision to terminate a constitutional dictatorship, like the decision to
institute one should never be in the hands of the man or men who constitute
the dictator. . .
10) No constitutional dictatorship should extend beyond the termination of
the crisis for which it was instituted…
 11) …the termination of the crisis must be followed by a complete return as
possible to the political and governmental conditions existing prior to the
initiation of the constitutional dictatorship…99
Rossiter accorded to legislature a far greater role in the oversight exercise of
emergency powers than did Watkins. He would secure to Congress final responsibility
for declaring the existence or termination of an emergency, and he places great faith
in the effectiveness of congressional investigating committees. 100
Scott and Cotter, in analyzing the above contemporary theories in light of recent
experience, were one in saying that, "the suggestion that democracies surrender
the control of government to an authoritarian ruler in time of grave danger to the
nation is not based upon sound constitutional theory." To appraise emergency
power in terms of constitutional dictatorship serves merely to distort the problem and
hinder realistic analysis. It matters not whether the term "dictator" is used in its normal
sense (as applied to authoritarian rulers) or is employed to embrace all chief
executives administering emergency powers. However used, "constitutional
dictatorship" cannot be divorced from the implication of suspension of the processes
of constitutionalism. Thus, they favored instead the "concept of constitutionalism"
articulated by Charles H. McIlwain:
A concept of constitutionalism which is less misleading in the analysis of problems of
emergency powers, and which is consistent with the findings of this study, is that
formulated by Charles H. McIlwain. While it does not by any means necessarily
exclude some indeterminate limitations upon the substantive powers of government,
full emphasis is placed upon procedural limitations, and political responsibility.
McIlwain clearly recognized the need to repose adequate power in government. And
in discussing the meaning of constitutionalism, he insisted that the historical and
proper test of constitutionalism was the existence of adequate processes for
keeping government responsible. He refused to equate constitutionalism with the
enfeebling of government by an exaggerated emphasis upon separation of powers
and substantive limitations on governmental power. He found that the really effective
checks on despotism have consisted not in the weakening of government but, but
rather in the limiting of it; between which there is a great and very significant
difference. In associating constitutionalism with "limited" as distinguished from
"weak" government, McIlwain meant government limited to the orderly
procedure of law as opposed to the processes of force. The two fundamental
correlative elements of constitutionalism for which all lovers of liberty must yet
fight are the legal limits to arbitrary power and a complete political
responsibility of government to the governed.101
In the final analysis, the various approaches to emergency of the above political
theorists –- from Lock’s "theory of prerogative," to Watkins’ doctrine of "constitutional
dictatorship" and, eventually, to McIlwain’s "principle of constitutionalism" --- ultimately
aim to solve one real problem in emergency governance, i.e., that of allotting
increasing areas of discretionary power to the Chief Executive, while insuring
that such powers will be exercised with a sense of political responsibility and
under effective limitations and checks.
Our Constitution has fairly coped with this problem. Fresh from the fetters of a
repressive regime, the 1986 Constitutional Commission, in drafting the 1987
Constitution, endeavored to create a government in the concept of Justice Jackson’s
"balanced power structure."102 Executive, legislative, and judicial powers are dispersed
to the President, the Congress, and the Supreme Court, respectively. Each is
supreme within its own sphere. But none has the monopoly of power in times of
emergency. Each branch is given a role to serve as limitation or check upon the
other. This system does not weaken the President, it just limits his power, using the
language of McIlwain. In other words, in times of emergency, our Constitution
reasonably demands that we repose a certain amount of faith in the basic integrity and
wisdom of the Chief Executive but, at the same time, it obliges him to operate
within carefully prescribed procedural limitations.
a. "Facial Challenge"
Petitioners contend that PP 1017 is void on its face because of its "overbreadth." They
claim that its enforcement encroached on both unprotected and protected rights under
Section 4, Article III of the Constitution and sent a "chilling effect" to the citizens.
A facial review of PP 1017, using the overbreadth doctrine, is uncalled for.
First and foremost, the overbreadth doctrine is an analytical tool developed for testing
"on their faces" statutes in free speech cases, also known under the American Law
as First Amendment cases.103
A plain reading of PP 1017 shows that it is not primarily directed to speech or even
speech-related conduct. It is actually a call upon the AFP to prevent or suppress all
forms of lawless violence. In United States v. Salerno,104the US Supreme Court held
that "we have not recognized an ‘overbreadth’ doctrine outside the limited
context of the First Amendment" (freedom of speech).
Moreover, the overbreadth doctrine is not intended for testing the validity of a law that
"reflects legitimate state interest in maintaining comprehensive control over harmful,
constitutionally unprotected conduct." Undoubtedly, lawless violence, insurrection and
rebellion are considered "harmful" and "constitutionally unprotected conduct."
In Broadrick v. Oklahoma,105 it was held:
It remains a ‘matter of no little difficulty’ to determine when a law may properly be held
void on its face and when ‘such summary action’ is inappropriate. But the plain
import of our cases is, at the very least, that facial overbreadth adjudication is
an exception to our traditional rules of practice and that its function, a limited
one at the outset, attenuates as the otherwise unprotected behavior that it
forbids the State to sanction moves from ‘pure speech’ toward conduct and that
conduct –even if expressive – falls within the scope of otherwise valid criminal
laws that reflect legitimate state interests in maintaining comprehensive
controls over harmful, constitutionally unprotected conduct.
Thus, claims of facial overbreadth are entertained in cases involving statutes And third, a facial challenge on the ground of overbreadth is the most difficult
which, by their terms, seek to regulate only "spoken words" and again, that challenge to mount successfully, since the challenger must establish that there can
"overbreadth claims, if entertained at all, have been curtailed when invoked be no instance when the assailed law may be valid. Here, petitioners did not even
against ordinary criminal laws that are sought to be applied to protected attempt to show whether this situation exists.
conduct."106 Here, the incontrovertible fact remains that PP 1017 pertains to a
spectrum of conduct, not free speech, which is manifestly subject to state regulation.
Petitioners likewise seek a facial review of PP 1017 on the ground of vagueness. This,
too, is unwarranted.
Second, facial invalidation of laws is considered as "manifestly strong medicine," to
be used "sparingly and only as a last resort," and is "generally disfavored;"107 The
Related to the "overbreadth" doctrine is the "void for vagueness doctrine" which holds
reason for this is obvious. Embedded in the traditional rules governing constitutional
that "a law is facially invalid if men of common intelligence must necessarily
adjudication is the principle that a person to whom a law may be applied will not be
guess at its meaning and differ as to its application."110 It is subject to the same
heard to challenge a law on the ground that it may conceivably be applied
principles governing overbreadth doctrine. For one, it is also an analytical tool for
unconstitutionally to others, i.e., in other situations not before the Court.108 A writer
testing "on their faces" statutes in free speech cases. And like overbreadth, it is said
and scholar in Constitutional Law explains further:
that a litigant may challenge a statute on its face only if it is vague in all its possible
applications. Again, petitioners did not even attempt to show that PP 1017 is
The most distinctive feature of the overbreadth technique is that it marks an vague in all its application. They also failed to establish that men of common
exception to some of the usual rules of constitutional litigation. Ordinarily, a intelligence cannot understand the meaning and application of PP 1017.
particular litigant claims that a statute is unconstitutional as applied to him or
her; if the litigant prevails, the courts carve away the unconstitutional aspects of
b. Constitutional Basis of PP 1017
the law by invalidating its improper applications on a case to case basis.
Moreover, challengers to a law are not permitted to raise the rights of third
parties and can only assert their own interests. In overbreadth analysis, those Now on the constitutional foundation of PP 1017.
rules give way; challenges are permitted to raise the rights of third parties; and
the court invalidates the entire statute "on its face," not merely "as applied for" so that
the overbroad law becomes unenforceable until a properly authorized court construes The operative portion of PP 1017 may be divided into three important provisions, thus:
it more narrowly. The factor that motivates courts to depart from the normal
adjudicatory rules is the concern with the "chilling;" deterrent effect of the overbroad First provision:
statute on third parties not courageous enough to bring suit. The Court assumes that
an overbroad law’s "very existence may cause others not before the court to refrain
from constitutionally protected speech or expression." An overbreadth ruling is "by virtue of the power vested upon me by Section 18, Artilce VII … do hereby
designed to remove that deterrent effect on the speech of those third parties. command the Armed Forces of the Philippines, to maintain law and order throughout
the Philippines, prevent or suppress all forms of lawless violence as well any act of
insurrection or rebellion"
In other words, a facial challenge using the overbreadth doctrine will require the Court
to examine PP 1017 and pinpoint its flaws and defects, not on the basis of its actual
operation to petitioners, but on the assumption or prediction that its very existence Second provision:
may cause others not before the Court to refrain from constitutionally protected
speech or expression. In Younger v. Harris,109 it was held that: "and to enforce obedience to all the laws and to all decrees, orders and regulations
promulgated by me personally or upon my direction;"
[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring
correction of these deficiencies before the statute is put into effect, is rarely if ever an Third provision:
appropriate task for the judiciary. The combination of the relative remoteness of the
controversy, the impact on the legislative process of the relief sought, and above
all the speculative and amorphous nature of the required line-by-line analysis of "as provided in Section 17, Article XII of the Constitution do hereby declare a State of
detailed statutes,...ordinarily results in a kind of case that is wholly National Emergency."
unsatisfactory for deciding constitutional questions, whichever way they might be
decided. First Provision: Calling-out Power
The first provision pertains to the President’s calling-out power. In Sanlakas v.
Executive Secretary,111 this Court, through Mr. Justice Dante O. Tinga, held that
Section 18, Article VII of the Constitution reproduced as follows:
Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the
Philippines and whenever it becomes necessary, he may call out such armed
forces to prevent or suppress lawless violence, invasion or rebellion. In case of
invasion or rebellion, when the public safety requires it, he may, for a period not
exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the
Philippines or any part thereof under martial law. Within forty-eight hours from the
proclamation of martial law or the suspension of the privilege of the writ of habeas
corpus, the President shall submit a report in person or in writing to the Congress. The
Congress, voting jointly, by a vote of at least a majority of all its Members in regular or
special session, may revoke such proclamation or suspension, which revocation shall
not be set aside by the President. Upon the initiative of the President, the Congress
may, in the same manner, extend such proclamation or suspension for a period to be
determined by the Congress, if the invasion or rebellion shall persist and public safety
requires it.
The Congress, if not in session, shall within twenty-four hours following such
proclamation or suspension, convene in accordance with its rules without need of a
call.
The Supreme Court may review, in an appropriate proceeding filed by any citizen, the
sufficiency of the factual bases of the proclamation of martial law or the suspension of
the privilege of the writ or the extension thereof, and must promulgate its decision
thereon within thirty days from its filing.
A state of martial law does not suspend the operation of the Constitution, nor supplant
the functioning of the civil courts or legislative assemblies, nor authorize the
conferment of jurisdiction on military courts and agencies over civilians where civil
courts are able to function, nor automatically suspend the privilege of the writ.
The suspension of the privilege of the writ shall apply only to persons judicially
charged for rebellion or offenses inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any person thus arrested or detained
shall be judicially charged within three days, otherwise he shall be released.
grants the President, as Commander-in-Chief, a "sequence" of graduated powers.
From the most to the least benign, these are: the calling-out power, the power to
suspend the privilege of the writ of habeas corpus, and the power to declare Martial
Law. Citing Integrated Bar of the Philippines v. Zamora,112 the Court ruled that the only
criterion for the exercise of the calling-out power is that "whenever it becomes
necessary," the President may call the armed forces "to prevent or suppress
lawless violence, invasion or rebellion." Are these conditions present in the instant
cases? As stated earlier, considering the circumstances then prevailing, President
Arroyo found it necessary to issue PP 1017. Owing to her Office’s vast intelligence
network, she is in the best position to determine the actual condition of the country.
Under the calling-out power, the President may summon the armed forces to aid him
in suppressing lawless violence, invasion and rebellion. This involves ordinary
police action. But every act that goes beyond the President’s calling-out power is
considered illegal or ultra vires. For this reason, a President must be careful in the
exercise of his powers. He cannot invoke a greater power when he wishes to act
under a lesser power. There lies the wisdom of our Constitution, the greater the
power, the greater are the limitations.
It is pertinent to state, however, that there is a distinction between the President’s
authority to declare a "state of rebellion" (in Sanlakas) and the authority to proclaim a
state of national emergency. While President Arroyo’s authority to declare a "state of
rebellion" emanates from her powers as Chief Executive, the statutory authority cited
in Sanlakas was Section 4, Chapter 2, Book II of the Revised Administrative Code of
1987, which provides:
SEC. 4. – Proclamations. – Acts of the President fixing a date or declaring a status or
condition of public moment or interest, upon the existence of which the operation of a
specific law or regulation is made to depend, shall be promulgated in proclamations
which shall have the force of an executive order.
President Arroyo’s declaration of a "state of rebellion" was merely an act declaring a
status or condition of public moment or interest, a declaration allowed under Section 4
cited above. Such declaration, in the words of Sanlakas, is harmless, without legal
significance, and deemed not written. In these cases, PP 1017 is more than that. In
declaring a state of national emergency, President Arroyo did not only rely on Section
18, Article VII of the Constitution, a provision calling on the AFP to prevent or
suppress lawless violence, invasion or rebellion. She also relied on Section 17, Article
XII, a provision on the State’s extraordinary power to take over privately-owned public
utility and business affected with public interest. Indeed, PP 1017 calls for the exercise
of an awesome power. Obviously, such Proclamation cannot be deemed harmless,
without legal significance, or not written, as in the case of Sanlakas.
Some of the petitioners vehemently maintain that PP 1017 is actually a declaration of
Martial Law. It is no so. What defines the character of PP 1017 are its wordings. It is
plain therein that what the President invoked was her calling-out power.
The declaration of Martial Law is a "warn[ing] to citizens that the military power has
been called upon by the executive to assist in the maintenance of law and order, and
that, while the emergency lasts, they must, upon pain of arrest and punishment, not
commit any acts which will in any way render more difficult the restoration of order and
the enforcement of law."113
In his "Statement before the Senate Committee on Justice" on March 13, 2006, Mr.
Justice Vicente V. Mendoza,114an authority in constitutional law, said that of the three
powers of the President as Commander-in-Chief, the power to declare Martial Law
poses the most severe threat to civil liberties. It is a strong medicine which should not
be resorted to lightly. It cannot be used to stifle or persecute critics of the government.
It is placed in the keeping of the President for the purpose of enabling him to secure
the people from harm and to restore order so that they can enjoy their individual
freedoms. In fact, Section 18, Art. VII, provides:
A state of martial law does not suspend the operation of the Constitution, nor supplant
the functioning of the civil courts or legislative assemblies, nor authorize the
conferment of jurisdiction on military courts and agencies over civilians where civil
courts are able to function, nor automatically suspend the privilege of the writ.
Justice Mendoza also stated that PP 1017 is not a declaration of Martial Law. It is no
more than a call by the President to the armed forces to prevent or suppress lawless
violence. As such, it cannot be used to justify acts that only under a valid declaration
of Martial Law can be done. Its use for any other purpose is a perversion of its nature
and scope, and any act done contrary to its command is ultra vires.
Justice Mendoza further stated that specifically, (a) arrests and seizures without
judicial warrants; (b) ban on public assemblies; (c) take-over of news media and
agencies and press censorship; and (d) issuance of Presidential Decrees, are powers
which can be exercised by the President as Commander-in-Chief only where there is
a valid declaration of Martial Law or suspension of the writ of habeas corpus.
Based on the above disquisition, it is clear that PP 1017 is not a declaration of Martial
Law. It is merely an exercise of President Arroyo’s calling-out power for the
armed forces to assist her in preventing or suppressing lawless violence.
Second Provision: "Take Care" Power
The second provision pertains to the power of the President to ensure that the laws be
faithfully executed. This is based on Section 17, Article VII which reads:
SEC. 17. The President shall have control of all the executive departments, bureaus,
and offices. He shall ensure that the laws be faithfully executed.
As the Executive in whom the executive power is vested, 115 the primary function of the
President is to enforce the laws as well as to formulate policies to be embodied in
existing laws. He sees to it that all laws are enforced by the officials and employees of
his department. Before assuming office, he is required to take an oath or affirmation to
the effect that as President of the Philippines, he will, among others, "execute its
laws."116 In the exercise of such function, the President, if needed, may employ the
powers attached to his office as the Commander-in-Chief of all the armed forces of the
country,117 including the Philippine National Police118 under the Department of Interior
and Local Government.119
Petitioners, especially Representatives Francis Joseph G. Escudero, Satur Ocampo,
Rafael Mariano, Teodoro Casiño, Liza Maza, and Josel Virador argue that PP 1017 is
unconstitutional as it arrogated upon President Arroyo the power to enact laws and
decrees in violation of Section 1, Article VI of the Constitution, which vests the power
to enact laws in Congress. They assail the clause "to enforce obedience to all the
laws and to all decrees, orders and regulations promulgated by me personally
or upon my direction."
\
Petitioners’ contention is understandable. A reading of PP 1017 operative clause
shows that it was lifted120 from Former President Marcos’ Proclamation No. 1081,
which partly reads:
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines by
virtue of the powers vested upon me by Article VII, Section 10, Paragraph (2) of the
Constitution, do hereby place the entire Philippines as defined in Article 1, Section 1 of
the Constitution under martial law and, in my capacity as their Commander-in-
Chief, do hereby command the Armed Forces of the Philippines, to maintain law
and order throughout the Philippines, prevent or suppress all forms of lawless
violence as well as any act of insurrection or rebellion and to enforce obedience
to all the laws and decrees, orders and regulations promulgated by me
personally or upon my direction.
We all know that it was PP 1081 which granted President Marcos legislative power. Its
enabling clause states: "to enforce obedience to all the laws and decrees, orders
and regulations promulgated by me personally or upon my direction." Upon the
other hand, the enabling clause of PP 1017 issued by President Arroyo is: to enforce
obedience to all the laws and to all decrees, orders and regulations promulgated
by me personally or upon my direction."
Is it within the domain of President Arroyo to promulgate "decrees"?
PP 1017 states in part: "to enforce obedience to all the laws and decrees x x
x promulgated by me personally or upon my direction."
The President is granted an Ordinance Power under Chapter 2, Book III of Executive
Order No. 292 (Administrative Code of 1987). She may issue any of the following:
Sec. 2. Executive Orders. — Acts of the President providing for rules of a general or
permanent character in implementation or execution of constitutional or statutory
powers shall be promulgated in executive orders.
Sec. 3. Administrative Orders. — Acts of the President which relate to particular
aspect of governmental operations in pursuance of his duties as administrative head
shall be promulgated in administrative orders.
Sec. 4. Proclamations. — Acts of the President fixing a date or declaring a status or
condition of public moment or interest, upon the existence of which the operation of a
specific law or regulation is made to depend, shall be promulgated in proclamations
which shall have the force of an executive order.
Sec. 5. Memorandum Orders. — Acts of the President on matters of administrative
detail or of subordinate or temporary interest which only concern a particular officer or
office of the Government shall be embodied in memorandum orders.
Sec. 6. Memorandum Circulars. — Acts of the President on matters relating to internal
administration, which the President desires to bring to the attention of all or some of
the departments, agencies, bureaus or offices of the Government, for information or
compliance, shall be embodied in memorandum circulars.
Sec. 7. General or Special Orders. — Acts and commands of the President in his
capacity as Commander-in-Chief of the Armed Forces of the Philippines shall be
issued as general or special orders.
President Arroyo’s ordinance power is limited to the foregoing issuances. She cannot
issue decrees similar to those issued by Former President Marcos under PP 1081.
Presidential Decrees are laws which are of the same category and binding force as
statutes because they were issued by the President in the exercise of his legislative
power during the period of Martial Law under the 1973 Constitution. 121
This Court rules that the assailed PP 1017 is unconstitutional insofar as it
grants President Arroyo the authority to promulgate "decrees." Legislative power
is peculiarly within the province of the Legislature. Section 1, Article VI categorically
states that "[t]he legislative power shall be vested in the Congress of the
Philippines which shall consist of a Senate and a House of Representatives." To
be sure, neither Martial Law nor a state of rebellion nor a state of emergency can
justify President Arroyo’s exercise of legislative power by issuing decrees.
Can President Arroyo enforce obedience to all decrees and laws through the military?
As this Court stated earlier, President Arroyo has no authority to enact decrees. It
follows that these decrees are void and, therefore, cannot be enforced. With respect to
"laws," she cannot call the military to enforce or implement certain laws, such as
customs laws, laws governing family and property relations, laws on obligations and
contracts and the like. She can only order the military, under PP 1017, to enforce laws
pertinent to its duty to suppress lawless violence.
Third Provision: Power to Take Over
The pertinent provision of PP 1017 states:
x x x and to enforce obedience to all the laws and to all decrees, orders, and
regulations promulgated by me personally or upon my direction; and as provided in
Section 17, Article XII of the Constitution do hereby declare a state of national
emergency.
The import of this provision is that President Arroyo, during the state of national
emergency under PP 1017, can call the military not only to enforce obedience "to all
the laws and to all decrees x x x" but also to act pursuant to the provision of Section
17, Article XII which reads:
Sec. 17. In times of national emergency, when the public interest so requires, the
State may, during the emergency and under reasonable terms prescribed by it,
temporarily take over or direct the operation of any privately-owned public utility or
business affected with public interest.
What could be the reason of President Arroyo in invoking the above provision when
she issued PP 1017?
The answer is simple. During the existence of the state of national emergency, PP
1017 purports to grant the President, without any authority or delegation from
Congress, to take over or direct the operation of any privately-owned public utility or
business affected with public interest.
This provision was first introduced in the 1973 Constitution, as a product of the
"martial law" thinking of the 1971 Constitutional Convention.122 In effect at the time of
its approval was President Marcos’ Letter of Instruction No. 2 dated September 22,
1972 instructing the Secretary of National Defense to take over "the management,
control and operation of the Manila Electric Company, the Philippine Long Distance
Telephone Company, the National Waterworks and Sewerage Authority, the Philippine
National Railways, the Philippine Air Lines, Air Manila (and) Filipinas Orient Airways . .
. for the successful prosecution by the Government of its effort to contain, solve and
end the present national emergency."
Petitioners, particularly the members of the House of Representatives, claim that
President Arroyo’s inclusion of Section 17, Article XII in PP 1017 is an encroachment
on the legislature’s emergency powers.
This is an area that needs delineation.
A distinction must be drawn between the President’s authority to declare "a state of
national emergency" and to exercise emergency powers. To the first, as elucidated by
the Court, Section 18, Article VII grants the President such power, hence, no
legitimate constitutional objection can be raised. But to the second, manifold
constitutional issues arise.
Section 23, Article VI of the Constitution reads:
SEC. 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session
assembled, voting separately, shall have the sole power to declare the existence of
a state of war.
(2) In times of war or other national emergency, the Congress may, by law,
authorize the President, for a limited period and subject to such restrictions as it may
prescribe, to exercise powers necessary and proper to carry out a declared national
policy. Unless sooner withdrawn by resolution of the Congress, such powers shall
cease upon the next adjournment thereof.
It may be pointed out that the second paragraph of the above provision refers not only
to war but also to "other national emergency." If the intention of the Framers of our
Constitution was to withhold from the President the authority to declare a "state of
national emergency" pursuant to Section 18, Article VII (calling-out power) and grant it
to Congress (like the declaration of the existence of a state of war), then the Framers
could have provided so. Clearly, they did not intend that Congress should first
authorize the President before he can declare a "state of national emergency." The
logical conclusion then is that President Arroyo could validly declare the existence of a
state of national emergency even in the absence of a Congressional enactment.
But the exercise of emergency powers, such as the taking over of privately owned
public utility or business affected with public interest, is a different matter. This
requires a delegation from Congress.
Courts have often said that constitutional provisions in pari materia are to be
construed together. Otherwise stated, different clauses, sections, and provisions of a
constitution which relate to the same subject matter will be construed together and
considered in the light of each other.123 Considering that Section 17 of Article XII and
Section 23 of Article VI, previously quoted, relate to national emergencies, they must
be read together to determine the limitation of the exercise of emergency powers.
Generally, Congress is the repository of emergency powers. This is evident in the
tenor of Section 23 (2), Article VI authorizing it to delegate such powers to the
President. Certainly, a body cannot delegate a power not reposed upon
it. However, knowing that during grave emergencies, it may not be possible or
practicable for Congress to meet and exercise its powers, the Framers of our
Constitution deemed it wise to allow Congress to grant emergency powers to the
President, subject to certain conditions, thus:
(1) There must be a war or other emergency.
(2) The delegation must be for a limited period only.
(3) The delegation must be subject to such restrictions as the Congress
may prescribe.
(4) The emergency powers must be exercised to carry out a national
policy declared by Congress.124
Section 17, Article XII must be understood as an aspect of the emergency powers
clause. The taking over of private business affected with public interest is just another
facet of the emergency powers generally reposed upon Congress. Thus, when
Section 17 states that the "the State may, during the emergency and under
reasonable terms prescribed by it, temporarily take over or direct the operation
of any privately owned public utility or business affected with public interest," it
refers to Congress, not the President. Now, whether or not the President may exercise
such power is dependent on whether Congress may delegate it to him pursuant to a
law prescribing the reasonable terms thereof. Youngstown Sheet & Tube Co. et al. v.
Sawyer,125 held:
It is clear that if the President had authority to issue the order he did, it must be found
in some provision of the Constitution. And it is not claimed that express constitutional
language grants this power to the President. The contention is that presidential power
should be implied from the aggregate of his powers under the Constitution. Particular
reliance is placed on provisions in Article II which say that "The executive Power shall
be vested in a President . . . .;" that "he shall take Care that the Laws be faithfully
executed;" and that he "shall be Commander-in-Chief of the Army and Navy of the
United States.
The order cannot properly be sustained as an exercise of the President’s military
power as Commander-in-Chief of the Armed Forces. The Government attempts to do
so by citing a number of cases upholding broad powers in military commanders
engaged in day-to-day fighting in a theater of war. Such cases need not concern us
here. Even though "theater of war" be an expanding concept, we cannot with
faithfulness to our constitutional system hold that the Commander-in-Chief of
the Armed Forces has the ultimate power as such to take possession of private
property in order to keep labor disputes from stopping production. This is a job
for the nation’s lawmakers, not for its military authorities.
Nor can the seizure order be sustained because of the several constitutional
provisions that grant executive power to the President. In the framework of our
Constitution, the President’s power to see that the laws are faithfully executed
refutes the idea that he is to be a lawmaker. The Constitution limits his
functions in the lawmaking process to the recommending of laws he thinks wise
and the vetoing of laws he thinks bad. And the Constitution is neither silent nor
equivocal about who shall make laws which the President is to execute. The
first section of the first article says that "All legislative Powers herein granted
shall be vested in a Congress of the United States. . ."126
Petitioner Cacho-Olivares, et al. contends that the term "emergency" under Section
17, Article XII refers to "tsunami," "typhoon," "hurricane"and"similar
occurrences." This is a limited view of "emergency."
Emergency, as a generic term, connotes the existence of conditions suddenly
intensifying the degree of existing danger to life or well-being beyond that which is
accepted as normal. Implicit in this definitions are the elements of intensity, variety,
and perception.127 Emergencies, as perceived by legislature or executive in the United
Sates since 1933, have been occasioned by a wide range of situations, classifiable
under three (3) principal heads: a)economic,128 b) natural
disaster,129 and c) national security.130
"Emergency," as contemplated in our Constitution, is of the same breadth. It may
include rebellion, economic crisis, pestilence or epidemic, typhoon, flood, or other
similar catastrophe of nationwide proportions or effect. 131 This is evident in the
Records of the Constitutional Commission, thus:
MR. GASCON. Yes. What is the Committee’s definition of "national emergency" which
appears in Section 13, page 5? It reads:
When the common good so requires, the State may temporarily take over or direct the
operation of any privately owned public utility or business affected with public interest.
MR. VILLEGAS. What I mean is threat from external aggression, for
example, calamities or natural disasters.
MR. GASCON. There is a question by Commissioner de los Reyes. What about
strikes and riots?
MR. VILLEGAS. Strikes, no; those would not be covered by the term "national
emergency."
MR. BENGZON. Unless they are of such proportions such that they would paralyze
government service.132
xxxxxx
MR. TINGSON. May I ask the committee if "national emergency" refers to military
national emergency or could this be economic emergency?"
MR. VILLEGAS. Yes, it could refer to both military or economic dislocations.
MR. TINGSON. Thank you very much.133
It may be argued that when there is national emergency, Congress may not be able to
convene and, therefore, unable to delegate to the President the power to take over
privately-owned public utility or business affected with public interest.
In Araneta v. Dinglasan,134 this Court emphasized that legislative power, through
which extraordinary measures are exercised, remains in Congress even in times of
crisis.
"x x x
After all the criticisms that have been made against the efficiency of the system of the
separation of powers, the fact remains that the Constitution has set up this form of
government, with all its defects and shortcomings, in preference to the commingling of
powers in one man or group of men. The Filipino people by adopting parliamentary
government have given notice that they share the faith of other democracy-loving
peoples in this system, with all its faults, as the ideal. The point is, under this
framework of government, legislation is preserved for Congress all the time, not
excepting periods of crisis no matter how serious. Never in the history of the United
States, the basic features of whose Constitution have been copied in ours, have
specific functions of the legislative branch of enacting laws been surrendered to
another department – unless we regard as legislating the carrying out of a legislative
policy according to prescribed standards; no, not even when that Republic was
fighting a total war, or when it was engaged in a life-and-death struggle to preserve
the Union. The truth is that under our concept of constitutional government, in times of
extreme perils more than in normal circumstances ‘the various branches, executive,
legislative, and judicial,’ given the ability to act, are called upon ‘to perform the duties
and discharge the responsibilities committed to them respectively."
Following our interpretation of Section 17, Article XII, invoked by President Arroyo in
issuing PP 1017, this Court rules that such Proclamation does not authorize her during
the emergency to temporarily take over or direct the operation of any privately owned
public utility or business affected with public interest without authority from Congress.
Let it be emphasized that while the President alone can declare a state of national
emergency, however, without legislation, he has no power to take over privately-
owned public utility or business affected with public interest. The President cannot
decide whether exceptional circumstances exist warranting the take over of privately-
owned public utility or business affected with public interest. Nor can he determine
when such exceptional circumstances have ceased. Likewise, without
legislation, the President has no power to point out the types of businesses affected
with public interest that should be taken over. In short, the President has no absolute
authority to exercise all the powers of the State under Section 17, Article VII in the
absence of an emergency powers act passed by Congress.
c. "AS APPLIED CHALLENGE"
One of the misfortunes of an emergency, particularly, that which pertains to security, is
that military necessity and the guaranteed rights of the individual are often not
compatible. Our history reveals that in the crucible of conflict, many rights are curtailed
and trampled upon. Here, the right against unreasonable search and seizure; the
right against warrantless arrest; and the freedom of speech, of expression, of
the press, and of assembly under the Bill of Rights suffered the greatest blow.
Of the seven (7) petitions, three (3) indicate "direct injury."
In G.R. No. 171396, petitioners David and Llamas alleged that, on February 24, 2006,
they were arrested without warrants on their way to EDSA to celebrate the 20th
Anniversary of People Power I. The arresting officers cited PP 1017 as basis of the
arrest.
In G.R. No. 171409, petitioners Cacho-Olivares and Tribune Publishing Co., Inc.
claimed that on February 25, 2006, the CIDG operatives "raided and ransacked
without warrant" their office. Three policemen were assigned to guard their office as a
possible "source of destabilization." Again, the basis was PP 1017.
And in G.R. No. 171483, petitioners KMU and NAFLU-KMU et al. alleged that their
members were "turned away and dispersed" when they went to EDSA and later, to
Ayala Avenue, to celebrate the 20th Anniversary of People Power I.
A perusal of the "direct injuries" allegedly suffered by the said petitioners shows that
they resulted from the implementation, pursuant to G.O. No. 5, of PP 1017.
Can this Court adjudge as unconstitutional PP 1017 and G.O. No 5 on the basis of
these illegal acts? In general, does the illegal implementation of a law render it
unconstitutional?
Settled is the rule that courts are not at liberty to declare statutes invalid although
they may be abused and misabused135 and may afford an opportunity for abuse
in the manner of application.136 The validity of a statute or ordinance is to be
determined from its general purpose and its efficiency to accomplish the end
desired, not from its effects in a particular case.137 PP 1017 is merely an invocation
of the President’s calling-out power. Its general purpose is to command the AFP to
suppress all forms of lawless violence, invasion or rebellion. It had accomplished the
end desired which prompted President Arroyo to issue PP 1021. But there is nothing
in PP 1017 allowing the police, expressly or impliedly, to conduct illegal arrest, search
or violate the citizens’ constitutional rights.
Now, may this Court adjudge a law or ordinance unconstitutional on the ground that its
implementor committed illegal acts? The answer is no. The criterion by which the
validity of the statute or ordinance is to be measured is the essential basis for the
exercise of power, and not a mere incidental result arising from its
exertion.138 This is logical. Just imagine the absurdity of situations when laws maybe
declared unconstitutional just because the officers implementing them have acted
arbitrarily. If this were so, judging from the blunders committed by policemen in the
cases passed upon by the Court, majority of the provisions of the Revised Penal Code
would have been declared unconstitutional a long time ago.
President Arroyo issued G.O. No. 5 to carry into effect the provisions of PP 1017.
General orders are "acts and commands of the President in his capacity as
Commander-in-Chief of the Armed Forces of the Philippines." They are internal rules
issued by the executive officer to his subordinates precisely for
the proper and efficientadministration of law. Such rules and regulations create no
relation except between the official who issues them and the official who receives
them.139 They are based on and are the product of, a relationship in which power is
their source, and obedience, their object.140 For these reasons, one requirement for
these rules to be valid is that they must be reasonable, not arbitrary or capricious.
G.O. No. 5 mandates the AFP and the PNP to immediately carry out the "necessary
and appropriate actions and measures to suppress and prevent acts of
terrorism and lawless violence."
Unlike the term "lawless violence" which is unarguably extant in our statutes and the
Constitution, and which is invariably associated with "invasion, insurrection or
rebellion," the phrase "acts of terrorism" is still an amorphous and vague concept.
Congress has yet to enact a law defining and punishing acts of terrorism.
In fact, this "definitional predicament" or the "absence of an agreed definition of
terrorism" confronts not only our country, but the international community as well. The
following observations are quite apropos:
In the actual unipolar context of international relations, the "fight against terrorism" has
become one of the basic slogans when it comes to the justification of the use of force
against certain states and against groups operating internationally. Lists of states
"sponsoring terrorism" and of terrorist organizations are set up and constantly being
updated according to criteria that are not always known to the public, but are clearly
determined by strategic interests.
The basic problem underlying all these military actions – or threats of the use of force
as the most recent by the United States against Iraq – consists in the absence of an
agreed definition of terrorism.
Remarkable confusion persists in regard to the legal categorization of acts of violence
either by states, by armed groups such as liberation movements, or by individuals.
The dilemma can by summarized in the saying "One country’s terrorist is another
country’s freedom fighter." The apparent contradiction or lack of consistency in the
use of the term "terrorism" may further be demonstrated by the historical fact that
leaders of national liberation movements such as Nelson Mandela in South Africa,
Habib Bourgouiba in Tunisia, or Ahmed Ben Bella in Algeria, to mention only a few,
were originally labeled as terrorists by those who controlled the territory at the time,
but later became internationally respected statesmen.
What, then, is the defining criterion for terrorist acts – the differentia
specifica distinguishing those acts from eventually legitimate acts of national
resistance or self-defense?
Since the times of the Cold War the United Nations Organization has been trying in
vain to reach a consensus on the basic issue of definition. The organization has
intensified its efforts recently, but has been unable to bridge the gap between those
who associate "terrorism" with any violent act by non-state groups against civilians,
state functionaries or infrastructure or military installations, and those who believe in
the concept of the legitimate use of force when resistance against foreign occupation
or against systematic oppression of ethnic and/or religious groups within a state is
concerned.
The dilemma facing the international community can best be illustrated by reference to
the contradicting categorization of organizations and movements such as Palestine
Liberation Organization (PLO) – which is a terrorist group for Israel and a liberation
movement for Arabs and Muslims – the Kashmiri resistance groups – who are
terrorists in the perception of India, liberation fighters in that of Pakistan – the earlier
Contras in Nicaragua – freedom fighters for the United States, terrorists for the
Socialist camp – or, most drastically, the Afghani Mujahedeen (later to become the
Taliban movement): during the Cold War period they were a group of freedom fighters
for the West, nurtured by the United States, and a terrorist gang for the Soviet Union.
One could go on and on in enumerating examples of conflicting categorizations that
cannot be reconciled in any way – because of opposing political interests that are at
the roots of those perceptions.
How, then, can those contradicting definitions and conflicting perceptions and
evaluations of one and the same group and its actions be explained? In our analysis,
the basic reason for these striking inconsistencies lies in the divergent interest of
states. Depending on whether a state is in the position of an occupying power or in
that of a rival, or adversary, of an occupying power in a given territory, the definition of
terrorism will "fluctuate" accordingly. A state may eventually see itself as protector of
the rights of a certain ethnic group outside its territory and will therefore speak of a
"liberation struggle," not of "terrorism" when acts of violence by this group are
concerned, and vice-versa.
The United Nations Organization has been unable to reach a decision on the definition
of terrorism exactly because of these conflicting interests of sovereign states that
determine in each and every instance how a particular armed movement (i.e. a non-
state actor) is labeled in regard to the terrorists-freedom fighter dichotomy. A "policy of
double standards" on this vital issue of international affairs has been the unavoidable
consequence.
This "definitional predicament" of an organization consisting of sovereign states – and
not of peoples, in spite of the emphasis in the Preamble to the United Nations Charter!
– has become even more serious in the present global power constellation: one
superpower exercises the decisive role in the Security Council, former great powers of
the Cold War era as well as medium powers are increasingly being marginalized; and
the problem has become even more acute since the terrorist attacks of 11 September
2001 I the United States.141
The absence of a law defining "acts of terrorism" may result in abuse and oppression
on the part of the police or military. An illustration is when a group of persons are
merely engaged in a drinking spree. Yet the military or the police may consider the act
as an act of terrorism and immediately arrest them pursuant to G.O. No. 5. Obviously,
this is abuse and oppression on their part. It must be remembered that an act can only
be considered a crime if there is a law defining the same as such and imposing the
corresponding penalty thereon.
So far, the word "terrorism" appears only once in our criminal laws, i.e., in P.D. No.
1835 dated January 16, 1981 enacted by President Marcos during the Martial Law
regime. This decree is entitled "Codifying The Various Laws on Anti-Subversion and
Increasing The Penalties for Membership in Subversive Organizations." The word
"terrorism" is mentioned in the following provision: "That one who conspires with any
other person for the purpose of overthrowing the Government of the Philippines x x x
by force, violence, terrorism, x x x shall be punished by reclusion temporal x x x."
P.D. No. 1835 was repealed by E.O. No. 167 (which outlaws the Communist Party of
the Philippines) enacted by President Corazon Aquino on May 5, 1985. These two (2)
laws, however, do not define "acts of terrorism." Since there is no law defining "acts of
terrorism," it is President Arroyo alone, under G.O. No. 5, who has the discretion to
determine what acts constitute terrorism. Her judgment on this aspect is absolute,
without restrictions. Consequently, there can be indiscriminate arrest without warrants,
breaking into offices and residences, taking over the media enterprises, prohibition
and dispersal of all assemblies and gatherings unfriendly to the administration. All
these can be effected in the name of G.O. No. 5. These acts go far beyond the calling-
out power of the President. Certainly, they violate the due process clause of the
Constitution. Thus, this Court declares that the "acts of terrorism" portion of G.O. No. 5
is unconstitutional.
Significantly, there is nothing in G.O. No. 5 authorizing the military or police to commit
acts beyond what are necessary and appropriate to suppress and prevent lawless
violence, the limitation of their authority in pursuing the Order. Otherwise, such acts
are considered illegal.
We first examine G.R. No. 171396 (David et al.)
The Constitution provides that "the right of the people to be secured in their persons,
houses, papers and effects against unreasonable search and seizure of whatever
nature and for any purpose shall be inviolable, and no search warrant or warrant of
arrest shall issue except upon probable cause to be determined personally by the
judge after examination under oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the place to be searched and
the persons or things to be seized."142 The plain import of the language of the
Constitution is that searches, seizures and arrests are normally unreasonable unless
authorized by a validly issued search warrant or warrant of arrest. Thus, the
fundamental protection given by this provision is that between person and police must
stand the protective authority of a magistrate clothed with power to issue or refuse to
issue search warrants or warrants of arrest.143
In the Brief Account144 submitted by petitioner David, certain facts are
established: first, he was arrested without warrant; second, the PNP operatives
arrested him on the basis of PP 1017; third, he was brought at Camp Karingal,
Quezon City where he was fingerprinted, photographed and booked like a criminal
suspect; fourth,he was treated brusquely by policemen who "held his head and tried to
push him" inside an unmarked car; fifth, he was charged with Violation of Batas
Pambansa Bilang No. 880145 and Inciting to Sedition; sixth, he was detained for
seven (7) hours; and seventh,he was eventually released for insufficiency of evidence.
Section 5, Rule 113 of the Revised Rules on Criminal Procedure provides:
Sec. 5. Arrest without warrant; when lawful. - A peace officer or a private person
may, without a warrant, arrest a person:
(a) When, in his presence, the person to be arrested has committed, is
actually committing, or is attempting to commit an offense.
(b) When an offense has just been committed and he has probable cause to
believe based on personal knowledge of facts or circumstances that the
person to be arrested has committed it; and
x x x.
Neither of the two (2) exceptions mentioned above justifies petitioner David’s
warrantless arrest. During the inquest for the charges of inciting to
sedition and violation of BP 880, all that the arresting officers could invoke was their
observation that some rallyists were wearing t-shirts with the invective "Oust Gloria
Now" and their erroneous assumption that petitioner David was the leader of the
rally.146 Consequently, the Inquest Prosecutor ordered his immediate release on the
ground of insufficiency of evidence. He noted that petitioner David was not wearing
the subject t-shirt and even if he was wearing it, such fact is insufficient to charge him
with inciting to sedition. Further, he also stated that there is insufficient evidence for
the charge of violation of BP 880 as it was not even known whether petitioner David
was the leader of the rally.147
But what made it doubly worse for petitioners David et al. is that not only was their
right against warrantless arrest violated, but also their right to peaceably assemble.
Section 4 of Article III guarantees:
No law shall be passed abridging the freedom of speech, of expression, or of the
press, or the right of the people peaceably to assemble and petition the government
for redress of grievances.
"Assembly" means a right on the part of the citizens to meet peaceably for
consultation in respect to public affairs. It is a necessary consequence of our
republican institution and complements the right of speech. As in the case of freedom
of expression, this right is not to be limited, much less denied, except on a showing of
a clear and present danger of a substantive evil that Congress has a right to prevent.
In other words, like other rights embraced in the freedom of expression, the right to
assemble is not subject to previous restraint or censorship. It may not be conditioned
upon the prior issuance of a permit or authorization from the government authorities
except, of course, if the assembly is intended to be held in a public place, a permit for
the use of such place, and not for the assembly itself, may be validly required.
The ringing truth here is that petitioner David, et al. were arrested while they were
exercising their right to peaceful assembly. They were not committing any crime,
neither was there a showing of a clear and present danger that warranted the
limitation of that right. As can be gleaned from circumstances, the charges of inciting
to sedition and violation of BP 880 were mere afterthought. Even the Solicitor
General, during the oral argument, failed to justify the arresting officers’ conduct. In De
Jonge v. Oregon,148 it was held that peaceable assembly cannot be made a crime,
thus:
Peaceable assembly for lawful discussion cannot be made a crime. The holding of
meetings for peaceable political action cannot be proscribed. Those who assist in the
conduct of such meetings cannot be branded as criminals on that score. The question,
if the rights of free speech and peaceful assembly are not to be preserved, is not as to
the auspices under which the meeting was held but as to its purpose; not as to the
relations of the speakers, but whether their utterances transcend the bounds of the
freedom of speech which the Constitution protects. If the persons assembling have
committed crimes elsewhere, if they have formed or are engaged in a conspiracy
against the public peace and order, they may be prosecuted for their conspiracy or
other violations of valid laws. But it is a different matter when the State, instead of
prosecuting them for such offenses, seizes upon mere participation in a
peaceable assembly and a lawful public discussion as the basis for a criminal
charge.
On the basis of the above principles, the Court likewise considers the dispersal and
arrest of the members of KMU et al. (G.R. No. 171483) unwarranted. Apparently, their
dispersal was done merely on the basis of Malacañang’s directive canceling all
permits previously issued by local government units. This is arbitrary. The wholesale
cancellation of all permits to rally is a blatant disregard of the principle that "freedom
of assembly is not to be limited, much less denied, except on a showing of
a clear and present danger of a substantive evil that the State has a right to
prevent."149 Tolerance is the rule and limitation is the exception. Only upon a showing
that an assembly presents a clear and present danger that the State may deny the
citizens’ right to exercise it. Indeed, respondents failed to show or convince the Court
that the rallyists committed acts amounting to lawless violence, invasion or rebellion.
With the blanket revocation of permits, the distinction between protected and
unprotected assemblies was eliminated.
Moreover, under BP 880, the authority to regulate assemblies and rallies is lodged
with the local government units. They have the power to issue permits and to revoke
such permits after due notice and hearing on the determination of the presence of
clear and present danger. Here, petitioners were not even notified and heard on the
revocation of their permits.150 The first time they learned of it was at the time of the
dispersal. Such absence of notice is a fatal defect. When a person’s right is restricted
by government action, it behooves a democratic government to see to it that the
restriction is fair, reasonable, and according to procedure.
G.R. No. 171409, (Cacho-Olivares, et al.) presents another facet of freedom of
speech i.e., the freedom of the press. Petitioners’ narration of facts, which the Solicitor
General failed to refute, established the following: first, the Daily Tribune’s offices were
searched without warrant;second, the police operatives seized several materials for
publication; third, the search was conducted at about 1:00 o’ clock in the morning of
February 25, 2006; fourth, the search was conducted in the absence of any official of
the Daily Tribune except the security guard of the building; and fifth, policemen
stationed themselves at the vicinity of the Daily Tribune offices.
Thereafter, a wave of warning came from government officials. Presidential Chief of
Staff Michael Defensor was quoted as saying that such raid was "meant to show a
‘strong presence,’ to tell media outlets not to connive or do anything that would
help the rebels in bringing down this government." Director General Lomibao
further stated that "if they do not follow the standards –and the standards are if
they would contribute to instability in the government, or if they do not
subscribe to what is in General Order No. 5 and Proc. No. 1017 – we will
recommend a ‘takeover.’" National Telecommunications Commissioner Ronald Solis
urged television and radio networks to "cooperate" with the government for the
duration of the state of national emergency. He warned that his agency will not
hesitate to recommend the closure of any broadcast outfit that violates rules set
out for media coverage during times when the national security is threatened.151
The search is illegal. Rule 126 of The Revised Rules on Criminal Procedure lays down
the steps in the conduct of search and seizure. Section 4 requires that a search
warrant be issued upon probable cause in connection with one specific offence to be
determined personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce. Section 8 mandates that the search
of a house, room, or any other premise be made in the presence of the lawful
occupant thereof or any member of his family or in the absence of the latter, in the
presence of two (2) witnesses of sufficient age and discretion residing in the same
locality. And Section 9 states that the warrant must direct that it be served in
the daytime, unless the property is on the person or in the place ordered to be
searched, in which case a direction may be inserted that it be served at any time of
the day or night. All these rules were violated by the CIDG operatives.
Not only that, the search violated petitioners’ freedom of the press. The best gauge of
a free and democratic society rests in the degree of freedom enjoyed by its media. In
the Burgos v. Chief of Staff152 this Court held that --
As heretofore stated, the premises searched were the business and printing offices of
the "Metropolitan Mail" and the "We Forum" newspapers. As a consequence of the
search and seizure, these premises were padlocked and sealed, with the further
result that the printing and publication of said newspapers were discontinued.
Such closure is in the nature of previous restraint or censorship abhorrent to
the freedom of the press guaranteed under the fundamental law, and constitutes
a virtual denial of petitioners' freedom to express themselves in print. This state
of being is patently anathematic to a democratic framework where a free, alert
and even militant press is essential for the political enlightenment and growth of
the citizenry.
While admittedly, the Daily Tribune was not padlocked and sealed like the
"Metropolitan Mail" and "We Forum" newspapers in the above case, yet it cannot be
denied that the CIDG operatives exceeded their enforcement duties. The search and
seizure of materials for publication, the stationing of policemen in the vicinity of
the The Daily Tribune offices, and the arrogant warning of government officials to
media, are plain censorship. It is that officious functionary of the repressive
government who tells the citizen that he may speak only if allowed to do so, and no
more and no less than what he is permitted to say on pain of punishment should he be
so rash as to disobey.153Undoubtedly, the The Daily Tribune was subjected to these
arbitrary intrusions because of its anti-government sentiments. This Court cannot
tolerate the blatant disregard of a constitutional right even if it involves the most
defiant of our citizens. Freedom to comment on public affairs is essential to the vitality
of a representative democracy. It is the duty of the courts to be watchful for the
constitutional rights of the citizen, and against any stealthy encroachments thereon.
The motto should always be obsta principiis.154
Incidentally, during the oral arguments, the Solicitor General admitted that the search
of the Tribune’s offices and the seizure of its materials for publication and other papers
are illegal; and that the same are inadmissible "for any purpose," thus:
JUSTICE CALLEJO:
You made quite a mouthful of admission when you said that the policemen, when
inspected the Tribune for the purpose of gathering evidence and you admitted that the
policemen were able to get the clippings. Is that not in admission of the admissibility of
these clippings that were taken from the Tribune?
SOLICITOR GENERAL BENIPAYO:
Under the law they would seem to be, if they were illegally seized, I think and I know, Maybe so, Your Honor. Maybe so, that is why I said, I don’t know if it is premature to
Your Honor, and these are inadmissible for any purpose.155 say this, we do not condone this. If the people who have been injured by this
would want to sue them, they can sue and there are remedies for this.156
xxxxxxxxx
Likewise, the warrantless arrests and seizures executed by the police were, according
to the Solicitor General, illegal and cannot be condoned, thus:
SR. ASSO. JUSTICE PUNO:

CHIEF JUSTICE PANGANIBAN:

These have been published in the past issues of the Daily Tribune; all you have to do
is to get those past issues. So why do you have to go there at 1 o’clock in the morning
and without any search warrant? Did they become suddenly part of the evidence of There seems to be some confusions if not contradiction in your theory.
rebellion or inciting to sedition or what?
SOLICITOR GENERAL BENIPAYO:
SOLGEN BENIPAYO:
I don’t know whether this will clarify. The acts, the supposed illegal or unlawful acts
Well, it was the police that did that, Your Honor. Not upon my instructions. committed on the occasion of 1017, as I said, it cannot be condoned. You cannot
blame the President for, as you said, a misapplication of the law. These are acts of the
police officers, that is their responsibility.157
SR. ASSO. JUSTICE PUNO:

The Dissenting Opinion states that PP 1017 and G.O. No. 5 are constitutional in every
Are you saying that the act of the policeman is illegal, it is not based on any law, and it
aspect and "should result in no constitutional or statutory breaches if applied
is not based on Proclamation 1017.
according to their letter."

SOLGEN BENIPAYO:
The Court has passed upon the constitutionality of these issuances. Its ratiocination
has been exhaustively presented. At this point, suffice it to reiterate that PP 1017 is
It is not based on Proclamation 1017, Your Honor, because there is nothing in 1017 limited to the calling out by the President of the military to prevent or suppress lawless
which says that the police could go and inspect and gather clippings from Daily violence, invasion or rebellion. When in implementing its provisions, pursuant to G.O.
Tribune or any other newspaper. No. 5, the military and the police committed acts which violate the citizens’ rights
under the Constitution, this Court has to declare such acts unconstitutional and illegal.
SR. ASSO. JUSTICE PUNO:
In this connection, Chief Justice Artemio V. Panganiban’s concurring opinion, attached
hereto, is considered an integral part of this ponencia.
Is it based on any law?

SUMMATION
SOLGEN BENIPAYO:

In sum, the lifting of PP 1017 through the issuance of PP 1021 – a supervening event
As far as I know, no, Your Honor, from the facts, no.
– would have normally rendered this case moot and academic. However, while PP
1017 was still operative, illegal acts were committed allegedly in pursuance thereof.
SR. ASSO. JUSTICE PUNO: Besides, there is no guarantee that PP 1017, or one similar to it, may not again be
issued. Already, there have been media reports on April 30, 2006 that allegedly PP
1017 would be reimposed "if the May 1 rallies" become "unruly and violent."
So, it has no basis, no legal basis whatsoever? Consequently, the transcendental issues raised by the parties should not be "evaded;"
they must now be resolved to prevent future constitutional aberration.
SOLGEN BENIPAYO:
The Court finds and so holds that PP 1017 is constitutional insofar as it constitutes a
call by the President for the AFP to prevent or suppress lawless violence. The
proclamation is sustained by Section 18, Article VII of the Constitution and the relevant constitutionalism: the maintenance of legal limits to arbitrary power, and political
jurisprudence discussed earlier. However, PP 1017’s extraneous provisions giving the responsibility of the government to the governed.158
President express or implied power (1) to issue decrees; (2) to direct the AFP to
enforce obedience to all laws even those not related to lawless violence as well as
WHEREFORE, the Petitions are partly granted. The Court rules that PP 1017
decrees promulgated by the President; and (3) to impose standards on media or any
is CONSTITUTIONAL insofar as it constitutes a call by President Gloria Macapagal-
form of prior restraint on the press, are ultra vires and unconstitutional. The Court
Arroyo on the AFP to prevent or suppress lawless violence. However, the
also rules that under Section 17, Article XII of the Constitution, the President, in the
provisions of PP 1017 commanding the AFP to enforce laws not related to lawless
absence of a legislation, cannot take over privately-owned public utility and private
violence, as well as decrees promulgated by the President, are
business affected with public interest.
declared UNCONSTITUTIONAL. In addition, the provision in PP 1017 declaring
national emergency under Section 17, Article VII of the Constitution
In the same vein, the Court finds G.O. No. 5 valid. It is an Order issued by the is CONSTITUTIONAL, but such declaration does not authorize the President to take
President – acting as Commander-in-Chief – addressed to subalterns in the AFP to over privately-owned public utility or business affected with public interest without prior
carry out the provisions of PP 1017. Significantly, it also provides a valid standard – legislation.
that the military and the police should take only the "necessary and appropriate
actions and measures to suppress and prevent acts of lawless violence."But the
G.O. No. 5 is CONSTITUTIONAL since it provides a standard by which the AFP and
words "acts of terrorism" found in G.O. No. 5 have not been legally defined and
the PNP should implement PP 1017, i.e. whatever is "necessary and appropriate
made punishable by Congress and should thus be deemed deleted from the said G.O.
actions and measures to suppress and prevent acts of lawless
While "terrorism" has been denounced generally in media, no law has been enacted to
violence." Considering that "acts of terrorism" have not yet been defined and made
guide the military, and eventually the courts, to determine the limits of the AFP’s
punishable by the Legislature, such portion of G.O. No. 5 is
authority in carrying out this portion of G.O. No. 5.
declared UNCONSTITUTIONAL.

On the basis of the relevant and uncontested facts narrated earlier, it is also pristine
The warrantless arrest of Randolf S. David and Ronald Llamas; the dispersal and
clear that (1) the warrantless arrest of petitioners Randolf S. David and Ronald
warrantless arrest of the KMU and NAFLU-KMU members during their rallies, in the
Llamas; (2) the dispersal of the rallies and warrantless arrest of the KMU and NAFLU-
absence of proof that these petitioners were committing acts constituting lawless
KMU members; (3) the imposition of standards on media or any prior restraint on the
violence, invasion or rebellion and violating BP 880; the imposition of standards on
press; and (4) the warrantless search of the Tribune offices and the whimsical
media or any form of prior restraint on the press, as well as the warrantless search of
seizures of some articles for publication and other materials, are not authorized by the
the Tribune offices and whimsical seizure of its articles for publication and other
Constitution, the law and jurisprudence. Not even by the valid provisions of PP 1017
materials, are declared UNCONSTITUTIONAL.
and G.O. No. 5.

No costs.
Other than this declaration of invalidity, this Court cannot impose any civil, criminal or
administrative sanctions on the individual police officers concerned. They have not
been individually identified and given their day in court. The civil complaints or causes SO ORDERED.
of action and/or relevant criminal Informations have not been presented before this
Court. Elementary due process bars this Court from making any specific
ANGELINA SANDOVAL-GUTIERREZ
pronouncement of civil, criminal or administrative liabilities.
Associate Justice

It is well to remember that military power is a means to an end and substantive

civil rights are ends in themselves. How to give the military the power it needs WE CONCUR:
to protect the Republic without unnecessarily trampling individual rights is one
of the eternal balancing tasks of a democratic state.During emergency, ARTEMIO V. PANGANIBAN
governmental action may vary in breadth and intensity from normal times, yet they Chief Justice
should not be arbitrary as to unduly restrain our people’s liberty.

Perhaps, the vital lesson that we must learn from the theorists who studied the various
(On leave)
competing political philosophies is that, it is possible to grant government the authority
REYNATO S. PUNO LEONARDO A. QUISUMBING
to cope with crises without surrendering the two vital principles of
 Associate Justice Asscociate Justice

CONSUELO YNARES-SANTIAGO ANTONIO T. CARPIO

Associate Justice Asscociate Justice

MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA

Associate Justice Asscociate Justice

CONCHITA CARPIO MORALES ROMEO J. CALLEJO, SR.

Associate Justice Asscociate Justice

ADOLFO S. AZCUNA DANTE O. TINGA

Associate Justice Asscociate Justice

MINITA V. CHICO-NAZARIO CANCIO C. GARCIA

Associate Justice Asscociate Justice

PRESBITERO J. VELASCO, JR.

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.

ARTEMIO V. PANGANIBAN
Chief Justice

Republic of the Philippines

SUPREME COURT
Manila
 EN BANC
G.R. No. L-23825 December 24, 1965
EMMANUEL PELAEZ, petitioner,
vs.
THE AUDITOR GENERAL, respondent.
Zulueta, Gonzales, Paculdo and Associates for petitioner.
Office of the Solicitor General for respondent.
CONCEPCION, J.:
During the period from September 4 to October 29, 1964 the President of the
Philippines, purporting to act pursuant to Section 68 of the Revised Administrative
Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-
three (33) municipalities enumerated in the margin.1 Soon after the date last
mentioned, or on November 10, 1964 petitioner Emmanuel Pelaez, as Vice President
of the Philippines and as taxpayer, instituted the present special civil action, for a writ
of prohibition with preliminary injunction, against the Auditor General, to restrain him,
as well as his representatives and agents, from passing in audit any expenditure of
public funds in implementation of said executive orders and/or any disbursement by
said municipalities.
Petitioner alleges that said executive orders are null and void, upon the ground that
said Section 68 has been impliedly repealed by Republic Act No. 2370 and constitutes
an undue delegation of legislative power. Respondent maintains the contrary view and
avers that the present action is premature and that not all proper parties — referring to
the officials of the new political subdivisions in question — have been impleaded.
Subsequently, the mayors of several municipalities adversely affected by the
aforementioned executive orders — because the latter have taken away from the
former the barrios composing the new political subdivisions — intervened in the case.
Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando were
allowed to and did appear as amici curiae.
The third paragraph of Section 3 of Republic Act No. 2370, reads:
Barrios shall not be created or their boundaries altered nor their names
changed except under the provisions of this Act or by Act of Congress.
Pursuant to the first two (2) paragraphs of the same Section 3:
All barrios existing at the time of the passage of this Act shall come under
the provisions hereof.
Upon petition of a majority of the voters in the areas affected, a new barrio
may be created or the name of an existing one may be changed by the
provincial board of the province, upon recommendation of the council of the
municipality or municipalities in which the proposed barrio is stipulated. The
recommendation of the municipal council shall be embodied in a resolution
approved by at least two-thirds of the entire membership of the said council:
Provided, however, That no new barrio may be created if its population is
less than five hundred persons.
Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios
may "not be created or their boundaries altered nor their names changed" except by
Act of Congress or of the corresponding provincial board "upon petition of a majority of
the voters in the areas affected" and the "recommendation of the council of the
municipality or municipalities in which the proposed barrio is situated." Petitioner
argues, accordingly: "If the President, under this new law, cannot even create a barrio,
can he create a municipality which is composed of several barrios, since barrios are
units of municipalities?"
Respondent answers in the affirmative, upon the theory that a new municipality can be
created without creating new barrios, such as, by placing old barrios under the
jurisdiction of the new municipality. This theory overlooks, however, the main import of
the petitioner's argument, which is that the statutory denial of the presidential authority
to create a new barrio implies a negation of the bigger power to create municipalities,
each of which consists of several barrios. The cogency and force of this argument is
too obvious to be denied or even questioned. Founded upon logic and experience, it
cannot be offset except by a clear manifestation of the intent of Congress to the
contrary, and no such manifestation, subsequent to the passage of Republic Act No.
2379, has been brought to our attention.
Moreover, section 68 of the Revised Administrative Code, upon which the disputed
executive orders are based, provides:
The (Governor-General) President of the Philippines may by executive order
define the boundary, or boundaries, of any province, subprovince,
municipality, [township] municipal district, or other political subdivision, and
increase or diminish the territory comprised therein, may divide any province
into one or more subprovinces, separate any political division other than a
province, into such portions as may be required, merge any of such
subdivisions or portions with another, name any new subdivision so created,
and may change the seat of government within any subdivision to such
place therein as the public welfare may require: Provided, That the
authorization of the (Philippine Legislature) Congress of the Philippines shall
first be obtained whenever the boundary of any province or subprovince is
to be defined or any province is to be divided into one or more
subprovinces. When action by the (Governor-General) President of the
Philippines in accordance herewith makes necessary a change of the
territory under the jurisdiction of any administrative officer or any judicial
officer, the (Governor-General) President of the Philippines, with the
 recommendation and advice of the head of the Department having
executive control of such officer, shall redistrict the territory of the several
officers affected and assign such officers to the new districts so formed.
Upon the changing of the limits of political divisions in pursuance of the
foregoing authority, an equitable distribution of the funds and obligations of
the divisions thereby affected shall be made in such manner as may be
recommended by the (Insular Auditor) Auditor General and approved by the
(Governor-General) President of the Philippines.
Respondent alleges that the power of the President to create municipalities under this
section does not amount to an undue delegation of legislative power, relying
upon Municipality of Cardona vs. Municipality of Binañgonan (36 Phil. 547), which, he
claims, has settled it. Such claim is untenable, for said case involved, not the creation
of a new municipality, but a mere transfer of territory — from an already
existing municipality (Cardona) to another municipality (Binañgonan), likewise, existing
at the time of and prior to said transfer (See Gov't of the P.I. ex rel. Municipality of
Cardona vs. Municipality, of Binañgonan [34 Phil. 518, 519-5201) — in consequence
of the fixing and definition, pursuant to Act No. 1748, of the common boundaries of
two municipalities.
It is obvious, however, that, whereas 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 — the authority to create
municipal corporations is essentially legislative in nature. In the language of other
courts, it is "strictly a legislative function" (State ex rel. Higgins vs. Aicklen, 119 S. 425,
January 2, 1959) or "solely and exclusively the exercise of legislative power" (Udall vs.
Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of Washington has
put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405, 409),
"municipal corporations are purely the creatures of statutes."
Although1a Congress may delegate to another branch of the Government the power to
fill in the details in the execution, enforcement or administration of a law, it is essential,
to forestall a violation of the principle of separation of powers, that said law: (a) be
complete in itself — it must set forth therein the policy to be executed, carried out or
implemented by the delegate2 — and (b) fix a standard — the limits of which are
sufficiently determinate or determinable — to which the delegate must conform in the
performance of his functions.2a Indeed, without a statutory declaration of policy, the
delegate would in effect, make or formulate such policy, which is the essence of every
law; and, without the aforementioned standard, there would be no means to
determine, with reasonable certainty, whether the delegate has acted within or beyond
the scope of his authority.2b Hence, he could thereby arrogate upon himself the power,
not only to make the law, but, also — and this is worse — to unmake it, by adopting
measures inconsistent with the end sought to be attained by the Act of Congress, thus
nullifying the principle of separation of powers and the system of checks and
balances, and, consequently, undermining the very foundation of our Republican
system.
Section 68 of the Revised Administrative Code does not meet these well settled
requirements for a valid delegation of the power to fix the details in the enforcement of
a law. It does not enunciate any policy to be carried out or implemented by the
President. Neither does it give a standard sufficiently precise to avoid the evil effects
above referred to. In this connection, we do not overlook the fact that, under the last
clause of the first sentence of Section 68, the President:
... may change the seat of the government within any subdivision to such
place therein as the public welfare may require.
It is apparent, however, from the language of this clause, that the phrase "as the
public welfare may require" qualified, not the clauses preceding the one just quoted,
but only the place to which the seat of the government may be transferred. This fact
becomes more apparent when we consider that said Section 68 was originally Section
1 of Act No. 1748,3 which provided that, "whenever in the judgment of the Governor-
General the public welfare requires, he may, by executive order," effect the changes
enumerated therein (as in said section 68), including the change of the seat of the
government "to such place ... as the public interest requires." The opening statement
of said Section 1 of Act No. 1748 — which was not included in Section 68 of the
Revised Administrative Code — governed the time at which, or the conditions under
which, the powers therein conferred could be exercised; whereas the last part of the
first sentence of said section referred exclusively to the place to which the seat of the
government was to be transferred.
At any rate, the conclusion would be the same, insofar as the case at bar is
concerned, even if we assumed that the phrase "as the public welfare may require," in
said Section 68, qualifies all other clauses thereof. It is true that in Calalang vs.
Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had upheld
"public welfare" and "public interest," respectively, as sufficient standards for a valid
delegation of the authority to execute the law. But, the doctrine laid down in these
cases — as all judicial pronouncements — must be construed in relation to the
specific facts and issues involved therein, outside of which they do not constitute
precedents and have no binding effect.4 The law construed in the Calalang case
conferred upon the Director of Public Works, with the approval of the Secretary of
Public Works and Communications, the power to issue rules and regulations
to promote safe transitupon national roads and streets. Upon the other hand, the
Rosenthal case referred to the authority of the Insular Treasurer, under Act No. 2581,
to issue and cancel certificates or permits for the sale of speculative securities. Both
cases involved grants to administrative officers of powers related to the exercise of
their administrative functions, calling for the determination of questions of fact.
Such is not the nature of the powers dealt with in section 68. As above indicated, the
creation of municipalities, is not an administrative function, but one which is essentially
and eminently legislative in character. The question of whether or not "public interest"
demands the exercise of such power is not one of fact. it is "purely a
legislativequestion "(Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority,
74 S.E. 2d. 310-313, 315-318), or a political question (Udall vs. Severn, 79 P. 2d. 347-
349). As the Supreme Court of Wisconsin has aptly characterized it, "the question as
to whether incorporation is for the best interest of the community in any case is
emphatically a question of public policy and statecraft" (In re Village of North
Milwaukee, 67 N.W. 1033, 1035-1037).
For this reason, courts of justice have annulled, as constituting undue delegation of
legislative powers, state laws granting the judicial department, the power to determine
whether certain territories should be annexed to a particular municipality (Udall vs.
Severn, supra, 258-359); or vesting in a Commission the right to determine the plan
and frame of government of proposed villages and what functions shall be exercised
by the same, although the powers and functions of the village are specifically limited
by statute (In re Municipal Charters, 86 Atl. 307-308); or conferring upon courts the
authority to declare a given town or village incorporated, and designate its metes and
bounds, upon petition of a majority of the taxable inhabitants thereof, setting forth the
area desired to be included in such village (Territory ex rel Kelly vs. Stewart, 23 Pac.
405-409); or authorizing the territory of a town, containing a given area and
population, to be incorporated as a town, on certain steps being taken by the
inhabitants thereof and on certain determination by a court and subsequent vote of the
inhabitants in favor thereof, insofar as the court is allowed to determine whether the
lands embraced in the petition "ought justly" to be included in the village, and whether
the interest of the inhabitants will be promoted by such incorporation, and to enlarge
and diminish the boundaries of the proposed village "as justice may require" (In re
Villages of North Milwaukee, 67 N.W. 1035-1037); or creating a Municipal Board of
Control which shall determine whether or not the laying out, construction or operation
of a toll road is in the "public interest" and whether the requirements of the law had
been complied with, in which case the board shall enter an order creating a municipal
corporation and fixing the name of the same (Carolina-Virginia Coastal Highway vs.
Coastal Turnpike Authority, 74 S.E. 2d. 310).
Insofar as the validity of a delegation of power by Congress to the President is
concerned, the case of Schechter Poultry Corporation vs. U.S. (79 L. Ed. 1570) is
quite relevant to the one at bar. The Schechter case involved the constitutionality of
Section 3 of the National Industrial Recovery Act authorizing the President of the
United States to approve "codes of fair competition" submitted to him by one or more
trade or industrial associations or corporations which "impose no inequitable
restrictions on admission to membership therein and are truly representative,"
provided that such codes are not designed "to promote monopolies or to eliminate or
oppress small enterprises and will not operate to discriminate against them, and will
tend to effectuate the policy" of said Act. The Federal Supreme Court held:
To summarize and conclude upon this point: Sec. 3 of the Recovery Act is
without precedent. It supplies no standards for any trade, industry or activity.
It does not undertake to prescribe rules of conduct to be applied to particular
states of fact determined by appropriate administrative procedure. Instead
of prescribing rules of conduct, it authorizes the making of codes to
prescribe them. For that legislative undertaking, Sec. 3 sets up no
standards, aside from the statement of the general aims of rehabilitation,
correction and expansion described in Sec. 1. In view of the scope of that
broad declaration, and of the nature of the few restrictions that are imposed,
the discretion of the President in approving or prescribing codes, and thus
enacting laws for the government of trade and industry throughout the
country, is virtually unfettered. We think that the code making authority thus
conferred is an unconstitutional delegation of legislative power.
If the term "unfair competition" is so broad as to vest in the President a discretion that
is "virtually unfettered." and, consequently, tantamount to a delegation of legislative
power, it is obvious that "public welfare," which has even a broader connotation, leads
to the same result. In fact, if the validity of the delegation of powers made in Section
68 were upheld, there would no longer be any legal impediment to a statutory grant of
authority to the President to do anything which, in his opinion, may be required by
public welfare or public interest. Such grant of authority would be a virtual abdication
of the powers of Congress in favor of the Executive, and would bring about a total
collapse of the democratic system established by our Constitution, which it is the
special duty and privilege of this Court to uphold.
It may not be amiss to note that the executive orders in question were issued after the
legislative bills for the creation of the municipalities involved in this case had failed to
pass Congress. A better proof of the fact that the issuance of said executive orders
entails the exercise of purely legislative functions can hardly be given.
Again, Section 10 (1) of Article VII of our fundamental law ordains:
The President shall have control of all the executive departments, bureaus,
or offices, exercise general supervision over all local governments as may
be provided by law, and take care that the laws be faithfully executed.
The power of control under this provision implies the right of the President to interfere
in the exercise of such discretion as may be vested by law in the officers of the
executive departments, bureaus, or offices of the national government, as well as to
act in lieu of such officers. This power is denied by the Constitution to the Executive,
insofar as local governments are concerned. With respect to the latter, the
fundamental law permits him to wield no more authority than that of checking whether
said local governments or the officers thereof perform their duties as provided by
statutory enactments. Hence, the President cannot interfere with local governments,
so long as the same or its officers act Within the scope of their authority. He may not
enact an ordinance which the municipal council has failed or refused to pass, even if it
had thereby violated a duty imposed thereto by law, although he may see to it that the
corresponding provincial officials take appropriate disciplinary action therefor. Neither
may he vote, set aside or annul an ordinance passed by said council within the scope
of its jurisdiction, no matter how patently unwise it may be. He may not even suspend
an elective official of a regular municipality or take any disciplinary action against him,
except on appeal from a decision of the corresponding provincial board. 5
Upon the other hand if the President could create a municipality, he could, in effect,
remove any of its officials, by creating a new municipality and including therein
the barrio in which the official concerned resides, for his office would thereby become
vacant.6 Thus, by merely brandishing the power to create a new municipality (if he had
it), without actually creating it, he could compel local officials to submit to his dictation,
thereby, in effect, exercising over them the power of control denied to him by the
Constitution.
Then, also, the power of control of the President over executive departments, bureaus
or offices implies no more than the authority to assume directly the functions thereof or
to interfere in the exercise of discretion by its officials. Manifestly, such control does
not include the authority either to abolish an executive department or bureau, or to
create a new one. As a consequence, the alleged power of the President to create
municipal corporations would necessarily connote the exercise by him of an authority
even greater than that of control which he has over the executive departments,
bureaus or offices. In other words, Section 68 of the Revised Administrative Code
does not merely fail to comply with the constitutional mandate above quoted. Instead
of giving the President less power over local governments than that vested in him over
the executive departments, bureaus or offices, it reverses the process and does
the exact opposite, by conferring upon him more power over municipal corporations
than that which he has over said executive departments, bureaus or offices.
In short, even if it did entail an undue delegation of legislative powers, as it certainly
does, said Section 68, as part of the Revised Administrative Code, approved on March
10, 1917, must be deemed repealed by the subsequent adoption of the Constitution,
in 1935, which is utterly incompatible and inconsistent with said statutory enactment.7
There are only two (2) other points left for consideration, namely, respondent's claim
(a) that "not all the proper parties" — referring to the officers of the newly created
municipalities — "have been impleaded in this case," and (b) that "the present petition
is premature."
As regards the first point, suffice it to say that the records do not show, and the parties
do not claim, that the officers of any of said municipalities have been appointed or
elected and assumed office. At any rate, the Solicitor General, who has appeared on
behalf of respondent Auditor General, is the officer authorized by law "to act and
represent the Government of the Philippines, its offices and agents, in any official
investigation, proceeding or matter requiring the services of a lawyer" (Section 1661,
Revised Administrative Code), and, in connection with the creation of the
aforementioned municipalities, which involves a political, not proprietary, function, said
local officials, if any, are mere agents or representatives of the national government.
Their interest in the case at bar has, accordingly, been, in effect, duly represented. 8
With respect to the second point, respondent alleges that he has not as yet acted on
any of the executive order & in question and has not intimated how he would act in
connection therewith. It is, however, a matter of common, public knowledge, subject to
judicial cognizance, that the President has, for many years, issued executive orders
creating municipal corporations and that the same have been organized and in actual
operation, thus indicating, without peradventure of doubt, that the expenditures
incidental thereto have been sanctioned, approved or passed in audit by the General
Auditing Office and its officials. There is no reason to believe, therefore, that
respondent would adopt a different policy as regards the new municipalities involved
in this case, in the absence of an allegation to such effect, and none has been made
by him.
WHEREFORE, the Executive Orders in question are hereby declared null and void ab
initio and the respondent permanently restrained from passing in audit any
expenditure of public funds in implementation of said Executive Orders or any
disbursement by the municipalities above referred to. It is so ordered.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur.
Zaldivar, J., took no part.
Separate Opinions
BENGZON, J.P., J., concurring and dissenting:
A sign of progress in a developing nation is the rise of new municipalities. Fostering
their rapid growth has long been the aim pursued by all three branches of our
Government.
So it was that the Governor-General during the time of the Jones Law was given
authority by the Legislature (Act No. 1748) to act upon certain details with respect to
said local governments, such as fixing of boundaries, subdivisions and mergers. And
the Supreme Court, within the framework of the Jones Law, ruled in 1917 that the
execution or implementation of such details, did not entail abdication of legislative
power (Government vs. Municipality of Binañgonan, 34 Phil. 518; Municipality of
Cardona vs. Municipality of Binañgonan, 36 Phil. 547). Subsequently, Act No. 1748's
aforesaid statutory authorization was embodied in Section 68 of the Revised
Administrative Code. And Chief Executives since then up to the present continued to
avail of said provision, time and again invoking it to issue executive orders providing
for the creation of municipalities.
From September 4, 1964 to October 29, 1964 the President of the Philippines issued
executive orders to create thirty-three municipalities pursuant to Section 68 of the
Revised Administrative Code. Public funds thereby stood to be disbursed in
implementation of said executive orders.
Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez filed in this
Court a petition for prohibition with preliminary injunction against the Auditor General.
It seeks to restrain the respondent or any person acting in his behalf, from passing in
audit any expenditure of public funds in implementation of the executive orders
aforementioned.
Petitioner contends that the President has no power to create a municipality by The test is said to lie in whether the statute allows any discretion on the delegate as to
executive order. It is argued that Section 68 of the Revised Administrative Code of whether the municipal corporation should be created. If so, there is an attempted
1917, so far as it purports to grant any such power, is invalid or, at the least, already delegation of legislative power and the statute is invalid (Ibid.). Now Section 68 no
repealed, in light of the Philippine Constitution and Republic Act 2370 (The Barrio doubt gives the President such discretion, since it says that the President "may by
Charter). executive order" exercise the powers therein granted. Furthermore, Section 5 of the
same Code states:
Section 68 is again reproduced hereunder for convenience:
SEC. 5. Exercise of administrative discretion — The exercise of the
permissive powers of all executive or administrative officers and bodies is
SEC. 68. General authority of [Governor-General) President of the
based upon discretion, and when such officer or body is given authority to
Philippines to fix boundaries and make new subdivisions. — The [Governor-
do any act but not required to do such act, the doing of the same shall be
General] President of the Philippines may by executive order define the
dependent on a sound discretion to be exercised for the good of the service
boundary, or boundaries, of any province, subprovince, municipality,
and benefit of the public, whether so expressed in the statute giving the
[township] municipal district, or other political subdivision, and increase or
authority or not.
diminish the territory comprised therein, may divide any province into one or
more subprovinces, separate any political division other than a province,
into such portions as may be required, merge any of such subdivisions or Under the prevailing rule in the United States — and Section 68 is of American origin
portions with another, name any new subdivision so created, and may — the provision in question would be an invalid attempt to delegate purely legislative
change the seat of government within any subdivision to such place therein powers, contrary to the principle of separation of powers.
as the public welfare may require: Provided, That the authorization of the
[Philippine Legislature] Congress of the Philippines shall first be obtained
It is very pertinent that Section 68 should be considered with the stream of history in
whenever the boundary of any province or subprovince is to be defined or
mind. A proper knowledge of the past is the only adequate background for the
any province is to be divided into one or more subprovinces. When action
present. Section 68 was adopted half a century ago. Political change, two world wars,
by the [Governor-General] President of the Philippines in accordance
the recognition of our independence and rightful place in the family of nations, have
herewith makes necessary a change of the territory under the jurisdiction of
since taken place. In 1917 the Philippines had for its Organic Act the Jones Law. And
any administrative officer or any judicial officer, the [Governor-General]
under the setup ordained therein no strict separation of powers was adhered to.
President of the Philippines, with the recommendation and advice of the
Consequently, Section 68 was not constitutionally objectionable at the time of its
head of the Department having executive control of such officer, shall
enactment.
redistrict the territory of the several officers to the new districts so formed.

The advent of the Philippine Constitution in 1935 however altered the situation. For
Upon the changing of the limits of political divisions in pursuance of the
not only was separation of powers strictly ordained, except only in specific instances
foregoing authority, an equitable distribution of the funds and obligations of
therein provided, but the power of the Chief Executive over local governments
the divisions thereby affected shall be made in such manner as may be
suffered an explicit reduction.
recommended by the [Insular Auditor] Auditor General and approved by the
[Governor-General] President of the Philippines.
Formerly, Section 21 of the Jones Law provided that the Governor-General "shall
have general supervision and control of all the departments and bureaus of the
From such working I believe that power to create a municipality is included: to
government in the Philippine Islands." Now Section 10 (1), Article VII of the Philippine
"separate any political division other than a province, into such portions as may be
Constitution provides: "The President shall have control of all the executive
required, merge any such subdivisions or portions with another, name any new
departments, bureaus, or offices, exercise general supervision over all local
subdivision so created." The issue, however, is whether the legislature can validly
governments as may be provided by law, and take care that the laws be faithfully
delegate to the Executive such power.
executed.

The power to create a municipality is legislative in character. American authorities

In short, the power of control over local governments had now been taken away from
have therefore favored the view that it cannot be delegated; that what is delegable is
the Chief Executive. Again, to fully understand the significance of this provision, one
not the power to create municipalities but only the power to determine the existence of
must trace its development and growth.
facts under which creation of a municipality will result (37 Am. Jur. 628).

As early as April 7, 1900 President McKinley of the United States, in his Instructions to
the Second Philippine Commission, laid down the policy that our municipal
governments should be "subject to the least degree of supervision and control" on the to the smaller of the two political units. The smaller the unit of local government, the
part of the national government. Said supervision and control was to be confined lesser is the need for the national government's intervention in its political affairs.
within the "narrowest limits" or so much only as "may be necessary to secure and Furthermore, for practical reasons, local autonomy cannot be given from the top
enforce faithful and efficient administration by local officers." And the national downwards. The national government, in such a case, could still exercise power over
government "shall have no direct administration except of matters of purely general the supposedly autonomous unit, e.g., municipalities, by exercising it over the smaller
concern." (See Hebron v. Reyes, L-9158, July 28, 1958.) units that comprise them, e.g., the barrios. A realistic program of decentralization
therefore calls for autonomy from the bottom upwards, so that it is not surprising for
Congress to deny the national government some power over barrios without denying it
All this had one aim, to enable the Filipinos to acquire experience in the art of self-
over municipalities. For this reason, I disagree with the majority view that because the
government, with the end in view of later allowing them to assume complete
President could not create a barrio under Republic Act 2370, a fortiori he cannot
management and control of the administration of their local affairs. Such aim is the
create a municipality.
policy now embodied in Section 10 (1), Article VII of the Constitution (Rodriguez v.
Montinola, 50 O.G. 4820).
It is my view, therefore, that the Constitution, and not Republic Act 2370, repealed
Section 68 of the Revised Administrative Code's provision giving the President
It is the evident decree of the Constitution, therefore, that the President shall have no
authority to create local governments. And for this reason I agree with the ruling in the
power of control over local governments. Accordingly, Congress cannot by law grant
majority opinion that the executive orders in question are null and void.
him such power (Hebron v. Reyes, supra). And any such power formerly granted
under the Jones Law thereby became unavoidably inconsistent with the Philippine
Constitution. In thus ruling, the Court is but sustaining the fulfillment of our historic desire to be free
and independent under a republican form of government, and exercising a function
derived from the very sovereignty that it upholds. Executive orders declared null and
It remains to examine the relation of the power to create and the power to control local
void.
governments. Said relationship has already been passed upon by this Court in Hebron
v. Reyes, supra. In said case, it was ruled that the power to control is an incident of
the power to create or abolish municipalities. Respondent's view, therefore, that Makalintal and Regala, JJ., concur.
creating municipalities and controlling their local governments are "two worlds apart,"
is untenable. And since as stated, the power to control local governments can no
longer be conferred on or exercised by the President, it follows a fortiori that the power
to create them, all the more cannot be so conferred or exercised.

I am compelled to conclude, therefore, that Section 10 (1), Article VII of the

Constitution has repealed Section 68 of the Revised Administrative Code as far as the
latter empowers the President to create local governments. Repeal by the Constitution
of prior statutes inconsistent with it has already been sustained in De los Santos v.
MaIlare, 87 Phil. 289. And it was there held that such repeal differs from a declaration
of unconstitutionality of a posterior legislation, so much so that only a majority vote of
the Court is needed to sustain a finding of repeal.

Since the Constitution repealed Section 68 as far back as 1935, it is academic to ask
whether Republic Act 2370 likewise has provisions in conflict with Section 68 so as to
repeal it. Suffice it to state, at any rate, that statutory prohibition on the President from
creating a barrio does not, in my opinion, warrant the inference of statutory prohibition
for creating a municipality. For although municipalities consist of barrios, there is
nothing in the statute that would preclude creation of new municipalities out of pre- Republic of the Philippines
existing barrios. SUPREME COURT
Manila
It is not contrary to the logic of local autonomy to be able to create larger political units
and unable to create smaller ones. For as long ago observed in President McKinley's EN BANC
Instructions to the Second Philippine Commission, greater autonomy is to be imparted
G.R. No. L-16704 March 17, 1962
VICTORIAS MILLING COMPANY, INC., petitioner-appellant,
vs.
SOCIAL SECURITY COMMISSION, respondent-appellee.
Ross, Selph and Carrascoso for petitioner-appellant.
Office of the Solicitor General and Ernesto T. Duran for respondent-appellee.
BARRERA, J.:
On October 15, 1958, the Social Security Commission issued its Circular No. 22 of the
following tenor: .
Effective November 1, 1958, all Employers in computing the premiums due
the System, will take into consideration and include in the Employee's
remuneration all bonuses and overtime pay, as well as the cash value of
other media of remuneration. All these will comprise the Employee's
remuneration or earnings, upon which the 3-1/2% and 2-1/2% contributions
will be based, up to a maximum of P500 for any one month.
Upon receipt of a copy thereof, petitioner Victorias Milling Company, Inc., through
counsel, wrote the Social Security Commission in effect protesting against the circular
as contradictory to a previous Circular No. 7, dated October 7, 1957 expressly
excluding overtime pay and bonus in the computation of the employers' and
employees' respective monthly premium contributions, and submitting, "In order to
assist your System in arriving at a proper interpretationof the term 'compensation' for
the purposes of" such computation, their observations on Republic Act 1161 and its
amendment and on the general interpretation of the words "compensation",
"remuneration" and "wages". Counsel further questioned the validity of the circular for
lack of authority on the part of the Social Security Commission to promulgate it without
the approval of the President and for lack of publication in the Official Gazette.
Overruling these objections, the Social Security Commission ruled that Circular No. 22
is not a rule or regulation that needed the approval of the President and publication in
the Official Gazette to be effective, but a mere administrative interpretation of the
statute, a mere statement of general policy or opinion as to how the law should be
construed.
Not satisfied with this ruling, petitioner comes to this Court on appeal.
The single issue involved in this appeal is whether or not Circular No. 22 is a rule or
regulation, as contemplated in Section 4(a) of Republic Act 1161 empowering the
Social Security Commission "to adopt, amend and repeal subject to the approval of
the President such rules and regulations as may be necessary to carry out the
provisions and purposes of this Act."
There can be no doubt that there is a distinction between an administrative rule or
regulation and an administrative interpretation of a law whose enforcement is
entrusted to an administrative body. When an administrative agency promulgates
rules and regulations, it "makes" a new law with the force and effect of a valid law,
while when it renders an opinion or gives a statement of policy, it merely interprets a
pre-existing law (Parker, Administrative Law, p. 197; Davis, Administrative Law, p.
194). Rules and regulations when promulgated in pursuance of the procedure or
authority conferred upon the administrative agency by law, partake of the nature of a
statute, and compliance therewith may be enforced by a penal sanction provided in
the law. This is so because statutes are usually couched in general terms, after
expressing the policy, purposes, objectives, remedies and sanctions intended by the
legislature. The details and the manner of carrying out the law are often times left to
the administrative agency entrusted with its enforcement. In this sense, it has been
said that rules and regulations are the product of a delegated power to create new or
additional legal provisions that have the effect of law. (Davis, op. cit., p. 194.) .
A rule is binding on the courts so long as the procedure fixed for its promulgation is
followed and its scope is within the statutory authority granted by the legislature, even
if the courts are not in agreement with the policy stated therein or its innate wisdom
(Davis, op. cit., 195-197). On the other hand, administrative interpretation of the law is
at best merely advisory, for it is the courts that finally determine what the law means.
Circular No. 22 in question was issued by the Social Security Commission, in view of
the amendment of the provisions of the Social Security Law defining the term
"compensation" contained in Section 8 (f) of Republic Act No. 1161 which, before its
amendment, reads as follows: .
(f) Compensation — All remuneration for employment include the cash
value of any remuneration paid in any medium other than cash except (1)
that part of the remuneration in excess of P500 received during the month;
(2) bonuses, allowances or overtime pay; and (3) dismissal and all other
payments which the employer may make, although not legally required to do
so.
Republic Act No. 1792 changed the definition of "compensation" to:
(f) Compensation — All remuneration for employment include the cash
value of any remuneration paid in any medium other than cash except that
part of the remuneration in excess of P500.00 received during the month.
It will thus be seen that whereas prior to the amendment, bonuses, allowances, and
overtime pay given in addition to the regular or base pay were expressly excluded, or
exempted from the definition of the term "compensation", such exemption or exclusion
was deleted by the amendatory law. It thus became necessary for the Social Security
Commission to interpret the effect of such deletion or elimination. Circular No. 22 was,
therefore, issued to apprise those concerned of the interpretation or understanding of
the Commission, of the law as amended, which it was its duty to enforce. It did not add
any duty or detail that was not already in the law as amended. It merely stated and IN VIEW OF THE FOREGOING, the Resolution appealed from is hereby affirmed,
circularized the opinion of the Commission as to how the law should be with costs against appellant. So ordered.
construed. 1äwphï1.ñët
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L.,
The case of People v. Jolliffe (G.R. No. L-9553, promulgated on May 30, 1959) cited Paredes, Dizon and De Leon, JJ., concur.
by appellant, does not support its contention that the circular in question is a rule or
regulation. What was there said was merely that a regulation may be incorporated in
the form of a circular. Such statement simply meant that the substance and not the
form of a regulation is decisive in determining its nature. It does not lay down a
general proposition of law that any circular, regardless of its substance and even if it is
only interpretative, constitutes a rule or regulation which must be published in the
Official Gazette before it could take effect.

The case of People v. Que Po Lay (50 O.G. 2850) also cited by appellant is not
applicable to the present case, because the penalty that may be incurred by
employers and employees if they refuse to pay the corresponding premiums on
bonus, overtime pay, etc. which the employer pays to his employees, is not by reason
of non-compliance with Circular No. 22, but for violation of the specific legal provisions
contained in Section 27(c) and (f) of Republic Act No. 1161.

We find, therefore, that Circular No. 22 purports merely to advise employers-members

of the System of what, in the light of the amendment of the law, they should include in
determining the monthly compensation of their employees upon which the social
security contributions should be based, and that such circular did not require
presidential approval and publication in the Official Gazette for its effectivity.

It hardly need be said that the Commission's interpretation of the amendment

embodied in its Circular No. 22, is correct. The express elimination among the
exemptions excluded in the old law, of all bonuses, allowances and overtime pay in
the determination of the "compensation" paid to employees makes it imperative that
such bonuses and overtime pay must now be included in the employee's
remuneration in pursuance of the amendatory law. It is true that in previous cases, this
Court has held that bonus is not demandable because it is not part of the wage,
salary, or compensation of the employee. But the question in the instant case is not
whether bonus is demandable or not as part of compensation, but whether, after the
employer does, in fact, give or pay bonus to his employees, such bonuses shall be
considered compensation under the Social Security Act after they have been received
by the employees. While it is true that terms or words are to be interpreted in
accordance with their well-accepted meaning in law, nevertheless, when such term or
word is specifically defined in a particular law, such interpretation must be adopted in
enforcing that particular law, for it can not be gainsaid that a particular phrase or term G.R. No. 164171 February 20, 2006
may have one meaning for one purpose and another meaning for some other
purpose. Such is the case that is now before us. Republic Act 1161 specifically
defined what "compensation" should mean "For the purposes of this Act". Republic HON. EXECUTIVE SECRETARY, HON. SECRETARY OF THE DEPARTMENT OF
Act 1792 amended such definition by deleting same exemptions authorized in the TRANSPORTATION AND COMMUNICATIONS (DOTC), COMMISSIONER OF
original Act. By virtue of this express substantial change in the phraseology of the law, CUSTOMS, ASSISTANT SECRETARY, LAND TRANSPORTATION OFFICE (LTO),
whatever prior executive or judicial construction may have been given to the phrase in COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT ZONE, AND CHIEF OF
question should give way to the clear mandate of the new law. LTO, SUBIC BAY FREE PORT ZONE, Petitioners,
vs.
SOUTHWING HEAVY INDUSTRIES, INC., represented by its President JOSE T.
DIZON, UNITED AUCTIONEERS, INC., represented by its President DOMINIC
SYTIN, and MICROVAN, INC., represented by its President MARIANO C.
SONON, Respondents.
x---------------x
"Providing for a comprehensive industrial policy and directions for the motor vehicle
development program and its implementing guidelines." The challenged provision
states:
3.1 The importation into the country, inclusive of the Freeport, of all
types of used motor vehicles is prohibited, except for the following:

G.R. No. 164172 February 20, 2006 3.1.1 A vehicle that is owned and for the personal use of a
returning resident or immigrant and covered by an authority to
import issued under the No-dollar Importation Program. Such
HON. EXECUTIVE SECRETARY, SECRETARY OF THE DEPARTMENT OF
vehicles cannot be resold for at least three (3) years;
TRANSPORTATION AND COMMUNICATION (DOTC), COMMISSIONER OF
CUSTOMS, ASSISTANT SECRETARY, LAND TRANSPORTATION OFFICE (LTO),
COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT ZONE AND CHIEF OF LTO, 3.1.2 A vehicle for the use of an official of the Diplomatic Corps
SUBIC BAY FREE PORT ZONE, Petitioners, and authorized to be imported by the Department of Foreign
vs. Affairs;
SUBIC INTEGRATED MACRO VENTURES CORP., represented by its President
YOLANDA AMBAR,Respondent.
3.1.3 Trucks excluding pickup trucks;

x---------------x
1. with GVW of 2.5-6.0 tons covered by an authority to
import issued by the DTI.
G.R. No. 168741 February 20, 2006
2. With GVW above 6.0 tons.
HON. EXECUTIVE SECRETARY, HON. SECRETARY OF FINANCE, THE CHIEF
OF THE LAND TRANSPORTATION OFFICE, THE COMMISSIONER OF
3.1.4 Buses:
CUSTOMS, and THE COLLECTOR OF CUSTOMS, SUBIC SPECIAL ECONOMIC
ZONE, Petitioners,
vs. 1. with GVW of 6-12 tons covered by an authority to
MOTOR VEHICLE IMPORTERS ASSOCIATION OF SUBIC BAY FREEPORT, INC., import issued by DTI;
represented by its President ALFREDO S. GALANG, Respondent.
2. with GVW above 12 tons.
DECISION
3.1.5 Special purpose vehicles:
YNARES-SANTIAGO, J.:
1. fire trucks
The instant consolidated petitions seek to annul and set aside the Decisions of the
Regional Trial Court of Olongapo City, Branch 72, in Civil Case No. 20-0-04 and Civil
Case No. 22-0-04, both dated May 24, 2004; and the February 14, 2005 Decision of 2. ambulances
the Court of Appeals in CA-G.R. SP. No. 83284, which declared Article 2, Section 3.1
of Executive Order No. 156 (EO 156) unconstitutional. Said executive issuance 3. funeral hearse/coaches
prohibits the importation into the country, inclusive of the Special Economic and
Freeport Zone or the Subic Bay Freeport (SBF or Freeport), of used motor vehicles,
subject to a few exceptions. 4. crane lorries

The undisputed facts show that on December 12, 2002, President Gloria Macapagal- 5. tractor heads and truck tractors
Arroyo, through Executive Secretary Alberto G. Romulo, issued EO 156, entitled
 6. boom trucks Bay Freeport Enterprises and engaged in the business of, among others, importing
and/or trading used motor vehicles.
7. tanker trucks
G.R. No. 164171:
8. tank lorries with high pressure spray gun
On January 16, 2004, respondents Southwing Heavy Industries, Inc., (Southwing)
United Auctioneers, Inc. (United Auctioneers), and Microvan, Inc. (Microvan),
9. reefers or refrigerated trucks
instituted a declaratory relief case docketed as Civil Case No. 20-0-04,1 against the
Executive Secretary, Secretary of Transportation and Communication, Commissioner
10. mobile drilling derricks of Customs, Assistant Secretary and Head of the Land Transportation Office, Subic
Bay Metropolitan Authority (SBMA), Collector of Customs for the Port at Subic Bay
Freeport Zone, and the Chief of the Land Transportation Office at Subic Bay Freeport
11. transit/concrete mixers Zone.

12. mobile radiological units Southwing, United Auctioneers and Microvan prayed that judgment be rendered (1)
declaring Article 2, Section 3.1 of EO 156 unconstitutional and illegal; (2) directing the
13. wreckers or tow trucks Secretary of Finance, Commissioner of Customs, Collector of Customs and the
Chairman of the SBMA to allow the importation of used motor vehicles; (2) ordering
the Land Transportation Office and its subordinates inside the Subic Special
14. concrete pump trucks Economic Zone to process the registration of the imported used motor vehicles; and
(3) in general, to allow the unimpeded entry and importation of used motor vehicles
15. aerial/bucket flat-form trucks subject only to the payment of the required customs duties.

16. street sweepers Upon filing of petitioners’ answer/comment, respondents Southwing and Microvan filed
a motion for summary judgment which was granted by the trial court. On May 24,
2004, a summary judgment was rendered declaring that Article 2, Section 3.1 of EO
17. vacuum trucks 156 constitutes an unlawful usurpation of legislative power vested by the Constitution
with Congress. The trial court further held that the proviso is contrary to the mandate
18. garbage compactors of Republic Act No. 7227 (RA 7227) or the Bases Conversion and Development Act of
1992 which allows the free flow of goods and capital within the Freeport. The
dispositive portion of the said decision reads:
19. self loader trucks

WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive

20. man lift trucks Order 156 [Article 2, Section] 3.1 for being unconstitutional and illegal; directing
respondents Collector of Customs based at SBMA to allow the importation and entry
21. lighting trucks of used motor vehicles pursuant to the mandate of RA 7227; directing respondent
Chief of the Land Transportation Office and its subordinates inside the Subic Special
Economic Zone or SBMA to process the registration of imported used motor vehicle;
22. trucks mounted with special purpose equipment and in general, to allow unimpeded entry and importation of used motor vehicles to the
Philippines subject only to the payment of the required customs duties.
23. all other types of vehicle designed for a specific
use. SO ORDERED.2

The issuance of EO 156 spawned three separate actions for declaratory relief before From the foregoing decision, petitioners sought relief before this Court via a petition
Branch 72 of the Regional Trial Court of Olongapo City, all seeking the declaration of for review on certiorari, docketed as G.R. No. 164171.
the unconstitutionality of Article 2, Section 3.1 of said executive order. The cases were
filed by herein respondent entities, who or whose members, are classified as Subic
G.R. No. 164172:
On January 20, 2004, respondent Subic Integrated Macro Ventures Corporation
(Macro Ventures) filed with the same trial court, a similar action for declaratory relief
docketed as Civil Case No. 22-0-04,3 with the same prayer and against the same
parties4 as those in Civil Case No. 20-0-04.
In this case, the trial court likewise rendered a summary judgment on May 24, 2004,
holding that Article 2, Section 3.1 of EO 156, is repugnant to the
constitution.5 Elevated to this Court via a petition for review on certiorari, Civil Case
No. 22-0-04 was docketed as G.R. No. 164172.
G.R. No. 168741
On January 22, 2003, respondent Motor Vehicle Importers Association of Subic Bay
Freeport, Inc. (Association), filed another action for declaratory relief with essentially
the same prayer as those in Civil Case No. 22-0-04 and Civil Case No. 20-0-04,
against the Executive Secretary, Secretary of Finance, Chief of the Land
Transportation Office, Commissioner of Customs, Collector of Customs at SBMA and
the Chairman of SBMA. This was docketed as Civil Case No. 30-0-2003,6 before the
same trial court.
In a decision dated March 10, 2004, the court a quo granted the Association’s prayer
and declared the assailed proviso as contrary to the Constitution, to wit:
WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive
Order 156 [Article 2, Section] 3.1 for being unconstitutional and illegal; directing
respondents Collector of Customs based at SBMA to allow the importation and entry
of used motor vehicles pursuant to the mandate of RA 7227; directing respondent
Chief of the Land Transportation Office and its subordinates inside the Subic Special
Economic Zone or SBMA to process the registration of imported used motor vehicles;
directing the respondent Chairman of the SBMA to allow the entry into the Subic
Special Economic Zone or SBMA imported used motor vehicle; and in general, to
allow unimpeded entry and importation of used motor vehicles to the Philippines
subject only to the payment of the required customs duties.
SO ORDERED.7
Aggrieved, the petitioners in Civil Case No. 30-0-2003, filed a petition for
certiorari8 with the Court of Appeals (CA-G.R. SP. No. 83284) which denied the
petition on February 14, 2005 and sustained the finding of the trial court that Article 2,
Section 3.1 of EO 156, is void for being repugnant to the constitution. The dispositive
portion thereof, reads:
WHEREFORE, the instant petition for certiorari is hereby DENIED. The assailed
decision of the Regional Trial Court, Third Judicial Region, Branch 72, Olongapo City,
in Civil Case No. 30-0-2003, accordingly, STANDS.
SO ORDERED.9
The aforequoted decision of the Court of Appeals was elevated to this Court and
docketed as G.R. No. 168741. In a Resolution dated October 4, 2005,10 said case was
consolidated with G.R. No. 164171 and G.R. No. 164172.
Petitioners are now before this Court contending that Article 2, Section 3.1 of EO 156
is valid and applicable to the entire country, including the Freeeport. In support of their
arguments, they raise procedural and substantive issues bearing on the
constitutionality of the assailed proviso. The procedural issues are: the lack of
respondents’ locus standi to question the validity of EO 156, the propriety of
challenging EO 156 in a declaratory relief proceeding and the applicability of a
judgment on the pleadings in this case.
Petitioners argue that respondents will not be affected by the importation ban
considering that their certificate of registration and tax exemption do not authorize
them to engage in the importation and/or trading of used cars. They also aver that the
actions filed by respondents do not qualify as declaratory relief cases. Section 1, Rule
63 of the Rules of Court provides that a petition for declaratory relief may be filed
before there is a breach or violation of rights. Petitioners claim that there was already
a breach of respondents’ supposed right because the cases were filed more than a
year after the issuance of EO 156. In fact, in Civil Case No. 30-0-2003, numerous
warrants of seizure and detention were issued against imported used motor vehicles
belonging to respondent Association’s members.
Petitioners’ arguments lack merit.
The established rule that the constitutionality of a law or administrative issuance can
be challenged by one who will sustain a direct injury as a result of its
enforcement11 has been satisfied in the instant case. The broad subject of the
prohibited importation is "all types of used motor vehicles." Respondents would
definitely suffer a direct injury from the implementation of EO 156 because their
certificate of registration and tax exemption authorize them to trade and/or import
new and used motor vehicles and spare parts, except "used cars."12 Other types of
motor vehicles imported and/or traded by respondents and not falling within the
category of used cars would thus be subjected to the ban to the prejudice of their
business. Undoubtedly, respondents have the legal standing to assail the validity of
EO 156.
As to the propriety of declaratory relief as a vehicle for assailing the executive
issuance, suffice it to state that any breach of the rights of respondents will not affect
the case. In Commission on Audit of the Province of Cebu v. Province of Cebu,13 the
Court entertained a suit for declaratory relief to finally settle the doubt as to the proper
interpretation of the conflicting laws involved, notwithstanding a violation of the right of
the party affected. We find no reason to deviate from said ruling mindful of the
significance of the present case to the national economy.
So also, summary judgments were properly rendered by the trial court because the
issues involved in the instant case were pure questions of law. A motion for summary
judgment is premised on the assumption that the issues presented need not be tried
either because these are patently devoid of substance or that there is no genuine
issue as to any pertinent fact. It is a method sanctioned by the Rules of Court for the
prompt disposition of a civil action in which the pleadings raise only a legal issue, not a
genuine issue as to any material fact.14
At any rate, even assuming the procedural flaws raised by petitioners truly exist, the
Court is not precluded from brushing aside these technicalities and taking cognizance
of the action filed by respondents considering its importance to the public and in
keeping with the duty to determine whether the other branches of the government
have kept themselves within the limits of the Constitution.15
We now come to the substantive issues, which are: (1) whether there is statutory
basis for the issuance of EO 156; and (2) if the answer is in the affirmative, whether
the application of Article 2, Section 3.1 of EO 156, reasonable and within the scope
provided by law.
The main thrust of the petition is that EO 156 is constitutional because it was issued
pursuant to EO 226, the Omnibus Investment Code of the Philippines and that its
application should be extended to the Freeport because the guarantee of RA 7227 on
the free flow of goods into the said zone is merely an exemption from customs duties
and taxes on items brought into the Freeport and not an open floodgate for all kinds of
goods and materials without restriction.
In G.R. No. 168741, the Court of Appeals invalidated Article 2, Section 3.1 of EO 156,
on the ground of lack of any statutory basis for the President to issue the same. It held
that the prohibition on the importation of used motor vehicles is an exercise of police
power vested on the legislature and absent any enabling law, the exercise thereof by
the President through an executive issuance, is void.
Police power is inherent in a government to enact laws, within constitutional limits, to
promote the order, safety, health, morals, and general welfare of society. It is lodged
primarily with the legislature. By virtue of a valid delegation of legislative power, it may
also be exercised by the President and administrative boards, as well as the
lawmaking bodies on all municipal levels, including the barangay.16 Such delegation
confers upon the President quasi-legislative power which may be defined as the
authority delegated by the law-making body to the administrative body to adopt rules
and regulations intended to carry out the provisions of the law and implement
legislative policy.17 To be valid, an administrative issuance, such as an executive
order, must comply with the following requisites:
(1) Its promulgation must be authorized by the legislature;
(2) It must be promulgated in accordance with the prescribed procedure;
(3) It must be within the scope of the authority given by the legislature; and
(4) It must be reasonable.18
Contrary to the conclusion of the Court of Appeals, EO 156 actually satisfied the first
requisite of a valid administrative order. It has both constitutional and statutory bases.
Delegation of legislative powers to the President is permitted in Section 28(2) of Article
VI of the Constitution. It provides:
(2) The Congress may, by law, authorize the President to fix within specified limits,
and subject to such limitations and restrictions as it may impose, tariff rates, import
and export quotas, tonnage and wharfage dues, and other duties or imposts within the
framework of the national development program of the Government.19 (Emphasis
supplied)
The relevant statutes to execute this provision are:
1) The Tariff and Customs Code which authorizes the President, in the interest of
national economy, general welfare and/or national security, to, inter alia, prohibit the
importation of any commodity. Section 401 thereof, reads:
Sec. 401. Flexible Clause. —
a. In the interest of national economy, general welfare and/or national security,
and subject to the limitations herein prescribed, the President, upon
recommendation of the National Economic and Development Authority
(hereinafter referred to as NEDA), is hereby empowered: x x x (2) to establish
import quota or to ban imports of any commodity, as may be necessary; x x x
Provided, That upon periodic investigations by the Tariff Commission and
recommendation of the NEDA, the President may cause a gradual reduction of
protection levels granted in Section One hundred and four of this Code, including
those subsequently granted pursuant to this section. (Emphasis supplied)
2) Executive Order No. 226, the Omnibus Investment Code of the Philippines which
was issued on July 16, 1987, by then President Corazon C. Aquino, in the exercise of
legislative power under the Provisional Freedom Constitution,20 empowers the
President to approve or reject the prohibition on the importation of any equipment or
raw materials or finished products. Pertinent provisions thereof, read:
ART. 4. Composition of the board. The Board of Investments shall be composed of provide guidelines to the law which the administrative agency is in charge of
seven (7) governors: The Secretary of Trade and Industry, three (3) Undersecretaries enforcing.25 A legislative rule, on the other hand, is in the nature of subordinate
of Trade and Industry to be chosen by the President; and three (3) representatives legislation, crafted to implement a primary legislation.
from the government agencies and the private sector x x x.
In Commissioner of Internal Revenue v. Court of Appeals,26 and Commissioner of
ART. 7. Powers and duties of the Board. Internal Revenue v. Michel J. Lhuillier Pawnshop, Inc.,27 the Court enunciated the
doctrine that when an administrative rule goes beyond merely providing for the means
that can facilitate or render less cumbersome the implementation of the law and
xxxx
substantially increases the burden of those governed, it behooves the agency to
accord at least to those directly affected a chance to be heard and, thereafter, to be
(12) Formulate and implement rationalization programs for certain industries whose duly informed, before the issuance is given the force and effect of law.
operation may result in dislocation, overcrowding or inefficient use of resources, thus
impeding economic growth. For this purpose, the Board may formulate guidelines for
In the instant case, EO 156 is obviously a legislative rule as it seeks to implement or
progressive manufacturing programs, local content programs, mandatory sourcing
execute primary legislative enactments intended to protect the domestic industry by
requirements and dispersal of industries. In appropriate cases and upon approval
imposing a ban on the importation of a specified product not previously subject to such
of the President, the Board may restrict, either totally or partially, the
prohibition. The due process requirements in the issuance thereof are embodied in
importation of any equipment or raw materials or finished products involved in
Section 40128 of the Tariff and Customs Code and Sections 5 and 9 of the
the rationalization program; (Emphasis supplied)
SMA29 which essentially mandate the conduct of investigation and public hearings
before the regulatory measure or importation ban may be issued.
3) Republic Act No. 8800, otherwise known as the "Safeguard Measures Act" (SMA),
and entitled "An Act Protecting Local Industries By Providing Safeguard Measures To
In the present case, respondents neither questioned before this Court nor with the
Be Undertaken In Response To Increased Imports And Providing Penalties For
courts below the procedure that paved the way for the issuance of EO 156. What they
Violation Thereof,"21 designated the Secretaries22 of the Department of Trade and
challenged in their petitions before the trial court was the absence of "substantive due
Industry (DTI) and the Department of Agriculture, in their capacity as alter egos of the
process" in the issuance of the EO.30 Their main contention before the court a quo is
President, as the implementing authorities of the safeguard measures, which
that the importation ban is illogical and unfair because it unreasonably drives them out
include, inter alia, modification or imposition of any quantitative restriction on the
of business to the prejudice of the national economy.
importation of a product into the Philippines. The purpose of the SMA is stated in the
declaration of policy, thus:
Considering the settled principle that in the absence of strong evidence to the
contrary, acts of the other branches of the government are presumed to be
SEC. 2. Declaration of Policy. – The State shall promote competitiveness of domestic
valid,31 and there being no objection from the respondents as to the procedure in the
industries and producers based on sound industrial and agricultural development
promulgation of EO 156, the presumption is that said executive issuance duly
policies, and efficient use of human, natural and technical resources. In pursuit of this
complied with the procedures and limitations imposed by law.
goal and in the public interest, the State shall provide safeguard measures to protect
domestic industries and producers from increased imports which cause or threaten to
cause serious injury to those domestic industries and producers. To determine whether EO 156 has complied with the third and fourth requisites of a
valid administrative issuance, to wit, that it was issued within the scope of authority
given by the legislature and that it is reasonable, an examination of the nature of a
There are thus explicit constitutional and statutory permission authorizing the
Freeport under RA 7227 and the primordial purpose of the importation ban under the
President to ban or regulate importation of articles and commodities into the country.
questioned EO is necessary.

Anent the second requisite, that is, that the order must be issued or promulgated in
RA 7227 was enacted providing for, among other things, the sound and balanced
accordance with the prescribed procedure, it is necessary that the nature of the
conversion of the Clark and Subic military reservations and their extensions into
administrative issuance is properly determined. As in the enactment of laws, the
alternative productive uses in the form of Special Economic and Freeport Zone, or the
general rule is that, the promulgation of administrative issuances requires previous
Subic Bay Freeport, in order to promote the economic and social development of
notice and hearing, the only exception being where the legislature itself requires it and
Central Luzon in particular and the country in general.
mandates that the regulation shall be based on certain facts as determined at an
appropriate investigation.23 This exception pertains to the issuance of legislative
rules as distinguished from interpretative rules which give no real consequence The Rules and Regulations Implementing RA 7227 specifically defines the territory
more than what the law itself has already prescribed;24 and are designed merely to comprising the Subic Bay Freeport, referred to as the Special Economic and Freeport
Zone in Section 12 of RA 7227 as "a separate customs territory consisting of the City
of Olongapo and the Municipality of Subic, Province of Zambales, the lands occupied
by the Subic Naval Base and its contiguous extensions as embraced, covered and
defined by the 1947 Philippine-U.S. Military Base Agreement as amended and within
the territorial jurisdiction of Morong and Hermosa, Province of Bataan, the metes and
bounds of which shall be delineated by the President of the Philippines; provided
further that pending establishment of secure perimeters around the entire SBF, the
SBF shall refer to the area demarcated by the SBMA pursuant to Section 1332 hereof."
Among the salient provisions of RA 7227 are as follows:
SECTION 12. Subic Special Economic Zone. —
xxxx
The abovementioned zone shall be subject to the following policies:
xxxx
(a) Within the framework and subject to the mandate and limitations of the
Constitution and the pertinent provisions of the Local Government Code, the
Subic Special Economic Zone shall be developed into a self-sustaining,
industrial, commercial, financial and investment center to generate
employment opportunities in and around the zone and to attract and
promote productive foreign investments;
(b) The Subic Special Economic Zone shall be operated and managed as a
separate customs territory ensuring free flow or movement of goods and
capital within, into and exported out of the Subic Special Economic Zone, as
well as provide incentives such as tax and duty-free importations of raw
materials, capital and equipment. However, exportation or removal of goods
from the territory of the Subic Special Economic Zone to the other parts of
the Philippine territory shall be subject to customs duties and taxes under
the Customs and Tariff Code and other relevant tax laws of the Philippines;
The Freeport was designed to ensure free flow or movement of goods and capital
within a portion of the Philippine territory in order to attract investors to invest their
capital in a business climate with the least governmental intervention. The concept of
this zone was explained by Senator Guingona in this wise:
Senator Guingona. Mr. President, the special economic zone is successful in many
places, particularly Hong Kong, which is a free port. The difference between a special
economic zone and an industrial estate is simply expansive in the sense that the
commercial activities, including the establishment of banks, services, financial
institutions, agro-industrial activities, maybe agriculture to a certain extent.
This delineates the activities that would have the least of government
intervention, and the running of the affairs of the special economic zone would
be run principally by the investors themselves, similar to a housing subdivision,
where the subdivision owners elect their representatives to run the affairs of the
subdivision, to set the policies, to set the guidelines.
We would like to see Subic area converted into a little Hong Kong, Mr.
President, where there is a hub of free port and free entry, free duties and
activities to a maximum spur generation of investment and jobs.
While the investor is reluctant to come in the Philippines, as a rule, because of red
tape and perceived delays, we envision this special economic zone to be an area
where there will be minimum government interference.
The initial outlay may not only come from the Government or the Authority as
envisioned here, but from them themselves, because they would be encouraged to
invest not only for the land but also for the buildings and factories. As long as they are
convinced that in such an area they can do business and reap reasonable profits, then
many from other parts, both local and foreign, would invest, Mr.
President.33 (Emphasis, added)
With minimum interference from the government, investors can, in general, engage in
any kind of business as well as import and export any article into and out of the
Freeport. These are among the rights accorded to Subic Bay Freeport Enterprises
under Section 39 of the Rules and Regulations Implementing RA 7227, thus –
SEC. 39. Rights and Obligations.- SBF Enterprises shall have the following rights and
obligations:
a. To freely engage in any business, trade, manufacturing, financial or service activity,
and to import and export freely all types of goods into and out of the SBF, subject to
the provisions of the Act, these Rules and other regulations that may be promulgated
by the SBMA;
Citing, inter alia, the interpellations of Senator Enrile, petitioners claim that the "free
flow or movement of goods and capital" only means that goods and material brought
within the Freeport shall not be subject to customs duties and other taxes and should
not be construed as an open floodgate for entry of all kinds of goods. They thus
surmise that the importation ban on motor vehicles is applicable within the Freeport.
Pertinent interpellations of Senator Enrile on the concept of Freeport is as follows:
Senator Enrile: Mr. President, I think we are talking here of sovereign concepts, not
territorial concepts. The concept that we are supposed to craft here is to carve out a
portion of our terrestrial domain as well as our adjacent waters and say to the world:
"Well, you can set up your factories in this area that we are circumscribing, and
bringing your equipment and bringing your goods, you are not subject to any taxes
and duties because you are not within the customs jurisdiction of the Republic of the
Philippines, whether you store the goods or only for purposes of transshipment or
whether you make them into finished products again to be reexported to other lands."
xxxx
My understanding of a "free port" is, we are in effect carving out a part of our
territory and make it as if it were foreign territory for purposes of our customs
laws, and that people can come, bring their goods, store them there and bring
them out again, as long as they do not come into the domestic commerce of the
Republic.
We do not really care whether these goods are stored here. The only thing that we
care is for our people to have an employment because of the entry of these goods that
are being discharged, warehoused and reloaded into the ships so that they can be
exported. That will generate employment for us. For as long as that is done, we are
saying, in effect, that we have the least contact with our tariff and customs laws and
our tax laws. Therefore, we consider these goods as outside of the customs
jurisdiction of the Republic of the Philippines as yet, until we draw them from this
territory and bring them inside our domestic commerce. In which case, they have to
pass through our customs gate. I thought we are carving out this entire area and
convert it into this kind of concept.34
However, contrary to the claim of petitioners, there is nothing in the foregoing excerpts
which absolutely limits the incentive to Freeport investors only to exemption from
customs duties and taxes. Mindful of the legislative intent to attract investors, enhance
investment and boost the economy, the legislature could not have limited the
enticement only to exemption from taxes. The minimum interference policy of the
government on the Freeport extends to the kind of business that investors may
embark on and the articles which they may import or export into and out of the zone. A
contrary interpretation would defeat the very purpose of the Freeport and drive away
investors.
It does not mean, however, that the right of Freeport enterprises to import all types of
goods and article is absolute. Such right is of course subject to the limitation that
articles absolutely prohibited by law cannot be imported into the
Freeport.35 Nevertheless, in determining whether the prohibition would apply to the
Freeport, resort to the purpose of the prohibition is necessary.
In issuing EO 156, particularly the prohibition on importation under Article 2, Section
3.1, the President envisioned to rationalize the importation of used motor vehicles and
to enhance the capabilities of the Philippine motor manufacturing firms to be globally
competitive producers of completely build-up units and their parts and components for
the local and export markets.36 In justifying the issuance of EO 156, petitioners alleged
that there has been a decline in the sales of new vehicles and a remarkable growth of
the sales of imported used motor vehicles. To address the same, the President issued
the questioned EO to prevent further erosion of the already depressed market base of
the local motor vehicle industry and to curtail the harmful effects of the increase in the
importation of used motor vehicles.37
Taking our bearings from the foregoing discussions, we hold that the importation ban
runs afoul the third requisitefor a valid administrative order. To be valid, an
administrative issuance must not be ultra vires or beyond the limits of the authority
conferred. It must not supplant or modify the Constitution, its enabling statute and
other existing laws, for such is the sole function of the legislature which the other
branches of the government cannot usurp. As held in United BF Homeowner’s
Association v. BF Homes, Inc.:38
The rule-making power of a public administrative body is a delegated legislative
power, which it may not use either to abridge the authority given it by Congress or the
Constitution or to enlarge its power beyond the scope intended. Constitutional and
statutory provisions control what rules and regulations may be promulgated by such a
body, as well as with respect to what fields are subject to regulation by it. It may not
make rules and regulations which are inconsistent with the provisions of the
Constitution or a statute, particularly the statute it is administering or which created it,
or which are in derogation of, or defeat, the purpose of a statute.
In the instant case, the subject matter of the laws authorizing the President to regulate
or forbid importation of used motor vehicles, is the domestic industry. EO 156,
however, exceeded the scope of its application by extending the prohibition on the
importation of used cars to the Freeport, which RA 7227, considers to some extent, a
foreign territory. The domestic industry which the EO seeks to protect is actually the
"customs territory" which is defined under the Rules and Regulations Implementing
RA 7227, as follows:
"the portion of the Philippines outside the Subic Bay Freeport where the Tariff
and Customs Code of the Philippines and other national tariff and customs laws
are in force and effect."39
The proscription in the importation of used motor vehicles should be operative only
outside the Freeport and the inclusion of said zone within the ambit of the prohibition
is an invalid modification of RA 7227. Indeed, when the application of an
administrative issuance modifies existing laws or exceeds the intended scope, as in
the instant case, the issuance becomes void, not only for being ultra vires, but also for
being unreasonable.
This brings us to the fourth requisite. It is an axiom in administrative law that
administrative authorities should not act arbitrarily and capriciously in the issuance of
rules and regulations. To be valid, such rules and regulations must be reasonable and
fairly adapted to secure the end in view. If shown to bear no reasonable relation to the
purposes for which they were authorized to be issued, then they must be held to be
invalid.40
There is no doubt that the issuance of the ban to protect the domestic industry is a examinations in accountancy. Besides being unreasonable on its face and violative of
reasonable exercise of police power. The deterioration of the local motor academic freedom, the measure was found to be more sweeping than what was
manufacturing firms due to the influx of imported used motor vehicles is an urgent necessary, viz:
national concern that needs to be swiftly addressed by the President. In the exercise
of delegated police power, the executive can therefore validly proscribe the
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the
importation of these vehicles. Thus, in Taxicab Operators of Metro Manila, Inc. v.
alleged leakages in the licensure examinations will be eradicated or at least
Board of Transportation,41 the Court held that a regulation phasing out taxi cabs more
minimized. Making the examinees suffer by depriving them of legitimate means of
than six years old is a valid exercise of police power. The regulation was sustained as
review or preparation on those last three precious days — when they should be
reasonable holding that the purpose thereof was to promote the convenience and
refreshing themselves with all that they have learned in the review classes and
comfort and protect the safety of the passengers.
preparing their mental and psychological make-up for the examination day itself —
would be like uprooting the tree to get rid of a rotten branch. What is needed to be
The problem, however, lies with respect to the application of the importation ban to the done by the respondent is to find out the source of such leakages and stop it right
Freeport. The Court finds no logic in the all encompassing application of the assailed there. If corrupt officials or personnel should be terminated from their loss, then so be
provision to the Freeport which is outside the customs territory. As long as the used it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by
motor vehicles do not enter the customs territory, the injury or harm sought to be examiners should be set up and if violations are committed, then licenses should be
prevented or remedied will not arise. The application of the law should be consistent suspended or revoked. x x x
with the purpose of and reason for the law. Ratione cessat lex, et cessat lex. When
the reason for the law ceases, the law ceases. It is not the letter alone but the spirit of
In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,45 the Court likewise struck
the law also that gives it life.42 To apply the proscription to the Freeport would not
down as unreasonable and overbreadth a city ordinance granting an exclusive
serve the purpose of the EO. Instead of improving the general economy of the
franchise for 25 years, renewable for another 25 years, to one entity for the
country, the application of the importation ban in the Freeport would subvert the
construction and operation of one common bus and jeepney terminal facility in Lucena
avowed purpose of RA 7227 which is to create a market that would draw investors
City. While professedly aimed towards alleviating the traffic congestion alleged to have
and ultimately boost the national economy.
been caused by the existence of various bus and jeepney terminals within the city, the
ordinance was held to be beyond what is reasonably necessary to solve the traffic
In similar cases, we also declared void the administrative issuance or ordinances problem in the city.
concerned for being unreasonable. To illustrate, in De la Cruz v. Paras,43 the Court
held as unreasonable and unconstitutional an ordinance characterized by
By parity of reasoning, the importation ban in this case should also be declared void
overbreadth. In that case, the Municipality of Bocaue, Bulacan, prohibited the
for its too sweeping and unnecessary application to the Freeport which has no bearing
operation of all night clubs, cabarets and dance halls within its jurisdiction for the
on the objective of the prohibition. If the aim of the EO is to prevent the entry of used
protection of public morals. As explained by the Court:
motor vehicles from the Freeport to the customs territory, the solution is not to forbid
entry of these vehicles into the Freeport, but to intensify governmental campaign and
x x x It cannot be said that such a sweeping exercise of a lawmaking power by measures to thwart illegal ingress of used motor vehicles into the customs territory.
Bocaue could qualify under the term reasonable. The objective of fostering public
morals, a worthy and desirable end can be attained by a measure that does not
At this juncture, it must be mentioned that on June 19, 1993, President Fidel V.
encompass too wide a field. Certainly the ordinance on its face is characterized by
Ramos issued Executive Order No. 97-A, "Further Clarifying The Tax And Duty-Free
overbreadth. The purpose sought to be achieved could have been attained by
Privilege Within The Subic Special Economic And Free Port Zone," Section 1 of which
reasonable restrictions rather than by an absolute prohibition. The admonition in
provides:
Salaveria should be heeded: "The Judiciary should not lightly set aside legislative
action when there is not a clear invasion of personal or property rights under the guise
of police regulation." It is clear that in the guise of a police regulation, there was in this SECTION 1. The following guidelines shall govern the tax and duty-free privilege
instance a clear invasion of personal or property rights, personal in the case of those within the Secured Area of the Subic Special Economic and Free Port Zone:
individuals desirous of patronizing those night clubs and property in terms of the
investments made and salaries to be earned by those therein employed.
1.1. The Secured Area consisting of the presently fenced-in former Subic Naval Base
shall be the only completely tax and duty-free area in the SSEFPZ. Business
Lupangco v. Court of Appeals,44 is a case involving a resolution issued by the enterprises and individuals (Filipinos and foreigners) residing within the Secured Area
Professional Regulation Commission which prohibited examinees from attending are free to import raw materials, capital goods, equipment, and consumer items tax
review classes and receiving handout materials, tips, and the like three days before and dutry-free. Consumption items, however, must be consumed within the Secured
the date of examination in order to preserve the integrity and purity of the licensure Area. Removal of raw materials, capital goods, equipment and consumer items out of
the Secured Area for sale to non-SSEFPZ registered enterprises shall be subject to
the usual taxes and duties, except as may be provided herein. Associate Justice Asscociate Justice

In Tiu v. Court of Appeals46 as reiterated in Coconut Oil Refiners Association, Inc. v.

Torres,47 this provision limiting the special privileges on tax and duty-free importation
ANGELINA SANDOVAL-GUTIERREZ ANTONIO T. CARPIO
in the presently fenced-in former Subic Naval Base has been declared valid and
Associate Justice Asscociate Justice
constitutional and in accordance with RA 7227. Consistent with these rulings and for
easier management and monitoring of activities and to prevent fraudulent importation
of merchandise and smuggling, the free flow and importation of used motor vehicles
shall be operative only within the "secured area." MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA
Associate Justice Asscociate Justice
In sum, the Court finds that Article 2, Section 3.1 of EO 156 is void insofar as it is
made applicable to the presently secured fenced-in former Subic Naval Base area as
stated in Section 1.1 of EO 97-A. Pursuant to the separability clause48 of EO 156, CONCHITA CARPIO-MORALES ROMEO J. CALLEJO, SR.
Section 3.1 is declared valid insofar as it applies to the customs territory or the Associate Justice Asscociate Justice
Philippine territory outside the presently secured fenced-in former Subic Naval Base
area as stated in Section 1.1 of EO 97-A. Hence, used motor vehicles that come into
the Philippine territory via the secured fenced-in former Subic Naval Base area may
be stored, used or traded therein, or exported out of the Philippine territory, but they ADOLFO S. AZCUNA DANTE O. TINGA
cannot be imported into the Philippine territory outside of the secured fenced-in former Associate Justice Asscociate Justice
Subic Naval Base area.

WHEREFORE, the petitions are PARTIALLY GRANTED and the May 24, 2004 MINITA V. CHICO-NAZARIO CANCIO C. GARCIA
Decisions of Branch 72, Regional Trial Court of Olongapo City, in Civil Case No. 20-0- Associate Justice Asscociate Justice
04 and Civil Case No. 22-0-04; and the February 14, 2005 Decision of the Court of
Appeals in CA-G.R. SP No. 63284, are MODIFIED insofar as they declared Article 2,
Section 3.1 of Executive Order No. 156, void in its entirety.
CERTIFICATION

Said provision is declared VALID insofar as it applies to the Philippine territory outside
the presently fenced-in former Subic Naval Base area and VOID with respect to its Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
application to the secured fenced-in former Subic Naval Base area. conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court.

SO ORDERED.
ARTEMIO V. PANGANIBAN
Chief Justice
CONSUELO YNARES-SANTIAGO
Associate Justice

WE CONCUR:

Footnotes
ARTEMIO V. PANGANIBAN
Chief Justice
1
Rollo (G.R. No. 164171), pp. 81-90.

2
Id. at 68; rollo (G.R. No. 164172), p. 65. Penned by Judge Eliodoro G.
REYNATO S. PUNO LEONARDO A. QUISUMBING Ubiadas.
3 19
Rollo (G.R. No. 164172), pp. 78-86. Essentially the same provision is embodied in the 1935 and 1973
Constitutions.
4
The Executive Secretary, Secretary of Transportation and Communication,
Commissioner of Customs, Assistant Secretary and Head of the Land Constitution (1935), Art. VI, Sec 22, par. (2):
Transportation Office, Subic Bay Metropolitan Authority (SBMA), Collector
of Customs for the Port at Subic Bay Freeport Zone, and the Chief of the
The Congress may by law authorize the President, subject to
Land Transportation Office at Subic Bay Freeport Zone.
such limitations and restrictions as it may impose, to fix, within
specified limits, tariff rates, import or export quotas, and tonnage
5
The dispositive portion thereof is identically worded as the quoted decretal and wharfage dues.
portion of the decision in Civil Case No. 20-0-04.
Constitution (1973), Art. VII, Sec 17, par. (2):
6
Rollo (G.R. No. 168741), pp. 139-153.
The Batasang Pambansa may by law authorize the President to
7
Id. at 264. Penned by Judge Eliodoro G. Ubiadas. fix within specified limits, and subject to such limitations and
restrictions as it may impose, tariff rates, import and export
8 quotas, tonnage and wharfage dues, and other duties or imposts.
Docketed as CA-G.R. SP. No. 83284.
20
9 Bernas, S.J., The 1987 Constitution of the Philippines: A Commentary,
Dated February 14, 2005, rollo (G.R. No. 168741), p. 125. Penned by
1996 Edition, p. 610.
Associate Justice Perlita J. Tria Tirona and concurred in by Associate
Justices Delilah Vidallon-Magtolis and Jose C. Reyes, Jr. Petitioners filed a
21
motion for reconsideration but was denied by the Court of Appeals on June Enacted on July 17, 2000. See Filipino Metals Corporation v. Secretary of
28, 2004, id. at 126. Trade and Industry, G.R. No. 157498, July 15, 2005, 463 SCRA 616, 619.

10 22
Id. at 354. "Secretary" as defined under Section 4 (n) of the SMA refers to either the
Secretary of the Department of Trade and Industry in the case of non-
11 agricultural products or the Secretary of the Department of Agriculture in the
Miranda v. Aguirre, 373 Phil. 386, 397 (1999).
case of agricultural products.
12
Rollo (G.R. No. 164171), pp. 94-96 and rollo (G.R. No. 164172), p. 88. 23
Cruz, supra note 17 at 53.
13
422 Phil. 519, 531 (2001). 24
Commissioner of Internal Revenue v. Court of Appeals, 329 Phil. 987,
1007 (1996).
14
Republic v. Sandiganbayan, G.R. No. 152154, November 18, 2003, 416
SCRA 133, 140. 25
Misamis Oriental Association of Coco Traders, Inc. v. Department of
Finance Secretary, G.R. No. 108524, November 10, 1994, 238 SCRA 63,
15
Coconut Oil Refiners Association, Inc. v. Torres, G.R. No. 132527, July 69.
29, 2005, 465 SCRA 47, 62.
26
Supra.
16
Camarines Norte Electric Cooperative, Inc. v. Torres, 350 Phil. 315, 331
(1998). 27
453 Phil. 1043, 1058 (2003).
17
Cruz, Philippine Administrative Law, 2003 Edition, p. 24. 28
Sec. 401. Flexible Clause. —
18
Id. at 41.
 a. In the interest of national economy, general welfare and/or
national security, and subject to the limitations herein prescribed,
the President, upon recommendation of the National Economic
and Development Authority (hereinafter referred to as NEDA), is
hereby empowered: (1) to increase, reduce or remove existing
protective rates of import duty (including any necessary change in
classification). The existing rates may be increased or decreased
but in no case shall the reduced rate of import duty be lower than
the basic rate of ten (10) per cent ad valorem, nor shall the
increased rate of import duty be higher than a maximum of one
hundred (100) per cent ad valorem; (2) to establish import quota
or to ban imports of any commodity, as may be necessary; and
(3) to impose an additional duty on all imports not exceeding ten
(10) per cent ad valorem whenever necessary; Provided, That
upon periodic investigations by the Tariff Commission and
recommendation of the NEDA, the President may cause a
gradual reduction of protection levels granted in Section One
Hundred and Four of this Code, including those subsequently
granted pursuant to this section.
b. Before any recommendation is submitted to the President by
the NEDA pursuant to the provisions of this section, except in the
imposition of an additional duty not exceeding ten (10) per cent ad
valorem, the Commission shall conduct an investigation in the
course of which they shall hold public hearings wherein interested
parties shall be afforded reasonable opportunity to be present,
produce evidence and to be heard. The Commission shall also
hear the views and recommendations of any government office,
agency or instrumentality concerned. The Commission shall
submit their findings and recommendations to the NEDA within
thirty (30) days after the termination of the public hearings.
29
SEC. 5. Conditions for the Application of General Safeguard Measures. –
The Secretary shall apply a general safeguard measure upon a positive final
determination of the Commission that a product is being imported into the
country in increased quantities, whether absolute or relative to the domestic
production, as to be a substantial cause of serious injury or threat thereof to
the domestic industry; however, in the case of non-agricultural products, the
secretary shall first establish that the application of such safeguard
measures will be in the public interest.
SEC. 9. Formal Investigation. – Within five (5) working days from
receipt of the request from the Secretary, the Commission shall
publish the notice of the commencement of the investigation, and
public hearings which shall afford interested parties and
consumers an opportunity to be present, or to present evidence,
to respond to the presentation of other parties and consumers,
and otherwise be heard. Evidence and positions with respect to
the importation of the subject article shall be submitted to the
Commission within fifteen (15) days after the initiation of the
investigation by the Commission.
The Commission shall complete its investigation and submit its
report to the Secretary within one hundred twenty (120) calendar
days from receipt of the referral by the Secretary, except when
the Secretary certifies that the same is urgent, in which case the
Commission shall complete the investigation and submit the
report to the Secretary within sixty (60) days.
30
Rollo (G.R. No. 168741), pp. 144-145; rollo (G.R. No. 164172), pp. 205-
206; rollo (G.R. No. 164171), pp. 87-86.
31
Coconut Oil Refiners Association, Inc. v. Torres, supra note 15 at 62-63.
32
Section 13 of the Rules and Regulations Implementing RA 7227 provides:
Establishment of Secure Perimeters, Points of Entry and Duty and Tax Free
Areas of the SBF. - Pending the establishment of secure perimeters around
the entire SBF, the SBMA shall have the authority to establish and
demarcate areas of the SBF with secure perimeters within which articles
and merchandise free of duties and internal revenue taxes may be limited,
without prejudice to the availment of other benefits conferred by the Act and
these Rules in the SBF outside such areas. The SBMA shall furthermore
have the authority to establish, regulate and maintain points of entry to the
SBF or to any limited duty and tax-free areas of the SBF.
33
Records, Senate 8th congress, Session (January 14, 1992).
34
Id.
35
SEC. 45. Importation of Articles. – In general, all articles may be imported
by SBF Enterprises into the SBF free of customs and import duties and
national internal revenue taxes, except those articles prohibited by the
SBMA and those absolutely prohibited by law. (Rules and Regulations
Implementing RA 7227)
36
Whereas clauses of EO 156.
37
Rollo (G.R. No. 168741), pp. 77-79; rollo (G.R. No. 164172), p.
46; rollo (G.R. No. 164171), p. 48.
38
369 Phil. 568, 579-580 (1999).
39
Definitions, Section 3 (n).
40
Lupangco v. Court of Appeals, G.R. No. L-77372, April 29, 1988, 160
SCRA 848, 858-859.

41
202 Phil. 925, 935-936 (1982).

42
Vergara v. People, G.R. No. 160328, February 4, 2005, 450 SCRA 495,
508.

43
208 Phil. 490, 499-500 (1983).

44
Supra note 40 at 860.

45
G.R. No. 148339, February 23, 2005, 452 SCRA 174.

46
361 Phil. 229 (1999).

47
Supra note 15.

48
Article 7, Section 3:

Sec. 3. Separability Clause. – The provisions of this Executive

Order are hereby declared separable and in the event any of such
provisions is declared unconstitutional, the other provisions, which
are not affected, thereby remain in force and effect

EN BANC

G.R. No. 155746 October 13, 2004

DIOSDADO LAGCAO, DOROTEO LAGCAO and URSULA LAGCAO, petitioners,
vs.
JUDGE GENEROSA G. LABRA, Branch 23, Regional Trial Court, Cebu, and the
CITY OF CEBU, respondent.
DECISION
CORONA, J.:
Before us is a petition for review of the decision dated July 1, 2002 of the Regional
Trial Court, Branch 23, Cebu City1 upholding the validity of the City of Cebu’s
Ordinance No. 1843, as well as the lower court’s order dated August 26, 2002 denying
petitioner’s motion for reconsideration.
In 1964, the Province of Cebu donated 210 lots to the City of Cebu. One of these lots
was Lot 1029, situated in Capitol Hills, Cebu City, with an area of 4,048 square
meters. In 1965, petitioners purchased Lot 1029 on installment basis. But then, in late
1965, the 210 lots, including Lot 1029, reverted to the Province of
Cebu.2 Consequently, the province tried to annul the sale of Lot 1029 by the City of
Cebu to the petitioners. This prompted the latter to sue the province for specific
performance and damages in the then Court of First Instance.
acquisition of Lot 1029 which was registered in the name of petitioners. The intended
acquisition was to be used for the benefit of the homeless after its subdivision and
sale to the actual occupants thereof. For this purpose, the ordinance appropriated the
amount of ₱6,881,600 for the payment of the subject lot. This ordinance was approved
by Mayor Garcia on August 2, 2000.
On August 29, 2000, petitioners filed with the RTC an action for declaration of nullity of
Ordinance No. 1843 for being unconstitutional. The trial court rendered its decision on
July 1, 2002 dismissing the complaint filed by petitioners whose subsequent motion for
reconsideration was likewise denied on August 26, 2002.
In this appeal, petitioners argue that Ordinance No. 1843 is unconstitutional as it
sanctions the expropriation of their property for the purpose of selling it to the
squatters, an endeavor contrary to the concept of "public use" contemplated in the
Constitution.8 They allege that it will benefit only a handful of people. The ordinance,
according to petitioners, was obviously passed for politicking, the squatters undeniably
being a big source of votes.1avvphi1
In sum, this Court is being asked to resolve whether or not the intended expropriation
by the City of Cebu of a 4,048-square-meter parcel of land owned by petitioners
contravenes the Constitution and applicable laws.

Under Section 48 of RA 7160,9 otherwise known as the Local Government Code of

On July 9, 1986, the court a quo ruled in favor of petitioners and ordered the Province
1991,10 local legislative power shall be exercised by the Sangguniang Panlungsod of
of Cebu to execute the final deed of sale in favor of petitioners. On June 11, 1992, the
the city. The legislative acts of the Sangguniang Panlungsodin the exercise of its
Court of Appeals affirmed the decision of the trial court. Pursuant to the ruling of the
lawmaking authority are denominated ordinances.
appellate court, the Province of Cebu executed on June 17, 1994 a deed of absolute
sale over Lot 1029 in favor of petitioners. Thereafter, Transfer Certificate of Title (TCT)
No. 129306 was issued in the name of petitioners and Crispina Lagcao.3 Local government units have no inherent power of eminent domain and can exercise it
only when expressly authorized by the legislature.11 By virtue of RA 7160, Congress
conferred upon local government units the power to expropriate. Ordinance No. 1843
After acquiring title, petitioners tried to take possession of the lot only to discover that
was enacted pursuant to Section 19 of RA 7160:
it was already occupied by squatters. Thus, on June 15, 1997, petitioners instituted
ejectment proceedings against the squatters. The Municipal Trial Court in Cities
(MTCC), Branch 1, Cebu City, rendered a decision on April 1, 1998, ordering the SEC. 19. Eminent Domain. − A local government unit may, through its chief
squatters to vacate the lot. On appeal, the RTC affirmed the MTCC’s decision and executive and acting pursuant to an ordinance, exercise the power of
issued a writ of execution and order of demolition.1avvphi1 eminent domain for public use, or purpose, or welfare for the benefit of the
poor and the landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws xxx. (italics supplied).
However, when the demolition order was about to be implemented, Cebu City Mayor
Alvin Garcia wrote two letters4to the MTCC, requesting the deferment of the
demolition on the ground that the City was still looking for a relocation site for the Ordinance No. 1843 which authorized the expropriation of petitioners’ lot was enacted
squatters. Acting on the mayor’s request, the MTCC issued two orders suspending the by the SP of Cebu City to provide socialized housing for the homeless and low-income
demolition for a period of 120 days from February 22, 1999. Unfortunately for residents of the City.
petitioners, during the suspension period, the Sangguniang Panlungsod (SP) of Cebu
City passed a resolution which identified Lot 1029 as a socialized housing site
However, while we recognize that housing is one of the most serious social problems
pursuant to RA 7279.5 Then, on June 30, 1999, the SP of Cebu City passed
of the country, local government units do not possess unbridled authority to exercise
Ordinance No. 17726 which included Lot 1029 among the identified sites for socialized
their power of eminent domain in seeking solutions to this problem.
housing. On July, 19, 2000, Ordinance No. 18437 was enacted by the SP of Cebu City
authorizing the mayor of Cebu City to initiate expropriation proceedings for the
There are two legal provisions which limit the exercise of this power: (1) no person
shall be deprived of life, liberty, or property without due process of law, nor shall any
person be denied the equal protection of the laws;12 and (2) private property shall not
be taken for public use without just compensation. 13 Thus, the exercise by local
government units of the power of eminent domain is not absolute. In fact, Section 19
of RA 7160 itself explicitly states that such exercise must comply with the provisions of
the Constitution and pertinent laws.
The exercise of the power of eminent domain drastically affects a landowner’s right to
private property, which is as much a constitutionally-protected right necessary for the
preservation and enhancement of personal dignity and intimately connected with the
rights to life and liberty.14 Whether directly exercised by the State or by its authorized
agents, the exercise of eminent domain is necessarily in derogation of private
rights.15 For this reason, the need for a painstaking scrutiny cannot be
overemphasized.
The due process clause cannot be trampled upon each time an ordinance orders the
expropriation of a private individual’s property. The courts cannot even adopt a hands-
off policy simply because public use or public purpose is invoked by an ordinance, or
just compensation has been fixed and determined. In De Knecht vs. Bautista,16 we
said:
It is obvious then that a land-owner is covered by the mantle of protection
due process affords. It is a mandate of reason. It frowns on arbitrariness, it
is the antithesis of any governmental act that smacks of whim or caprice. It
negates state power to act in an oppressive manner. It is, as had been
stressed so often, the embodiment of the sporting idea of fair play. In that
sense, it stands as a guaranty of justice. That is the standard that must be
met by any governmental agency in the exercise of whatever competence is
entrusted to it. As was so emphatically stressed by the present Chief
Justice, "Acts of Congress, as well as those of the Executive, can deny due
process only under pain of nullity. xxx.
The foundation of the right to exercise eminent domain is genuine necessity and that
necessity must be of public character.17 Government may not capriciously or arbitrarily
choose which private property should be expropriated. In this case, there was no
showing at all why petitioners’ property was singled out for expropriation by the city
ordinance or what necessity impelled the particular choice or selection. Ordinance No.
1843 stated no reason for the choice of petitioners’ property as the site of a socialized
housing project.
Condemnation of private lands in an irrational or piecemeal fashion or the random
expropriation of small lots to accommodate no more than a few tenants or squatters is
certainly not the condemnation for public use contemplated by the Constitution. This is
depriving a citizen of his property for the convenience of a few without perceptible
benefit to the public.18
RA 7279 is the law that governs the local expropriation of property for purposes of
urban land reform and housing. Sections 9 and 10 thereof provide:
SEC 9. Priorities in the Acquisition of Land. − Lands for socialized housing
shall be acquired in the following order:
(a) Those owned by the Government or any of its subdivisions,
instrumentalities, or agencies, including government-owned or
controlled corporations and their subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas or Priority Development,
Zonal Improvement Program sites, and Slum Improvement and
Resettlement Program sites which have not yet been acquired;
(e) Bagong Lipunan Improvement of Sites and Services or BLISS
which have not yet been acquired; and
(f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to
the beneficiaries, the priorities mentioned in this section shall not apply. The
local government units shall give budgetary priority to on-site development
of government lands. (Emphasis supplied).
SEC. 10. Modes of Land Acquisition. − The modes of acquiring lands for
purposes of this Act shall include, among others, community mortgage, land
swapping, land assembly or consolidation, land banking, donation to the
Government, joint venture agreement, negotiated purchase, and
expropriation: Provided, however, That expropriation shall be resorted to
only when other modes of acquisition have been exhausted: Provided
further, That where expropriation is resorted to, parcels of land owned by
small property owners shall be exempted for purposes of this Act: xxx.
(Emphasis supplied).
In the recent case of Estate or Heirs of the Late Ex-Justice Jose B.L. Reyes et al. vs.
City of Manila,19 we ruled that the above-quoted provisions are strict limitations on the
exercise of the power of eminent domain by local government units, especially with
respect to (1) the order of priority in acquiring land for socialized housing and (2) the
resort to expropriation proceedings as a means to acquiring it. Private lands rank last
in the order of priority for purposes of socialized housing. In the same vein,
expropriation proceedings may be resorted to only after the other modes of acquisition
are exhausted. Compliance with these conditions is mandatory because these are
the only safeguards of oftentimes helpless owners of private property against what
may be a tyrannical violation of due process when their property is forcibly taken from
them allegedly for public use.
We have found nothing in the records indicating that the City of Cebu complied strictly
with Sections 9 and 10 of RA 7279. Ordinance No. 1843 sought to expropriate
petitioners’ property without any attempt to first acquire the lands listed in (a) to (e) of
Section 9 of RA 7279. Likewise, Cebu City failed to establish that the other modes of
acquisition in Section 10 of RA 7279 were first exhausted. Moreover, prior to the
passage of Ordinance No. 1843, there was no evidence of a valid and definite offer to
buy petitioners’ property as required by Section 19 of RA 7160.20 We therefore find
Ordinance No. 1843 to be constitutionally infirm for being violative of the petitioners’
right to due process.
It should also be noted that, as early as 1998, petitioners had already obtained a
favorable judgment of eviction against the illegal occupants of their property. The
judgment in this ejectment case had, in fact, already attained finality, with a writ of
execution and an order of demolition. But Mayor Garcia requested the trial court to
suspend the demolition on the pretext that the City was still searching for a relocation
site for the squatters. However, instead of looking for a relocation site during the
suspension period, the city council suddenly enacted Ordinance No. 1843 for the
expropriation of petitioners’ lot. It was trickery and bad faith, pure and simple. The
unconscionable manner in which the questioned ordinance was passed clearly
indicated that respondent City transgressed the Constitution, RA 7160 and RA 7279.
For an ordinance to be valid, it must not only be within the corporate powers of the city
or municipality to enact but must also be passed according to the procedure
prescribed by law. It must be in accordance with certain well-established basic
principles of a substantive nature. These principles require that an ordinance (1) must
not contravene the Constitution or any statute (2) must not be unfair or oppressive (3)
must not be partial or discriminatory (4) must not prohibit but may regulate trade (5)
must be general and consistent with public policy, and (6) must not be unreasonable. 21
Ordinance No. 1843 failed to comply with the foregoing substantive requirements. A
clear case of constitutional infirmity having been thus established, this Court is
constrained to nullify the subject ordinance. We recapitulate:
first, as earlier discussed, the questioned ordinance is repugnant to the
pertinent provisions of the Constitution, RA 7279 and RA 7160;
second, the precipitate manner in which it was enacted was plain
oppression masquerading as a pro-poor ordinance;
third, the fact that petitioners’ small property was singled out for
expropriation for the purpose of awarding it to no more than a few squatters
indicated manifest partiality against petitioners, and
fourth, the ordinance failed to show that there was a reasonable relation
between the end sought and the means adopted. While the objective of the
City of Cebu was to provide adequate housing to slum dwellers, the means
it employed in pursuit of such objective fell short of what was legal, sensible
and called for by the circumstances.
Indeed, experience has shown that the disregard of basic liberties and the use of
short-sighted methods in expropriation proceedings have not achieved the desired
results. Over the years, the government has tried to remedy the worsening squatter
problem. Far from solving it, however, government’s kid-glove approach has only
resulted in the multiplication and proliferation of squatter colonies and blighted areas.
A pro-poor program that is well-studied, adequately funded, genuinely sincere and
truly respectful of everyone’s basic rights is what this problem calls for, not the
improvident enactment of politics-based ordinances targeting small private lots in no
rational fashion.
WHEREFORE, the petition is hereby GRANTED. The July 1, 2002 decision of Branch
23 of the Regional Trial Court of Cebu City is REVERSED and SET ASIDE.
SO ORDERED.
Davide, Jr., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio, Austria-Martinez, Carpio Morales*, Callejo, Sr., Azcuna*, Tinga, and Chico-
Nazario*, JJ., concur.
Footnotes
* on leave
1
Presided by Judge Generosa G. Labra.
2
The records of the case do not state why and how the lots reverted to the
Province of Cebu.
3
Now deceased.
4
Dated February 22, 1999 and May 20, 1999.
5
The Urban Development and Housing Act of 1992 (Lina Law).
6
Entitled, "AN ORDINANCE FURTHER AMENDING ORDINANCE NO.
1656 AS AMENDED BY ORDINANCE NO. 1684 OTHERWISE KNOWN AS
THE 1966 REVISED ZONING ORDINANCE OF THE CITY OF CEBU, BY
INCORPORATING THEREIN A NEW DISTRICT CALLED SOCIALIZED
HOUSING SITES."

7
Entitled "AN ORDINANCE AUTHORIZING THE CITY MAYOR OF CEBU
CITY TO INSTITUTE EXPROPRIATION PROCEEDINGS AGAINST MRS.
CRISPINA VDA. DE LAGCAO, OWNER OF LOT NO. 1029 LOCATED AT
GREEN VALLEY, CAPITOL SITE, CEBU CITY, TO ACQUIRE THE SAME
FOR PUBLIC USE OR PURPOSE."

8
Article IV, Section 9 – "Private property shall not be taken for public use
without just compensation."

9
Section 48. Local Legislative Power – Local legislative power shall be
exercised by the sangguniang panlalawigan for the province;
the sangguniang panlungsod for the city; the sangguniang bayan for the
municipality; and the sangguniang barangay for the barangay.