Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 100113 September 3, 1991

RENATO CAYETANO, petitioner,

vs.
CHRISTIAN MONSOD, HON. JOVITO R. SALONGA, COMMISSION ON APPOINTMENT, and
HON. GUILLERMO CARAGUE, in his capacity as Secretary of Budget and
Management, respondents.

Renato L. Cayetano for and in his own behalf.

Sabina E. Acut, Jr. and Mylene Garcia-Albano co-counsel for petitioner.

PARAS, J.:

We are faced here with a controversy of far-reaching proportions. While ostensibly only legal issues
are involved, the Court's decision in this case would indubitably have a profound effect on the
political aspect of our national existence.

The 1987 Constitution provides in Section 1 (1), Article IX-C:

There shall be a Commission on Elections composed of a Chairman and six Commissioners

who shall be natural-born citizens of the Philippines and, at the time of their appointment, at
least thirty-five years of age, holders of a college degree, and must not have been
candidates for any elective position in the immediately preceding -elections. However, a
majority thereof, including the Chairman, shall be members of the Philippine Bar who have
been engaged in the practice of law for at least ten years. (Emphasis supplied)

The aforequoted provision is patterned after Section l(l), Article XII-C of the 1973 Constitution which
similarly provides:

There shall be an independent Commission on Elections composed of a Chairman and eight

Commissioners who shall be natural-born citizens of the Philippines and, at the time of their
appointment, at least thirty-five years of age and holders of a college degree. However, a majority
thereof, including the Chairman, shall be members of the Philippine Bar who have been engaged in
the practice of law for at least ten years.' (Emphasis supplied)

Regrettably, however, there seems to be no jurisprudence as to what constitutes practice of law as a

legal qualification to an appointive office.

Black defines "practice of law" as:

The rendition of services requiring the knowledge and the application of legal principles and
technique to serve the interest of another with his consent. It is not limited to appearing in
court, or advising and assisting in the conduct of litigation, but embraces the preparation of
pleadings, and other papers incident to actions and special proceedings, conveyancing, the
preparation of legal instruments of all kinds, and the giving of all legal advice to clients. It
embraces all advice to clients and all actions taken for them in matters connected with the
law. An attorney engages in the practice of law by maintaining an office where he is held out
to be-an attorney, using a letterhead describing himself as an attorney, counseling clients in
legal matters, negotiating with opposing counsel about pending litigation, and fixing and
collecting fees for services rendered by his associate. (Black's Law Dictionary, 3rd ed.)
The practice of law is not limited to the conduct of cases in court. (Land Title Abstract and Trust Co.
v. Dworken, 129 Ohio St. 23, 193 N.E. 650) A person is also considered to be in the practice of law
when he:

... for valuable consideration engages in the business of advising person, firms, associations
or corporations as to their rights under the law, or appears in a representative capacity as an
advocate in proceedings pending or prospective, before any court, commissioner, referee,
board, body, committee, or commission constituted by law or authorized to settle
controversies and there, in such representative capacity performs any act or acts for the
purpose of obtaining or defending the rights of their clients under the law. Otherwise stated,
one who, in a representative capacity, engages in the business of advising clients as to their
rights under the law, or while so engaged performs any act or acts either in court or outside
of court for that purpose, is engaged in the practice of law. (State ex. rel. Mckittrick v..C.S.
Dudley and Co., 102 S.W. 2d 895, 340 Mo. 852)

This Court in the case of Philippine Lawyers Association v.Agrava, (105 Phil. 173,176-177) stated:

The practice of law is not limited to the conduct of cases or litigation in court; it embraces the
preparation of pleadings and other papers incident to actions and special proceedings, the
management of such actions and proceedings on behalf of clients before judges and courts,
and in addition, conveying. In general, all advice to clients, and all action taken for them in
matters connected with the law incorporation services, assessment and condemnation
services contemplating an appearance before a judicial body, the foreclosure of a mortgage,
enforcement of a creditor's claim in bankruptcy and insolvency proceedings, and conducting
proceedings in attachment, and in matters of estate and guardianship have been held to
constitute law practice, as do the preparation and drafting of legal instruments, where the
work done involves the determination by the trained legal mind of the legal effect of facts and
conditions. (5 Am. Jr. p. 262, 263). (Emphasis supplied)

Practice of law under modem conditions consists in no small part of work performed outside
of any court and having no immediate relation to proceedings in court. It embraces
conveyancing, the giving of legal advice on a large variety of subjects, and the preparation
and execution of legal instruments covering an extensive field of business and trust relations
and other affairs. Although these transactions may have no direct connection with court
proceedings, they are always subject to become involved in litigation. They require in many
aspects a high degree of legal skill, a wide experience with men and affairs, and great
capacity for adaptation to difficult and complex situations. These customary functions of an
attorney or counselor at law bear an intimate relation to the administration of justice by the
courts. No valid distinction, so far as concerns the question set forth in the order, can be
drawn between that part of the work of the lawyer which involves appearance in court and
that part which involves advice and drafting of instruments in his office. It is of importance to
the welfare of the public that these manifold customary functions be performed by persons
possessed of adequate learning and skill, of sound moral character, and acting at all times
under the heavy trust obligations to clients which rests upon all attorneys.
(Moran, Comments on the Rules of Court, Vol. 3 [1953 ed.] , p. 665-666, citing In re Opinion
of the Justices [Mass.], 194 N.E. 313, quoted in Rhode Is. Bar Assoc. v. Automobile Service
Assoc. [R.I.] 179 A. 139,144). (Emphasis ours)

The University of the Philippines Law Center in conducting orientation briefing for new lawyers
(1974-1975) listed the dimensions of the practice of law in even broader terms as advocacy,
counselling and public service.

One may be a practicing attorney in following any line of employment in the profession. If
what he does exacts knowledge of the law and is of a kind usual for attorneys engaging in
the active practice of their profession, and he follows some one or more lines of employment
such as this he is a practicing attorney at law within the meaning of the statute. (Barr v.
Cardell, 155 NW 312)

Practice of law means any activity, in or out of court, which requires the application of law, legal
procedure, knowledge, training and experience. "To engage in the practice of law is to perform those
acts which are characteristics of the profession. Generally, to practice law is to give notice or render
any kind of service, which device or service requires the use in any degree of legal knowledge or
skill." (111 ALR 23)
The following records of the 1986 Constitutional Commission show that it has adopted a liberal
interpretation of the term "practice of law."

MR. FOZ. Before we suspend the session, may I make a manifestation which I forgot to do
during our review of the provisions on the Commission on Audit. May I be allowed to make a
very brief statement?

THE PRESIDING OFFICER (Mr. Jamir).

The Commissioner will please proceed.

MR. FOZ. This has to do with the qualifications of the members of the Commission on Audit.
Among others, the qualifications provided for by Section I is that "They must be Members of
the Philippine Bar" — I am quoting from the provision — "who have been engaged in the
practice of law for at least ten years".

To avoid any misunderstanding which would result in excluding members of the Bar who are now
employed in the COA or Commission on Audit, we would like to make the clarification that this
provision on qualifications regarding members of the Bar does not necessarily refer or involve actual
practice of law outside the COA We have to interpret this to mean that as long as the lawyers who
are employed in the COA are using their legal knowledge or legal talent in their respective work
within COA, then they are qualified to be considered for appointment as members or commissioners,
even chairman, of the Commission on Audit.

This has been discussed by the Committee on Constitutional Commissions and Agencies and we
deem it important to take it up on the floor so that this interpretation may be made available
whenever this provision on the qualifications as regards members of the Philippine Bar engaging in
the practice of law for at least ten years is taken up.

MR. OPLE. Will Commissioner Foz yield to just one question.

MR. FOZ. Yes, Mr. Presiding Officer.

MR. OPLE. Is he, in effect, saying that service in the COA by a lawyer is equivalent to the
requirement of a law practice that is set forth in the Article on the Commission on Audit?

MR. FOZ. We must consider the fact that the work of COA, although it is auditing, will
necessarily involve legal work; it will involve legal work. And, therefore, lawyers who are
employed in COA now would have the necessary qualifications in accordance with the
Provision on qualifications under our provisions on the Commission on Audit. And, therefore,
the answer is yes.

MR. OPLE. Yes. So that the construction given to this is that this is equivalent to the practice
of law.

MR. FOZ. Yes, Mr. Presiding Officer.

MR. OPLE. Thank you.

... ( Emphasis supplied)

Section 1(1), Article IX-D of the 1987 Constitution, provides, among others, that the Chairman and
two Commissioners of the Commission on Audit (COA) should either be certified public accountants
with not less than ten years of auditing practice, or members of the Philippine Bar who have been
engaged in the practice of law for at least ten years. (emphasis supplied)

Corollary to this is the term "private practitioner" and which is in many ways synonymous with the
word "lawyer." Today, although many lawyers do not engage in private practice, it is still a fact that
the majority of lawyers are private practitioners. (Gary Munneke, Opportunities in Law Careers [VGM
Career Horizons: Illinois], [1986], p. 15).
At this point, it might be helpful to define private practice. The term, as commonly understood,
means "an individual or organization engaged in the business of delivering legal services." (Ibid.).
Lawyers who practice alone are often called "sole practitioners." Groups of lawyers are called
"firms." The firm is usually a partnership and members of the firm are the partners. Some firms may
be organized as professional corporations and the members called shareholders. In either case, the
members of the firm are the experienced attorneys. In most firms, there are younger or more
inexperienced salaried attorneyscalled "associates." (Ibid.).

The test that defines law practice by looking to traditional areas of law practice is essentially
tautologous, unhelpful defining the practice of law as that which lawyers do. (Charles W.
Wolfram, Modern Legal Ethics [West Publishing Co.: Minnesota, 1986], p. 593). The practice of law
is defined as the performance of any acts . . . in or out of court, commonly understood to be the
practice of law. (State Bar Ass'n v. Connecticut Bank & Trust Co., 145 Conn. 222, 140 A.2d 863, 870
[1958] [quoting Grievance Comm. v. Payne, 128 Conn. 325, 22 A.2d 623, 626 [1941]). Because
lawyers perform almost every function known in the commercial and governmental realm, such a
definition would obviously be too global to be workable.(Wolfram, op. cit.).

The appearance of a lawyer in litigation in behalf of a client is at once the most publicly familiar role
for lawyers as well as an uncommon role for the average lawyer. Most lawyers spend little time in
courtrooms, and a large percentage spend their entire practice without litigating a case. (Ibid., p.
593). Nonetheless, many lawyers do continue to litigate and the litigating lawyer's role colors much
of both the public image and the self perception of the legal profession. (Ibid.).

In this regard thus, the dominance of litigation in the public mind reflects history, not reality. (Ibid.).
Why is this so? Recall that the late Alexander SyCip, a corporate lawyer, once articulated on the
importance of a lawyer as a business counselor in this wise: "Even today, there are still uninformed
laymen whose concept of an attorney is one who principally tries cases before the courts. The
members of the bench and bar and the informed laymen such as businessmen, know that in most
developed societies today, substantially more legal work is transacted in law offices than in the
courtrooms. General practitioners of law who do both litigation and non-litigation work also know that
in most cases they find themselves spending more time doing what [is] loosely desccribe[d] as
business counseling than in trying cases. The business lawyer has been described as the planner,
the diagnostician and the trial lawyer, the surgeon. I[t] need not [be] stress[ed] that in law, as in
medicine, surgery should be avoided where internal medicine can be effective." (Business Star,
"Corporate Finance Law," Jan. 11, 1989, p. 4).

In the course of a working day the average general practitioner wig engage in a number of legal
tasks, each involving different legal doctrines, legal skills, legal processes, legal institutions, clients,
and other interested parties. Even the increasing numbers of lawyers in specialized practice wig
usually perform at least some legal services outside their specialty. And even within a narrow
specialty such as tax practice, a lawyer will shift from one legal task or role such as advice-giving to
an importantly different one such as representing a client before an administrative agency.
(Wolfram, supra, p. 687).

By no means will most of this work involve litigation, unless the lawyer is one of the relatively rare
types — a litigator who specializes in this work to the exclusion of much else. Instead, the work will
require the lawyer to have mastered the full range of traditional lawyer skills of client counselling,
advice-giving, document drafting, and negotiation. And increasingly lawyers find that the new skills of
evaluation and mediation are both effective for many clients and a source of employment. (Ibid.).

Most lawyers will engage in non-litigation legal work or in litigation work that is constrained in very
important ways, at least theoretically, so as to remove from it some of the salient features of
adversarial litigation. Of these special roles, the most prominent is that of prosecutor. In some
lawyers' work the constraints are imposed both by the nature of the client and by the way in which
the lawyer is organized into a social unit to perform that work. The most common of these roles are
those of corporate practice and government legal service. (Ibid.).

In several issues of the Business Star, a business daily, herein below quoted are emerging trends in
corporate law practice, a departure from the traditional concept of practice of law.

We are experiencing today what truly may be called a revolutionary transformation in

corporate law practice. Lawyers and other professional groups, in particular those members
participating in various legal-policy decisional contexts, are finding that understanding the
major emerging trends in corporation law is indispensable to intelligent decision-making.
Constructive adjustment to major corporate problems of today requires an accurate
understanding of the nature and implications of the corporate law research function
accompanied by an accelerating rate of information accumulation. The recognition of the
need for such improved corporate legal policy formulation, particularly "model-making" and
"contingency planning," has impressed upon us the inadequacy of traditional procedures in
many decisional contexts.

In a complex legal problem the mass of information to be processed, the sorting and
weighing of significant conditional factors, the appraisal of major trends, the necessity of
estimating the consequences of given courses of action, and the need for fast decision and
response in situations of acute danger have prompted the use of sophisticated concepts of
information flow theory, operational analysis, automatic data processing, and electronic
computing equipment. Understandably, an improved decisional structure must stress the
predictive component of the policy-making process, wherein a "model", of the decisional
context or a segment thereof is developed to test projected alternative courses of action in
terms of futuristic effects flowing therefrom.

Although members of the legal profession are regularly engaged in predicting and projecting
the trends of the law, the subject of corporate finance law has received relatively little
organized and formalized attention in the philosophy of advancing corporate legal education.
Nonetheless, a cross-disciplinary approach to legal research has become a vital necessity.

Certainly, the general orientation for productive contributions by those trained primarily in the
law can be improved through an early introduction to multi-variable decisional context and
the various approaches for handling such problems. Lawyers, particularly with either a
master's or doctorate degree in business administration or management, functioning at the
legal policy level of decision-making now have some appreciation for the concepts and
analytical techniques of other professions which are currently engaged in similar types of
complex decision-making.

Truth to tell, many situations involving corporate finance problems would require the services
of an astute attorney because of the complex legal implications that arise from each and
every necessary step in securing and maintaining the business issue raised. (Business Star,
"Corporate Finance Law," Jan. 11, 1989, p. 4).

In our litigation-prone country, a corporate lawyer is assiduously referred to as the "abogado

de campanilla." He is the "big-time" lawyer, earning big money and with a clientele
composed of the tycoons and magnates of business and industry.

Despite the growing number of corporate lawyers, many people could not explain what it is
that a corporate lawyer does. For one, the number of attorneys employed by a single
corporation will vary with the size and type of the corporation. Many smaller and some large
corporations farm out all their legal problems to private law firms. Many others have in-house
counsel only for certain matters. Other corporation have a staff large enough to handle most
legal problems in-house.

A corporate lawyer, for all intents and purposes, is a lawyer who handles the legal affairs of a
corporation. His areas of concern or jurisdiction may include, inter alia: corporate legal
research, tax laws research, acting out as corporate secretary (in board meetings),
appearances in both courts and other adjudicatory agencies (including the Securities and
Exchange Commission), and in other capacities which require an ability to deal with the law.

At any rate, a corporate lawyer may assume responsibilities other than the legal affairs of the
business of the corporation he is representing. These include such matters as determining
policy and becoming involved in management. ( Emphasis supplied.)

In a big company, for example, one may have a feeling of being isolated from the action, or
not understanding how one's work actually fits into the work of the orgarnization. This can be
frustrating to someone who needs to see the results of his work first hand. In short, a
corporate lawyer is sometimes offered this fortune to be more closely involved in the running
of the business.

Moreover, a corporate lawyer's services may sometimes be engaged by a multinational

corporation (MNC). Some large MNCs provide one of the few opportunities available to
corporate lawyers to enter the international law field. After all, international law is practiced in
a relatively small number of companies and law firms. Because working in a foreign country
is perceived by many as glamorous, tills is an area coveted by corporate lawyers. In most
cases, however, the overseas jobs go to experienced attorneys while the younger attorneys
do their "international practice" in law libraries. (Business Star, "Corporate Law Practice,"
May 25,1990, p. 4).

This brings us to the inevitable, i.e., the role of the lawyer in the realm of finance. To borrow
the lines of Harvard-educated lawyer Bruce Wassertein, to wit: "A bad lawyer is one who
fails to spot problems, a good lawyer is one who perceives the difficulties, and the excellent
lawyer is one who surmounts them." (Business Star, "Corporate Finance Law," Jan. 11,
1989, p. 4).

Today, the study of corporate law practice direly needs a "shot in the arm," so to speak. No
longer are we talking of the traditional law teaching method of confining the subject study to
the Corporation Code and the Securities Code but an incursion as well into the intertwining
modern management issues.

Such corporate legal management issues deal primarily with three (3) types of learning: (1)
acquisition of insights into current advances which are of particular significance to the
corporate counsel; (2) an introduction to usable disciplinary skins applicable to a corporate
counsel's management responsibilities; and (3) a devotion to the organization and
management of the legal function itself.

These three subject areas may be thought of as intersecting circles, with a shared area
linking them. Otherwise known as "intersecting managerial jurisprudence," it forms a unifying
theme for the corporate counsel's total learning.

Some current advances in behavior and policy sciences affect the counsel's role. For that
matter, the corporate lawyer reviews the globalization process, including the resulting
strategic repositioning that the firms he provides counsel for are required to make, and the
need to think about a corporation's; strategy at multiple levels. The salience of the nation-
state is being reduced as firms deal both with global multinational entities and simultaneously
with sub-national governmental units. Firms increasingly collaborate not only with public
entities but with each other — often with those who are competitors in other arenas.

Also, the nature of the lawyer's participation in decision-making within the corporation is
rapidly changing. The modem corporate lawyer has gained a new role as a stakeholder — in
some cases participating in the organization and operations of governance through
participation on boards and other decision-making roles. Often these new patterns develop
alongside existing legal institutions and laws are perceived as barriers. These trends are
complicated as corporations organize for global operations. ( Emphasis supplied)

The practising lawyer of today is familiar as well with governmental policies toward the
promotion and management of technology. New collaborative arrangements for promoting
specific technologies or competitiveness more generally require approaches from industry
that differ from older, more adversarial relationships and traditional forms of seeking to
influence governmental policies. And there are lessons to be learned from other countries. In
Europe, Esprit, Eureka and Race are examples of collaborative efforts between
governmental and business Japan's MITI is world famous. (Emphasis supplied)

Following the concept of boundary spanning, the office of the Corporate Counsel comprises
a distinct group within the managerial structure of all kinds of organizations. Effectiveness of
both long-term and temporary groups within organizations has been found to be related to
indentifiable factors in the group-context interaction such as the groups actively revising their
knowledge of the environment coordinating work with outsiders, promoting team
achievements within the organization. In general, such external activities are better
predictors of team performance than internal group processes.

In a crisis situation, the legal managerial capabilities of the corporate lawyer vis-a-vis the
managerial mettle of corporations are challenged. Current research is seeking ways both to
anticipate effective managerial procedures and to understand relationships of financial
liability and insurance considerations. (Emphasis supplied)
 Regarding the skills to apply by the corporate counsel, three factors are apropos:

First System Dynamics. The field of systems dynamics has been found an effective tool for
new managerial thinking regarding both planning and pressing immediate problems. An
understanding of the role of feedback loops, inventory levels, and rates of flow, enable users
to simulate all sorts of systematic problems — physical, economic, managerial, social, and
psychological. New programming techniques now make the system dynamics principles
more accessible to managers — including corporate counsels. (Emphasis supplied)

Second Decision Analysis. This enables users to make better decisions involving complexity
and uncertainty. In the context of a law department, it can be used to appraise the settlement
value of litigation, aid in negotiation settlement, and minimize the cost and risk involved in
managing a portfolio of cases. (Emphasis supplied)

Third Modeling for Negotiation Management. Computer-based models can be used directly
by parties and mediators in all lands of negotiations. All integrated set of such tools provide
coherent and effective negotiation support, including hands-on on instruction in these
techniques. A simulation case of an international joint venture may be used to illustrate the
point.

[Be this as it may,] the organization and management of the legal function, concern three
pointed areas of consideration, thus:

Preventive Lawyering. Planning by lawyers requires special skills that comprise a major part
of the general counsel's responsibilities. They differ from those of remedial law. Preventive
lawyering is concerned with minimizing the risks of legal trouble and maximizing legal rights
for such legal entities at that time when transactional or similar facts are being considered
and made.

Managerial Jurisprudence. This is the framework within which are undertaken those activities
of the firm to which legal consequences attach. It needs to be directly supportive of this
nation's evolving economic and organizational fabric as firms change to stay competitive in a
global, interdependent environment. The practice and theory of "law" is not adequate today
to facilitate the relationships needed in trying to make a global economy work.

Organization and Functioning of the Corporate Counsel's Office. The general counsel has
emerged in the last decade as one of the most vibrant subsets of the legal profession. The
corporate counsel hear responsibility for key aspects of the firm's strategic issues, including
structuring its global operations, managing improved relationships with an increasingly
diversified body of employees, managing expanded liability exposure, creating new and
varied interactions with public decision-makers, coping internally with more complex make or
by decisions.

This whole exercise drives home the thesis that knowing corporate law is not enough to
make one a good general corporate counsel nor to give him a full sense of how the legal
system shapes corporate activities. And even if the corporate lawyer's aim is not the
understand all of the law's effects on corporate activities, he must, at the very least, also gain
a working knowledge of the management issues if only to be able to grasp not only the basic
legal "constitution' or makeup of the modem corporation. "Business Star", "The Corporate
Counsel," April 10, 1991, p. 4).

The challenge for lawyers (both of the bar and the bench) is to have more than a passing
knowledge of financial law affecting each aspect of their work. Yet, many would admit to
ignorance of vast tracts of the financial law territory. What transpires next is a dilemma of
professional security: Will the lawyer admit ignorance and risk opprobrium?; or will he feign
understanding and risk exposure? (Business Star, "Corporate Finance law," Jan. 11, 1989,
p. 4).

Respondent Christian Monsod was nominated by President Corazon C. Aquino to the position of
Chairman of the COMELEC in a letter received by the Secretariat of the Commission on
Appointments on April 25, 1991. Petitioner opposed the nomination because allegedly Monsod does
not possess the required qualification of having been engaged in the practice of law for at least ten
years.
On June 5, 1991, the Commission on Appointments confirmed the nomination of Monsod as
Chairman of the COMELEC. On June 18, 1991, he took his oath of office. On the same day, he
assumed office as Chairman of the COMELEC.

Challenging the validity of the confirmation by the Commission on Appointments of Monsod's

nomination, petitioner as a citizen and taxpayer, filed the instant petition for certiorari and Prohibition
praying that said confirmation and the consequent appointment of Monsod as Chairman of the
Commission on Elections be declared null and void.

Atty. Christian Monsod is a member of the Philippine Bar, having passed the bar examinations of
1960 with a grade of 86-55%. He has been a dues paying member of the Integrated Bar of the
Philippines since its inception in 1972-73. He has also been paying his professional license fees as
lawyer for more than ten years. (p. 124, Rollo)

After graduating from the College of Law (U.P.) and having hurdled the bar, Atty. Monsod worked in
the law office of his father. During his stint in the World Bank Group (1963-1970), Monsod worked as
an operations officer for about two years in Costa Rica and Panama, which involved getting
acquainted with the laws of member-countries negotiating loans and coordinating legal, economic,
and project work of the Bank. Upon returning to the Philippines in 1970, he worked with the Meralco
Group, served as chief executive officer of an investment bank and subsequently of a business
conglomerate, and since 1986, has rendered services to various companies as a legal and
economic consultant or chief executive officer. As former Secretary-General (1986) and National
Chairman (1987) of NAMFREL. Monsod's work involved being knowledgeable in election law. He
appeared for NAMFREL in its accreditation hearings before the Comelec. In the field of advocacy,
Monsod, in his personal capacity and as former Co-Chairman of the Bishops Businessmen's
Conference for Human Development, has worked with the under privileged sectors, such as the
farmer and urban poor groups, in initiating, lobbying for and engaging in affirmative action for the
agrarian reform law and lately the urban land reform bill. Monsod also made use of his legal
knowledge as a member of the Davide Commission, a quast judicial body, which conducted
numerous hearings (1990) and as a member of the Constitutional Commission (1986-1987), and
Chairman of its Committee on Accountability of Public Officers, for which he was cited by the
President of the Commission, Justice Cecilia Muñoz-Palma for "innumerable amendments to
reconcile government functions with individual freedoms and public accountability and the party-list
system for the House of Representative. (pp. 128-129 Rollo) ( Emphasis supplied)

Just a word about the work of a negotiating team of which Atty. Monsod used to be a member.

In a loan agreement, for instance, a negotiating panel acts as a team, and which is
adequately constituted to meet the various contingencies that arise during a negotiation.
Besides top officials of the Borrower concerned, there are the legal officer (such as the legal
counsel), the finance manager, and an operations officer (such as an official involved in
negotiating the contracts) who comprise the members of the team. (Guillermo V. Soliven,
"Loan Negotiating Strategies for Developing Country Borrowers," Staff Paper No. 2, Central
Bank of the Philippines, Manila, 1982, p. 11). (Emphasis supplied)

After a fashion, the loan agreement is like a country's Constitution; it lays down the law as far
as the loan transaction is concerned. Thus, the meat of any Loan Agreement can be
compartmentalized into five (5) fundamental parts: (1) business terms; (2) borrower's
representation; (3) conditions of closing; (4) covenants; and (5) events of default. (Ibid., p.
13).

In the same vein, lawyers play an important role in any debt restructuring program. For aside
from performing the tasks of legislative drafting and legal advising, they score national
development policies as key factors in maintaining their countries' sovereignty. (Condensed
from the work paper, entitled "Wanted: Development Lawyers for Developing Nations,"
submitted by L. Michael Hager, regional legal adviser of the United States Agency for
International Development, during the Session on Law for the Development of Nations at the
Abidjan World Conference in Ivory Coast, sponsored by the World Peace Through Law
Center on August 26-31, 1973). ( Emphasis supplied)

Loan concessions and compromises, perhaps even more so than purely renegotiation
policies, demand expertise in the law of contracts, in legislation and agreement drafting and
in renegotiation. Necessarily, a sovereign lawyer may work with an international business
specialist or an economist in the formulation of a model loan agreement. Debt restructuring
 contract agreements contain such a mixture of technical language that they should be
carefully drafted and signed only with the advise of competent counsel in conjunction with
the guidance of adequate technical support personnel. (See International Law Aspects of the
Philippine External Debts, an unpublished dissertation, U.S.T. Graduate School of Law,
1987, p. 321). ( Emphasis supplied)

A critical aspect of sovereign debt restructuring/contract construction is the set of terms and
conditions which determines the contractual remedies for a failure to perform one or more
elements of the contract. A good agreement must not only define the responsibilities of both
parties, but must also state the recourse open to either party when the other fails to
discharge an obligation. For a compleat debt restructuring represents a devotion to that
principle which in the ultimate analysis is sine qua non for foreign loan agreements-an
adherence to the rule of law in domestic and international affairs of whose kind U.S.
Supreme Court Justice Oliver Wendell Holmes, Jr. once said: "They carry no banners, they
beat no drums; but where they are, men learn that bustle and bush are not the equal of quiet
genius and serene mastery." (See Ricardo J. Romulo, "The Role of Lawyers in Foreign
Investments," Integrated Bar of the Philippine Journal, Vol. 15, Nos. 3 and 4, Third and
Fourth Quarters, 1977, p. 265).

Interpreted in the light of the various definitions of the term Practice of law". particularly the modern
concept of law practice, and taking into consideration the liberal construction intended by the framers
of the Constitution, Atty. Monsod's past work experiences as a lawyer-economist, a lawyer-manager,
a lawyer-entrepreneur of industry, a lawyer-negotiator of contracts, and a lawyer-legislator of both
the rich and the poor — verily more than satisfy the constitutional requirement — that he has been
engaged in the practice of law for at least ten years.

Besides in the leading case of Luego v. Civil Service Commission, 143 SCRA 327, the Court said:

Appointment is an essentially discretionary power and must be performed by the officer in

which it is vested according to his best lights, the only condition being that the appointee
should possess the qualifications required by law. If he does, then the appointment cannot
be faulted on the ground that there are others better qualified who should have been
preferred. This is a political question involving considerations of wisdom which only the
appointing authority can decide. (emphasis supplied)

No less emphatic was the Court in the case of (Central Bank v. Civil Service Commission, 171
SCRA 744) where it stated:

It is well-settled that when the appointee is qualified, as in this case, and all the other legal
requirements are satisfied, the Commission has no alternative but to attest to the
appointment in accordance with the Civil Service Law. The Commission has no authority to
revoke an appointment on the ground that another person is more qualified for a particular
position. It also has no authority to direct the appointment of a substitute of its choice. To do
so would be an encroachment on the discretion vested upon the appointing authority. An
appointment is essentially within the discretionary power of whomsoever it is vested, subject
to the only condition that the appointee should possess the qualifications required by law. (
Emphasis supplied)

The appointing process in a regular appointment as in the case at bar, consists of four (4) stages: (1)
nomination; (2) confirmation by the Commission on Appointments; (3) issuance of a commission (in
the Philippines, upon submission by the Commission on Appointments of its certificate of
confirmation, the President issues the permanent appointment; and (4) acceptance e.g., oath-taking,
posting of bond, etc. . . . (Lacson v. Romero, No. L-3081, October 14, 1949; Gonzales, Law on
Public Officers, p. 200)

The power of the Commission on Appointments to give its consent to the nomination of Monsod as
Chairman of the Commission on Elections is mandated by Section 1(2) Sub-Article C, Article IX of
the Constitution which provides:

The Chairman and the Commisioners shall be appointed by the President with the consent of
the Commission on Appointments for a term of seven years without reappointment. Of those
first appointed, three Members shall hold office for seven years, two Members for five years,
and the last Members for three years, without reappointment. Appointment to any vacancy
 shall be only for the unexpired term of the predecessor. In no case shall any Member be
appointed or designated in a temporary or acting capacity.

Anent Justice Teodoro Padilla's separate opinion, suffice it to say that his definition of the
practice of law is the traditional or stereotyped notion of law practice, as distinguished
from the modern concept of the practice of law, which modern connotation is exactly what
was intended by the eminent framers of the 1987 Constitution. Moreover, Justice Padilla's
definition would require generally a habitual law practice, perhaps practised two or three
times a week and would outlaw say, law practice once or twice a year for ten consecutive
years. Clearly, this is far from the constitutional intent.

Upon the other hand, the separate opinion of Justice Isagani Cruz states that in my written opinion, I
made use of a definition of law practice which really means nothing because the definition says that
law practice " . . . is what people ordinarily mean by the practice of law." True I cited the definition but
only by way of sarcasm as evident from my statement that the definition of law practice by
"traditional areas of law practice is essentially tautologous" or defining a phrase by means of the
phrase itself that is being defined.

Justice Cruz goes on to say in substance that since the law covers almost all situations, most
individuals, in making use of the law, or in advising others on what the law means, are actually
practicing law. In that sense, perhaps, but we should not lose sight of the fact that Mr. Monsod is a
lawyer, a member of the Philippine Bar, who has been practising law for over ten years. This is
different from the acts of persons practising law, without first becoming lawyers.

Justice Cruz also says that the Supreme Court can even disqualify an elected President of the
Philippines, say, on the ground that he lacks one or more qualifications. This matter, I greatly doubt.
For one thing, how can an action or petition be brought against the President? And even assuming
that he is indeed disqualified, how can the action be entertained since he is the incumbent
President?

We now proceed:

The Commission on the basis of evidence submitted doling the public hearings on Monsod's
confirmation, implicitly determined that he possessed the necessary qualifications as required by
law. The judgment rendered by the Commission in the exercise of such an acknowledged power is
beyond judicial interference except only upon a clear showing of a grave abuse of discretion
amounting to lack or excess of jurisdiction. (Art. VIII, Sec. 1 Constitution). Thus, only where such
grave abuse of discretion is clearly shown shall the Court interfere with the Commission's judgment.
In the instant case, there is no occasion for the exercise of the Court's corrective power, since no
abuse, much less a grave abuse of discretion, that would amount to lack or excess of jurisdiction
and would warrant the issuance of the writs prayed, for has been clearly shown.

Additionally, consider the following:

(1) If the Commission on Appointments rejects a nominee by the President, may the
Supreme Court reverse the Commission, and thus in effect confirm the appointment?
Clearly, the answer is in the negative.

(2) In the same vein, may the Court reject the nominee, whom the Commission
has confirmed? The answer is likewise clear.

(3) If the United States Senate (which is the confirming body in the U.S. Congress) decides
to confirm a Presidential nominee, it would be incredible that the U.S. Supreme Court would
still reverse the U.S. Senate.

Finally, one significant legal maxim is:

We must interpret not by the letter that killeth, but by the spirit that giveth life.

Take this hypothetical case of Samson and Delilah. Once, the procurator of Judea asked Delilah
(who was Samson's beloved) for help in capturing Samson. Delilah agreed on condition that —

No blade shall touch his skin;

 No blood shall flow from his veins.

When Samson (his long hair cut by Delilah) was captured, the procurator placed an iron rod burning
white-hot two or three inches away from in front of Samson's eyes. This blinded the man. Upon
hearing of what had happened to her beloved, Delilah was beside herself with anger, and fuming
with righteous fury, accused the procurator of reneging on his word. The procurator calmly replied:
"Did any blade touch his skin? Did any blood flow from his veins?" The procurator was clearly relying
on the letter, not the spirit of the agreement.

In view of the foregoing, this petition is hereby DISMISSED.

SO ORDERED.

Fernan, C.J., Griño-Aquino and Medialdea, JJ., concur.

Feliciano, J., I certify that he voted to dismiss the petition. (Fernan, C.J.)

Sarmiento, J., is on leave.

Regalado, and Davide, Jr., J., took no part.

Separate Opinions

NARVASA, J., concurring:

I concur with the decision of the majority written by Mr. Justice Paras, albeit only in the result; it does
not appear to me that there has been an adequate showing that the challenged determination by the
Commission on Appointments-that the appointment of respondent Monsod as Chairman of the
Commission on Elections should, on the basis of his stated qualifications and after due assessment
thereof, be confirmed-was attended by error so gross as to amount to grave abuse of discretion and
consequently merits nullification by this Court in accordance with the second paragraph of Section 1,
Article VIII of the Constitution. I therefore vote to DENY the petition.

PADILLA, J., dissenting:

The records of this case will show that when the Court first deliberated on the Petition at bar, I voted
not only to require the respondents to comment on the Petition, but I was the sole vote for the
issuance of a temporary restraining order to enjoin respondent Monsod from assuming the position
of COMELEC Chairman, while the Court deliberated on his constitutional qualification for the office.
My purpose in voting for a TRO was to prevent the inconvenience and even embarrassment to all
parties concerned were the Court to finally decide for respondent Monsod's disqualification.
Moreover, a reading of the Petition then in relation to established jurisprudence already
showed prima facie that respondent Monsod did not possess the needed qualification, that is, he
had not engaged in the practice of law for at least ten (10) years prior to his appointment as
COMELEC Chairman.

After considering carefully respondent Monsod's comment, I am even more convinced that the
constitutional requirement of "practice of law for at least ten (10) years" has not been met.

The procedural barriers interposed by respondents deserve scant consideration because, ultimately,
the core issue to be resolved in this petition is the proper construal of the constitutional provision
requiring a majority of the membership of COMELEC, including the Chairman thereof to "have been
engaged in the practice of law for at least ten (10) years." (Art. IX(C), Section 1(1), 1987
Constitution). Questions involving the construction of constitutional provisions are best left to judicial
resolution. As declared in Angara v. Electoral Commission, (63 Phil. 139) "upon the judicial
department is thrown the solemn and inescapable obligation of interpreting the Constitution and
defining constitutional boundaries."

The Constitution has imposed clear and specific standards for a COMELEC Chairman. Among these
are that he must have been "engaged in the practice of law for at least ten (10) years." It is the
bounden duty of this Court to ensure that such standard is met and complied with.

What constitutes practice of law? As commonly understood, "practice" refers to the actual
performance or application of knowledge as distinguished from mere possession of knowledge; it
connotes an active, habitual, repeated or customary action.1 To "practice" law, or any profession for
that matter, means, to exercise or pursue an employment or profession actively, habitually,
repeatedly or customarily.

Therefore, a doctor of medicine who is employed and is habitually performing the tasks of a nursing
aide, cannot be said to be in the "practice of medicine." A certified public accountant who works as a
clerk, cannot be said to practice his profession as an accountant. In the same way, a lawyer who is
employed as a business executive or a corporate manager, other than as head or attorney of a
Legal Department of a corporation or a governmental agency, cannot be said to be in the practice of
law.

As aptly held by this Court in the case of People vs. Villanueva:2

Practice is more than an isolated appearance for it consists in frequent or customary actions,
a succession of acts of the same kind. In other words, it is frequent habitual exercise (State
vs- Cotner, 127, p. 1, 87 Kan. 864, 42 LRA, M.S. 768). Practice of law to fall within the
prohibition of statute has been interpreted as customarily or habitually holding one's self out
to the public as a lawyer and demanding payment for such services (State vs. Bryan, 4 S.E.
522, 98 N.C. 644,647.) ... (emphasis supplied).

It is worth mentioning that the respondent Commission on Appointments in a Memorandum it

prepared, enumerated several factors determinative of whether a particular activity constitutes
"practice of law." It states:

1. Habituality. The term "practice of law" implies customarily or habitually holding one's self
out to the public as a lawyer (People vs. Villanueva, 14 SCRA 109 citing State v. Boyen, 4
S.E. 522, 98 N.C. 644) such as when one sends a circular announcing the establishment of
a law office for the general practice of law (U.S. v. Ney Bosque, 8 Phil. 146), or when one
takes the oath of office as a lawyer before a notary public, and files a manifestation with the
Supreme Court informing it of his intention to practice law in all courts in the country (People
v. De Luna, 102 Phil. 968).

Practice is more than an isolated appearance for it consists in frequent or customary action,
a succession of acts of the same kind. In other words, it is a habitual exercise (People v.
Villanueva, 14 SCRA 109 citing State v. Cotner, 127, p. 1, 87 Kan, 864).

2. Compensation. Practice of law implies that one must have presented himself to be in the
active and continued practice of the legal profession and that his professional services are
available to the public for compensation, as a service of his livelihood or in consideration of
his said services. (People v. Villanueva, supra). Hence, charging for services such as
preparation of documents involving the use of legal knowledge and skill is within the term
"practice of law" (Ernani Paño, Bar Reviewer in Legal and Judicial Ethics, 1988 ed., p. 8
citing People v. People's Stockyards State Bank, 176 N.B. 901) and, one who renders an
opinion as to the proper interpretation of a statute, and receives pay for it, is to that extent,
practicing law (Martin, supra, p. 806 citing Mendelaun v. Gilbert and Barket Mfg. Co., 290
N.Y.S. 462) If compensation is expected, all advice to clients and all action taken for them in
matters connected with the law; are practicing law. (Elwood Fitchette et al., v. Arthur C.
Taylor, 94A-L.R. 356-359)

3. Application of law legal principle practice or procedure which calls for legal knowledge,
training and experience is within the term "practice of law". (Martin supra)
 4. Attorney-client relationship. Engaging in the practice of law presupposes the existence of
lawyer-client relationship. Hence, where a lawyer undertakes an activity which requires
knowledge of law but involves no attorney-client relationship, such as teaching law or writing
law books or articles, he cannot be said to be engaged in the practice of his profession or a
lawyer (Agpalo, Legal Ethics, 1989 ed., p. 30).3

The above-enumerated factors would, I believe, be useful aids in determining whether or not
respondent Monsod meets the constitutional qualification of practice of law for at least ten (10) years
at the time of his appointment as COMELEC Chairman.

The following relevant questions may be asked:

1. Did respondent Monsod perform any of the tasks which are peculiar to the practice of law?

2. Did respondent perform such tasks customarily or habitually?

3. Assuming that he performed any of such tasks habitually, did he do so HABITUALLY FOR AT
LEAST TEN (10) YEARS prior to his appointment as COMELEC Chairman?

Given the employment or job history of respondent Monsod as appears from the records, I am
persuaded that if ever he did perform any of the tasks which constitute the practice of law, he did not
do so HABITUALLY for at least ten (10) years prior to his appointment as COMELEC Chairman.

While it may be granted that he performed tasks and activities which could be latitudinarianly
considered activities peculiar to the practice of law, like the drafting of legal documents and the
rendering of legal opinion or advice, such were isolated transactions or activities which do not qualify
his past endeavors as "practice of law." To become engaged in the practice of law, there must be
a continuity, or a succession of acts. As observed by the Solicitor General in People vs. Villanueva:4

Essentially, the word private practice of law implies that one must have presented himself to
be in the activeand continued practice of the legal profession and that his professional
services are available to the public for a compensation, as a source of his livelihood or in
consideration of his said services.

ACCORDINGLY, my vote is to GRANT the petition and to declare respondent Monsod as not
qualified for the position of COMELEC Chairman for not having engaged in the practice of law for at
least ten (10) years prior to his appointment to such position.

CRUZ, J., dissenting:

I am sincerely impressed by the ponencia of my brother Paras but find I must dissent just the same.
There are certain points on which I must differ with him while of course respecting hisviewpoint.

To begin with, I do not think we are inhibited from examining the qualifications of the respondent
simply because his nomination has been confirmed by the Commission on Appointments. In my
view, this is not a political question that we are barred from resolving. Determination of the
appointee's credentials is made on the basis of the established facts, not the discretion of that body.
Even if it were, the exercise of that discretion would still be subject to our review.

In Luego, which is cited in the ponencia, what was involved was the discretion of the appointing
authority to choosebetween two claimants to the same office who both possessed the required
qualifications. It was that kind of discretion that we said could not be reviewed.

If a person elected by no less than the sovereign people may be ousted by this Court for lack of the
required qualifications, I see no reason why we cannot disqualified an appointee simply because he
has passed the Commission on Appointments.

Even the President of the Philippines may be declared ineligible by this Court in an appropriate
proceeding notwithstanding that he has been found acceptable by no less than the enfranchised
citizenry. The reason is that what we would be examining is not the wisdom of his election but
whether or not he was qualified to be elected in the first place.
Coming now to the qualifications of the private respondent, I fear that the ponencia may have been
too sweeping in its definition of the phrase "practice of law" as to render the qualification practically
toothless. From the numerous activities accepted as embraced in the term, I have the uncomfortable
feeling that one does not even have to be a lawyer to be engaged in the practice of law as long as
his activities involve the application of some law, however peripherally. The stock broker and the
insurance adjuster and the realtor could come under the definition as they deal with or give advice
on matters that are likely "to become involved in litigation."

The lawyer is considered engaged in the practice of law even if his main occupation is another
business and he interprets and applies some law only as an incident of such business. That covers
every company organized under the Corporation Code and regulated by the SEC under P.D. 902-A.
Considering the ramifications of the modern society, there is hardly any activity that is not affected
by some law or government regulation the businessman must know about and observe. In fact,
again going by the definition, a lawyer does not even have to be part of a business concern to be
considered a practitioner. He can be so deemed when, on his own, he rents a house or buys a car or
consults a doctor as these acts involve his knowledge and application of the laws regulating such
transactions. If he operates a public utility vehicle as his main source of livelihood, he would still be
deemed engaged in the practice of law because he must obey the Public Service Act and the rules
and regulations of the Energy Regulatory Board.

The ponencia quotes an American decision defining the practice of law as the "performance of any
acts ... in or out of court, commonly understood to be the practice of law," which tells us absolutely
nothing. The decision goes on to say that "because lawyers perform almost every function known in
the commercial and governmental realm, such a definition would obviously be too global to be
workable."

The effect of the definition given in the ponencia is to consider virtually every lawyer to be engaged
in the practice of law even if he does not earn his living, or at least part of it, as a lawyer. It is enough
that his activities are incidentally (even if only remotely) connected with some law, ordinance, or
regulation. The possible exception is the lawyer whose income is derived from teaching ballroom
dancing or escorting wrinkled ladies with pubescent pretensions.

The respondent's credentials are impressive, to be sure, but they do not persuade me that he has
been engaged in the practice of law for ten years as required by the Constitution. It is conceded that
he has been engaged in business and finance, in which areas he has distinguished himself, but as
an executive and economist and not as a practicing lawyer. The plain fact is that he has occupied
the various positions listed in his resume by virtue of his experience and prestige as a businessman
and not as an attorney-at-law whose principal attention is focused on the law. Even if it be argued
that he was acting as a lawyer when he lobbied in Congress for agrarian and urban reform, served in
the NAMFREL and the Constitutional Commission (together with non-lawyers like farmers and
priests) and was a member of the Davide Commission, he has not proved that his activities in these
capacities extended over the prescribed 10-year period of actual practice of the law. He is doubtless
eminently qualified for many other positions worthy of his abundant talents but not as Chairman of
the Commission on Elections.

I have much admiration for respondent Monsod, no less than for Mr. Justice Paras, but I must
regretfully vote to grant the petition.

GUTIERREZ, JR., J., dissenting:

When this petition was filed, there was hope that engaging in the practice of law as a qualification for
public office would be settled one way or another in fairly definitive terms. Unfortunately, this was not
the result.

Of the fourteen (14) member Court, 5 are of the view that Mr. Christian Monsod engaged in the
practice of law (with one of these 5 leaving his vote behind while on official leave but not expressing
his clear stand on the matter); 4 categorically stating that he did not practice law; 2 voting in the
result because there was no error so gross as to amount to grave abuse of discretion; one of official
leave with no instructions left behind on how he viewed the issue; and 2 not taking part in the
deliberations and the decision.

There are two key factors that make our task difficult. First is our reviewing the work of a
constitutional Commission on Appointments whose duty is precisely to look into the qualifications of
persons appointed to high office. Even if the Commission errs, we have no power to set aside error.
We can look only into grave abuse of discretion or whimsically and arbitrariness. Second is our belief
that Mr. Monsod possesses superior qualifications in terms of executive ability, proficiency in
management, educational background, experience in international banking and finance, and instant
recognition by the public. His integrity and competence are not questioned by the petitioner. What is
before us is compliance with a specific requirement written into the Constitution.

Inspite of my high regard for Mr. Monsod, I cannot shirk my constitutional duty. He has never
engaged in the practice of law for even one year. He is a member of the bar but to say that he has
practiced law is stretching the term beyond rational limits.

A person may have passed the bar examinations. But if he has not dedicated his life to the law, if he
has not engaged in an activity where membership in the bar is a requirement I fail to see how he can
claim to have been engaged in the practice of law.

Engaging in the practice of law is a qualification not only for COMELEC chairman but also for
appointment to the Supreme Court and all lower courts. What kind of Judges or Justices will we
have if there main occupation is selling real estate, managing a business corporation, serving in fact-
finding committee, working in media, or operating a farm with no active involvement in the law,
whether in Government or private practice, except that in one joyful moment in the distant past, they
happened to pass the bar examinations?

The Constitution uses the phrase "engaged in the practice of law for at least ten years." The
deliberate choice of words shows that the practice envisioned is active and regular, not isolated,
occasional, accidental, intermittent, incidental, seasonal, or extemporaneous. To be "engaged" in an
activity for ten years requires committed participation in something which is the result of one's
decisive choice. It means that one is occupied and involved in the enterprise; one is obliged or
pledged to carry it out with intent and attention during the ten-year period.

I agree with the petitioner that based on the bio-data submitted by respondent Monsod to the
Commission on Appointments, the latter has not been engaged in the practice of law for at least ten
years. In fact, if appears that Mr. Monsod has never practiced law except for an alleged one year
period after passing the bar examinations when he worked in his father's law firm. Even then his law
practice must have been extremely limited because he was also working for M.A. and Ph. D.
degrees in Economics at the University of Pennsylvania during that period. How could he practice
law in the United States while not a member of the Bar there?

The professional life of the respondent follows:

1.15.1. Respondent Monsod's activities since his passing the Bar examinations in 1961
consist of the following:

1. 1961-1963: M.A. in Economics (Ph. D. candidate), University of Pennsylvania

2. 1963-1970: World Bank Group — Economist, Industry Department; Operations, Latin

American Department; Division Chief, South Asia and Middle East, International Finance
Corporation

3. 1970-1973: Meralco Group — Executive of various companies, i.e., Meralco Securities

Corporation, Philippine Petroleum Corporation, Philippine Electric Corporation

4. 1973-1976: Yujuico Group — President, Fil-Capital Development Corporation and

affiliated companies

5. 1976-1978: Finaciera Manila — Chief Executive Officer

6. 1978-1986: Guevent Group of Companies — Chief Executive Officer

7. 1986-1987: Philippine Constitutional Commission — Member

8. 1989-1991: The Fact-Finding Commission on the December 1989 Coup Attempt —

Member

9. Presently: Chairman of the Board and Chief Executive Officer of the following companies:
 a. ACE Container Philippines, Inc.

b. Dataprep, Philippines

c. Philippine SUNsystems Products, Inc.

d. Semirara Coal Corporation

e. CBL Timber Corporation

Member of the Board of the Following:

a. Engineering Construction Corporation of the Philippines

b. First Philippine Energy Corporation

c. First Philippine Holdings Corporation

d. First Philippine Industrial Corporation

e. Graphic Atelier

f. Manila Electric Company

g. Philippine Commercial Capital, Inc.

h. Philippine Electric Corporation

i. Tarlac Reforestation and Environment Enterprises

j. Tolong Aquaculture Corporation

k. Visayan Aquaculture Corporation

l. Guimaras Aquaculture Corporation (Rollo, pp. 21-22)

There is nothing in the above bio-data which even remotely indicates that respondent Monsod has
given the lawenough attention or a certain degree of commitment and participation as would support
in all sincerity and candor the claim of having engaged in its practice for at least ten years. Instead of
working as a lawyer, he has lawyers working for him. Instead of giving receiving that legal advice of
legal services, he was the oneadvice and those services as an executive but not as a lawyer.

The deliberations before the Commission on Appointments show an effort to equate "engaged in the
practice of law" with the use of legal knowledge in various fields of endeavor such as commerce,
industry, civic work, blue ribbon investigations, agrarian reform, etc. where such knowledge would be
helpful.

I regret that I cannot join in playing fast and loose with a term, which even an ordinary layman
accepts as having a familiar and customary well-defined meaning. Every resident of this country who
has reached the age of discernment has to know, follow, or apply the law at various times in his life.
Legal knowledge is useful if not necessary for the business executive, legislator, mayor, barangay
captain, teacher, policeman, farmer, fisherman, market vendor, and student to name only a few. And
yet, can these people honestly assert that as such, they are engaged in the practice of law?

The Constitution requires having been "engaged in the practice of law for at least ten years." It is not
satisfied with having been "a member of the Philippine bar for at least ten years."

Some American courts have defined the practice of law, as follows:

The practice of law involves not only appearance in court in connection with litigation but also
services rendered out of court, and it includes the giving of advice or the rendering of any
 services requiring the use of legal skill or knowledge, such as preparing a will, contract or
other instrument, the legal effect of which, under the facts and conditions involved, must be
carefully determined. People ex rel. Chicago Bar Ass'n v. Tinkoff, 399 Ill. 282, 77 N.E.2d
693; People ex rel. Illinois State Bar Ass'n v. People's Stock Yards State Bank, 344 Ill.
462,176 N.E. 901, and cases cited.

It would be difficult, if not impossible to lay down a formula or definition of what constitutes
the practice of law. "Practicing law" has been defined as "Practicing as an attorney or
counselor at law according to the laws and customs of our courts, is the giving of advice or
rendition of any sort of service by any person, firm or corporation when the giving of such
advice or rendition of such service requires the use of any degree of legal knowledge or
skill." Without adopting that definition, we referred to it as being substantially correct
in People ex rel. Illinois State Bar Ass'n v. People's Stock Yards State Bank, 344 Ill. 462,176
N.E. 901. (People v. Schafer, 87 N.E. 2d 773, 776)

For one's actions to come within the purview of practice of law they should not only be activities
peculiar to the work of a lawyer, they should also be performed, habitually, frequently or customarily,
to wit:

xxx xxx xxx

Respondent's answers to questions propounded to him were rather evasive. He was asked
whether or not he ever prepared contracts for the parties in real-estate transactions where he
was not the procuring agent. He answered: "Very seldom." In answer to the question as to
how many times he had prepared contracts for the parties during the twenty-one years of his
business, he said: "I have no Idea." When asked if it would be more than half a dozen times
his answer was I suppose. Asked if he did not recall making the statement to several parties
that he had prepared contracts in a large number of instances, he answered: "I don't recall
exactly what was said." When asked if he did not remember saying that he had made a
practice of preparing deeds, mortgages and contracts and charging a fee to the parties
therefor in instances where he was not the broker in the deal, he answered: "Well, I don't
believe so, that is not a practice." Pressed further for an answer as to his practice in
preparing contracts and deeds for parties where he was not the broker, he finally answered:
"I have done about everything that is on the books as far as real estate is concerned."

xxx xxx xxx

Respondent takes the position that because he is a real-estate broker he has a lawful right to
do any legal work in connection with real-estate transactions, especially in drawing of real-
estate contracts, deeds, mortgages, notes and the like. There is no doubt but that he has
engaged in these practices over the years and has charged for his services in that
connection. ... (People v. Schafer, 87 N.E. 2d 773)

xxx xxx xxx

... An attorney, in the most general sense, is a person designated or employed by another to
act in his stead; an agent; more especially, one of a class of persons authorized to appear
and act for suitors or defendants in legal proceedings. Strictly, these professional persons
are attorneys at law, and non-professional agents are properly styled "attorney's in fact;" but
the single word is much used as meaning an attorney at law. A person may be an attorney in
facto for another, without being an attorney at law. Abb. Law Dict. "Attorney." A public
attorney, or attorney at law, says Webster, is an officer of a court of law, legally qualified to
prosecute and defend actions in such court on the retainer of clients. "The principal duties of
an attorney are (1) to be true to the court and to his client; (2) to manage the business of his
client with care, skill, and integrity; (3) to keep his client informed as to the state of his
business; (4) to keep his secrets confided to him as such. ... His rights are to be justly
compensated for his services." Bouv. Law Dict. tit. "Attorney." The transitive verb "practice,"
as defined by Webster, means 'to do or perform frequently, customarily, or habitually; to
perform by a succession of acts, as, to practice gaming, ... to carry on in practice, or
repeated action; to apply, as a theory, to real life; to exercise, as a profession, trade, art. etc.;
as, to practice law or medicine,' etc...." (State v. Bryan, S.E. 522, 523; Emphasis supplied)

In this jurisdiction, we have ruled that the practice of law denotes frequency or a succession of acts.
Thus, we stated in the case of People v. Villanueva (14 SCRA 109 [1965]):
 xxx xxx xxx

... Practice is more than an isolated appearance, for it consists in frequent or customary actions, a
succession of acts of the same kind. In other words, it is frequent habitual exercise (State v. Cotner,
127, p. 1, 87 Kan. 864, 42 LRA, M.S. 768). Practice of law to fall within the prohibition of statute has
been interpreted as customarily or habitually holding one's self out to the public, as a lawyer and
demanding payment for such services. ... . (at p. 112)

It is to be noted that the Commission on Appointment itself recognizes habituality as a required

component of the meaning of practice of law in a Memorandum prepared and issued by it, to wit:

l. Habituality. The term 'practice of law' implies customarilyor habitually holding one's self out
to the public as a lawyer (People v. Villanueva, 14 SCRA 109 citing State v. Bryan, 4 S.E.
522, 98 N.C. 644) such as when one sends a circular announcing the establishment of a law
office for the general practice of law (U.S. v. Noy Bosque, 8 Phil. 146), or when one takes the
oath of office as a lawyer before a notary public, and files a manifestation with the Supreme
Court informing it of his intention to practice law in all courts in the country (People v. De
Luna, 102 Phil. 968).

Practice is more than an isolated appearance, for it consists in frequent or customary action,
a succession of acts of the same kind. In other words, it is a habitual exercise (People v.
Villanueva, 14 SCRA 1 09 citing State v. Cotner, 1 27, p. 1, 87 Kan, 864)." (Rollo, p. 115)

xxx xxx xxx

While the career as a businessman of respondent Monsod may have profited from his legal
knowledge, the use of such legal knowledge is incidental and consists of isolated activities which do
not fall under the denomination of practice of law. Admission to the practice of law was not required
for membership in the Constitutional Commission or in the Fact-Finding Commission on the 1989
Coup Attempt. Any specific legal activities which may have been assigned to Mr. Monsod while a
member may be likened to isolated transactions of foreign corporations in the Philippines which do
not categorize the foreign corporations as doing business in the Philippines. As in the practice of
law, doing business also should be active and continuous. Isolated business transactions or
occasional, incidental and casual transactions are not within the context of doing business. This was
our ruling in the case of Antam Consolidated, Inc. v. Court of appeals, 143 SCRA 288 [1986]).

Respondent Monsod, corporate executive, civic leader, and member of the Constitutional
Commission may possess the background, competence, integrity, and dedication, to qualify for such
high offices as President, Vice-President, Senator, Congressman or Governor but the Constitution in
prescribing the specific qualification of having engaged in the practice of law for at least ten (10)
years for the position of COMELEC Chairman has ordered that he may not be confirmed for that
office. The Constitution charges the public respondents no less than this Court to obey its mandate.

I, therefore, believe that the Commission on Appointments committed grave abuse of discretion in
confirming the nomination of respondent Monsod as Chairman of the COMELEC.

I vote to GRANT the petition.

Bidin, J., dissent

Separate Opinions

NARVASA, J., concurring:

I concur with the decision of the majority written by Mr. Justice Paras, albeit only in the result; it does
not appear to me that there has been an adequate showing that the challenged determination by the
Commission on Appointments-that the appointment of respondent Monsod as Chairman of the
Commission on Elections should, on the basis of his stated qualifications and after due assessment
thereof, be confirmed-was attended by error so gross as to amount to grave abuse of discretion and
consequently merits nullification by this Court in accordance with the second paragraph of Section 1,
Article VIII of the Constitution. I therefore vote to DENY the petition.
Melencio-Herrera, J., concur.

PADILLA, J., dissenting:

The records of this case will show that when the Court first deliberated on the Petition at bar, I voted
not only to require the respondents to comment on the Petition, but I was the sole vote for the
issuance of a temporary restraining order to enjoin respondent Monsod from assuming the position
of COMELEC Chairman, while the Court deliberated on his constitutional qualification for the office.
My purpose in voting for a TRO was to prevent the inconvenience and even embarrassment to all
parties concerned were the Court to finally decide for respondent Monsod's disqualification.
Moreover, a reading of the Petition then in relation to established jurisprudence already
showed prima facie that respondent Monsod did not possess the needed qualification, that is, he
had not engaged in the practice of law for at least ten (10) years prior to his appointment as
COMELEC Chairman.

After considering carefully respondent Monsod's comment, I am even more convinced that the
constitutional requirement of "practice of law for at least ten (10) years" has not been met.

The procedural barriers interposed by respondents deserve scant consideration because, ultimately,
the core issue to be resolved in this petition is the proper construal of the constitutional provision
requiring a majority of the membership of COMELEC, including the Chairman thereof to "have been
engaged in the practice of law for at least ten (10) years." (Art. IX(C), Section 1(1), 1987
Constitution). Questions involving the construction of constitutional provisions are best left to judicial
resolution. As declared in Angara v. Electoral Commission, (63 Phil. 139) "upon the judicial
department is thrown the solemn and inescapable obligation of interpreting the Constitution and
defining constitutional boundaries."

The Constitution has imposed clear and specific standards for a COMELEC Chairman. Among these
are that he must have been "engaged in the practice of law for at least ten (10) years." It is the
bounden duty of this Court to ensure that such standard is met and complied with.

What constitutes practice of law? As commonly understood, "practice" refers to the actual
performance or application of knowledge as distinguished from mere possession of knowledge; it
connotes an active, habitual, repeated or customary action.1 To "practice" law, or any profession for
that matter, means, to exercise or pursue an employment or profession actively, habitually,
repeatedly or customarily.

Therefore, a doctor of medicine who is employed and is habitually performing the tasks of a nursing
aide, cannot be said to be in the "practice of medicine." A certified public accountant who works as a
clerk, cannot be said to practice his profession as an accountant. In the same way, a lawyer who is
employed as a business executive or a corporate manager, other than as head or attorney of a
Legal Department of a corporation or a governmental agency, cannot be said to be in the practice of
law.

As aptly held by this Court in the case of People vs. Villanueva:2

Practice is more than an isolated appearance for it consists in frequent or customary actions,
a succession of acts of the same kind. In other words, it is frequent habitual exercise (State
vs- Cotner, 127, p. 1, 87 Kan. 864, 42 LRA, M.S. 768). Practice of law to fall within the
prohibition of statute has been interpreted as customarily or habitually holding one's self out
to the public as a lawyer and demanding payment for such services (State vs. Bryan, 4 S.E.
522, 98 N.C. 644,647.) ... (emphasis supplied).

It is worth mentioning that the respondent Commission on Appointments in a Memorandum it

prepared, enumerated several factors determinative of whether a particular activity constitutes
"practice of law." It states:

1. Habituality. The term "practice of law" implies customarily or habitually holding one's self
out to the public as a lawyer (People vs. Villanueva, 14 SCRA 109 citing State v. Boyen, 4
S.E. 522, 98 N.C. 644) such as when one sends a circular announcing the establishment of
a law office for the general practice of law (U.S. v. Ney Bosque, 8 Phil. 146), or when one
takes the oath of office as a lawyer before a notary public, and files a manifestation with the
 Supreme Court informing it of his intention to practice law in all courts in the country (People
v. De Luna, 102 Phil. 968).

Practice is more than an isolated appearance for it consists in frequent or customary action,
a succession of acts of the same kind. In other words, it is a habitual exercise (People v.
Villanueva, 14 SCRA 109 citing State v. Cotner, 127, p. 1, 87 Kan, 864).

2. Compensation. Practice of law implies that one must have presented himself to be in the
active and continued practice of the legal profession and that his professional services are
available to the public for compensation, as a service of his livelihood or in consideration of
his said services. (People v. Villanueva, supra). Hence, charging for services such as
preparation of documents involving the use of legal knowledge and skill is within the term
"practice of law" (Ernani Paño, Bar Reviewer in Legal and Judicial Ethics, 1988 ed., p. 8
citing People v. People's Stockyards State Bank, 176 N.B. 901) and, one who renders an
opinion as to the proper interpretation of a statute, and receives pay for it, is to that extent,
practicing law (Martin, supra, p. 806 citing Mendelaun v. Gilbert and Barket Mfg. Co., 290
N.Y.S. 462) If compensation is expected, all advice to clients and all action taken for them in
matters connected with the law; are practicing law. (Elwood Fitchette et al., v. Arthur C.
Taylor, 94A-L.R. 356-359)

3. Application of law legal principle practice or procedure which calls for legal knowledge,
training and experience is within the term "practice of law". (Martin supra)

4. Attorney-client relationship. Engaging in the practice of law presupposes the existence of

lawyer-client relationship. Hence, where a lawyer undertakes an activity which requires
knowledge of law but involves no attorney-client relationship, such as teaching law or writing
law books or articles, he cannot be said to be engaged in the practice of his profession or a
lawyer (Agpalo, Legal Ethics, 1989 ed., p. 30).3

The above-enumerated factors would, I believe, be useful aids in determining whether or not
respondent Monsod meets the constitutional qualification of practice of law for at least ten (10) years
at the time of his appointment as COMELEC Chairman.

The following relevant questions may be asked:

1. Did respondent Monsod perform any of the tasks which are peculiar to the practice of law?

2. Did respondent perform such tasks customarily or habitually?

3. Assuming that he performed any of such tasks habitually, did he do so HABITUALLY FOR AT
LEAST TEN (10) YEARS prior to his appointment as COMELEC Chairman?

Given the employment or job history of respondent Monsod as appears from the records, I am
persuaded that if ever he did perform any of the tasks which constitute the practice of law, he did not
do so HABITUALLY for at least ten (10) years prior to his appointment as COMELEC Chairman.

While it may be granted that he performed tasks and activities which could be latitudinarianly
considered activities peculiar to the practice of law, like the drafting of legal documents and the
rendering of legal opinion or advice, such were isolated transactions or activities which do not qualify
his past endeavors as "practice of law." To become engaged in the practice of law, there must be
a continuity, or a succession of acts. As observed by the Solicitor General in People vs. Villanueva:4

Essentially, the word private practice of law implies that one must have presented himself to
be in the activeand continued practice of the legal profession and that his professional
services are available to the public for a compensation, as a source of his livelihood or in
consideration of his said services.

ACCORDINGLY, my vote is to GRANT the petition and to declare respondent Monsod as not
qualified for the position of COMELEC Chairman for not having engaged in the practice of law for at
least ten (10) years prior to his appointment to such position.

CRUZ, J., dissenting:

I am sincerely impressed by the ponencia of my brother Paras but find I must dissent just the same.
There are certain points on which I must differ with him while of course respecting hisviewpoint.

To begin with, I do not think we are inhibited from examining the qualifications of the respondent
simply because his nomination has been confirmed by the Commission on Appointments. In my
view, this is not a political question that we are barred from resolving. Determination of the
appointee's credentials is made on the basis of the established facts, not the discretion of that body.
Even if it were, the exercise of that discretion would still be subject to our review.

In Luego, which is cited in the ponencia, what was involved was the discretion of the appointing
authority to choosebetween two claimants to the same office who both possessed the required
qualifications. It was that kind of discretion that we said could not be reviewed.

If a person elected by no less than the sovereign people may be ousted by this Court for lack of the
required qualifications, I see no reason why we cannot disqualified an appointee simply because he
has passed the Commission on Appointments.

Even the President of the Philippines may be declared ineligible by this Court in an appropriate
proceeding notwithstanding that he has been found acceptable by no less than the enfranchised
citizenry. The reason is that what we would be examining is not the wisdom of his election but
whether or not he was qualified to be elected in the first place.

Coming now to the qualifications of the private respondent, I fear that the ponencia may have been
too sweeping in its definition of the phrase "practice of law" as to render the qualification practically
toothless. From the numerous activities accepted as embraced in the term, I have the uncomfortable
feeling that one does not even have to be a lawyer to be engaged in the practice of law as long as
his activities involve the application of some law, however peripherally. The stock broker and the
insurance adjuster and the realtor could come under the definition as they deal with or give advice
on matters that are likely "to become involved in litigation."

The lawyer is considered engaged in the practice of law even if his main occupation is another
business and he interprets and applies some law only as an incident of such business. That covers
every company organized under the Corporation Code and regulated by the SEC under P.D. 902-A.
Considering the ramifications of the modern society, there is hardly any activity that is not affected
by some law or government regulation the businessman must know about and observe. In fact,
again going by the definition, a lawyer does not even have to be part of a business concern to be
considered a practitioner. He can be so deemed when, on his own, he rents a house or buys a car or
consults a doctor as these acts involve his knowledge and application of the laws regulating such
transactions. If he operates a public utility vehicle as his main source of livelihood, he would still be
deemed engaged in the practice of law because he must obey the Public Service Act and the rules
and regulations of the Energy Regulatory Board.

The ponencia quotes an American decision defining the practice of law as the "performance of any
acts . . . in or out of court, commonly understood to be the practice of law," which tells us absolutely
nothing. The decision goes on to say that "because lawyers perform almost every function known in
the commercial and governmental realm, such a definition would obviously be too global to be
workable."

The effect of the definition given in the ponencia is to consider virtually every lawyer to be engaged
in the practice of law even if he does not earn his living, or at least part of it, as a lawyer. It is enough
that his activities are incidentally (even if only remotely) connected with some law, ordinance, or
regulation. The possible exception is the lawyer whose income is derived from teaching ballroom
dancing or escorting wrinkled ladies with pubescent pretensions.

The respondent's credentials are impressive, to be sure, but they do not persuade me that he has
been engaged in the practice of law for ten years as required by the Constitution. It is conceded that
he has been engaged in business and finance, in which areas he has distinguished himself, but as
an executive and economist and not as a practicing lawyer. The plain fact is that he has occupied
the various positions listed in his resume by virtue of his experience and prestige as a businessman
and not as an attorney-at-law whose principal attention is focused on the law. Even if it be argued
that he was acting as a lawyer when he lobbied in Congress for agrarian and urban reform, served in
the NAMFREL and the Constitutional Commission (together with non-lawyers like farmers and
priests) and was a member of the Davide Commission, he has not proved that his activities in these
capacities extended over the prescribed 10-year period of actual practice of the law. He is doubtless
eminently qualified for many other positions worthy of his abundant talents but not as Chairman of
the Commission on Elections.

I have much admiration for respondent Monsod, no less than for Mr. Justice Paras, but I must
regretfully vote to grant the petition.

GUTIERREZ, JR., J., dissenting:

When this petition was filed, there was hope that engaging in the practice of law as a qualification for
public office would be settled one way or another in fairly definitive terms. Unfortunately, this was not
the result.

Of the fourteen (14) member Court, 5 are of the view that Mr. Christian Monsod engaged in the
practice of law (with one of these 5 leaving his vote behind while on official leave but not expressing
his clear stand on the matter); 4 categorically stating that he did not practice law; 2 voting in the
result because there was no error so gross as to amount to grave abuse of discretion; one of official
leave with no instructions left behind on how he viewed the issue; and 2 not taking part in the
deliberations and the decision.

There are two key factors that make our task difficult. First is our reviewing the work of a
constitutional Commission on Appointments whose duty is precisely to look into the qualifications of
persons appointed to high office. Even if the Commission errs, we have no power to set aside error.
We can look only into grave abuse of discretion or whimsically and arbitrariness. Second is our belief
that Mr. Monsod possesses superior qualifications in terms of executive ability, proficiency in
management, educational background, experience in international banking and finance, and instant
recognition by the public. His integrity and competence are not questioned by the petitioner. What is
before us is compliance with a specific requirement written into the Constitution.

Inspite of my high regard for Mr. Monsod, I cannot shirk my constitutional duty. He has never
engaged in the practice of law for even one year. He is a member of the bar but to say that he has
practiced law is stretching the term beyond rational limits.

A person may have passed the bar examinations. But if he has not dedicated his life to the law, if he
has not engaged in an activity where membership in the bar is a requirement I fail to see how he can
claim to have been engaged in the practice of law.

Engaging in the practice of law is a qualification not only for COMELEC chairman but also for
appointment to the Supreme Court and all lower courts. What kind of Judges or Justices will we
have if there main occupation is selling real estate, managing a business corporation, serving in fact-
finding committee, working in media, or operating a farm with no active involvement in the law,
whether in Government or private practice, except that in one joyful moment in the distant past, they
happened to pass the bar examinations?

The Constitution uses the phrase "engaged in the practice of law for at least ten years." The
deliberate choice of words shows that the practice envisioned is active and regular, not isolated,
occasional, accidental, intermittent, incidental, seasonal, or extemporaneous. To be "engaged" in an
activity for ten years requires committed participation in something which is the result of one's
decisive choice. It means that one is occupied and involved in the enterprise; one is obliged or
pledged to carry it out with intent and attention during the ten-year period.

I agree with the petitioner that based on the bio-data submitted by respondent Monsod to the
Commission on Appointments, the latter has not been engaged in the practice of law for at least ten
years. In fact, if appears that Mr. Monsod has never practiced law except for an alleged one year
period after passing the bar examinations when he worked in his father's law firm. Even then his law
practice must have been extremely limited because he was also working for M.A. and Ph. D.
degrees in Economics at the University of Pennsylvania during that period. How could he practice
law in the United States while not a member of the Bar there?

The professional life of the respondent follows:

1.15.1. Respondent Monsod's activities since his passing the Bar examinations in 1961
consist of the following:
 1. 1961-1963: M.A. in Economics (Ph. D. candidate), University of Pennsylvania

2. 1963-1970: World Bank Group — Economist, Industry Department; Operations, Latin

American Department; Division Chief, South Asia and Middle East, International Finance
Corporation

3. 1970-1973: Meralco Group — Executive of various companies, i.e., Meralco Securities

Corporation, Philippine Petroleum Corporation, Philippine Electric Corporation

4. 1973-1976: Yujuico Group — President, Fil-Capital Development Corporation and

affiliated companies

5. 1976-1978: Finaciera Manila — Chief Executive Officer

6. 1978-1986: Guevent Group of Companies — Chief Executive Officer

7. 1986-1987: Philippine Constitutional Commission — Member

8. 1989-1991: The Fact-Finding Commission on the December 1989 Coup Attempt —

Member

9. Presently: Chairman of the Board and Chief Executive Officer of the following companies:

a. ACE Container Philippines, Inc.

b. Dataprep, Philippines

c. Philippine SUNsystems Products, Inc.

d. Semirara Coal Corporation

e. CBL Timber Corporation

Member of the Board of the Following:

a. Engineering Construction Corporation of the Philippines

b. First Philippine Energy Corporation

c. First Philippine Holdings Corporation

d. First Philippine Industrial Corporation

e. Graphic Atelier

f. Manila Electric Company

g. Philippine Commercial Capital, Inc.

h. Philippine Electric Corporation

i. Tarlac Reforestation and Environment Enterprises

j. Tolong Aquaculture Corporation

k. Visayan Aquaculture Corporation

l. Guimaras Aquaculture Corporation (Rollo, pp. 21-22)

There is nothing in the above bio-data which even remotely indicates that respondent Monsod has
given the lawenough attention or a certain degree of commitment and participation as would support
in all sincerity and candor the claim of having engaged in its practice for at least ten years. Instead of
working as a lawyer, he has lawyers working for him. Instead of giving receiving that legal advice of
legal services, he was the oneadvice and those services as an executive but not as a lawyer.

The deliberations before the Commission on Appointments show an effort to equate "engaged in the
practice of law" with the use of legal knowledge in various fields of endeavor such as commerce,
industry, civic work, blue ribbon investigations, agrarian reform, etc. where such knowledge would be
helpful.

I regret that I cannot join in playing fast and loose with a term, which even an ordinary layman
accepts as having a familiar and customary well-defined meaning. Every resident of this country who
has reached the age of discernment has to know, follow, or apply the law at various times in his life.
Legal knowledge is useful if not necessary for the business executive, legislator, mayor, barangay
captain, teacher, policeman, farmer, fisherman, market vendor, and student to name only a few. And
yet, can these people honestly assert that as such, they are engaged in the practice of law?

The Constitution requires having been "engaged in the practice of law for at least ten years." It is not
satisfied with having been "a member of the Philippine bar for at least ten years."

Some American courts have defined the practice of law, as follows:

The practice of law involves not only appearance in court in connection with litigation but also
services rendered out of court, and it includes the giving of advice or the rendering of any
services requiring the use of legal skill or knowledge, such as preparing a will, contract or
other instrument, the legal effect of which, under the facts and conditions involved, must be
carefully determined. People ex rel. Chicago Bar Ass'n v. Tinkoff, 399 Ill. 282, 77 N.E.2d
693; People ex rel. Illinois State Bar Ass'n v. People's Stock Yards State Bank, 344 Ill.
462,176 N.E. 901, and cases cited.

It would be difficult, if not impossible to lay down a formula or definition of what constitutes
the practice of law. "Practicing law" has been defined as "Practicing as an attorney or
counselor at law according to the laws and customs of our courts, is the giving of advice or
rendition of any sort of service by any person, firm or corporation when the giving of such
advice or rendition of such service requires the use of any degree of legal knowledge or
skill." Without adopting that definition, we referred to it as being substantially correct
in People ex rel. Illinois State Bar Ass'n v. People's Stock Yards State Bank, 344 Ill. 462,176
N.E. 901. (People v. Schafer, 87 N.E. 2d 773, 776)

For one's actions to come within the purview of practice of law they should not only be activities
peculiar to the work of a lawyer, they should also be performed, habitually, frequently or customarily,
to wit:

xxx xxx xxx

Respondent's answers to questions propounded to him were rather evasive. He was asked
whether or not he ever prepared contracts for the parties in real-estate transactions where he
was not the procuring agent. He answered: "Very seldom." In answer to the question as to
how many times he had prepared contracts for the parties during the twenty-one years of his
business, he said: "I have no Idea." When asked if it would be more than half a dozen times
his answer was I suppose. Asked if he did not recall making the statement to several parties
that he had prepared contracts in a large number of instances, he answered: "I don't recall
exactly what was said." When asked if he did not remember saying that he had made a
practice of preparing deeds, mortgages and contracts and charging a fee to the parties
therefor in instances where he was not the broker in the deal, he answered: "Well, I don't
believe so, that is not a practice." Pressed further for an answer as to his practice in
preparing contracts and deeds for parties where he was not the broker, he finally answered:
"I have done about everything that is on the books as far as real estate is concerned."

xxx xxx xxx

Respondent takes the position that because he is a real-estate broker he has a lawful right to
do any legal work in connection with real-estate transactions, especially in drawing of real-
estate contracts, deeds, mortgages, notes and the like. There is no doubt but that he has
 engaged in these practices over the years and has charged for his services in that
connection. ... (People v. Schafer, 87 N.E. 2d 773)

xxx xxx xxx

... An attorney, in the most general sense, is a person designated or employed by another to
act in his stead; an agent; more especially, one of a class of persons authorized to appear
and act for suitors or defendants in legal proceedings. Strictly, these professional persons
are attorneys at law, and non-professional agents are properly styled "attorney's in fact;" but
the single word is much used as meaning an attorney at law. A person may be an attorney in
facto for another, without being an attorney at law. Abb. Law Dict. "Attorney." A public
attorney, or attorney at law, says Webster, is an officer of a court of law, legally qualified to
prosecute and defend actions in such court on the retainer of clients. "The principal duties of
an attorney are (1) to be true to the court and to his client; (2) to manage the business of his
client with care, skill, and integrity; (3) to keep his client informed as to the state of his
business; (4) to keep his secrets confided to him as such. ... His rights are to be justly
compensated for his services." Bouv. Law Dict. tit. "Attorney." The transitive verb "practice,"
as defined by Webster, means 'to do or perform frequently, customarily, or habitually; to
perform by a succession of acts, as, to practice gaming, ... to carry on in practice, or
repeated action; to apply, as a theory, to real life; to exercise, as a profession, trade, art. etc.;
as, to practice law or medicine,' etc...." (State v. Bryan, S.E. 522, 523; Emphasis supplied)

In this jurisdiction, we have ruled that the practice of law denotes frequency or a succession of acts.
Thus, we stated in the case of People v. Villanueva (14 SCRA 109 [1965]):

xxx xxx xxx

... Practice is more than an isolated appearance, for it consists in frequent or customary actions, a
succession of acts of the same kind. In other words, it is frequent habitual exercise (State v. Cotner,
127, p. 1, 87 Kan. 864, 42 LRA, M.S. 768). Practice of law to fall within the prohibition of statute has
been interpreted as customarily or habitually holding one's self out to the public, as a lawyer and
demanding payment for such services. ... . (at p. 112)

It is to be noted that the Commission on Appointment itself recognizes habituality as a required

component of the meaning of practice of law in a Memorandum prepared and issued by it, to wit:

l. Habituality. The term 'practice of law' implies customarilyor habitually holding one's self out
to the public as a lawyer (People v. Villanueva, 14 SCRA 109 citing State v. Bryan, 4 S.E.
522, 98 N.C. 644) such as when one sends a circular announcing the establishment of a law
office for the general practice of law (U.S. v. Noy Bosque, 8 Phil. 146), or when one takes the
oath of office as a lawyer before a notary public, and files a manifestation with the Supreme
Court informing it of his intention to practice law in all courts in the country (People v. De
Luna, 102 Phil. 968).

Practice is more than an isolated appearance, for it consists in frequent or customary action,
a succession of acts of the same kind. In other words, it is a habitual exercise (People v.
Villanueva, 14 SCRA 1 09 citing State v. Cotner, 1 27, p. 1, 87 Kan, 864)." (Rollo, p. 115)

xxx xxx xxx

While the career as a businessman of respondent Monsod may have profited from his legal
knowledge, the use of such legal knowledge is incidental and consists of isolated activities which do
not fall under the denomination of practice of law. Admission to the practice of law was not required
for membership in the Constitutional Commission or in the Fact-Finding Commission on the 1989
Coup Attempt. Any specific legal activities which may have been assigned to Mr. Monsod while a
member may be likened to isolated transactions of foreign corporations in the Philippines which do
not categorize the foreign corporations as doing business in the Philippines. As in the practice of
law, doing business also should be active and continuous. Isolated business transactions or
occasional, incidental and casual transactions are not within the context of doing business. This was
our ruling in the case of Antam Consolidated, Inc. v. Court of appeals, 143 SCRA 288 [1986]).

Respondent Monsod, corporate executive, civic leader, and member of the Constitutional
Commission may possess the background, competence, integrity, and dedication, to qualify for such
high offices as President, Vice-President, Senator, Congressman or Governor but the Constitution in
prescribing the specific qualification of having engaged in the practice of law for at least ten (10)
years for the position of COMELEC Chairman has ordered that he may not be confirmed for that
office. The Constitution charges the public respondents no less than this Court to obey its mandate.

I, therefore, believe that the Commission on Appointments committed grave abuse of discretion in
confirming the nomination of respondent Monsod as Chairman of the COMELEC.

I vote to GRANT the petition.

Bidin, J., dissent

Footnotes

1 Webster's 3rd New International Dictionary.

2 14 SCRA 109

3 Commission on Appointments' Memorandum dated 25 June 1991 RE: WHAT

CONSTITUTES PRACTICE OF LAW, pp. 6-7.

4 14 SCRA 109.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

B.M. No. 44 February 24, 1992

EUFROSINA Y. TAN, complainant,

vs.
NICOLAS EL. SABANDAL, respondent.

SBC No. 609 February 24, 1992

MOISES B. BOQUIA, complainant,

vs.
NICOLAS EL. SABANDAL, respondent.

SBC No. 616 February 24, 1992

HERVE DAGPIN, complainant,

vs.
NICOLAS EL. SABANDAL, respondent.

Nelbert T. Paculan for respondent.

Moises B. Boquia for himself and Herve Dagpin.

RESOLUTION

MELENCIO-HERRERA, J.:
On 29 November 1983, * this Court sustained the charge of unauthorized practice of law filed
against respondent Sabandal and accordingly denied the latter's petition to be allowed to take the
oath as member of the Philippine Bar and to sign the Roll of Attorneys.

From 1984-1988, Sabandal filed Motions for Reconsideration of the aforesaid Resolution, all of
which were either denied or "Noted without action." The Court, however, on 10 February 1989, after
considering his plea for mercy and forgiveness, his willingness to reform and the several testimonials
attesting to his good moral character and civic consciousness, reconsidered its earlier Resolution
and finally allowed him to take the lawyer's oath "with the Court binding him to his assurance that he
shall strictly abide by and adhere to the language, meaning and spirit of the Lawyer's Oath and the
highest standards of the legal profession" (Yap Tan v. Sabandal, 10 February 1989, 170 SCRA 211).

However, before a date could be set for Sabandal's oath-taking, complainants Tan, Dagpin and
Boquia each filed separate motions for reconsideration of the Resolution of 10 February 1989.
These were acted upon in the Resolution of 4 July 1989 hereunder quoted, in part, for ready
reference:

On 7 April 1989, Complainant Herve Dagpin in SBC No. 616, and Complainant
Moises Boquia in SBC No. 609 also filed a Motion for Reconsideration of our
Resolution allowing respondent to take his oath. They alleged that respondent had
deliberately and maliciously excluded them in his Petition of 28 June 1988. That, of
course, is without merit considering that in his Petition of 28 June 1988, respondent
had discussed said cases quite lengthily.

On 27 April 1989, Complainant Tan also manifested that Complainant Benjamin

Cabigon in BM No. 59 and Complainant Cornelio Agnis in SBC No. 624, had passed
away so that they are in no position to submit their respective Comments.

One of the considerations we had taken into account in allowing respondent to take
his oath, was a testimonial from the IBP Zamboanga del Norte Chapter, dated 29
December 1986, certifying that respondent was "acting with morality and has been
careful in his actuations in the community."

Complainant Tan maintains that said IBP testimonial was signed only by the then
President of the IBP, Zamboanga del Norte Chapter, Atty. Senen O. Angeles, without
authorization from the Board of Officers of said Chapter; and that Atty. Angeles was
respondent's own counsel as well as the lawyer of respondent's parents-in-law in
CAR Case No. 347, Ozamiz City. Attached to Complainant's Motion for
Reconsideration was a Certification, dated 24 February 1989, signed by the IBP
Zamboanga del Norte Chapter President, Atty. Norberto L. Nuevas, stating that "the
present Board of Officers with the undersigned as President had not issued any
testimonial attesting to the good moral character and civic consciousness of Mr.
Nicolas Sabandal."

In his Comment, received by the Court on 27 March 1989, respondent states that the
IBP testimonial referred to by Complainant Tan must have been that signed by the
former IBP Zamboanga del Norte Chapter President, Atty. Senen O. Angeles,
addressed to the Chief Justice, dated 29 December 1986, and that he himself had
not submitted to the Court any certification from the IBP Zamboanga del Norte
Chapter Board of Officers of 1988-1989.

Under the circumstances, the Court has deemed it best to require the present Board
of Officers of the IBP, Zamboanga del Norte Chapter, to MANIFEST whether or not it
is willing to give a testimonial certifying to respondent's good moral character as to
entitle him to take the lawyer's oath, and if not, the reason therefor. The Executive
Judge of the Regional Trial Court of Zamboanga del Norte is likewise required to
submit a COMMENT on respondent's moral fitness to be a member of the Bar.

Compliance herewith is required within ten (10) days from notice.

Pursuant to the aforesaid Resolution, Judge Pelagio R. Lachica, Executive Judge of the Regional
Trial Court of Zamboanga del Norte, filed his Comment, dated 4 August 1989, and received on 25
August 1989, pertinently reading:
 The undersigned, who is not well acquainted personally with the respondent, is not
aware of any acts committed by him as would disqualify him from admission to the
Bar. It might be relevant to mention, however, that there is Civil Case No. 3747
entitled Republic of the Philippines, Represented by the Director of Lands, Plaintiff,
versus Nicolas Sabandal, Register of Deeds of Zamboanga del Norte and Rural
Bank of Pinan, (Zamboanga del Norte), Inc., for Cancellation of Title and/or
Reversion pending in this Court in which said respondent, per complaint filed by the
Office of the Solicitor General, is alleged to have secured a free patent and later a
certificate of title to a parcel of land which, upon investigation, turned out to be a
swampland and not susceptible of acquisition under a free patent, and which he later
mortgaged to the Rural Bank of Pinan (ZN) Inc. The mortgage was later foreclosed
and the land sold at public auction and respondent has not redeemed the land until
the present. (Emphasis Supplied)

The IBP Zamboanga del Norte Chapter also submitted a Certification, dated 2 February 1990,
signed by its Secretary Peter Y. Co and attested to by its President Gil L. Batula, to wit:

This is to certify that based on the certifications issued by the Office of the Clerk of
Court—Municipal Trial Court in the City of Dipolog; Regional Trial Court of
Zamboanga del Norte and the Office of the Provincial and City Prosecutors, Mr.
Nicolas E. Sabandal has not been convicted of any crime, nor is there any pending
derogatory criminal case against him. Based on the above findings, the Board does
not find any acts committed by the petitioner to disqualify him from admission to the
Philippine Bar.

We required the complainants to comment on the aforesaid IBP Certification and to reply to
Executive Judge Pelagio Lachica's comment in our Resolution of 15 February 1990.

On 17 April 1990, after taking note of the unrelenting vehement objections of complainants Tan (in
BM 44) and Boquia (in SBC 616) and the Certification by Executive Judge Lachica, dated 4 August
1989, that there is a pending case before his Court involving respondent Sabandal, this Court
resolved to DEFER the setting of a date for the oath-taking of respondent Sabandal and required
Judge Lachica to inform this Court of the outcome of the case entitled Republic v. Sabandal, (Civil
Case 3747), pending before his "Sala" as soon as resolved.

In the meantime, on 18 April 1990, the Court received another Comment, dated 13 March 1990, by
complainant Herve Dagpin in SBC 609, vehemently objecting to the oath-taking of respondent
Sabandal and describing his actuations in Civil Case 3747 as manipulative and surreptitious. This
comment was Noted in the Resolution of 22 May 1990.

In a letter, addressed to the Chief Justice, dated 15 August 1990, complainant Tan in Bar Matter 44,
informed the Court that her relationship with Sabandal has "already been restored," as he had asked
forgiveness for what has been done to her and that she finds no necessity in pursuing her case
against him. Complainant Tan further stated that she sees no further reason to oppose his
admission to the Bar as he had shown sincere repentance and reformation which she believes make
him morally fit to become a member of the Philippine Bar. "In view of this development," the letter
stated, "we highly recommend him for admission to the legal profession and request this Honorable
Court to schedule his oath-taking at a time most convenient." This letter was Noted in the Resolution
of 2 October 1990, which also required a comment on Tan's letter from complainants Boquia and
Dagpin.

Moises Boquia, for himself, and complainant Dagpin, in their comment, dated 5 November 1990,
stated thus:

Eufrosina Yap Tan's letter dated 15 August 1990 is a private personal disposition
which raises the question whether personal forgiveness is enough basis to exculpate
and obliterate these cases. On our part, we believe and maintain the importance and
finality of the Honorable Supreme Court's resolutions in these cases. . . .

It is not within the personal competence, jurisdiction and discretion of any party to
change or amend said final resolutions which are already res judicata. Viewed in the
light of the foregoing final and executory resolutions, these cases therefore should
not in the least be considered as anything which is subject and subservient to the
 changing moods and dispositions of the parties, devoid of any permanency or finality.
Respondent's scheming change in tactics and strategy could not improve his case.

The above was "Noted" in the Resolution of 29 November 1990.

In compliance with the Resolution of 2 October 1990, Judge Pacifico M. Garcia, Regional Trial Court
Judge of Branch 8, Dipolog City (who apparently succeeded Judge Pelagio Lachica, the latter
having availed of optional retirement on 30 June 1990) submitted to this Court, on 17 December
1990, a copy of the "Judgment," dated 12 December 1990, in Civil Case 3747, entitled "Republic of
the Philippines v. Nicolas Sabandal et al" for Cancellation of Title and/or Reversion, which, according
to him, was already considered closed and terminated.

Said judgment reveals that an amicable settlement, dated 24 October 1990, had been reached
between the principal parties, approved by the Trial Court, and conformed to by the counsel for
defendant Rural Bank of Pinan.

Briefly, the said amicable settlement cancelled the Original Certificate of Title under Free Patent in
Sabandal's name and the latter's mortgage thereof in favor of the Rural Bank of Pinan; provided for
the surrender of the certificate of title to the Register of Deeds for proper annotation; reverted to the
mass of public domain the land covered by the aforesaid Certificate of' Title with defendant Sabandal
refraining from exercising acts of possession or ownership over said land; caused the defendant
Sabandal to pay defendant Rural Bank of Pinan the sum of P35,000 for the loan and interest; and
the Rural Bank of Pinan to waive its cross-claims against defendant Nicolas Sabandal.

Judge Pacifico Garcia's letter and the afore-mentioned Judgment were NOTED in our Resolution of
29 January 1991. In the same Resolution, complainants Tan, Boquia and Dagpin were required to
comment on the same.

Upon request of Sabandal, a certification, dated 20 December 1990, was sent by Executive judge
Jesus Angeles of the RTC of Zamboanga del Norte, certifying that Sabandal has no pending case
with his Court and that he has no cause to object to his admission to the Philippine Bar. This was
"Noted" in the Resolution of 26 February 1991.

Meanwhile, Sabandal reiterated his prayer to be allowed to take the lawyer's oath in a Motion dated
8 June 1991. In our Resolution of 1 August 1991, we deferred action on the aforesaid Motion
pending compliance by the complainants with the Resolution of 29 January 1991 requiring them to
comment on the letter of Judge Pacifico M. Garcia.

To date, only complainant Tan has complied with the said Resolution by submitting a Comment,
dated 29 August 1991, stating that the termination of Civil Case No. 3747 is "proof of Sabandal's
sincere reformation, of his repentance with restitution of the rights of complainants he violated," and
that "there is no more reason to oppose his admission to the Bar." This was "Noted" in the
Resolution of 24 September 1991.

In a Manifestation, dated 6 December 1991, Sabandal reiterates his plea to be allowed to take the
Lawyer's Oath.

His plea must be DENIED.

In our Resolution of 10 February 1989, Sabandal was allowed to take the oath, ten (10) years having
elapsed from the time he took and passed the 1976 Bar examinations, after careful consideration of
his show of contrition and willingness to reform. Also taken cognizance of were the several
testimonials attesting to his good moral character and civic consciousness. At that time, we had not
received the objections from complainant Tan to Sabandal's taking the oath nor were we aware of
the gravity of the civil case against him.

It turns out that Civil Case No. 3747 entitled "Republic of the Philippines v. Nicolas Sabandal" was
instituted by the Government in 1985 and was brought about because of respondent's procurement
of a certificate of free patent over a parcel of land belonging to the public domain and its use as
security for a mortgage in order to obtain a loan. At that time, Sabandal was an employee of the
Bureau of Lands. He did not submit any defense and was declared it default by order of the RTC
dated 26 November 1986. The controversy was eventually settled by mere compromise with
respondent surrendering the bogus certificate of title to the government and paying-off the
mortgagor, "to buy peace and forestall further expenses of litigation incurred by defendants" (Rollo,
Judgment in Civil Case No. 3747). The Office of the Solicitor General interposed no objection to the
approval of the said amicable settlement and prayed that judgment be rendered in accordance
therewith, "as the amicable settlement may amount to a confession by the defendant" (Rollo, supra).
It must also be stressed that in 1985, at the time said case was instituted, Sabandal's petition to take
the lawyer's oath had already been denied on 29 November 1983 and he was then submitting to this
Court motions for reconsideration alleging his good moral character without, however, mentioning
the pendency of that civil case against him.

In view of the nature of that case and the circumstances attending its termination, the Court now
entertains second thoughts about respondent's fitness to become a member of the Bar.

It should be recalled that Sabandal worked as Land Investigator at the Bureau of Lands. Said
employment facilitated his procurement of the free patent title over property which he could not but
have known was public land. This was manipulative on his part and does not speak well of his moral
character. It is a manifestation of gross dishonesty while in the public service, which can not be
erased by the termination of the case filed by the Republic against him where no determination of his
guilt or innocence was made because the suit had been compromised. Although as the Solicitor
General had pointed out, the amicable settlement was tantamount to a confession on his part. What
is more, he could not but have known of the intrinsic invalidity of his title and yet he took advantage
of it by securing a bank loan, mortgaging it as collateral, and notwithstanding the foreclosure of the
mortgage and the sale of the land at public auction, he did not lift a finger to redeem the same until
the civil case filed against him was eventually compromised. This is a sad reflection on his sense of
honor and fair dealing. His failure to reveal to this Court the pendency of the civil case for Reversion
filed against him during the period that he was submitting several Motions for Reconsideration
before us also reveal his lack of candor and truthfulness.

There are testimonials attesting to his good moral character, yes. But these were confined to lack of
knowledge of the pendency of any criminal case against him and were obviously made without
awareness of the facts and circumstances surrounding the case instituted by the Government
against him. Those testimonials can not, therefore, outweigh nor smother his acts of dishonesty and
lack of good moral character.

That the other complainants, namely, Moises Boquia (in SBC 606) and Herve Dagpin (in SBC 619)
have not submitted any opposition to his motion to take the oath, is of no moment. They have
already expressed their objections in their earlier comments. That complainant Tan has withdrawn
her objection to his taking the oath can neither tilt the balance in his favor, the basis of her complaint
treating as it does of another subject matter.

Time and again, it has been held that the practice of law is not a matter of right. It is a privilege
bestowed upon individuals who are not only learned in the law but who are also known to possess
good moral character:

The Supreme Court and the Philippine Bar have always tried to maintain a high
standard for the legal profession, both in academic preparation and legal training as
well as in honesty and fair dealing. The Court and the licensed lawyers themselves
are vitally interested in keeping this high standard; and one of the ways of achieving
this end is to admit to the practice of this noble profession only those persons who
are known to be honest and to possess good moral character. . . . (In re Parazo, 82
Phil. 230).

Although the term "good moral character" admits of broad dimensions, it has been defined as
"including at least common honesty" (Royong v. Oblena, Adm. Case No. 376, April 30, 1963, 7
SCRA 859; In re Del Rosario, 52 Phil. 399 [1928]). It has also been held that no moral qualification
for bar membership is more important than truthfulness or candor (Fellner v. Bar Association of
Baltimore City, 131 A. 2d 729).

WHEREFORE, finding respondent Sabandal to be unfit to become a member of the BAR, this
Court's Resolution, dated 10 February 1989 is RECALLED and his prayer to be allowed to take the
lawyer's oath is hereby denied.

SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea,
Regalado, Davide, Jr., Romero and Nocon, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 88866 February 18, 1991

METROPOLITAN BANK & TRUST COMPANY, petitioner,

vs.
COURT OF APPEALS, GOLDEN SAVINGS & LOAN ASSOCIATION, INC., LUCIA CASTILLO,
MAGNO CASTILLO and GLORIA CASTILLO, respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioner.

Bengzon, Zarraga, Narciso, Cudala, Pecson & Bengson for Magno and Lucia Castillo.
Agapito S. Fajardo and Jaime M. Cabiles for respondent Golden Savings & Loan Association, Inc.

CRUZ, J.:

This case, for all its seeming complexity, turns on a simple question of negligence. The facts, pruned
of all non-essentials, are easily told.

The Metropolitan Bank and Trust Co. is a commercial bank with branches throughout the Philippines
and even abroad. Golden Savings and Loan Association was, at the time these events happened,
operating in Calapan, Mindoro, with the other private respondents as its principal officers.

In January 1979, a certain Eduardo Gomez opened an account with Golden Savings and deposited
over a period of two months 38 treasury warrants with a total value of P1,755,228.37. They were all
drawn by the Philippine Fish Marketing Authority and purportedly signed by its General Manager and
countersigned by its Auditor. Six of these were directly payable to Gomez while the others appeared
to have been indorsed by their respective payees, followed by Gomez as second indorser.1

On various dates between June 25 and July 16, 1979, all these warrants were subsequently
indorsed by Gloria Castillo as Cashier of Golden Savings and deposited to its Savings Account No.
2498 in the Metrobank branch in Calapan, Mindoro. They were then sent for clearing by the branch
office to the principal office of Metrobank, which forwarded them to the Bureau of Treasury for
special clearing.2

More than two weeks after the deposits, Gloria Castillo went to the Calapan branch several times to
ask whether the warrants had been cleared. She was told to wait. Accordingly, Gomez was
meanwhile not allowed to withdraw from his account. Later, however, "exasperated" over Gloria's
repeated inquiries and also as an accommodation for a "valued client," the petitioner says it finally
decided to allow Golden Savings to withdraw from the proceeds of the
warrants.3

The first withdrawal was made on July 9, 1979, in the amount of P508,000.00, the second on July
13, 1979, in the amount of P310,000.00, and the third on July 16, 1979, in the amount of
P150,000.00. The total withdrawal was P968.000.00.4

In turn, Golden Savings subsequently allowed Gomez to make withdrawals from his own account,
eventually collecting the total amount of P1,167,500.00 from the proceeds of the apparently cleared
warrants. The last withdrawal was made on July 16, 1979.
On July 21, 1979, Metrobank informed Golden Savings that 32 of the warrants had been dishonored
by the Bureau of Treasury on July 19, 1979, and demanded the refund by Golden Savings of the
amount it had previously withdrawn, to make up the deficit in its account.

The demand was rejected. Metrobank then sued Golden Savings in the Regional Trial Court of
Mindoro.5 After trial, judgment was rendered in favor of Golden Savings, which, however, filed a
motion for reconsideration even as Metrobank filed its notice of appeal. On November 4, 1986, the
lower court modified its decision thus:

ACCORDINGLY, judgment is hereby rendered:

1. Dismissing the complaint with costs against the plaintiff;

2. Dissolving and lifting the writ of attachment of the properties of defendant Golden Savings
and Loan Association, Inc. and defendant Spouses Magno Castillo and Lucia Castillo;

3. Directing the plaintiff to reverse its action of debiting Savings Account No. 2498 of the sum
of P1,754,089.00 and to reinstate and credit to such account such amount existing before
the debit was made including the amount of P812,033.37 in favor of defendant Golden
Savings and Loan Association, Inc. and thereafter, to allow defendant Golden Savings and
Loan Association, Inc. to withdraw the amount outstanding thereon before the debit;

4. Ordering the plaintiff to pay the defendant Golden Savings and Loan Association, Inc.
attorney's fees and expenses of litigation in the amount of P200,000.00.

5. Ordering the plaintiff to pay the defendant Spouses Magno Castillo and Lucia Castillo
attorney's fees and expenses of litigation in the amount of P100,000.00.

SO ORDERED.

On appeal to the respondent court,6 the decision was affirmed, prompting Metrobank to file this
petition for review on the following grounds:

1. Respondent Court of Appeals erred in disregarding and failing to apply the clear
contractual terms and conditions on the deposit slips allowing Metrobank to charge back any
amount erroneously credited.

(a) Metrobank's right to charge back is not limited to instances where the checks or
treasury warrants are forged or unauthorized.

(b) Until such time as Metrobank is actually paid, its obligation is that of a mere
collecting agent which cannot be held liable for its failure to collect on the warrants.

2. Under the lower court's decision, affirmed by respondent Court of Appeals, Metrobank is
made to pay for warrants already dishonored, thereby perpetuating the fraud committed by
Eduardo Gomez.

3. Respondent Court of Appeals erred in not finding that as between Metrobank and Golden
Savings, the latter should bear the loss.

4. Respondent Court of Appeals erred in holding that the treasury warrants involved in this
case are not negotiable instruments.

The petition has no merit.

From the above undisputed facts, it would appear to the Court that Metrobank was indeed negligent
in giving Golden Savings the impression that the treasury warrants had been cleared and that,
consequently, it was safe to allow Gomez to withdraw the proceeds thereof from his account with it.
Without such assurance, Golden Savings would not have allowed the withdrawals; with such
assurance, there was no reason not to allow the withdrawal. Indeed, Golden Savings might even
have incurred liability for its refusal to return the money that to all appearances belonged to the
depositor, who could therefore withdraw it any time and for any reason he saw fit.
It was, in fact, to secure the clearance of the treasury warrants that Golden Savings deposited them
to its account with Metrobank. Golden Savings had no clearing facilities of its own. It relied on
Metrobank to determine the validity of the warrants through its own services. The proceeds of the
warrants were withheld from Gomez until Metrobank allowed Golden Savings itself to withdraw them
from its own deposit.7 It was only when Metrobank gave the go-signal that Gomez was finally allowed
by Golden Savings to withdraw them from his own account.

The argument of Metrobank that Golden Savings should have exercised more care in checking the
personal circumstances of Gomez before accepting his deposit does not hold water. It was Gomez
who was entrusting the warrants, not Golden Savings that was extending him a loan; and moreover,
the treasury warrants were subject to clearing, pending which the depositor could not withdraw its
proceeds. There was no question of Gomez's identity or of the genuineness of his signature as
checked by Golden Savings. In fact, the treasury warrants were dishonored allegedly because of the
forgery of the signatures of the drawers, not of Gomez as payee or indorser. Under the
circumstances, it is clear that Golden Savings acted with due care and diligence and cannot be
faulted for the withdrawals it allowed Gomez to make.

By contrast, Metrobank exhibited extraordinary carelessness. The amount involved was not trifling
— more than one and a half million pesos (and this was 1979). There was no reason why it should
not have waited until the treasury warrants had been cleared; it would not have lost a single centavo
by waiting. Yet, despite the lack of such clearance — and notwithstanding that it had not received a
single centavo from the proceeds of the treasury warrants, as it now repeatedly stresses — it
allowed Golden Savings to withdraw — not once, not twice, but thrice — from the uncleared treasury
warrants in the total amount of P968,000.00

Its reason? It was "exasperated" over the persistent inquiries of Gloria Castillo about the clearance
and it also wanted to "accommodate" a valued client. It "presumed" that the warrants had been
cleared simply because of "the lapse of one week."8 For a bank with its long experience, this
explanation is unbelievably naive.

And now, to gloss over its carelessness, Metrobank would invoke the conditions printed on the
dorsal side of the deposit slips through which the treasury warrants were deposited by Golden
Savings with its Calapan branch. The conditions read as follows:

Kindly note that in receiving items on deposit, the bank obligates itself only as the depositor's
collecting agent, assuming no responsibility beyond care in selecting correspondents, and
until such time as actual payment shall have come into possession of this bank, the right is
reserved to charge back to the depositor's account any amount previously credited, whether
or not such item is returned. This also applies to checks drawn on local banks and bankers
and their branches as well as on this bank, which are unpaid due to insufficiency of funds,
forgery, unauthorized overdraft or any other reason. (Emphasis supplied.)

According to Metrobank, the said conditions clearly show that it was acting only as a collecting agent
for Golden Savings and give it the right to "charge back to the depositor's account any amount
previously credited, whether or not such item is returned. This also applies to checks ". . . which are
unpaid due to insufficiency of funds, forgery, unauthorized overdraft of any other reason." It is
claimed that the said conditions are in the nature of contractual stipulations and became binding on
Golden Savings when Gloria Castillo, as its Cashier, signed the deposit slips.

Doubt may be expressed about the binding force of the conditions, considering that they have
apparently been imposed by the bank unilaterally, without the consent of the depositor. Indeed, it
could be argued that the depositor, in signing the deposit slip, does so only to identify himself and
not to agree to the conditions set forth in the given permit at the back of the deposit slip. We do not
have to rule on this matter at this time. At any rate, the Court feels that even if the deposit slip were
considered a contract, the petitioner could still not validly disclaim responsibility thereunder in the
light of the circumstances of this case.

In stressing that it was acting only as a collecting agent for Golden Savings, Metrobank seems to be
suggesting that as a mere agent it cannot be liable to the principal. This is not exactly true. On the
contrary, Article 1909 of the Civil Code clearly provides that —

Art. 1909. — The agent is responsible not only for fraud, but also for negligence, which shall
be judged 'with more or less rigor by the courts, according to whether the agency was or was
not for a compensation.
The negligence of Metrobank has been sufficiently established. To repeat for emphasis, it was the
clearance given by it that assured Golden Savings it was already safe to allow Gomez to withdraw
the proceeds of the treasury warrants he had deposited Metrobank misled Golden Savings. There
may have been no express clearance, as Metrobank insists (although this is refuted by Golden
Savings) but in any case that clearance could be implied from its allowing Golden Savings to
withdraw from its account not only once or even twice but three times. The total withdrawal was in
excess of its original balance before the treasury warrants were deposited, which only added to its
belief that the treasury warrants had indeed been cleared.

Metrobank's argument that it may recover the disputed amount if the warrants are not paid for any
reason is not acceptable. Any reason does not mean no reason at all. Otherwise, there would have
been no need at all for Golden Savings to deposit the treasury warrants with it for clearance. There
would have been no need for it to wait until the warrants had been cleared before paying the
proceeds thereof to Gomez. Such a condition, if interpreted in the way the petitioner suggests, is not
binding for being arbitrary and unconscionable. And it becomes more so in the case at bar when it is
considered that the supposed dishonor of the warrants was not communicated to Golden Savings
before it made its own payment to Gomez.

The belated notification aggravated the petitioner's earlier negligence in giving express or at least
implied clearance to the treasury warrants and allowing payments therefrom to Golden Savings. But
that is not all. On top of this, the supposed reason for the dishonor, to wit, the forgery of the
signatures of the general manager and the auditor of the drawer corporation, has not been
established.9 This was the finding of the lower courts which we see no reason to disturb. And as we
said in MWSS v. Court of Appeals:10

Forgery cannot be presumed (Siasat, et al. v. IAC, et al., 139 SCRA 238). It must be
established by clear, positive and convincing evidence. This was not done in the present
case.

A no less important consideration is the circumstance that the treasury warrants in question are not
negotiable instruments. Clearly stamped on their face is the word "non-negotiable." Moreover, and
this is of equal significance, it is indicated that they are payable from a particular fund, to wit, Fund
501.

The following sections of the Negotiable Instruments Law, especially the underscored parts, are
pertinent:

Sec. 1. — Form of negotiable instruments. — An instrument to be negotiable must conform

to the following requirements:

(a) It must be in writing and signed by the maker or drawer;

(b) Must contain an unconditional promise or order to pay a sum certain in money;

(c) Must be payable on demand, or at a fixed or determinable future time;

(d) Must be payable to order or to bearer; and

(e) Where the instrument is addressed to a drawee, he must be named or otherwise

indicated therein with reasonable certainty.

xxx xxx xxx

Sec. 3. When promise is unconditional. — An unqualified order or promise to pay is

unconditional within the meaning of this Act though coupled with —

(a) An indication of a particular fund out of which reimbursement is to be made or a particular

account to be debited with the amount; or

(b) A statement of the transaction which gives rise to the instrument judgment.

But an order or promise to pay out of a particular fund is not unconditional.

The indication of Fund 501 as the source of the payment to be made on the treasury warrants
makes the order or promise to pay "not unconditional" and the warrants themselves non-negotiable.
There should be no question that the exception on Section 3 of the Negotiable Instruments Law is
applicable in the case at bar. This conclusion conforms to Abubakar vs. Auditor General11 where the
Court held:

The petitioner argues that he is a holder in good faith and for value of a negotiable
instrument and is entitled to the rights and privileges of a holder in due course, free from
defenses. But this treasury warrant is not within the scope of the negotiable instrument law.
For one thing, the document bearing on its face the words "payable from the appropriation
for food administration, is actually an Order for payment out of "a particular fund," and is not
unconditional and does not fulfill one of the essential requirements of a negotiable instrument
(Sec. 3 last sentence and section [1(b)] of the Negotiable Instruments Law).

Metrobank cannot contend that by indorsing the warrants in general, Golden Savings assumed that
they were "genuine and in all respects what they purport to be," in accordance with Section 66 of the
Negotiable Instruments Law. The simple reason is that this law is not applicable to the non-
negotiable treasury warrants. The indorsement was made by Gloria Castillo not for the purpose of
guaranteeing the genuineness of the warrants but merely to deposit them with Metrobank for
clearing. It was in fact Metrobank that made the guarantee when it stamped on the back of the
warrants: "All prior indorsement and/or lack of endorsements guaranteed, Metropolitan Bank & Trust
Co., Calapan Branch."

The petitioner lays heavy stress on Jai Alai Corporation v. Bank of the Philippine Islands,12 but we
feel this case is inapplicable to the present controversy. That case involved checks whereas this
1âw phi 1

case involves treasury warrants. Golden Savings never represented that the warrants were
negotiable but signed them only for the purpose of depositing them for clearance. Also, the fact of
forgery was proved in that case but not in the case before us. Finally, the Court found the Jai Alai
Corporation negligent in accepting the checks without question from one Antonio Ramirez
notwithstanding that the payee was the Inter-Island Gas Services, Inc. and it did not appear that he
was authorized to indorse it. No similar negligence can be imputed to Golden Savings.

We find the challenged decision to be basically correct. However, we will have to amend it insofar as
it directs the petitioner to credit Golden Savings with the full amount of the treasury checks deposited
to its account.

The total value of the 32 treasury warrants dishonored was P1,754,089.00, from which Gomez was
allowed to withdraw P1,167,500.00 before Golden Savings was notified of the dishonor. The amount
he has withdrawn must be charged not to Golden Savings but to Metrobank, which must bear the
consequences of its own negligence. But the balance of P586,589.00 should be debited to Golden
Savings, as obviously Gomez can no longer be permitted to withdraw this amount from his deposit
because of the dishonor of the warrants. Gomez has in fact disappeared. To also credit the balance
to Golden Savings would unduly enrich it at the expense of Metrobank, let alone the fact that it has
already been informed of the dishonor of the treasury warrants.

WHEREFORE, the challenged decision is AFFIRMED, with the modification that Paragraph 3 of the
dispositive portion of the judgment of the lower court shall be reworded as follows:

3. Debiting Savings Account No. 2498 in the sum of P586,589.00 only and thereafter
allowing defendant Golden Savings & Loan Association, Inc. to withdraw the amount
outstanding thereon, if any, after the debit.

SO ORDERED.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
G.R. No. L-18463 October 4, 1922

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,

vs.
GREGORIO PERFECTOR, defendant-appellant.

Alfonso E. Mendoza and the appellant in behalf of the latter.

Attorney-General Villa-Real for appellee.

MALCOLM, J.:

The important question is here squarely presented of whether article 256 of the Spanish Penal
Code, punishing "Any person who, by . . . writing, shall defame, abuse, or insult any Minister of the
Crown or other person in authority . . .," is still in force.

About August 20, 1920, the Secretary of the Philippine Senate, Fernando M. Guerrero, discovered
that certain documents which constituted the records of testimony given by witnesses in the
investigation of oil companies, had disappeared from his office. Shortly thereafter, the Philippine
Senate, having been called into special session by the Governor-General, the Secretary for the
Senate informed that body of the loss of the documents and of the steps taken by him to discover
the guilty party. The day following the convening of the Senate, September 7, 1920, the
newspaper La Nacion, edited by Mr. Gregorio Perfecto, published an article reading as follows:

Half a month has elapsed since the discovery, for the first time, of the scandalous robbery of
records which were kept and preserved in the iron safe of the Senate, yet up to this time
there is not the slightest indication that the author or authors of the crime will ever be
discovered.

To find them, it would not, perhaps, be necessary to go out of the Sente itself, and the
persons in charge of the investigation of the case would not have to display great skill in
order to succeed in their undertaking, unless they should encounter the insuperable obstacle
of offical concealment.

In that case, every investigation to be made would be but a mere comedy and nothing more.

After all, the perpetration of the robbery, especially under the circumstances that have
surrounded it, does not surprise us at all.

The execution of the crime was but the natural effect of the environment of the place in which
it was committed.

How many of the present Senators can say without remorse in their conscience and with
serenity of mind, that they do not owe their victory to electoral robbery? How may?

The author or authors of the robbery of the records from the said iron safe of the Senate
have, perhaps, but followed the example of certain Senators who secured their election
through fraud and robbery.

The Philippine Senate, in its session of September 9, 1920, adopted a resolution authorizing its
committee on elections and privileges to report as to the action which should be taken with reference
to the article published in La Nacion. On September 15, 1920, the Senate adopted a resolution
authorizing the President of the Senate to indorse to the Attorney-General, for his study and
corresponding action, all the papers referring to the case of the newspaper La Nacion and its editor,
Mr. Gregorio Perfecto. As a result, an information was filed in the municipal court of the City of
Manila by an assistant city fiscal, in which the editorial in question was set out and in which it was
alleged that the same constituted a violation of article 256 of the Penal Code. The defendant
Gregorio Perfecto was found guilty in the municipal court and again in the Court of First Instance of
Manila.
During the course of the trial in the Court of First Instance, after the prosecution had rested, the
defense moved for the dismissal of the case. On the subject of whether or not article 256 of the
Penal Code, under which the information was presented, is in force, the trial judge, the Honorable
George R. Harvey, said:

This antiquated provision was doubtless incorporated into the Penal Code of Spain for the
protection of the Ministers of the Crown and other representatives of the King against free
speech and action by Spanish subjects. A severe punishment was prescribed because it was
doubtless considered a much more serious offense to insult the King's representative than to
insult an ordinary individual. This provision, with almost all the other articles of that Code,
was extended to the Philippine Islands when under the dominion of Spain because the
King's subject in the Philippines might defame, abuse or insult the Ministers of the Crown or
other representatives of His Majesty. We now have no Ministers of the Crown or other
persons in authority in the Philippines representing the King of Spain, and said provision,
with other articles of the Penal Code, had apparently passed into "innocuous desuetude," but
the Supreme Corut of the Philippine Islands has, by a majority decision, held that said article
256 is the law of the land to-day. . . .

The Helbig case is a precedent which, by the rule of stare decisis, is binding upon this court
until otherwise determined by proper authority.

In the decision rendered by the same judge, he concluded with the following language:

In the United States such publications are usually not punishable as criminal offense, and
little importance is attached to them, because they are generally the result of political
controversy and are usually regarded as more or less colored or exaggerated. Attacks of this
character upon a legislative body are not punishable, under the Libel Law. Although such
publications are reprehensible, yet this court feels some aversion to the application of the
provision of law under which this case was filed. Our Penal Code has come to us from the
Spanish regime. Article 256 of that Code prescribes punishment for persons who use
insulting language about Ministers of the Crown or other "authority." The King of Spain
doubtless left the need of such protection to his ministers and others in authority in the
Philippines as well as in Spain. Hence, the article referred to was made applicable here.
Notwithstanding the change of sovereignty, our Supreme Court, in a majority decision, has
held that this provision is still in force, and that one who made an insulting remark about the
President of the United States was punishable under it. (U.S. vs. Helbig, supra.) If it
applicable in that case, it would appear to be applicable in this case. Hence, said article 256
must be enforced, without fear or favor, until it shall be repealed or superseded by other
legislation, or until the Supreme Court shall otherwise determine.

In view of the foregoing considerations, the court finds the defendant guilty as charged in the
information and under article 256 of their Penal Code sentences him to suffer two months
and one day of arresto mayor and the accessory penalties prescribed by law, and to pay the
costs of both instances.

The fifteen errors assigned by the defendant and appellant, reenforced by an extensive brief, and
eloquent oral argument made in his own behalf and by his learned counsel, all reduce themselves to
the pertinent and decisive question which was announced in the beginning of this decision.

It will be noted in the first place that the trial judge considered himself bound to follow the rule
announced in the case of United States vs. Helbig (R. G. No. 14705, 1 not published). In that case,
the accused was charged with having said, "To hell with the President and his proclamations, or
words to that effect," in violation of article 256 of the Penal Code. He was found guilty in a judgment
rendered by the Court of First Instance of Manila and again on appeal to the Supreme Court, with
the writer of the instant decision dissenting on two principal grounds: (1) That the accused was
deprived of the constitutional right of cross-examination, and (2) that article 256 of the Spanish Penal
Code is no longer in force. Subsequently, on a motion of reconsideration, the court, being of the
opinion that the Court of First Instance had committed a prejudicial error in depriving the accused of
his right to cross-examine a principal witness, set aside the judgment affirming the judgment
appealed from and ordered the return of the record to the court of origin for the celebration of a new
trial. Whether such a trial was actually had, is not known, but at least, the record in the Helbig case
has never again been elevated to this court.
There may perchance exist some doubt as to the authority of the decision in the Helbig case, in view
of the circumstances above described. This much, however, is certain: The facts of the Helbig case
and the case before us, which we may term the Perfecto case, are different, for in the first case there
was an oral defamation, while in the second there is a written defamation. Not only this, but a new
point which, under the facts, could not have been considered in the Helbig case, is, in the Perfecto
case, urged upon the court. And, finally, as is apparent to all, the appellate court is not restrained, as
was the trial court, by strict adherence to a former decision. We much prefer to resolve the question
before us unhindered by references to the Helbig decision.

This is one of those cases on which a variety of opinions all leading to the same result can be had. A
majority of the court are of the opinion that the Philippine Libel Law, Act No. 277, has had the effect
of repealing so much of article 256 of the Penal Code as relates to written defamation, abuse, or
insult, and that under the information and the facts, the defendant is neither guilty of a violation of
article 256 of the Penal Code, nor of the Libel Law. The view of the Chief Justice is that the accused
should be acquitted for the reason that the facts alleged in the information do not constitute a
violation of article 156 of the Penal Code. Three members of the court believe that article 256 was
abrogated completely by the change from Spanish to American sovereignty over the Philippines and
is inconsistent with democratic principles of government.

Without prejudice to the right of any member of the court to explain his position, we will discuss the
two main points just mentioned.

1. Effect of the Philippine Libel Law, Act No. 277, on article 256 of the Spanish Penal Code.
— The Libel Law, Act No. 277, was enacted by the Philippine Commission shortly after
organization of this legislative body. Section 1 defines libel as a "malicious defamation,
expressed either in writing, printing, or by signs or pictures, or the like, or public theatrical
exhibitions, tending to blacken the memory of one who is dead or to impeach the honesty,
virtue, or reputation, or publish the alleged or natural deffects of one who is alive, and
thereby expose him to public hatred, contempt or ridicule." Section 13 provides that "All laws
and parts of laws now in force, so far as the same may be in conflict herewith, are hereby
repealed. . . ."

That parts of laws in force in 1901 when the Libel Law took effect, were in conflict therewith, and that
the Libel Law abrogated certain portion of the Spanish Penal Code, cannot be gainsaid. Title X of
Book II of the Penal Code, covering the subjects of calumny and insults, must have been particularly
affected by the Libel Law. Indeed, in the early case of Pardo de Tavera vs. Garcia Valdez ([1902], 1.
Phil., 468), the Supreme Court spoke of the Libel Law as "reforming the preexisting Spanish law on
the subject of calumnia and injuria." Recently, specific attention was given to the effect of the Libel
Law on the provisions of the Penal Code, dealing with calumny and insults, and it was found that
those provisions of the Penal Code on the subject of calumny and insults in which the elements of
writing an publicity entered, were abrogated by the Libel Law. (People vs. Castro [1922], p.
842, ante.)

The Libel Law must have had the same result on other provisions of the Penal Code, as for instance
article 256.

The facts here are that the editor of a newspaper published an article, naturally in writing, which may
have had the tendency to impeach the honesty, virtue, or reputation of members of the Philippine
Senate, thereby possibly exposing them to public hatred, contempt, or ridicule, which is exactly libel,
as defined by the Libel Law. Sir J. F. Stephen is authority for the statement that a libel is indictable
when defaming a "body of persons definite and small enough for individual members to be
recognized as such, in or by means of anything capable of being a libel." (Digest of Criminal Law,
art. 267.) But in the United States, while it may be proper to prosecute criminally the author of a libel
charging a legislator with corruption, criticisms, no matter how severe, on a legislature, are within the
range of the liberty of the press, unless the intention and effect be seditious. (3 Wharton's Criminal
Law, p. 2131.) With these facts and legal principles in mind, recall that article 256 begins: Any
person who, by . . . writing, shall defame, abuse, or insult any Minister of the Crown or other person
in authority," etc.

The Libel Law is a complete and comprehensive law on the subject of libel. The well-known rule of
statutory construction is, that where the later statute clearly covers the old subject-matter of
antecedent acts, and it plainly appears to have been the purpose of the legislature to give
expression in it to the whole law on the subject, previous laws are held to be repealed by necessary
implication. (1 Lewis' Sutherland Statutory Construction, p. 465.) For identical reasons, it is evident
that Act No. 277 had the effect so much of this article as punishes defamation, abuse, or insults by
writing.

Act No. 292 of the Philippine Commission, the Treason and Sedition Law, may also have affected
article 256, but as to this point, it is not necessary to make a pronouncement.

2. Effect of the change from Spanish to Amercian sevoreignty over the Philippine son article
256 of the Spanish Penal Code. — Appellant's main proposition in the lower court and again
energetically pressed in the appellate court was that article 256 of the Spanish Penal Code is
not now in force because abrogated by the change from Spanish to American sovereignty
over the Philippines and because inconsistent with democratic principles of government. This
view was indirectly favored by the trial judge, and, as before stated, is the opinion of three
members of this court.

Article 256 is found in Chapter V of title III of Book II of the Spanish Penal Code. Title I of Book II
punishes the crimes of treason, crimes that endanger the peace or independence of the state,
crimes against international law, and the crime of piracy. Title II of the same book punishes the
crimes of lese majeste, crimes against the Cortes and its members and against the council of
ministers, crimes against the form of government, and crimes committed on the occasion of the
exercise of rights guaranteed by the fundamental laws of the state, including crime against religion
and worship. Title III of the same Book, in which article 256 is found, punishes the crimes of
rebellion, sedition, assaults upon persons in authority, and their agents, and contempts,
insults, injurias, and threats against persons in authority, and insults, injurias, and threats against
their agents and other public officers, the last being the title to Chapter V. The first two articles in
Chapter V define and punish the offense of contempt committed by any one who shall be word or
deed defame, abuse, insult, or threathen a minister of the crown, or any person in authority. The with
an article condemning challenges to fight duels intervening, comes article 256, now being weighed in
the balance. It reads as follows: "Any person who, by word, deed, or writing, shall defame, abuse, or
insult any Minister of the Crown or other person in authority, while engaged in the performance of
official duties, or by reason of such performance, provided that the offensive minister or person, or
the offensive writing be not addressed to him, shall suffer the penalty of arresto mayor," — that is,
the defamation, abuse, or insult of any Minister of the Crown of the Monarchy of Spain (for there
could not be a Minister of the Crown in the United States of America), or other person in authority in
the Monarchy of Spain.

It cannot admit of doubt that all those provisions of the Spanish Penal Code having to do with such
subjects as treason, lese majeste, religion and worship, rebellion, sedition, and contempts of
ministers of the crown, are not longer in force. Our present task, therefore, is a determination of
whether article 256 has met the same fate, or, more specifically stated, whether it is in the nature of
a municipal law or political law, and is consistent with the Constitution and laws of the United States
and the characteristics and institutions of the American Government.

It is a general principle of the public law that on acquisition of territory the previous political relations
of the ceded region are totally abrogated. "Political" is here used to denominate the laws regulating
the relations sustained by the inhabitants to the sovereign. (American Insurance Co. vs. Canter
[1828], 1 Pet., 511; Chicago, Rock Island and Pacific Railway Co. vs. McGlinn [1885], 114 U.S., 542;
Roa vs. Collector of Customs [1912], 23 Phil., 315.) Mr. Justice Field of the United States Supreme
Court stated the obvious when in the course of his opinion in the case of Chicago, Rock Island and
Pacific Railway Co. vs. McGlinn, supra, he said: "As a matter of course, all laws, ordinances and
regulations in conflict with the political character, institutions and Constitution of the new government
are at once displaced. Thus, upon a cession of political jurisdiction and legislative power — and the
latter is involved in the former — to the United States, the laws of the country in support of an
established religion or abridging the freedom of the press, or authorizing cruel and unusual
punishments, and he like, would at once cease to be of obligatory force without any declaration to
that effect." To quote again from the United States Supreme Court: "It cannot be admitted that the
King of Spain could, by treaty or otherwise, impart to the United States any of his royal prerogatives;
and much less can it be admitted that they have capacity to receive or power to exercise them.
Every nation acquiring territory, by treaty or otherwise, must hold it subject to the Constitution and
laws of its own government, and not according to those of the government ceding it."
(Pollard vs. Hagan [1845], 3 Hos., 210.)

On American occupation of the Philippines, by instructions of the President to the Military

Commander dated May 28, 1898, and by proclamation of the latter, the municipal laws of the
conquered territory affecting private rights of person and property and providing for the punishment
of crime were nominally continued in force in so far as they were compatible with the new order of
things. But President McKinley, in his instructions to General Merritt, was careful to say: "The first
effect of the military occupation of the enemy's territory is the severance of the former political
relation of the inhabitants and the establishment of a new political power." From that day to this, the
ordinarily it has been taken for granted that the provisions under consideration were still effective. To
paraphrase the language of the United States Supreme Court in Weems vs. United States ([1910],
217 U. S., 349), there was not and could not be, except as precise questions were presented, a
careful consideration of the codal provisions and a determination of the extent to which they
accorded with or were repugnant to the "'great principles of liberty and law' which had been 'made
the basis of our governmental system.' " But when the question has been squarely raised, the
appellate court has been forced on occasion to hold certain portions of the Spanish codes repugnant
t democratic institutions and American constitutional principles. (U.S. vs. Sweet [1901], 1 Phil., 18;
U.S. vs. Balcorta [1913], 25 Phil., 273; U.S. vs. Balcorta [1913], 25 Phil., 533;
Weems vs. U.S., supra.)

The nature of the government which has been set up in the Philippines under American sovereignty
was outlined by President McKinley in that Magna Charta of Philippine liberty, his instructions to the
Commission, of April 7, 1900. In part, the President said:

In all the forms of government and administrative provisions which they are authorized to
prescribe, the Commission should bear in mind that he government which they are
establishing is designed not for our satisfaction or for the expression of our theoretical views,
but for the happiness, peace, and prosperity of the people of the Philippine Islands, and the
measures adopted should be made to conform to their customs, their habits, and even their
prejudices, to the fullest extent consistent with the accomplishment of the indispensable
requisites of just and effective government. At the same time the Commission should bear in
mind, and the people of the Islands should be made plainly to understand, that there are
certain great principles of government which have been made the basis of our governmental
system, which we deem essential to the rule of law and the maintenance of individual
freedom, and of which they have, unfortunately, been denied the experience possessed by
us; that there are also certain practical rules of government which we have found to be
essential to the preservation of these great principles of liberty and law, and that these
principles and these rules of government must be established and maintained in their islands
for the sake of their liberty and happiness, however much they may conflict with the customs
or laws of procedure with which they are familiar. It is evident that the most enligthened
thought of the Philippine Islands fully appreciates the importance of these principles and
rules, and they will inevitably within a short time command universal assent.

The courts have naturally taken the same view. Mr. Justice Elliott, speaking for our Supreme Court,
in the case of United States vs. Bull ([1910], 15 Phil., 7), said: "The President and Congress framed
the government on the model with which American are familiar, and which has proven best adapted
for the advancement of the public interests and the protection of individual rights and privileges."

Therefore, it has come with somewhat of a shock to hear the statement made that the happiness,
peace, and prosperity of the people of the Philippine Islands and their customs, habits, and
prejudices, to follow the language of President McKinley, demand obeisance to authority, and royal
protection for that authority.

According to our view, article 256 of the Spanish Penal Code was enacted by the Government of
Spain to protect Spanish officials who were the representatives of the King. With the change of
sovereignty, a new government, and a new theory of government, as set up in the Philippines. It was
in no sense a continuation of the old, although merely for convenience certain of the existing
institutions and laws were continued. The demands which the new government made, and makes,
on the individual citizen are likewise different. No longer is there a Minister of the Crown or a person
in authority of such exalted position that the citizen must speak of him only with bated breath. "In the
eye of our Constitution and laws, every man is a sovereign, a ruler and a freeman, and has equal
rights with every other man. We have no rank or station, except that of respectability and intelligence
as opposed to indecency and ignorance, and the door to this rank stands open to every man to
freely enter and abide therein, if he is qualified, and whether he is qualified or not depends upon the
life and character and attainments and conduct of each person for himself. Every man may lawfully
do what he will, so long as it is not malum in se or malum prohibitum or does not infringe upon the
qually sacred rights of others." (State vs. Shepherd [1903], 177 Mo., 205; 99 A. S. R., 624.)
It is true that in England, from which so many of the laws and institutions of the United States are
derived, there were once statutes of scandalum magnatum, under which words which would not be
actionable if spoken of an ordinary subject were made actionable if spoken of a peer of the realm or
of any of the great officers of the Crown, without proof of any special damage. The Crown of
England, unfortunately, took a view less tolerant that that of other sovereigns, as for instance, the
Emperors Augustus, Caesar, and Tiberius. These English statutes have, however, long since,
become obsolete, while in the United States, the offense of scandalum magnatum is not known. In
the early days of the American Republic, a sedition law was enacted, making it an offense to libel the
Government, the Congress, or the President of the United States, but the law met with so much
popular disapproval, that it was soon repealed. "In this country no distinction as to persons is
recognized, and in practice a person holding a high office is regarded as a target at whom any
person may let fly his poisonous words. High official position, instead of affording immunity from
slanderous and libelous charges, seems rather to be regarded as making his character free plunder
for any one who desires to create a senation by attacking it." (Newell, Slander and Libel, 3d ed., p.
245; Sillars vs. Collier [1890], 151 Mass., 50; 6 L.R.A., 680.)

Article 256 of the Penal Code is contrary to the genius and fundamental principles of the American
character and system of government. The gulf which separates this article from the spirit which
inspires all penal legislation of American origin, is as wide as that which separates a monarchy from
a democratic Republic like that of the United States. This article was crowded out by implication as
soon as the United States established its authority in the Philippine Islands. Penalties out of all
proportion to the gravity of the offense, grounded in a distorted monarchical conception of the nature
of political authority, as opposed to the American conception of the protection of the interests of the
public, have been obliterated by the present system of government in the Islands. 1aw ph!l.net

From an entirely different point of view, it must be noted that this article punishes contempts against
executive officials, although its terms are broad enough to cover the entire official class. Punishment
for contempt of non-judicial officers has no place in a government based upon American principles.
Our official class is not, as in monarchies, an agent of some authority greater than the people but it
is an agent and servant of the people themselves. These officials are only entitled to respect and
obedience when they are acting within the scope of their authority and jurisdiction. The American
system of government is calculated to enforce respect and obedience where such respect and
obedience is due, but never does it place around the individual who happens to occupy an official
position by mandate of the people any official halo, which calls for drastic punishment for
contemptuous remarks.

The crime of lese majeste disappeared in the Philippines with the ratification of the Treaty of Paris.
Ministers of the Crown have no place under the American flag.

To summarize, the result is, that all the members of the court are of the opinion, although for
different reasons, that the judgment should be reversed and the defendant and appellant acquitted,
with costs de officio. So ordered.

Ostrand and Johns, JJ., concur.

Separate Opinions

ARAULLO, C.J., concurring:

I concur with the dispositive part of the foregoing decision, that is, with the acquittal of the accused,
for the sole reason that the facts alleged in the information do not constitute a violation of article 256
of the Penal Code; for although that article is in force with respect to calumny, injuria, or insult, by
deed or word, against an authority in the performance of his duties or by reason thereof, outside of
his presence, it is repealed by the Libel Law in so far as it refers to calumny, injuria, or insult
committed against an authority by writing or printing, as was that inserted in the said information.

ROMUALDEZ, J., concurring:

I concur with the result. I believe that the responsibility of the accused has not been shown either
under article 256 of the Penal Code or under the Libel Law.

I am of the opinion that article 256 of the Penal Code is still in force, except as it refers to "Ministers
of the Crown," whom we do not have in our Government, and to calumny, injuria, or insult, by writing
or printing, committed against an authority in the performance of his duties or by reason thereof,
which portion was repealed by the Libel Law.

Johnson, Street, Avanceña and Villamor, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-36142 March 31, 1973

JOSUE JAVELLANA, petitioner,

vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF NATIONAL DEFENSE, THE SECRETARY
OF JUSTICE AND THE SECRETARY OF FINANCE, respondents.

G.R. No. L-36164 March 31, 1973

VIDAL TAN, J. ANTONIO ARANETA, ALEJANDRO ROCES, MANUEL CRUDO, ANTONIO U.

MIRANDA, EMILIO DE PERALTA AND LORENZO M. TAÑADA, petitioners,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE , THE SECRETARY OF
JUSTICE, THE SECRETARY OF LAND REFORM, THE SECRETARY OF NATIONAL DEFENSE,
THE AUDITOR GENERAL, THE BUDGET COMMISSIONER, THE CHAIRMAN OF
PRESIDENTIAL COMMISSION ON REORGANIZATION, THE TREASURER OF THE
PHILIPPINES, THE COMMISSION ON ELECTIONS AND THE COMMISSIONER OF CIVIL
SERVICE, respondents.

G.R. No. L-36165 March 31, 1973.

GERARDO ROXAS, AMBROSIO PADILLA, JOVITO R. SALONGA, SALVADOR H. LAUREL,

RAMON V. MITRA, JR. and EVA ESTRADA-KALAW, petitioners,
vs.
ALEJANDRO MELCHOR, in his capacity as Executive Secretary; JUAN PONCE ENRILE, in his
capacity as Secretary of National Defense; General ROMEO ESPINO, in his capacity as Chief
of Staff of the Armed Forces of the Philippines; TANCIO E. CASTAÑEDA, in his capacity as
Secretary General Services; Senator GIL J. PUYAT, in his capacity as President of the
Senate; and Senator JOSE ROY, his capacity, as President Pro Tempore of the of the
Senate, respondents.

G.R. No. L-36236 March 31, 1973

EDDIE B. MONTECLARO, [personally and in his capacity as President of the National Press
Club of the Philippines], petitioner,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF PUBLIC INFORMATION, THE AUDITOR
GENERAL, THE BUDGET COMMISSIONER & THE NATIONAL TREASURER, respondents.

G.R. No. L-36283 March 31, 1973

NAPOLEON V. DILAG, ALFREDO SALAPANTAN, JR., LEONARDO ASODISEN, JR., and RAUL
M. GONZALEZ, petitioners,
vs.
THE HONORABLE EXECUTIVE SECRETARY, THE HONORABLE SECRETARY OF NATIONAL
DEFENSE, THE HONORABLE BUDGET COMMISSIONER, THE HONORABLE AUDITOR
GENERAL, respondents.
Ramon A. Gonzales for petitioner Josue Javellana.

Lorenzo M. Tañada and Associates for petitioners Vidal Tan, et al.

Tañada, Salonga, Ordoñez, Rodrigo, Sanidad, Roxas. Gonzales and Arroyo for petitioners Gerardo
Roxas, et al.

Joker P. Arroyo and Rogelio B. Padilla for petitioner Eddie Monteclaro.

Raul M. Gonzales and Associates for petitioners Napoleon V. Dilag, et al.

Arturo M. Tolentino for respondents Gil J. Puyat and Jose Roy.

Office of the Solicitor General Estelito P. Mendoza, Solicitor Vicente V. Mendoza and Solicitor
Reynato S. Puno for other respondents.

RESOLUTION

CONCEPCION, C.J.:

The above-entitled five (5) cases are a sequel of cases G.R. Nos. L-35925,
L-35929, L-35940, L-35941, L-35942, L-35948, L-35953, L-35961, L-35965 and
L-35979, decided on January 22, 1973, to which We will hereafter refer collectively as the plebiscite
cases.

Background of the Plebiscite Cases.

The factual setting thereof is set forth in the decision therein rendered, from which We quote:

On March 16, 1967, Congress of the Philippines passed Resolution No. 2, which was
amended by Resolution No. 4 of said body, adopted on June 17, 1969, calling a
Convention to propose amendments to the Constitution of the Philippines. Said
Resolution No. 2, as amended, was implemented by Republic Act No. 6132,
approved on August 24, 1970, pursuant to the provisions of which the election of
delegates to said Convention was held on November 10, 1970, and the 1971
Constitutional Convention began to perform its functions on June 1, 1971. While the
Convention was in session on September 21, 1972, the President issued
Proclamation No. 1081 placing the entire Philippines under Martial Law. On
November 29, 1972, the Convention approved its Proposed Constitution of the
Republic of the Philippines. The next day, November 30, 1972, the President of the
Philippines issued Presidential Decree No. 73, "submitting to the Filipino people for
ratification or rejection the Constitution of the Republic of the Philippines proposed by
the 1971 Constitutional Convention, and appropriating funds therefor," as well as
setting the plebiscite for said ratification or rejection of the Proposed Constitution on
January 15, 1973.

Soon after, or on December 7, 1972, Charito Planas filed, with this Court, Case G.R.
No. L-35925, against the Commission on Elections, the Treasurer of the Philippines
and the Auditor General, to enjoin said "respondents or their agents from
implementing Presidential Decree No. 73, in any manner, until further orders of the
Court," upon the grounds, inter alia, that said Presidential Decree "has no force and
effect as law because the calling ... of such plebiscite, the setting of guidelines for the
conduct of the same, the prescription of the ballots to be used and the question to be
answered by the voters, and the appropriation of public funds for the purpose, are, by
the Constitution, lodged exclusively in Congress ...," and "there is no proper
submission to the people of said Proposed Constitution set for January 15, 1973,
there being no freedom of speech, press and assembly, and there being no sufficient
time to inform the people of the contents thereof."

Substantially identical actions were filed, on December 8, 1972, by Pablo C. Sanidad

against the Commission on Elections (Case G.R. No. L- 35929) on December 11,
1972, by Gerardo Roxas, et al., against the Commission on Elections, the Director of
Printing, the National Treasurer and the Auditor General (Case G.R. L-35940), by
Eddie B. Monteclaro against the Commission on Elections and the Treasurer of the
Philippines (Case G.R. No. L-35941), and by Sedfrey Ordoñez, et al. against the
National Treasurer and the Commission on Elections (Case G.R. No. L-35942); on
December 12, 1972, by Vidal Tan, et al., against the Commission on Elections, the
Treasurer of the Philippines, the Auditor General and the Director of Printing (Case
G.R. No. L-35948) and by Jose W. Diokno and Benigno S. Aquino against the
Commission on Elections (Case G.R. No. L-35953); on December 14, 1972, by
Jacinto Jimenez against the Commission on Elections, the Auditor General, the
Treasurer of the Philippines and the Director of the Bureau of Printing (Case G.R.
No. L-35961), and by Raul M. Gonzales against the Commission on Elections, the
Budget Commissioner, the National Treasurer and the Auditor General (Case G.R.
No. L-35965); and on December 16, 1972, by Ernesto C. Hidalgo against the
Commission on Elections, the Secretary of Education, the National Treasurer and the
Auditor General (Case G.R. No. L-35979).

In all these cases, except the last (G.R. No. L-35979), the respondents were required
to file their answers "not later than 12:00 (o'clock) noon of Saturday, December 16,
1972." Said cases were, also, set for hearing and partly heard on Monday, December
18, 1972, at 9:30 a.m. The hearing was continued on December 19, 1972. By
agreement of the parties, the aforementioned last case — G.R. No. L-35979 — was,
also, heard, jointly with the others, on December 19, 1972. At the conclusion of the
hearing, on that date, the parties in all of the aforementioned cases were given a
short period of time within which "to submit their notes on the points they desire to
stress." Said notes were filed on different dates, between December 21, 1972, and
January 4, 1973.

Meanwhile, or on December 17, 1972, the President had issued an order temporarily
suspending the effects of Proclamation No. 1081, for the purpose of free and open
debate on the Proposed Constitution. On December 23, the President announced
the postponement of the plebiscite for the ratification or rejection of the Proposed
Constitution. No formal action to this effect was taken until January 7, 1973, when
General Order No. 20 was issued, directing "that the plebiscite scheduled to be held
on January 15, 1978, be postponed until further notice." Said General Order No. 20,
moreover, "suspended in the meantime" the "order of December 17, 1972,
temporarily suspending the effects of Proclamation No. 1081 for purposes of free and
open debate on the proposed Constitution."

In view of these events relative to the postponement of the aforementioned

plebiscite, the Court deemed it fit to refrain, for the time being, from deciding the
aforementioned cases, for neither the date nor the conditions under which said
plebiscite would be held were known or announced officially. Then, again, Congress
was, pursuant to the 1935 Constitution, scheduled to meet in regular session on
January 22, 1973, and since the main objection to Presidential Decree No. 73 was
that the President does not have the legislative authority to call a plebiscite and
appropriate funds therefor, which Congress unquestionably could do, particularly in
view of the formal postponement of the plebiscite by the President — reportedly after
consultation with, among others, the leaders of Congress and the Commission on
Elections — the Court deemed it more imperative to defer its final action on these
cases.

"In the afternoon of January 12, 1973, the petitioners in Case G.R. No.
L-35948 filed an "urgent motion," praying that said case be decided "as soon as
possible, preferably not later than January 15, 1973." It was alleged in said
motion, inter alia:

"6. That the President subsequently announced the issuance of Presidential Decree
No. 86 organizing the so-called Citizens Assemblies, to be consulted on certain
public questions [Bulletin Today, January 1, 1973];

"7. That thereafter it was later announced that "the Assemblies will be asked if they
favor or oppose —
 [1] The New Society;

[2] Reforms instituted under Martial Law;

[3] The holding of a plebiscite on the proposed new Constitution and

when (the tentative new dates given following the postponement of
the plebiscite from the original date of January 15 are February 19
and March 5);

[4] The opening of the regular session slated on January 22 in

accordance with the existing Constitution despite Martial Law."
[Bulletin Today, January 3, 1973.]

"8. That it was later reported that the following are to be the forms of the questions to
be asked to the Citizens Assemblies: —

[1] Do you approve of the New Society?

[2] Do you approve of the reform measures under martial law?

[3] Do you think that Congress should meet again in regular session?

[4] How soon would you like the plebiscite on the new Constitution to
be held? [Bulletin Today, January 5, 1973].

"9. That the voting by the so-called Citizens Assemblies was announced to take
place during the period from January 10 to January 15, 1973;

"10. That on January 10, 1973, it was reported that on more question would be
added to the four (4) question previously announced, and that the forms of the
question would be as follows: —

[1] Do you like the New Society?

[2] Do you like the reforms under martial law?

[3] Do you like Congress again to hold sessions?

[4] Do you like the plebiscite to be held later?

[5] Do you like the way President Marcos running the affairs of the
government? [Bulletin Today, January 10, 1973; emphasis an
additional question.]

"11. That on January 11, 1973, it was reported that six (6) more questions would be
submitted to the so-called Citizens Assemblies: —

[1] Do you approve of the citizens assemblies as the base of popular

government to decide issues of national interests?

[2] Do you approve of the new Constitution?

[3] Do you want a plebiscite to be called to ratify the new

Constitution?

[4] Do you want the elections to be held in November, 1973 in

accordance with the provisions of the 1935 Constitution?

[5] If the elections would not be held, when do you want the next
elections to be called?
 [6] Do you want martial law to continue? [Bulletin Today, January 11,
1973; emphasis supplied]

"12. That according to reports, the returns with respect to the six (6) additional
questions quoted above will be on a form similar or identical to Annex "A" hereof;

"13. That attached to page 1 of Annex "A" is another page, which we marked as
Annex "A-1", and which reads: —

COMMENTS ON

QUESTION No. 1

In order to broaden the base of citizens' participation

in government.

QUESTION No. 2

But we do not want the Ad Interim Assembly to be convoked. Or if it

is to be convened at all, it should not be done so until after at least
seven (7) years from the approval of the New Constitution by the
Citizens Assemblies.

QUESTION No. 3

The vote of the Citizens Assemblies should already be considered

the plebiscite on the New Constitution.

If the Citizens Assemblies approve of the New Constitution, then the

new Constitution should be deemed ratified.

QUESTION No. 4

We are sick and tired of too frequent elections. We are fed up with
politics, of so many debates and so much expenses.

QUESTION No. 5

Probably a period of at least seven (7) years moratorium on elections

will be enough for stability to be established in the country, for
reforms to take root and normalcy to return.

QUESTION No. 6

We want President Marcos to continue with Martial Law. We want

him to exercise his powers with more authority. We want him to be
strong and firm so that he can accomplish all his reform programs
and establish normalcy in the country. If all other measures fail, we
want President Marcos to declare a revolutionary government along
the lines of the new Constitution without the ad interim Assembly."

"Attention is respectfully invited to the comments on "Question No. 3," which reads:
—

QUESTION No. 3

The vote of the Citizens Assemblies should be considered the

plebiscite on the New Constitution.

If the Citizens Assemblies approve of the New Constitution, then the

new Constitution should be deemed ratified.
This, we are afraid, and therefore allege, is pregnant with ominous possibilities.

14. That, in the meantime, speaking on television and over the radio, on January 7,
1973, the President announced that the limited freedom of debate on the proposed
Constitution was being withdrawn and that the proclamation of martial law and the
orders and decrees issued thereunder would thenceforth strictly be enforced [Daily
Express, January 8, 1973];

15. That petitioners have reason to fear, and therefore state, that the question added
in the last list of questions to be asked to the Citizens Assemblies, namely: —

Do you approve of the

New Constitution? —

in relation to the question following it: —

Do you still want a plebiscite to be

called to ratify the new Constitution?"
—

would be an attempt to by-pass and short-circuit this Honorable Court before which
the question of the validity of the plebiscite on the proposed Constitution is now
pending;

"16. That petitioners have reason to fear, and therefore allege, that if an affirmative
answer to the two questions just referred to will be reported then this Honorable
Court and the entire nation will be confronted with a fait accompli which has been
attained in a highly unconstitutional and undemocratic manner;

"17. That the fait accompli would consist in the supposed expression of the people
approving the proposed Constitution;

"18. That, if such event would happen, then the case before this Honorable Court
could, to all intents and purposes, become moot because, petitioners fear, and they
therefore allege, that on the basis of such supposed expression of the will of the
people through the Citizens Assemblies, it would be announced that the proposed
Constitution, with all its defects, both congenital and otherwise, has been ratified;

"19. That, in such a situation the Philippines will be facing a real crisis and there is
likelihood of confusion if not chaos, because then, the people and their officials will
not know which Constitution is in force.

"20. That the crisis mentioned above can only be avoided if this Honorable Court will
immediately decide and announce its decision on the present petition;

"21. That with the withdrawal by the President of the limited freedom of discussion on
the proposed Constitution which was given to the people pursuant to Sec. 3 of
Presidential Decree No. 73, the opposition of respondents to petitioners' prayer at the
plebiscite be prohibited has now collapsed and that a free plebiscite can no longer be
held."

At about the same time, a similar prayer was made in a "manifestation" filed by the
petitioners in L-35949, "Gerardo Roxas, et al. v. Commission on Elections, et al.,"
and L-35942, "Sedfrey A. Ordoñez, et al. v. The National Treasurer, et al."

The next day, January 13, 1973, which was a Saturday, the Court issued a resolution
requiring the respondents in said three (3) cases to comment on said "urgent motion"
and "manifestation," "not later than Tuesday noon, January 16, 1973." Prior thereto,
or on January 15, 1973, shortly before noon, the petitioners in said Case G.R. No. L-
35948 riled a "supplemental motion for issuance of restraining order and inclusion of
additional respondents," praying —
 "... that a restraining order be issued enjoining and restraining
respondent Commission on Elections, as well as the Department of
Local Governments and its head, Secretary Jose Roño; the
Department of Agrarian Reforms and its head, Secretary Conrado
Estrella; the National Ratification Coordinating Committee and its
Chairman, Guillermo de Vega; their deputies, subordinates and
substitutes, and all other officials and persons who may be assigned
such task, from collecting, certifying, and announcing and reporting to
the President or other officials concerned, the so-called Citizens'
Assemblies referendum results allegedly obtained when they were
supposed to have met during the period comprised between January
10 and January 15, 1973, on the two questions quoted in paragraph 1
of this Supplemental Urgent Motion."

In support of this prayer, it was alleged —

"3. That petitioners are now before this Honorable Court in order to ask further that
this Honorable Court issue a restraining order enjoining herein respondents,
particularly respondent Commission on Elections as well as the Department of Local
Governments and its head, Secretary Jose Roño; the Department of Agrarian
Reforms and its head, Secretary Conrado Estrella; the National Ratification
Coordinating Committee and its Chairman, Guillermo de Vega; and their deputies,
subordinates and/or substitutes, from collecting, certifying, announcing and reporting
to the President the supposed Citizens' Assemblies referendum results allegedly
obtained when they were supposed to have met during the period between January
10 and January 15, 1973, particularly on the two questions quoted in paragraph 1 of
this Supplemental Urgent Motion;

"4. That the proceedings of the so-called Citizens' Assemblies are illegal, null and
void particularly insofar as such proceedings are being made the basis of a
supposed consensus for the ratification of the proposed Constitution because: —

[a] The elections contemplated in the Constitution, Article XV, at

which the proposed constitutional amendments are to be submitted
for ratification, are elections at which only qualified and duly
registered voters are permitted to vote, whereas, the so called
Citizens' Assemblies were participated in by persons 15 years of age
and older, regardless of qualifications or lack thereof, as prescribed in
the Election Code;

[b] Elections or plebiscites for the ratification of constitutional

amendments contemplated in Article XV of the Constitution have
provisions for the secrecy of choice and of vote, which is one of the
safeguards of freedom of action, but votes in the Citizens' Assemblies
were open and were cast by raising hands;

[c] The Election Code makes ample provisions for free, orderly and
honest elections, and such provisions are a minimum requirement for
elections or plebiscites for the ratification of constitutional
amendments, but there were no similar provisions to guide and
regulate proceedings of the so called Citizens' Assemblies;

[d] It is seriously to be doubted that, for lack of material time, more

than a handful of the so called Citizens' Assemblies have been
actually formed, because the mechanics of their organization were
still being discussed a day or so before the day they were supposed
to begin functioning: —

"Provincial governors and city and municipal mayors

had been meeting with barrio captains and community
leaders since last Monday [January 8, 1973) to thresh
out the mechanics in the formation of the Citizens
Assemblies and the topics for discussion." [Bulletin
Today, January 10, 1973]
"It should be recalled that the Citizens' Assemblies were ordered formed only at the
beginning of the year [Daily Express, January 1, 1973], and considering the lack of
experience of the local organizers of said assemblies, as well as the absence of
sufficient guidelines for organization, it is too much to believe that such assemblies
could be organized at such a short notice.

"5. That for lack of material time, the appropriate amended petition to include the
additional officials and government agencies mentioned in paragraph 3 of this
Supplemental Urgent Motion could not be completed because, as noted in the
Urgent Motion of January 12, 1973, the submission of the proposed Constitution to
the Citizens' Assemblies was not made known to the public until January 11, 1973.
But be that as it may, the said additional officials and agencies may be properly
included in the petition at bar because: —

[a] The herein petitioners have prayed in their petition for the
annulment not only of Presidential Decree No. 73, but also of "any
similar decree, proclamation, order or instruction.

so that Presidential Decree No. 86, insofar at least as it attempts to submit the
proposed Constitution to a plebiscite by the so-called Citizens' Assemblies, is
properly in issue in this case, and those who enforce, implement, or carry out the
said Presidential Decree No. 86. and the instructions incidental thereto clearly fall
within the scope of this petition;

[b] In their petition, petitioners sought the issuance of a writ of

preliminary injunction restraining not only the respondents named in
the petition but also their "agents" from implementing not only
Presidential Decree No. 73, but also "any other similar decree, order,
instruction, or proclamation in relation to the holding of a plebiscite on
January 15, 1973 for the purpose of submitting to the Filipino people
for their ratification or rejection the 1972 Draft or proposed
Constitution approved by the Constitutional Convention on November
30, 1972"; and finally,

[c] Petitioners prayed for such other relief which may be just and
equitable. [p. 39, Petition].

"Therefore, viewing the case from all angles, the officials and government agencies
mentioned in paragraph 3 of this Supplemental Urgent Motion, can lawfully be
reached by the processes of this Honorable Court by reason of this petition,
considering, furthermore, that the Commission on Elections has under our laws the
power, among others, of: —

(a) Direct and immediate supervision and control over national,

provincial, city, municipal and municipal district officials required by
law to perform duties relative to the conduct of elections on matters
pertaining to the enforcement of the provisions of this Code ..."
[Election Code of 1971, Sec. 3].

"6. That unless the petition at bar is decided immediately and the Commission on
Elections, together with the officials and government agencies mentioned in
paragraph 3 of this Supplemental Urgent Motion are restrained or enjoined from
collecting, certifying, reporting or announcing to the President the results of the
alleged voting of the so-called Citizens' Assemblies, irreparable damage will be
caused to the Republic of the Philippines, the Filipino people, the cause of freedom
an democracy, and the petitioners herein because:

[a] After the result of the supposed voting on the questions mentioned
in paragraph 1 hereof shall have been announced, a conflict will arise
between those who maintain that the 1935 Constitution is still in
force, on the one hand, and those who will maintain that it has been
superseded by the proposed Constitution, on the other, thereby
creating confusion, if not chaos;
 [b] Even the jurisdiction of this Court will be subject to serious attack
because the advocates of the theory that the proposed Constitution
has been ratified by reason of the announcement of the results of the
proceedings of the so-called Citizens' Assemblies will argue that,
General Order No. 3, which shall also be deemed ratified pursuant to
the Transitory Provisions of the proposed Constitution, has placed
Presidential Decree Nos. 73 and 86 beyond the reach and jurisdiction
of this Honorable Court."

On the same date — January 15, 1973 — the Court passed a resolution requiring the
respondents in said case G.R. No. L-35948 to file "file an answer to the said motion
not later than 4 P.M., Tuesday, January 16, 1973," and setting the motion for hearing
"on January 17, 1973, at 9:30 a.m." While the case was being heard, on the date last
mentioned, at noontime, the Secretary of Justice called on the writer of this opinion
and said that, upon instructions of the President, he (the Secretary of Justice) was
delivering to him (the writer) a copy of Proclamation No. 1102, which had just been
signed by the President. Thereupon, the writer returned to the Session Hall and
announced to the Court, the parties in G.R. No. L-35948 — inasmuch as the hearing
in connection therewith was still going on — and the public there present that the
President had, according to information conveyed by the Secretary of Justice, signed
said Proclamation No. 1102, earlier that morning. Thereupon, the writer read
Proclamation No. 1102 which is of the following tenor:

"BY THE PRESIDENT OF THE PHILIPPINES

"PROCLAMATION NO. 1102

"ANNOUNCING THE RATIFICATION BY THE FILIPINO PEOPLE OF THE

CONSTITUTION PROPOSED BY THE 1971 CONSTITUTIONAL CONVENTION.

"WHEREAS, the Constitution proposed by the nineteen hundred seventy-one

Constitutional Convention is subject to ratification by the Filipino people;

"WHEREAS, Citizens Assemblies were created in barrios, in municipalities and in

districts/wards in chartered cities pursuant to Presidential Decree No. 86, dated
December 31, 1972, composed of all persons who are residents of the barrio, district
or ward for at least six months, fifteen years of age or over, citizens of the Philippines
and who are registered in the list of Citizen Assembly members kept by the barrio,
district or ward secretary;

"WHEREAS, the said Citizens Assemblies were established precisely to broaden the
base of citizen participation in the democratic process and to afford ample
opportunity for the citizenry to express their views on important national issues;

"WHEREAS, responding to the clamor of the people and pursuant to Presidential

Decree No. 86-A, dated January 5, 1973, the following questions were posed before
the Citizens Assemblies or Barangays: Do you approve of the New Constitution? Do
you still want a plebiscite to be called to ratify the new Constitution?

"WHEREAS, fourteen million nine hundred seventy-six thousand five hundred sixty-
one (14,976,561) members of all the Barangays (Citizens Assemblies) voted for the
adoption of the proposed Constitution, as against seven hundred forty-three
thousand eight hundred sixty-nine (743,869) who voted for its rejection; while on the
question as to whether or not the people would still like a plebiscite to be called to
ratify the new Constitution, fourteen million two hundred ninety-eight thousand eight
hundred fourteen (14,298,814) answered that there was no need for a plebiscite and
that the vote of the Barangays (Citizens Assemblies) should be considered as a vote
in a plebiscite;

"WHEREAS, since the referendum results show that more than ninety-five (95) per
cent of the members of the Barangays (Citizens Assemblies) are in favor of the new
Constitution, the Katipunan ng Mga Barangay has strongly recommended that the
new Constitution should already be deemed ratified by the Filipino people;
 "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers in me vested by the Constitution, do hereby certify and proclaim
that the Constitution proposed by the nineteen hundred and seventy-one (1971)
Constitutional Convention has been ratified by an overwhelming majority of all of the
votes cast by the members of all the Barangays (Citizens Assemblies) throughout the
Philippines, and has thereby come into effect.

"IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the
Republic of the Philippines to be affixed.

"Done in the City of Manila, this 17th day of January, in the year of Our Lord,
nineteen hundred and seventy-three.

(Sgd.)
FERDI
NAND
E.
MARC
OS
"Presid
ent of
the
Philippi
nes

"By the President:

"ALEJANDRO MELCHOR
"Executive Secretary"

Such is the background of the cases submitted determination. After admitting some
of the allegations made in the petition in L-35948 and denying the other allegations
thereof, respondents therein alleged in their answer thereto, by way affirmative
defenses: 1) that the "questions raised" in said petition "are political in character"; 2)
that "the Constitutional Convention acted freely and had plenary authority to propose
not only amendments but a Constitution which would supersede the present
Constitution"; 3) that "the President's call for a plebiscite and the appropriation of
funds for this purpose are valid"; 4) that "there is not an improper submission" and
"there can be a plebiscite under Martial Law"; and 5) that the "argument that the
Proposed Constitution is vague and incomplete, makes an unconstitutional
delegation of power, includes a referendum on the proclamation of Martial Law and
purports to exercise judicial power" is "not relevant and ... without merit." Identical
defenses were set up in the other cases under consideration.

Immediately after the hearing held on January 17, 1973, or since the afternoon of
that date, the Members of the Court have been deliberating on the aforementioned
cases and, after extensive discussions on the merits thereof, have deemed it best
that each Member write his own views thereon and that thereafter the Chief Justice
should state the result or the votes thus cast on the points in issue. Hence, the
individual views of my brethren in the Court are set forth in the opinions attached
hereto, except that, instead of writing their separate opinions, some Members have
preferred to merely concur in the opinion of one of our colleagues.

Then the writer of said decision expressed his own opinion on the issues involved therein, after
which he recapitulated the views of the Members of the Court, as follows:

1. There is unanimity on the justiciable nature of the issue on the legality of

Presidential Decree No. 73.

2. On the validity of the decree itself, Justices Makalintal, Castro, Fernando,

Teehankee, Esguerra and myself, or six (6) Members of the Court, are of the opinion
that the issue has become moot and academic, whereas Justices Barredo, Makasiar
and Antonio voted to uphold the validity of said Decree.
 3. On the authority of the 1971 Constitutional Convention to pass the proposed
Constitution or to incorporate therein the provisions contested by the petitioners in L-
35948, Justices Makalintal, Castro, Teehankee and Esguerra opine that the issue
has become moot and academic. Justices Fernando, Barredo, Makasiar, Antonio
and myself have voted to uphold the authority of the Convention.

4. Justice Fernando, likewise, expressed the view that the 1971 Constitutional
Convention had authority to continue in the performance of its functions despite the
proclamation of Martial Law. In effect, Justices Barredo, Makasiar and Antonio hold
the same view.

5. On the question whether the proclamation of Martial Law affected the proper
submission of the proposed Constitution to a plebiscite, insofar as the freedom
essential therefor is concerned, Justice Fernando is of the opinion that there is a
repugnancy between the election contemplated under Art. XV of the 1935
Constitution and the existence of Martial Law, and would, therefore, grant the
petitions were they not moot and academic. Justices Barredo, Antonio and Esguerra
are of the opinion that issue involves questions of fact which cannot be
predetermined, and that Martial Law per se does not necessarily preclude the factual
possibility of adequate freedom, for the purposes contemplated.

6. On Presidential Proclamation No. 1102, the following views were expressed:

a. Justices Makalintal, Castro, Fernando, Teehankee, Makasiar,

Esguerra and myself are of the opinion that the question of validity of
said Proclamation has not been properly raised before the Court,
which, accordingly, should not pass upon such question.

b. Justice Barredo holds that the issue on the constitutionality of

Proclamation No. 1102 has been submitted to and should be
determined by the Court, and that the "purported ratification of the
Proposed Constitution ... based on the referendum among Citizens'
Assemblies falls short of being in strict conformity with the
requirements of Article XV of the 1935 Constitution," but that such
unfortunate drawback notwithstanding, "considering all other related
relevant circumstances, ... the new Constitution is legally
recognizable and should be recognized as legitimately in force."

c. Justice Zaldivar maintains unqualifiedly that the Proposed

Constitution has not been ratified in accordance with Article XV of the
1935 Constitution, and that, accordingly, it has no force and effect
whatsoever.

d. Justice Antonio feels "that the Court is not competent to act" on the
issue whether the Proposed Constitution has been ratified by the
people or not, "in the absence of any judicially discoverable and
manageable standards," since the issue "poses a question of fact.

7. On the question whether or not these cases should be dismissed, Justices

Makalintal, Castro, Barredo, Makasiar, Antonio and Esguerra voted in the affirmative,
for the reasons set forth in their respective opinions. Justices Fernando, Teehankee,
and the writer similarly voted, except as regards Case No. L-35948 as to which they
voted to grant to the petitioners therein a reasonable period of time within which to
file appropriate pleadings should they wish to contest the legality of Presidential
Proclamation No. 1102. Justice Zaldivar favors the granting of said period to the
petitioners in said Case No. L-35948 for the aforementioned purpose, but he
believes, in effect, that the Court should go farther and decide on the merits
everyone of the cases under consideration.

Accordingly, the Court — acting in conformity with the position taken by six (6) of its members,1 with
three (3) members dissenting,2 with respect to G.R. No. L-35948, only and another
member3 dissenting, as regards all of the cases dismissed the same, without special pronouncement
as to costs.
The Present Cases

Prior thereto, or on January 20, 1973, Josue Javellana filed Case G.R. No. L-36142 against the
Executive Secretary and the Secretaries of National Defense, Justice and Finance, to restrain said
respondents "and their subordinates or agents from implementing any of the provisions of the
propose Constitution not found in the present Constitution" — referring to that of 1935. The petition
therein, filed by Josue Javellana, as a "Filipino citizen, and a qualified and registered voter" and as
"a class suit, for himself, and in behalf of all citizens and voters similarly situated," was amended on
or about January 24, 1973. After reciting in substance the facts set forth in the decision in the
plebiscite cases, Javellana alleged that the President had announced "the immediate
implementation of the New Constitution, thru his Cabinet, respondents including," and that the latter
"are acting without, or in excess of jurisdiction in implementing the said proposed Constitution" upon
the ground: "that the President, as Commander-in-Chief of the Armed Forces of the Philippines, is
without authority to create the Citizens Assemblies"; that the same "are without power to approve the
proposed Constitution ..."; "that the President is without power to proclaim the ratification by the
Filipino people of the proposed Constitution"; and "that the election held to ratify the proposed
Constitution was not a free election, hence null and void."

Similar actions were filed, on January 23, 1973, by Vidal Tan, J. Antonio Araneta, Alejandro Roces,
Manuel Crudo, Antonio U. Miranda, Emilio de Peralta and Lorenzo M. Tañada, against the Executive
Secretary, the Secretaries of Finance, Justice, Land Reform, and National Defense, the Auditor
General, the Budget Commissioner, the Chairman of the Presidential Commission on
Reorganization, the Treasurer of the Philippines, the Commission on Elections and the
Commissioner of Civil Service4 on February 3, 1973, by Eddie Monteclaro, personally and as
President of the National Press Club of the Philippines, against the Executive Secretary, the
Secretary of Public Information, the Auditor General, the Budget Commissioner and the National
Treasurer5 and on February 12, 1973, by Napoleon V. Dilag, Alfredo Salapantan, Jr., Leonardo
Asodisen, Jr. and Raul M. Gonzales,6 against the Executive Secretary, the Secretary of National
Defense, the Budget Commissioner and the Auditor General.

Likewise, on January 23, 1973, Gerardo Roxas, Ambrosio Padilla, Jovito R. Salonga, Salvador H.
Laurel,7 Ramon V. Mitra, Jr. and Eva Estrada-Kalaw, the first as "duly elected Senator and Minority
Floor Leader of the Senate," and others as "duly elected members" thereof, filed Case G.R. No. L-
36165, against the Executive Secretary, the Secretary National Defense, the Chief of Staff of the
Armed Forces of the Philippines, the Secretary of General Services, the President and the President
Pro Tempore of the Senate. In their petition — as amended on January 26, 1973 — petitioners
Gerardo Roxas, et al. allege, inter alia, that the term of office of three of the aforementioned
petitioners8 would expire on December 31, 1975, and that of the others9 on December 31, 1977; that
pursuant to our 1935 Constitution, "which is still in force Congress of the Philippines "must convene
for its 8th Session on Monday, January 22, 1973, at 10:00 A.M., which is regular customary hour of
its opening session"; that "on said day, from 10:00 A.M. up to the afternoon," said petitioner "along
with their other colleagues, were unlawfully prevented from using the Senate Session Hall, the same
having been closed by the authorities in physical possession and control the Legislative Building";
that "(a)t about 5:00 to 6:00 P.M. the said day, the premises of the entire Legislative Building were
ordered cleared by the same authorities, and no one was allowed to enter and have access to said
premises"; that "(r)espondent Senate President Gil J. Puyat and, in his absence, respondent
President Pro Tempore Jose Roy we asked by petitioning Senators to perform their duties under the
law and the Rules of the Senate, but unlawfully refrained and continue to refrain from doing so"; that
the petitioners ready and willing to perform their duties as duly elected members of the Senate of the
Philippines," but respondent Secretary of National Defense, Executive Secretary and Chief of Staff,
"through their agents and representatives, are preventing petitioners from performing their duties as
duly elected Senators of the Philippines"; that "the Senate premise in the Congress of the Philippines
Building ... are occupied by and are under the physical control of the elements military organizations
under the direction of said respondents"; that, as per "official reports, the Department of General
Services ... is now the civilian agency in custody of the premises of the Legislative Building"; that
respondents "have unlawfully excluded and prevented, and continue to so exclude and prevent" the
petitioners "from the performance of their sworn duties, invoking the alleged approval of the 1972
(1973) Constitution of the Philippines by action of the so-called Citizens' Assemblies on January 10,
1973 to January 15, 1973, as stated in and by virtue of Proclamation No. 1102 signed and issued by
the President of the Philippines"; that "the alleged creation of the Citizens' Assemblies as
instrumentalities for the ratification of the Constitution of the Republic of the Philippines" is inherently
illegal and palpably unconstitutional; that respondents Senate President and Senate President Pro
Tempore "have unlawfully refrained and continue to refrain from and/or unlawfully neglected and
continue to neglect the performance of their duties and functions as such officers under the law and
the Rules of the Senate" quoted in the petition; that because of events supervening the institution of
the plebiscite cases, to which reference has been made in the preceding pages, the Supreme Court
dismissed said cases on January 22, 1973, by a majority vote, upon the ground that the petitions
therein had become moot and academic; that the alleged ratification of the 1972 (1973) Constitution
"is illegal, unconstitutional and void and ... can not have superseded and revoked the 1935
Constitution," for the reasons specified in the petition as amended; that, by acting as they did, the
respondents and their "agents, representatives and subordinates ...have excluded the petitioners
from an office to which" they "are lawfully entitled"; that "respondents Gil J. Puyat and Jose Roy
have unlawfully refrained from convening the Senate for its 8th session, assuming general
jurisdiction over the Session Hall and the premises of the Senate and ... continue such inaction up to
this time and ... a writ of mandamus is warranted in order to compel them to comply with the duties
and functions specifically enjoined by law"; and that "against the above mentioned unlawful acts of
the respondents, the petitioners have no appeal nor other speedy and adequate remedy in the
ordinary course of law except by invoking the equitable remedies of mandamus and prohibition with
the provisional remedy of preliminary mandatory injunction."

Premised upon the foregoing allegations, said petitioners prayed that, "pending hearing on the
merits, a writ of preliminary mandatory injunction be issued ordering respondents Executive
Secretary, the Secretary of National Defense, the Chief of Staff of the Armed Forces of the
Philippines, and the ... Secretary of General Service, as well as all their agents, representatives and
subordinates to vacate the premises of the Senate of the Philippines and to deliver physical
possession of the same to the President of the Senate or his authorized representative"; and that
hearing, judgment be rendered declaring null and Proclamation No. 1102 ... and any order, decree,
proclamation having the same import and objective, issuing writs of prohibition and mandamus, as
prayed for against above-mentioned respondents, and making the writ injunction permanent; and
that a writ of mandamus be issued against the respondents Gil J. Puyat and Jose Roy directing them
to comply with their duties and functions as President and President Pro Tempore, respectively, of
the Senate of Philippines, as provided by law and the Rules of the Senate."

Required to comment on the above-mentioned petitions and/or amended petitions, respondents

filed, with the leave Court first had and obtained, a consolidated comment on said petitions and/or
amended petitions, alleging that the same ought to have been dismissed outright; controverting
petitioners' allegations concerning the alleged lack impairment of the freedom of the 1971
Constitution Convention to approve the proposed Constitution, its alleged lack of authority to
incorporate certain contested provisions thereof, the alleged lack of authority of the President to
create and establish Citizens' Assemblies "for the purpose submitting to them the matter of
ratification of the new Constitution," the alleged "improper or inadequate submiss of the proposed
constitution," the "procedure for ratification adopted ... through the Citizens Assemblies"; a
maintaining that: 1) "(t)he Court is without jurisdiction to act on these petitions"; 2) the questions
raised therein are "political in character and therefore nonjusticiable"; 3) "there substantial
compliance with Article XV of the 1 Constitution"; 4) "(t)he Constitution was properly submitted the
people in a free, orderly and honest election; 5) "Proclamation No. 1102, certifying the results of the
election, is conclusive upon the courts"; and 6) "(t)he amending process outlined in Article XV of the
1935 Constitution is not exclusive of other modes of amendment."

Respondents Puyat and Roy, in said Case G.R. No. L-36165, filed their separate comment therein,
alleging that "(t)he subject matter" of said case "is a highly political question which, under the
circumstances, this ...Court would not be in a position to act upon judicially," and that, in view of the
opinions expressed by three members of this Court in its decision in the plebiscite cases, in effect
upholding the validity of Proclamation No. 1102, "further proceedings in this case may only be an
academic exercise in futility."

On February 5, 1973, the Court issued a resolution requiring respondents in L-36236 to comment on
the petition therein not later than Saturday, February 10, 1973, and setting the case for hearing on
February 12, 1973, at 9:30 a.m. By resolution dated February 7, 1973, this Court resolved to
consider the comments of the respondents in cases G.R. Nos. L-36142, L-36164, and L-36165, as
motions to dismiss the petitions therein, and to set said cases for hearing on the same date and time
as L-36236. On that date, the parties in G.R. No. L-36283 10 agreed that the same be, likewise,
heard, as it was, in fact, heard jointly with the aforementioned cases G.R. Nos. L-36142, L-36164, L-
36165 and L-36236. The hearing, which began on February 12, 1973, shortly after 9:30 a.m., was
continued not only that afternoon, but, also, on February 13, 14, 15 and 16, morning and afternoon,
after which the parties were granted up to February 24, 1973, noon, within which to submit their
notes of oral arguments and additional arguments, as well as the documents required of them or
whose presentation was reserved by them. The same resolution granted the parties until March 1,
1973, to reply to the notes filed by their respective opponents. Counsel for the petitioners in G.R.
Nos. L-36164 and L-36165 filed their aforementioned notes on February 24, 1973, on which date the
Solicitor General sought an extension of time up to March 3, 1973, within which to file his notes,
which was granted, with the understanding that said notes shall include his reply to the notes already
filed by the petitioners in G.R. Nos. L-36164 a L-36165. Counsel for the petitioners, likewise, moved
and were granted an extension of time, to expire on March 10, 1973, within which to file, as they did,
their notes in reply to those submitted by the Solicitor General on March 3, 1973. On March 21,
1973, petitioners in L-36165 filed a "Manifestation a Supplemental Rejoinder," whereas the Office of
the Solicitor General submitted in all these cases a "Rejoinder Petitioners' Replies."

After deliberating on these cases, the members of the Court agreed that each would write his own
opinion and serve a copy thereof on his colleagues, and this they did. Subsequently, the Court
discussed said opinions and votes were cast thereon. Such individual opinions are appended hereto.

Accordingly, the writer will first express his person opinion on the issues before the Court. After the
exposition his aforesaid opinion, the writer will make, concurrently with his colleagues in the Court, a
resume of summary of the votes cast by them in these cases.

Writer's Personal Opinion

I.

Alleged academic futility of further proceedings in G.R. L-36165.

This defense or theory, set up by counsel for respondents Gil J. Puyat and Jose Roy in G.R. No. L-
36165, and, also, by the Solicitor General, is predicated upon the fact that, in Our decision in the
plebiscite cases, Mr. Justice Barredo had expressed the view that the 1935 Constitution had "pro
tanto passed into history" and "been legitimately supplanted by the Constitution now in force by
virtue of Proclamation No. 1102 ..."; that Mr. Justice Antonio did not feel "that this Court competent to
act" in said cases "in the absence of any judicially discoverable and manageable standards" and
because "the access to relevant information is insufficient to assure the correct determination of the
issue," apart from the circumstance that "the new constitution has been promulgated and great
interests have already arisen under it" and that the political organ of the Government has recognized
its provisions; whereas, Mr. Justice Esguerra had postulated that "(w)ithout any competent evidence
... about the circumstances attending the holding" of the "referendum or plebiscite" thru the Citizens'
Assemblies, he "cannot say that it was not lawfully held" and that, accordingly, he assumed "that
what the proclamation (No. 1102) says on its face is true and until overcome by satisfactory
evidence" he could not "subscribe to the claim that such plebiscite was not held accordingly"; and
that he accepted "as a fait accompli that the Constitution adopted (by the 1971 Constitutional
Convention) on November 30, 1972, has been duly ratified.

Counsel for respondents Gil J. Puyat and Jose Roy goes on to say that, under these circumstances,
"it seems remote or improbable that the necessary eight (8) votes under the 1935 Constitution, and
much less the ten (10) votes required by the 1972 (1973) Constitution, can be obtained for the relief
sought in the Amended Petition" in G.R. No.
L-36165.

I am unable to share this view. To begin with, Mr. Justice Barredo announced publicly, in open court,
during the hearing of these cases, that he was and is willing to be convinced that his aforementioned
opinion in the plebiscite cases should be reconsidered and changed. In effect, he thus declared that
he had an open mind in connection with the cases at bar, and that in deciding the same he would
not necessarily adhere to said opinion if the petitioners herein succeeded in convincing him that their
view should be sustained.

Secondly, counsel for the aforesaid respondents had apparently assumed that, under the 1935
Constitution, eight (8) votes are necessary to declare invalid the contested Proclamation No. 1102. I
do not believe that this assumption is borne out by any provision of said Constitution. Section 10 of
Article VIII thereof reads:

All cases involving the constitutionality of a treaty or law shall be heard and decided
by the Supreme Court in banc, and no treaty or law may be declared unconstitutional
without the concurrence of two thirds of all the members of the Court.
Pursuant to this section, the concurrence of two-thirds of all the Members of the Supreme Court is
required only to declare "treaty or law" unconstitutional. Construing said provision, in a resolution
dated September 16, 1949, then Chief Justice Moran, voicing the unanimous view of the Members
of this Court, postulated:

... There is nothing either in the Constitution or in the Judiciary Act requiring the vote
of eight Justices to nullify a rule or regulation or an executive order issued by the
President. It is very significant that in the previous drafts of section 10, Article VIII of
the Constitution, "executive order" and "regulation" were included among those that
required for their nullification the vote of two-thirds of all the members of the Court.
But "executive order" and "regulation" were later deleted from the final draft (Aruego,
The Framing of the Philippine Constitution, Vol. I, pp. 495, 496), and thus a mere
majority of six members of this Court is enough to nullify them. 11

The distinction is not without reasonable foundation. The two thirds vote (eight [8] votes)
requirement, indeed, was made to apply only to treaty and law, because, in these cases, the
participation of the two other departments of the government — the Executive and the Legislative —
is present, which circumstance is absent in the case of rules, regulations and executive orders.
Indeed, a law (statute) passed by Congress is subject to the approval or veto of the President,
whose disapproval cannot be overridden except by the vote of two-thirds (2/3) of all members of
each House of Congress. 12 A treaty is entered into by the President with the concurrence of the
Senate, 13 which is not required in the case of rules, regulations or executive orders which are
exclusive acts of the President. Hence, to nullify the same, a lesser number of votes is necessary in
the Supreme Court than that required to invalidate a law or treaty.

Although the foregoing refers to rules, regulations and executive orders issued by the President, the
dictum applies with equal force to executive proclamation, like said Proclamation No. 1102,
inasmuch as the authority to issue the same is governed by section 63 of the Revised Administrative
Code, which provides:

Administrative acts and commands of the (Governor-General) President of the

Philippines touching the organization or mode of operation of the Government or
rearranging or readjusting any of the districts, divisions, parts or ports of the
(Philippine Islands) Philippines and all acts and commands governing the general
performance of duties by public employees or disposing of issues of general concern
shall be made effective in executive orders.

Executive orders fixing the dates when specific laws, resolutions, or orders are to
have or cease to (have) effect and any information concerning matters of public
moment determined by law, resolution, or executive orders, may be promulgated in
an executive proclamation, with all the force of an executive order. 14

In fact, while executive order embody administrative acts or commands of the President, executive
proclamations are mainly informative and declaratory in character, and so does counsel for
respondents Gil J. Puyat and Jose Roy maintain in G.R. No.
L-36165. 15 As consequence, an executive proclamation has no more than "the force of an executive
order," so that, for the Supreme Court to declare such proclamation unconstitutional, under the 1935
Constitution, the same number of votes needed to invalidate an executive order, rule or regulation —
namely, six (6) votes — would suffice.

As regards the applicability of the provisions of the proposed new Constitution, approved by the
1971 Constitutional Convention, in the determination of the question whether or not it is now in force,
it is obvious that such question depends upon whether or not the said new Constitution has been
ratified in accordance with the requirements of the 1935 Constitution, upon the authority of which
said Constitutional Convention was called and approved the proposed Constitution. It is well settled
that the matter of ratification of an amendment to the Constitution should be settled by applying the
provisions of the Constitution in force at the time of the alleged ratification, or the old Constitution. 16

II

Does the issue on the validity of Proclamation No. 1102 partake of the nature of a political, and,
hence, non-justiciable question?
The Solicitor General maintains in his comment the affirmative view and this is his main defense. In
support thereof, he alleges that "petitioners would have this Court declare as invalid the New
Constitution of the Republic" from which — he claims — "this Court now derives its authority"; that
"nearly 15 million of our body politic from the age of 15 years have mandated this Constitution to be
the New Constitution and the prospect of unsettling acts done in reliance on it caution against
interposition of the power of judicial review"; that "in the case of the New Constitution, the
government has been recognized in accordance with the New Constitution"; that "the country's
foreign relations are now being conducted in accordance with the new charter"; that "foreign
governments have taken note of it"; that the "plebiscite cases" are "not precedents for holding
questions regarding proposal and ratification justiciable"; and that "to abstain from judgment on the
ultimate issue of constitutionality is not to abdicate duty."

At the outset, it is obvious to me that We are not being asked to "declare" the new Constitution
invalid. What petitioners dispute is the theory that it has been validly ratified by the people, especially
that they have done so in accordance with Article XV of the 1935 Constitution. The petitioners
maintain that the conclusion reached by the Chief Executive in the dispositive portion of
Proclamation No. 1102 is not borne out by the whereases preceding the same, as the predicates
from which said conclusion was drawn; that the plebiscite or "election" required in said Article XV
has not been held; that the Chief Executive has no authority, under the 1935 Constitution, to
dispensewith said election or plebiscite; that the proceedings before the Citizens' Assemblies did not
constitute and may not be considered as such plebiscite; that the facts of record abundantly show
that the aforementioned Assemblies could not have been held throughout the Philippines from
January 10 to January 15, 1973; and that, in any event, the proceedings in said Assemblies are null
and void as an alleged ratification of the new Constitution proposed by the 1971 Constitutional
Convention, not only because of the circumstances under which said Assemblies had been created
and held, but, also, because persons disqualified to vote under Article V of the Constitution were
allowed to participate therein, because the provisions of our Election Code were not observed in said
Assemblies, because the same were not held under the supervision of the Commission on Elections,
in violation of section 2 of Article X of the 1935 Constitution, and because the existence of Martial
Law and General Order No. 20, withdrawing or suspending the limited freedom to discuss the merits
and demerits of said proposed Constitution, impaired the people's freedom in voting thereon,
particularly a viva voce, as it was done in many instances, as well as their ability to have a
reasonable knowledge of the contents of the document on which they were allegedly called upon to
express their views.

Referring now more specifically to the issue on whether the new Constitution proposed by the 1971
Constitutional Convention has been ratified in accordance with the provisions of Article XV of the
1935 Constitution is a political question or not, I do not hesitate to state that the answer must be in
the negative. Indeed, such is the position taken by this Court, 17 in an endless line of decisions, too
long to leave any room for possible doubt that said issue is inherently and essentially justiciable.
Such, also, has been the consistent position of the courts of the United States of America, whose
decisions have a persuasive effect in this jurisdiction, our constitutional system in the 1935
Constitution being patterned after that of the United States. Besides, no plausible reason has, to my
mind, been advanced to warrant a departure from said position, consistently with the form of
government established under said Constitution..

Thus, in the aforementioned plebiscite cases, 18 We rejected the theory of the respondents therein
that the question whether Presidential Decree No. 73 calling a plebiscite to be held on January 15,
1973, for the ratification or rejection of the proposed new Constitution, was valid or not, was not a
proper subject of judicial inquiry because, they claimed, it partook of a political nature, and
We unanimously declared that the issue was a justiciable one. With identical unanimity, We
overruled the respondents' contention in the 1971 habeas corpus cases, 19 questioning Our authority
to determine the constitutional sufficiency of the factual bases of the Presidential proclamation
suspending the privilege of the writ of habeas corpus on August 21, 1971, despite the opposite view
taken by this Court in Barcelona v. Baker 20 and Montenegro v. Castañeda, 21 insofar as it adhered to
the former case, which view We, accordingly, abandoned and refused to apply. For the same
reason, We did not apply and expressly modified, in Gonzales v. Commission on Elections, 22 the
political-question theory adopted in Mabanag v. Lopez Vito. 23 Hence, respondents herein urge Us to
reconsider the action thus taken by the Court and to revert to and follow the views expressed
in Barcelon v. Baker and Mabanag v. Lopez Vito. 24

The reasons adduced in support thereof are, however, substantially the same as those given in
support of the political-question theory advanced in said habeas corpus and plebiscite cases, which
were carefully considered by this Court and found by it to be legally unsound and constitutionally
untenable. As a consequence, Our decision in the aforementioned habeas corpus cases partakes of
the nature and effect of a stare decisis, which gained added weight by its virtual reiteration in the
plebiscite cases.

The reason why the issue under consideration and other issues of similar character are justiciable,
not political, is plain and simple. One of the principal bases of the non-justiciability of so-called
political questions is the principle of separation of powers — characteristic of the Presidential system
of government — the functions of which are classified or divided, by reason of their nature, into three
(3) categories, namely: 1) those involving the making of laws, which are allocated to the legislative
department; 2) those concerned mainly with the enforcement of such laws and of judicial decisions
applying and/or interpreting the same, which belong to the executive department; and 3) those
dealing with the settlement of disputes, controversies or conflicts involving rights, duties or
prerogatives that are legally demandable and enforceable, which are apportioned to courts of justice.
Within its own sphere — but only within such sphere — each department is supreme and
independent of the others, and each is devoid of authority, not only to encroach upon the powers or
field of action assigned to any of the other departments, but, also, to inquire into or pass upon the
advisability or wisdom of the acts performed, measures taken or decisions made by the other
departments — provided that such acts, measures or decisions are within the area allocated thereto
by the Constitution. 25

This principle of separation of powers under the presidential system goes hand in hand with the
system of checks and balances, under which each department is vested by the Fundamental Law
with some powers to forestall, restrain or arrest a possible or actual misuse or abuse of powers by
the other departments. Hence, the appointing power of the Executive, his pardoning power, his veto
power, his authority to call the Legislature or Congress to special sessions and even to prescribe or
limit the object or objects of legislation that may be taken up in such sessions, etc. Conversely,
Congress or an agency or arm thereof — such as the commission on Appointments — may approve
or disapprove some appointments made by the President. It, also, has the power of appropriation, to
"define, prescribe, and apportion the jurisdiction of the various courts," as well as that of
impeachment. Upon the other hand, under the judicial power vested by the Constitution, the
"Supreme Court and ... such inferior courts as may be established by law," may settle or decide with
finality, not only justiciable controversies between private individuals or entities, but, also, disputes or
conflicts between a private individual or entity, on the one hand, and an officer or branch of the
government, on the other, or between two (2) officers or branches of service, when the latter officer
or branch is charged with acting without jurisdiction or in excess thereof or in violation of law. And
so, when a power vested in said officer or branch of the government is absolute or unqualified, the
acts in the exercise of such power are said to be political in nature, and, consequently, non-
justiciable or beyond judicial review. Otherwise, courts of justice would be arrogating upon
themselves a power conferred by the Constitution upon another branch of the service to the
exclusion of the others. Hence, in Tañada v. Cuenco, 26 this Court quoted with approval from In re
McConaughy, 27 the following:

"At the threshold of the case we are met with the assertion that the questions
involved are political, and not judicial. If this is correct, the court has no jurisdiction as
the certificate of the state canvassing board would then be final, regardless of the
actual vote upon the amendment. The question thus raised is a fundamental one; but
it has been so often decided contrary to the view contended for by the Attorney
General that it would seem to be finally settled.

xxx xxx xxx

"... What is generally meant, when it is said that a question is political, and not
judicial, is that it is a matter which is to be exercised by the people in their primary
political capacity, or that it has been specifically delegated to some other department
or particular officer of the government, with discretionary power to act. See State vs.
Cunningham, 81 Wis. 497, N.W. 724, 15 L.R.A. 561; In re Gunn, 50 Kan. 155; 32
Pac. 470, 948, 19 L.R.A. 519; Green vs. Mills, 69 Fed. 852, 16 C.C.A. 516, 30 L.R.A.
90; Fletcher vs. Tuttle 151 Ill. 41, 37 N.E. 683, 25 L.R.A. 143, 42 Am. St. Rep. 220.
Thus the Legislature may in its discretion determine whether it will pass law or submit
a proposed constitutional amendment to the people. The courts have no judicial
control over such matters, not merely because they involve political questions, but
because they are matters which the people have by the Constitution delegated to the
Legislature. The Governor may exercise the powers delegated him, free from judicial
control, so long as he observes the laws act within the limits of the power conferred.
 His discretionary acts cannot be controllable, not primarily because they are of a
politics nature, but because the Constitution and laws have placed the particular
matter under his control. But every officer under constitutional government must act
accordingly to law and subject its restrictions, and every departure therefrom or
disregard thereof must subject him to that restraining and controlling power of the
people, acting through the agency of the judiciary; for it must be remembered that the
people act through courts, as well as through the executive or the Legislature. One
department is just as representative as the other, and the judiciary is the department
which is charged with the special duty of determining the limitations which the law
places upon all official action. The recognition of this principle, unknown except in
Great Britain and America, is necessary, to "the end that the government may be one
of laws and not of men" — words which Webster said were the greatest contained in
any written constitutional document." (Emphasis supplied.)

and, in an attempt to describe the nature of a political question in terms, it was hoped,
understandable to the laymen, We added that "... the term "political question" connotes, in legal
parlance, what it means in ordinary parlance, namely, a question of policy" in matters concerning the
government of a State, as a body politic. "In other words, in the language of Corpus Juris Secundum
(supra), it refers to "those questions which, under the Constitution, are to be decided by the
people in their sovereign capacity, or in regard to which full discretionary authority has been
delegated to the Legislature or executive branch of the government." It is concerned with issues
dependent upon the wisdom, not legality, of a particular measure."

Accordingly, when the grant of power is qualified, conditional or subject to limitations, the issue on
whether or not the prescribed qualifications or conditions have been met, or the limitations
respected, is justiciable or non-political, the crux of the problem being one of legality or validity of the
contested act, not its wisdom. Otherwise, said qualifications, conditions or limitations — particularly
those prescribed or imposed by the Constitution — would be set at naught. What is more, the judicial
inquiry into such issue and the settlement thereof are the main functions of courts of justice under
the Presidential form of government adopted in our 1935 Constitution, and the system of checks and
balances, one of its basic predicates. As a consequence, We have neither the authority nor the
discretion to decline passing upon said issue, but are under the ineluctable obligation — made
particularly more exacting and peremptory by our oath, as members of the highest Court of the land,
to support and defend the Constitution — to settle it. This explains why, in Miller v. Johnson, 28 it was
held that courts have a "duty, rather than a power", to determine whether another branch of the
government has "kept within constitutional limits." Not satisfied with this postulate, the court went
farther and stressed that, if the Constitution provides how it may be amended — as it is in our 1935
Constitution — "then, unless the manner is followed, the judiciary as the interpreter of that
constitution, will declare the amendment invalid." 29 In fact, this very Court — speaking through
Justice Laurel, an outstanding authority on Philippine Constitutional Law, as well as one of the highly
respected and foremost leaders of the Convention that drafted the 1935 Constitution — declared, as
early as July 15, 1936, that "(i)n 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 organwhich can be called upon to determine
the proper allocation of powers between the several departments" of the government. 30

The Solicitor General has invoked Luther v. Borden 31 in support of his stand that the issue under
consideration is non-justiciable in nature. Neither the factual background of that case nor the action
taken therein by the Federal Supreme Court has any similarity with or bearing on the cases under
consideration.

Luther v. Borden was an action for trespass filed by Luther with the Circuit Court of the United States
against Borden and others for having forcibly entered into Luther's house, in Rhode Island,
sometime in 1842. The defendants who were in the military service of said former colony of England,
alleged in their defense that they had acted in obedience to the commands of a superior officer,
because Luther and others were engaged in a conspiracy to overthrow the government by force and
the state had been placed by competent authority under Martial Law. Such authority was the charter
government of Rhode Island at the time of the Declaration of Independence, for — unlike other
states which adopted a new Constitution upon secession from England — Rhode Island retained its
form of government under a British Charter, making only such alterations, by acts of the Legislature,
as were necessary to adapt it to its subsequent condition as an independent state. It was under this
form of government when Rhode Island joined other American states in the Declaration of
Independence and, by subsequently ratifying the Constitution of the United States, became a
member of the Union. In 1843, it adopted a new Constitution.
Prior thereto, however, many citizens had become dissatisfied with the charter government.
Memorials addressed by them to the Legislature having failed to bring about the desired effect,
meetings were held and associations formed — by those who belonged to this segment of the
population — which eventually resulted in a convention called for the drafting of a new Constitution
to be submitted to the people for their adoption or rejection. The convention was not authorized by
any law of the existing government. The delegates to such convention framed a new Constitution
which was submitted to the people. Upon the return of the votes cast by them, the convention
declared that said Constitution had been adopted and ratified by a majority of the people and
became the paramount law and Constitution of Rhode Island.

The charter government, which was supported by a large number of citizens of the state, contested,
however, the validity of said proceedings. This notwithstanding, one Thomas W. Dorr, who had been
elected governor under the new Constitution of the rebels, prepared to assert authority by force of
arms, and many citizens assembled to support him. Thereupon, the charter government passed an
Act declaring the state under Martial Law and adopted measures to repel the threatened attack and
subdue the rebels. This was the state of affairs when the defendants, who were in the military
service of the charter government and were to arrest Luther, for engaging in the support of the rebel
government — which was never able to exercise any authority in the state — broke into his house.

Meanwhile, the charter government had taken measures to call its own convention to revise the
existing form of government. Eventually, a new constitution was drafted by a convention held under
the authority of the charter government, and thereafter was adopted and ratified by the people.
"(T)he times and places at which the votes were to be given, the persons who were to receive and
return them, and the qualifications of the voters having all been previously authorized and provided
for by law passed by the charter government," the latter formally surrendered all of its powers to the
new government, established under its authority, in May 1843, which had been in
operation uninterruptedly since then.

About a year before, or in May 1842, Dorr, at the head of a military force, had made an unsuccessful
attempt to take possession of the state arsenal in Providence, but he was repulsed, and, after an
"assemblage of some hundreds of armed men under his command at Chepatchet in the June
following, which dispersed upon approach of the troops of the old government, no further effort was
made to establish" his government. "... until the Constitution of 1843" — adopted under the auspices
of the charter government — "went into operation, the charter government continued to assert its
authority and exercise its powers and to enforce obedience throughout the state ... ."

Having offered to introduce evidence to prove that the constitution of the rebels had been ratified by
the majority of the people, which the Circuit Court rejected, apart from rendering judgment for the
defendants, the plaintiff took the case for review to the Federal Supreme Court which affirmed the
action of the Circuit Court, stating:

It is worthy of remark, however, when we are referring to the authority of State

decisions, that the trial of Thomas W. Dorr took place after the constitution of 1843
went into operation. The judges who decided that case held their authority under that
constitution and it is admitted on all hands that it was adopted by the people of the
State, and is the lawful and established government. It is the decision, therefore, of a
State court, whose judicial authority to decide upon the constitution and laws of
Rhode Island is not questioned by either party to this controversy, although the
government under which it acted was framed and adopted under the sanction and
laws of the charter government.

The point, then, raised here has been already decided by the courts of Rhode Island.
The question relates, altogether, to the constitution and laws of that State, and the
well settled rule in this court is, that the courts of the United States adopt and follow
the decisions of the State courts in questions which concern merely the constitution
and laws of the State.

Upon what ground could the Circuit Court of the United States which tried this case
have departed from this rule, and disregarded and overruled the decisions of the
courts of Rhode Island? Undoubtedly the courts of the United States have certain
powers under the Constitution and laws of the United States which do not belong to
the State courts. But the power of determining that a State government has been
lawfully established, which the courts of the State disown and repudiate, is not one of
them. Upon such a question the courts of the United States are bound to follow the
 decisions of the State tribunals, and must therefore regard the charter government as
the lawful and established government during the time of this contest. 32

It is thus apparent that the context within which the case of Luther v. Borden was decided is basically
and fundamentally different from that of the cases at bar. To begin with, the case did not involve a
federal question, but one purely municipal in nature. Hence, the Federal Supreme Court was "bound
to follow the decisions of the State tribunals" of Rhode Island upholding the constitution adopted
under the authority of the charter government. Whatever else was said in that case constitutes,
therefore, an obiter dictum. Besides, no decision analogous to that rendered by the State Court of
Rhode Island exists in the cases at bar. Secondly, the states of the Union have a measure of internal
sovereignty upon which the Federal Government may not encroach, whereas ours is a unitary form
of government, under which our local governments derive their authority from the national
government. Again, unlike our 1935 Constitution, the charter or organic law of Rhode Island
contained no provision on the manner, procedure or conditions for its amendment.

Then, too, the case of Luther v. Borden hinged more on the question of recognition of government,
than on recognition of constitution, and there is a fundamental difference between these two (2)
types of recognition, the first being generally conceded to be a political question, whereas the nature
of the latter depends upon a number of factors, one of them being whether the new Constitution has
been adopted in the manner prescribed in the Constitution in force at the time of the purported
ratification of the former, which is essentially a justiciable question. There was, in Luther v. Borden, a
conflict between two (2) rival governments, antagonistic to each other, which is absent in the present
cases. Here, the Government established under the 1935 Constitution is the very same government
whose Executive Department has urged the adoption of the new or revised Constitution proposed by
the 1971 Constitutional Convention and now alleges that it has been ratified by the people.

In short, the views expressed by the Federal Supreme Court in Luther v. Borden, decided in 1849,
on matters otherthan those referring to its power to review decisions of a state court concerning the
constitution and government of that state, not the Federal Constitution or Government, are
manifestly neither, controlling, nor even persuasive in the present cases, having as
the Federal Supreme Court admitted — no authority whatsoever to pass upon such matters or to
review decisions of said state court thereon. In fact, referring to that case, the Supreme Court of
Minnessota had the following to say:

Luther v. Borden, 7 How. 1, 12 L. Ed. 581, is always cited by those who assert that
the courts have no power to determine questions of a political character. It is
interesting historically, but it has not the slightest application to the case at bar. When
carefully analyzed, it appears that it merely determines that the federal courts will
accept as final and controlling a decision of the highest court of a state upon a
question of the construction of the Constitution of the state. ... . 33

Baker v. Carr, 34 cited by respondents, involved an action to annul a Tennessee statute apportioning
the seats in the General Assembly among the counties of the State, upon the theory that the
legislation violated the equal protection clause. A district court dismissed the case upon the ground,
among others, that the issue was a political one, but, after a painstaking review of the jurisprudence
on the matter, the Federal Supreme Court reversed the appealed decision and held that said
issue was justiciable and non-political, inasmuch as:"... (d)eciding whether a matter has in any
measure been committed by the Constitution to another branch of government, or whether the action
of that branch exceeds whatever authority has been committed, is itself a delicate exercise in
constitutional interpretation, and is a responsibility of this Court as ultimate interpreter of the
Constitution ... ."

Similarly, in Powell v. McCormack, 35 the same Court, speaking through then Chief Justice Warren,
reversed a decision of the Court of Appeals of New York affirming that of a Federal District Court,
dismissing Powell's action for a declaratory judgment declaring thereunder that he — whose
qualifications were uncontested — had been unlawfully excluded from the 90th Congress of the U.S.
Said dismissal was predicated upon the ground, inter alia, that the issue was political, but the
Federal Supreme Court held that it was clearly a justiciable one.

The Supreme Court of Minnessota undertook a careful review of American jurisprudence on the
matter. Owing to the lucidity of its appraisal thereof, We append the same to this opinion as Annex A
thereof.

After an, exhaustive analysis of the cases on this subject, the Court concluded:
 The authorities are thus practically uniform in holding that whether a constitutional
amendment has been properly adopted according to the requirements of an existing
Constitution is a judicial question. There can be little doubt that the consensus of
judicial opinion is to the effect that it is the absolute dutyof the judiciary to determine
whether the Constitution has been amended in the manner required by the
Constitution, unless a special tribunal has been created to determine the question;
and even then many of the courts hold that the tribunal cannot be permitted to
illegally amend the organic law. ... . 36

In the light of the foregoing, and considering that Art. XV of our 1935 Constitution prescribes the
method or procedure for its amendment, it is clear to my mind that the question whether or not the
revised Constitution drafted by the 1971 Constitutional Convention has been ratified in accordance
with said Art. XV is a justiciable one and non-political in nature, and that it is not only subject to
judicial inquiry, but, also, that it is the Court's bounden duty to decide such question.

The Supreme Court of the United States has meaningfully postulated that "the courts cannot reject
as 'no law suit' " — because it allegedly involves a political question — "a bona fide controversy as to
whether some action denominated "political" exceeds constitutional authority." 37

III

Has the proposed new or revised Constitution been ratified conformably to said Art. XV of the 1935
Constitution?

Petitioners in L-36142 maintain the negative view, upon ground: 1) that the President "is without
authority to create the Citizens' Assemblies" through which, respondents maintain, the proposed new
Constitution has been ratified; that said Assemblies "are without power to approve the proposed
Constitution"; 3) that the President "is without power to proclaim the ratification by the Filipino people
of the proposed Constitution"; and 4) that "the election held (in the Citizens' Assemblies) to ratify the
proposed Constitution was not a free election, hence null and void."

Apart from substantially reiterating these grounds support of said negative view, the petitioners in L-
36164 contend: 1) that the President "has no power to call a plebiscite for the ratification or rejection"
of the proposed new Constitution or "to appropriate funds for the holding of the said plebiscite"; 2)
that the proposed new or revised Constitution "is vague and incomplete," as well as "contains
provisions which are beyond the powers of the 1971 Convention to enact," thereby rendering it "unfit
for ... submission the people;" 3) that "(t)he period of time between November 1972 when the 1972
draft was approved and January 11-15, 1973," when the Citizens' Assemblies supposedly ratified
said draft, "was too short, worse still, there was practically no time for the Citizens' Assemblies to
discuss the merits of the Constitution which the majority of them have not read a which they never
knew would be submitted to them ratification until they were asked the question — "do you approve
of the New Constitution?" during the said days of the voting"; and that "(t)here was altogether no
freedom discussion and no opportunity to concentrate on the matter submitted to them when the
1972 draft was supposedly submitted to the Citizens' Assemblies for ratification."

Petitioner in L-36236 added, as arguments in support of the negative view, that : 1) "(w)ith a
government-controlled press, there can never be a fair and proper submission of the proposed
Constitution to the people"; and 2) Proclamation No. 1102 is null and void "(i)nasmuch as the
ratification process" prescribed "in the 1935 Constitution was not followed."

Besides adopting substantially some of the grounds relied upon by the petitioners in the above-
mentioned cases, the petitioners in L-36283 argue that "(t)he creation of the Citizens' Assemblies as
the vehicle for the ratification of the Constitution was a deception upon the people since the
President announced the postponement of the January 15, 1973 plebiscite to either February 19 or
March 5, 1973." 38

The reasons adduced by the petitioners in L-36165 in favor of the negative view have already been
set forth earlier in this opinion. Hence, it is unnecessary to reproduce them here. So it is, with
respect to the positions taken in L-36165 by counsel for therein respondents Gil J. Puyat and Jose
Roy — although more will be said later about them — and by the Solicitor General, on behalf of the
other respondents in that case and the respondents in the other cases.

1. What is the procedure prescribed by the 1935 Constitution for its amendment?
Under section 1 of Art. XV of said Constitution, three (3) steps are essential, namely:

1. That the amendments to the Constitution be proposed either by Congress or by a convention

called for that purpose, "by a vote of three-fourths of all the Members of the Senate and the House of
Representatives voting separately," but "in joint session assembled";

2. That such amendments be "submitted to the people for their ratification" at an "election"; and

3. That such amendments be "approved by a majority of the votes cast" in said election.

Compliance with the first requirement is virtually conceded, although the petitioners in L-36164
question the authority of the 1971 Constitutional Convention to incorporate certain provisions into the
draft of the new or revised Constitution. The main issue in these five (5) cases hinges, therefore, on
whether or not the last two (2) requirements have been complied with.

2. Has the contested draft of the new or revised Constitution been submitted to the people for their
ratification conformably to Art. XV of the Constitution?

In this connection, other provisions of the 1935 Constitution concerning "elections" must, also, be
taken into account, namely, section I of Art. V and Art. X of said Constitution. The former reads:

Section 1. Suffrage may be exercised by male citizens of the Philippines not

otherwise disqualified by law, who are twenty-one years of age or over and are able
to read and write, and who shall have resided in the Philippines for one year and in
the municipality wherein they propose to vote for at least six months preceding the
election. The National Assembly shall extend the right of suffrage to women, if in a
plebiscite which shall be held for that purpose within two years after the adoption of
this Constitution, not less than three hundred thousand women possessing the
necessary qualifications shall vote affirmatively on the question.

Sections 1 and 2 of Art. X of the Constitution ordain in part:

Section 1. There shall be an independent Commission on Elections composed of a

Chairman and two other Members to be appointed by the President with the consent
of the Commission on Appointments, who shall hold office for a term of nine years
and may not be reappointed. ...

xxx xxx xxx

Sec. 2. The Commission on Elections shall have exclusive charge of the

enforcement and administration of all laws relative to the conduct of elections and
shall exercise all other functions which may be conferred upon it by law. It shall
decide, save those involving the right to vote, all administrative questions, affecting
elections, including the determination of the number and location of polling places,
and the appointment of election inspectors and of other election officials. All law
enforcement agencies and instrumentalities of the Government, when so required by
the Commission, shall act as its deputiesfor the purpose of insuring fee, orderly, and
honest elections. The decisions, orders, and rulings of the Commission shall be
subject to review by the Supreme Court.

xxx xxx xxx 39

a. Who may vote in a plebiscite under Art. V of the Constitution?

Petitioners maintain that section 1 of Art. V of the Constitution is a limitation upon the exercise of the
right of suffrage. They claim that no other persons than "citizens of the Philippines not otherwise
disqualified by law, who are twenty-one years of age or over and are able to read and write, and who
shall have resided in the Philippines for one year and in the municipality wherein they propose to
vote for at least six months preceding the election," may exercise the right of suffrage in the
Philippines. Upon the other hand, the Solicitor General contends that said provision
merely guarantees the right of suffrage to persons possessing the aforementioned qualifications and
none of the disqualifications, prescribed by law, and that said right may be vested by competent
authorities in persons lacking some or all of the aforementioned qualifications, and possessing some
of the aforesaid disqualifications. In support of this view, he invokes the permissive nature of the
language — "(s)uffrage may be exercised" — used in section 1 of Art. V of the Constitution, and the
provisions of the Revised Barrio Charter, Republic Act No. 3590, particularly sections 4 and 6
thereof, providing that citizens of the Philippines "eighteen years of age or over," who are registered
in the list of barrio assembly members, shall be members thereof and may participate as such in the
plebiscites prescribed in said Act.

I cannot accept the Solicitor General's theory. Art. V of the Constitution declares who may exercise
the right of suffrage, so that those lacking the qualifications therein prescribed may not exercise such
right. This view is borne out by the records of the Constitutional Convention that drafted the 1935
Constitution. Indeed, section 1 of Art. V of the 1935 Constitution was largely based on the report of
the committee on suffrage of the Convention that drafted said Constitution which report was, in turn,
"strongly influenced by the election laws then in force in the Philippines ... ." 40 " Said committee had
recommended: 1) "That the right of suffrage should exercised only by male citizens of the
Philippines." 2) "That should be limited to those who could read and write." 3) "That the duty to vote
should be made obligatory." It appears that the first recommendation was discussed extensively in
the Convention, and that, by way of compromise, it was eventually agreed to include, in section 1 of
Art. V of the Constitution, the second sentence thereof imposing upon the National Assembly
established by the original Constitution — instead of the bicameral Congress subsequently created
by amendment said Constitution — the duty to "extend the right of suffrage women, if in a plebiscite
to, be held for that purpose within two years after the adoption of this Constitution, not less than
three hundred thousand women possessing the necessary qualifications shall vote affirmatively on
the question." 41

The third recommendation on "compulsory" voting was, also debated upon rather extensively, after
which it was rejected by the Convention. 42 This accounts, in my opinion, for the permissive language
used in the first sentence of said Art. V. Despite some debates on the age qualification —
amendment having been proposed to reduce the same to 18 or 20, which were rejected, and the
residence qualification, as well as the disqualifications to the exercise of the right of suffrage — the
second recommendation limiting the right of suffrage to those who could "read and write" was — in
the language of Dr. Jose M. Aruego, one of the Delegates to said Convention — "readily approved in
the Convention without any dissenting vote," although there was some debate on whether the
Fundamental Law should specify the language or dialect that the voter could read and write, which
was decided in the negative. 43

What is relevant to the issue before Us is the fact that the constitutional provision under
consideration was meant to be and is a grant or conferment of a right to persons possessing the
qualifications and none of the disqualifications therein mentioned, which in turn, constitute
a limitation of or restriction to said right, and cannot, accordingly, be dispensed with, except by
constitutional amendment. Obviously, every such constitutional grant or conferment of a right is
necessarily a negation of the authority of Congress or of any other branch of the Government to
deny said right to the subject of the grant — and, in this sense only, may the same partake of the
nature of a guarantee. But, this does not imply not even remotely, that the Fundamental Law allows
Congress or anybody else to vest in those lacking the qualifications and having the disqualifications
mentioned in the Constitution the right of suffrage.

At this juncture, it is noteworthy that the committee on suffrage responsible for the adoption of
section 1 of Art. V of the Constitution was "strongly influenced by the election laws then in force in
the Philippines." Our first Election Law was Act 1582, passed on January 9, 1907, which was partly
amended by Acts 1669, 1709, 1726 and 1768, and incorporated into the Administrative Code of
1916 — Act 2657 — as chapter 20 thereof, and then in the Administrative Code of 1917 — Act 2711
— as chapter 18 thereof, which, in turn, was amended by Act 3387, approved on December 3, 1927.
Sections 431 and 432 of said Code of 1917, prescribing, respectively, the qualifications for and
disqualifications from voting, are quoted below. 44 In all of these legislative acts, the provisions
concerning the qualifications of voters partook of the nature of a grant or recognition of the right of
suffrage, and, hence, of a denial thereof to those who lacked the requisite qualification and
possessed any of the statutory disqualifications. In short, the history of section 1, Art. V of the
Constitution, shows beyond doubt than the same conferred — not guaranteed — the authority to
persons having the qualifications prescribed therein and none of disqualifications to be specified in
ordinary laws and, necessary implication, denied such right to those lacking any said qualifications,
or having any of the aforementioned disqualifications.

This view is further bolstered by the fact that the 1971 Constitutional Convention sought the
submission to a plebiscite of a "partial amendment" to said section 1 of Art. V of the 1935
Constitution, by reducing the voting age from twenty-one (21) years to eighteen (18) years, which,
however, did not materialize on account of the decision of this Court in Tolentino v. Commission on
Elections, 45 granting the writs, of prohibition and injunction therein applied for, upon the ground that,
under the Constitution, all of the amendments adopted by the Convention should be submitted in "an
election" or a single election, not separately or in several or distinct elections, and that the proposed
amendment sought to be submitted to a plebiscite was not even a complete amendment, but a
"partial amendment" of said section 1, which could be amended further, after its ratification, had the
same taken place, so that the aforementioned partial amendment was, for legal purposes, no more
than a provisional or temporary amendment. Said partial amendment was predicated upon the
generally accepted contemporary construction that, under the 1935 Constitution, persons below
twenty-one (21) years of age could not exercise the right of suffrage, without a previous amendment
of the Constitution.

Upon the other hand, the question, whether 18-year-old members of barrio assemblies may vote in
barrio assembly plebiscites is, to say the least, a debatable one. Indeed, there seems to be a conflict
between the last paragraph of said section 6 of Rep. Act No. 3590, 46 pursuant to which the "majority
vote of all the barrio assembly members" (which include all barrio residents 18 years of age or over,
duly registered in the list of barrio assembly members) is necessary for the approval, in an assembly
plebiscite, of "any budgetary, supplemental appropriations or special tax ordinances," whereas,
according to the paragraph preceding the penultimate one of said section, 47 "(a)ll duly registered
barrio assembly members qualified to vote" — who, pursuant to section 10 of the same Act, must be
citizens "of the Philippines, twenty-one years of age or over, able to read and write," and residents
the barrio "during the six months immediately preceding election, duly registered in the list of voters"
and " otherwise disqualified ..." — just like the provisions of present and past election codes of the
Philippines and Art. V of the 1935 Constitution — "may vote in the plebiscite."

I believe, however, that the apparent conflict should resolved in favor of the 21-year-old members of
the assembly, not only because this interpretation is in accord with Art. V the Constitution, but, also,
because provisions of a Constitution — particularly of a written and rigid one, like ours generally
accorded a mandatory status — unless the intention to the contrary is manifest, which is not so as
regards said Art. V — for otherwise they would not have been considered sufficiently important to be
included in the Fundamental Law of the land. 48 Besides, it would be illogical, if not absurd, believe
that Republic Act No. 3590 requires, for the most important measures for which it demands — in
addition to favorable action of the barrio council — the approval of barrio assembly through
a plebiscite, lesser qualifications than those prescribed in dealing with ordinary measures for which
such plebiscite need not be held.

It is similarly inconceivable that those who drafted the 1935 Constitution intended section 1 of Art. V
thereof to apply only to elections of public officers, not to plebiscites for the ratification of
amendments to the Fundamental Law or revision thereof, or of an entirely new Constitution, and
permit the legislature to require lesser qualifications for such ratification, notwithstanding the fact that
the object thereof much more important — if not fundamental, such as the basic changes introduced
in the draft of the revised Constitution adopted by the 1971 Constitutional Convention, which a
intended to be in force permanently, or, at least, for many decades, and to affect the way of life of
the nation — and, accordingly, demands greater experience and maturity on the part of the
electorate than that required for the election of public officers, 49 whose average term ranges from 2
to 6 years.

It is admitted that persons 15 years of age or over, but below 21 years, regardless of whether or not
they possessed the other qualifications laid down in both the Constitution and the present Election
Code, 50 and of whether or not they are disqualified under the provisions of said Constitution and
Code, 51 or those of Republic Act No. 3590, 52have participated and voted in the Citizens' Assemblies
that have allegedly ratified the new or revised Constitution drafted by the 1971 Constitutional
Convention.

In fact, according to the latest official data, the total number of registered voters 21 years of age or
over in the entire Philippines, available in January 1973, was less than 12 million. Yet, Proclamation
No. 1102 states that 14,976,56 "members of all the Barangays (Citizens Assemblies) voted for the
adoption of the proposed Constitution, as against ... 743,869 who voted for its rejection," whereas,
on the question whether or not the people still wanted a plebiscite to be called to ratify the new
Constitution, "... 14,298,814 answered that there was no need for a plebiscite and that the vote of
the Barangays (Citizens Assemblies) should be considered as a vote in a plebiscite." In other words,
it is conceded that the number of people who allegedly voted at the Citizens' Assemblies for
exceeded the number of registered voters under the Election Code in force in January 1973.
It is thus clear that the proceedings held in such Citizens' Assemblies — and We have more to say
on this point in subsequent pages — were fundamentally irregular, in that persons lacking the
qualifications prescribed in section 1 of Art. V of the Constitution were allowed to vote in said
Assemblies. And, since there is no means by which the invalid votes of those less than 21 years of
age can be separated or segregated from those of the qualified voters, the proceedings in the
Citizens' Assemblies must be considered null and void. 53

It has been held that "(t)he power to reject an entire poll ... should be exercised ... in a case where it
is impossible to ascertain with reasonable certainty the true vote," as where "it is impossible to
separate the legal votes from the illegal or spurious ... ." 54

In Usman v. Commission on Elections, et al., 55 We held:

Several circumstances, defying exact description and dependent mainly on the

factual milieu of the particular controversy, have the effect of destroying the integrity
and authenticity of disputed election returns and of avoiding their prima facie value
and character. If satisfactorily proven, although in a summary proceeding, such
circumstances as alleged by the affected or interested parties, stamp the election
returns with the indelible mark of falsity and irregularity, and, consequently, of
unreliability, and justify their exclusion from the canvass.

Then, too, the 1935 Constitution requires "a majority of the votes cast" for a proposed amendment to
the Fundamental Law to be "valid" as part thereof, and the term "votes cast" has a well-settled
meaning.

The term "votes cast" ... was held in Smith v. Renville County Commissioners, 65
N.W. 956, 64 Minn. 16, to have been used as an equivalent of "ballots cast." 56

The word "cast" is defined as "to deposit formally or officially." 57

It seems to us that a vote is cast when a ballot is deposited indicating a "choice." ...
The word "cast" means "deposit (a ballot) formally or officially ... .

... In simple words, we would define a "vote cast" as the exercise on a ballot of the
choice of the voter on the measure proposed. 58

In short, said Art. XV envisages — with the term "votes cast" — choices made on ballots — not
orally or by raising — by the persons taking part in plebiscites. This is but natural and logical, for,
since the early years of the American regime, we had adopted the Australian Ballot System, with its
major characteristics, namely, uniform official ballots prepared and furnished by the Government and
secrecy in the voting, with the advantage of keeping records that permit judicial inquiry, when
necessary, into the accuracy of the election returns. And the 1935 Constitution has been consistently
interpreted in all plebiscites for the ratification rejection of proposed amendments thereto, from 1935
to 1967. Hence, the viva voce voting in the Citizens' Assemblies was and is null and void ab initio.

b. How should the plebiscite be held? (COMELEC supervision indispensable; essential requisites)

Just as essential as compliance with said Art. V of the 19 Constitution is that of Art. X thereof,
particularly its sections 1 and 2. Indeed, section 1 provides that "(t)here shall be
an independent Commission on Elections ... ." The point to be stressed here is the term
"independent." Indeed, why was the term used?

In the absence of said constitutional provision as to the independence of the Commission, would it
have been depends upon either Congress or the Judiciary? The answer must be the negative,
because the functions of the Commission — "enforcement and administration" of election laws —
are neither legislative nor judicial in nature, and, hence, beyond the field allocated to either Congress
or courts of justice. Said functions are by their nature essentially executive, for which reason, the
Commission would be under the "control" of the President, pursuant to section 10, paragraph (1) of
Art. VII of the Constitution, if Art. X thereof did not explicitly declare that it (the Commission) is an
"independent" body. In other words, in amending the original 1935 Constitution, by inserting therein
said Art. X, on the Commission on Elections, the purpose was to make said
Commission independent principally of the Chief Executive.
And the reason therefor is, also, obvious. Prior to the creation of the Commission on Elections as a
constitutional organ, election laws in the Philippines were enforced by the then Department of the
Interior, through its Executive Bureau, one of the offices under the supervision and control of said
Department. The same — like other departments of the Executive Branch of the Government —
was, in turn, under the control of the Chief Executive, before the adoption of the 1935 Constitution,
and had been — until the abolition of said Department, sometime ago — under the control of the
President of the Philippines, since the effectivity of said Fundamental Law. Under the provisions
thereof, the Executive could so use his power of control over the Department of the Interior and its
Executive Bureau as to place the minority party at such a great, if not decisive, disadvantage, as to
deprive it, in effect, of the opportunity to defeat the political party in power, and, hence, to enable the
same to perpetuate itself therein. To forestall this possibility, the original 1935 Constitution was
amended by the establishment of the Commission on Elections as a constitutional body independent
primarily of the President of the Philippines.

The independence of the Commission was sought to be strengthened by the long term of office of its
members — nine (9) years, except those first appointed 59 — the longest under the Constitution,
second only to that of the Auditor General 60; by providing that they may not be removed from office
except by impeachment, placing them, in this respect, on the same plane as the President, the Vice-
President, the Justices of the Supreme Court and the Auditor General; that they may not be
reappointed; that their salaries, "shall be neither increased nor diminished during their term of office";
that the decisions the Commission "shall be subject to review by the Supreme Court" only 61; that
"(n)o pardon, parole, or suspension sentence for the violation of any election law may be granted
without the favorable recommendation of the Commission"62; and, that its chairman and members
"shall not, during the continuance in office, engage in the practice of any profession or intervene,
directly or indirectly, in the management or control of any private enterprise which in anyway may
affected by the functions of their office; nor shall they, directly or indirectly, be financially interested in
any contract with the Government or any subdivision or instrumentality thereof." 63 Thus, the framers
of the amendment to the original Constitution of 1935 endeavored to do everything possible protect
and insure the independence of each member of the Commission.

With respect to the functions thereof as a body, section 2 of said Art. X ordains that "(t)he
Commission on Elections shall have exclusive charge of the enforcement and administration all laws
relative to the conduct of elections," apart from such other "functions which may be conferred upon it
by law." It further provides that the Commission "shall decide, save those involving the right to
vote, all administrative question affecting elections, including the determination of the number and
location of polling places, and the appointment of election inspectors and of other election officials."
And, to forests possible conflicts or frictions between the Commission, on one hand, and the other
offices or agencies of the executive department, on the other, said section 2 postulates that "(a)ll law
enforcement agencies and instrumentalities of the Government, when so required by the
Commission, shall act as its deputies for the purpose of insuring free, orderly, and honest elections."
Not satisfied with this, it declares, in effect, that "(t)he decisions, orders, and ruling of the
Commission" shall not be subject to review, except by the Supreme Court.

In accordance with the letter and spirit of said Art. X of the Constitution, Rep. Act No. 6388,
otherwise known as the Election Code of 1971, implements the constitutional powers of the
Commission on Elections and grants additional powers thereto, some of which are enumerated in
sections 5 and 6 of said Act, quoted below. 64 Moreover, said Act contains, inter alia, detailed
provisions regulating contributions and other (corrupt) practices; the establishment of election
precincts; the designation and arrangement of polling places, including voting booths, to protect the
secrecy of the ballot; formation of lists of voters, the identification and registration of voters, the
proceedings therefor, as well as for the inclusion in, or exclusion or cancellation from said list and
the publication thereof; the establishment of municipal, provincial and files of registered voters; the
composition and appointment of board of election inspectors; the particulars of the official ballots to
be used and the precautions to be taken to insure authenticity thereof; the procedure for the casting
of votes; the counting of votes by boards of inspectors; the rules for the appreciation of ballots and
the preparation and disposition of election returns; the constitution and operation of municipal,
provincials and national boards of canvassers; the presentation of the political parties and/or their
candidates in each election precinct; the proclamation of the results, including, in the case of election
of public officers, election contests; and the jurisdiction of courts of justice in cases of violation of the
provisions of said Election Code and the penalties for such violations.

Few laws may be found with such meticulous and elaborate set of provisions aimed at "insuring free,
orderly, and honest election," as envisaged in section 2 of Art. X of the Constitution. Yet, none of the
foregoing constitutional and statutory provisions was followed by the so-called Barangays or
Citizens' Assemblies. And no reasons have been given, or even sought to be given therefor. In
many, if not most, instances, the election were held a viva voce, thus depriving the electorate of the
right to vote secretly — one of the most, fundamental and critical features of our election laws from
time immemorial — particularly at a time when the same was of utmost importance, owing to
the existence of Martial Law.

In Glen v. Gnau, 65 involving the casting of many votes, openly, without complying with the
requirements of the law pertinent thereto, it was held that the "election officers" involved "cannot be
too strongly condemned" therefor and that if they "could legally dispense with such requirement ...
they could with equal propriety dispense with all of them, including the one that the vote shall be by
secret ballot, or even by ballot
at all ... ."

Moreover, upon the formal presentation to the Executive of the proposed Constitution drafted by the
1971 Constitutional Convention, or on December 1, 1972, Presidential Decree No. 73 (on the validity
of which — which was contested in the plebiscite cases, as well as in the 1972 habeas
corpus cases 66 — We need not, in the case of bar, express any opinion) was issued, calling a
plebiscite, to be held on January 15, 1973, at which the proposed Constitution would be submitted to
the people for ratification or rejection; directing the publication of said proposed Constitution; and
declaring, inter alia, that "(t)he provision of the Election Code of 1971, insofar as they are not
inconsistent" with said decree — excepting those "regarding right and obligations of political parties
and candidates" — "shall apply to the conduct of the plebiscite." Indeed, section 2 of said Election
Code of 1971 provides that "(a)ll elections of public officers except barrio officials and
plebiscites shall be conducted in the manner provided by this Code." General Order No. 20, dated
January 7, 1973, postponing until further notice, "the plebiscite scheduled to be held on January 15,
1973," said nothing about the procedure to be followed in plebiscite to take place at such notice, and
no other order or decree has been brought to Our attention, expressly or impliedly repealing the
provisions of Presidential Decree 73, insofar as said procedure is concerned.

Upon the other hand, said General Order No. 20 expressly suspended "the provisions of Section 3 of
Presidential Decree No. 73 insofar as they allow free public discussion of proposed Constitution ...
temporarily suspending effects of Proclamation No. 1081 for the purposes of free open dabate on
the proposed Constitution ... ." This specific mention of the portions of the decrees or orders or
instructions suspended by General Order No. 20 necessarily implies that all other portions of said
decrees, orders or instructions — and, hence, the provisions of Presidential Decree No. 73 outlining
the procedure to be followed in the plebiscite for ratification or rejection of the proposed Constitution
— remained in force, assuming that said Decree is valid.

It is claimed that by virtue of Presidential Decree No. 86-A — the text of which is quoted below 67 —
the Executive declared, inter alia, that the collective views expressed in the Citizens' Assemblies
"shall be considered in the formulation of national policies or programs and, wherever practicable,
shall be translated into concrete and specific decision"; that such Citizens' Assemblies "shall
consider vital national issues ... like the holding of the plebiscite on the new Constitution ... and
others in the future, which shall serve as guide or basis for action or decision by the national
government"; and that the Citizens' Assemblies "shall conduct between January 10 and 15, 1973,
a referendum on important national issues, including those specified in paragraph 2 hereof, and
submit the results thereof to the Department of Local Governments and Community Development
immediately thereafter, ... ." As in Presidential Decree No. 86, this Decree No. 86-A does not and
cannot exclude the exercise of the constitutional supervisory power of the Commission on Elections
or its participation in the proceedings in said Assemblies, if the same had been intended to constitute
the "election" or Plebiscite required Art. V of the 1935 Constitution. The provision of Decree No. 86-A
directing the immediate submission of the result thereof to the Department of Local Governments
Community Development is not necessarily inconsistent with, and must be subordinate to the
constitutional power of the Commission on Elections to exercise its "exclusive authority over the
enforcement and administration of all laws to the conduct of elections," if the proceedings in the
Assemblies would partake of the nature of an "election" or plebiscite for the ratification or rejection of
the proposed Constitution.

We are told that Presidential Decree No. 86 was further amended by Presidential Decree No. 86-B,
dated 1973, ordering "that important national issues shall from time to time; be referred to the
Barangays (Citizens Assemblies) for resolution in accordance with Presidential Decree No. 86-A
dated January 5, 1973 and that the initial referendum include the matter of ratification of the
Constitution by the 1971 Constitutional Convention" and that "(t)he Secretary of the Department of
Local Governments and Community Development shall insure the implementation of this order." As
in the case of Presidential Decrees Nos. 86 and 86-A, the foregoing directives do not necessarily
exclude exercise of the powers vested by the 1935 Constitution in the Commission on Elections,
even if the Executive had the authority to repeal Art. X of our Fundamental Law — which he does
not possess. Copy of Presidential Decree No. 86-B is appended hereto as Annex B hereof.

The point is that, such of the Barrio Assemblies as were held took place without the intervention of
the Commission on Elections, and without complying with the provisions of the Election Code of
1971 or even of those of Presidential Decree No. 73. What is more, they were held under the
supervision of the very officers and agencies of the Executive Department sought to be
excluded therefrom by Art. X of the 1935 Constitution. Worse still, said officers and agencies of the
1935 Constitution would be favored thereby, owing to the practical indefinite extension of their
respective terms of office in consequence of section 9 of the Transitory Provisions, found in Art. XVII
of the proposed Constitution, without any elections therefor. And the procedure therein mostly
followed is such that there is no reasonable means of checking the accuracy of the returns files by
the officers who conducted said plebiscites. This is another patent violation of Art. of the Constitution
which can hardly be sanctioned. And, since the provisions of this article form part of
the fundamental scheme set forth in the 1935 Constitution, as amended, to insure the "free, orderly,
and honest" expression of the people's will, the aforementioned violation thereof renders null and
void the contested proceedings or alleged plebiscite in the Citizens' Assemblies, insofar as the same
are claimed to have ratified the revised Constitution proposed by the 1971 Constitutional
Convention. "... (a)ll the authorities agree that the legal definition of an election, as well as that which
is usually and ordinarily understood by the term, is a choosing or as election by those having a right
to participate (in the selection) of those who shall fill the offices, or of the adoption or rejection of any
public measure affecting the territory involved. 15 Cyc. 279; Lewis v. Boynton, 25 Colo. 486, 55 Pac.
732; Saunders v. Haynes, 13 Cal. 145; Seaman v. Baughman, 82 Iowa 216, 47 N.W. 1091, 11
L.R.A. 354; State v. Hirsh, 125 Ind. 207, 24 N.E. 1062, 9 L.R.A. 170; Bouvier's Law Dictionary. 68

IV

Has the proposed Constitution aforementioned

been approved by a majority of the people in
Citizens' Assemblies allegedly held
throughout the Philippines?

Respondents maintain the affirmative, relying upon Proclamation No. 1102, the validity of which is
precisely being contested by petitioners herein. Respondents claim that said proclamation is
"conclusive" upon this Court, or is, at least, entitled to full faith and credence, as an enrolled bill; that
the proposed Constitution has been, in fact, ratified, approved or adopted by the "overwhelming"
majority of the people; that Art. XV of the 1935 Constitution has thus been "substancially" complied
with; and that the Court refrain from passing upon the validity of Proclamation No. 1102, not only
because such question is political in nature, but, also, because should the Court invalidate the
proclamation, the former would, in effect, veto the action of the people in whom sovereignty resides
and from its power are derived.

The major flaw in this process of rationalization is that it assumes, as a fact, the very premise on
which it is predicated, and which, moreover, is contested by the petitioners. As the Supreme Court of
Minnessota has aptly put it —

... every officer under a constitutional government must act according to law and
subject to its restrictions, and every departure therefrom or disregard thereof must
subject him to the restraining and controlling of the people, acting through the agency
of the judiciary; for it must be remembered that the people act through courts, as well
as through the executive or the Legislature. One department is just as representative
as the other, and the judiciary is the department which is charged with the special
duty of determining the limitations which the law places upon all official action. ... .

Accordingly, the issue boils downs to whether or not the Executive acted within the limits of his
authority when he certified in Proclamation No. 1102 "that the Constitution proposed by the nineteen
hundred and seventy-one (1971) Constitutional Convention has been ratified by an overwhelming
majority of all of the votes cast by the members of all the Barangays (Citizens Assemblies)
throughout the Philippines and has thereby come into effect."

In this connection, it is not claimed that the Chief Executive had personal knowledge of the data he
certified in said proclamation. Moreover, Art. X of the 1935 Constitution was precisely inserted to
place beyond the Executive the power to supervise or even exercise any authority whatsoever over
"all laws relative to the conduct of elections," and, hence, whether the elections are for the choice or
selection of public officers or for the ratification or rejection of any proposed amendment, or revision
of the Fundamental Law, since the proceedings for the latter are, also, referred to in said Art. XV as
"elections".

The Solicitor General stated, in his argument before this Court, that he had been informed that there
was in each municipality a municipal association of presidents of the citizens' assemblies for each
barrio of the municipality; that the president of each such municipal association formed part of a
provincial or city association of presidents of such municipal associations; that the president of each
one of these provincial or city associations in turn formed part of a National Association or
Federation of Presidents of such Provincial or City Associations; and that one Francisco Cruz from
Pasig, Rizal, as President of said National Association or Federation, reported to the President of the
Philippines, in the morning of January 17, 1973, the total result of the voting in the citizens'
assemblies all over the country from January 10 to January 15, 1973. The Solicitor General further
intimated that the said municipal associations had reported the results of the citizens' assemblies in
their respective municipalities to the corresponding Provincial Association, which, in turn, transmitted
the results of the voting in the to the Department of Local Governments and Community
Development, which tabulated the results of the voting in the citizens' assemblies throughout the
Philippines and then turned them over to Mr. Franciso Cruz, as President or acting President of the
National Association or Federation, whereupon Mr. Cruz, acting in a ceremonial capacity, reported
said results (tabulated by the Department of Governments and Community Development) to the
Chief Executive, who, accordingly, issued Proclamation No. 1102.

The record shows, however, that Mr. Cruz was not even a member of any barrio council since 1972,
so that he could possibly have been a member on January 17, 1973, of a municipal association
of presidents of barrio or ward citizens' assemblies, much less of a Provincial, City or National
Association or Federation of Presidents of any such provincial or city associations.

Secondly, at the conclusion of the hearing of these cases February 16, 1973, and in the resolution of
this Court of same date, the Solicitor General was asked to submit, together with his notes on his
oral argument, a true copy of aforementioned report of Mr. Cruz to the President and of
"(p)roclamation, decree, instruction, order, regulation or circular, if any, creating or directing or
authorizing creation, establishment or organization" of said municipal, provincial and national
associations, but neither a copy of alleged report to the President, nor a copy of any "(p)roclamation,
decree, instruction, order, regulation or circular," has been submitted to this Court. In the absence of
said report, "(p)roclamation, decree, instruction," etc., Proclamation No. 1102 is devoid of
any factual and legalfoundation. Hence, the conclusion set forth in the dispositive portion of said
Proclamation No. 1102, to the effect that the proposed new or revised Constitution had been ratified
by majority of the votes cast by the people, can not possibly have any legal effect or value.

The theory that said proclamation is "conclusive upon Court is clearly untenable. If it were, acts of
the Executive and those of Congress could not possibly be annulled or invalidated by courts of
justice. Yet, such is not the case. In fact, even a resolution of Congress declaring that a given person
has been elected President or Vice-President of the Philippines as provided in the Constitution, 69 is
not conclusive upon the courts. It is no more than prima facie evidence of what is attested to by said
resolution. 70 If assailed directly in appropriate proceedings, such as an election protest, if and when
authorized by law, as it is in the Philippines, the Court may receive evidence and declare, in
accordance therewith, who was duly elected to the office involved. 71 If prior to the creation of the
Presidential Electoral Tribunal, no such protest could be filed, it was not because the resolution of
Congress declaring who had been elected President or Vice-President was conclusive upon courts
of justice, but because there was no law permitting the filing of such protest and declaring what court
or body would hear and decide the same. So, too, a declaration to the effect that a given
amendment to the Constitution or revised or new Constitution has been ratified by a majority of the
votes cast therefor, may be duly assailed in court and be the object of judicial inquiry,
in direct proceedings therefor — such as the cases at bar — and the issue raised therein may and
should be decided in accordance with the evidence presented.

The case of In re McConaughy 72 is squarely in point. "As the Constitution stood from the
organization of the state" — of Minnessota — "all taxes were required to be raised under the system
known as the 'general property tax.' Dissatisfaction with the results of this method and the
development of more scientific and satisfactory methods of raising revenue induced the Legislature
to submit to the people an amendment to the Constitution which provided merely that taxes shall be
uniform upon the same class of subjects. This proposed amendment was submitted at the general
election held in November, 1906, and in due time it was certified by the state canvassing board and
proclaimed by the Governor as having been legally adopted. Acting upon the assumption that the
amendment had become a part of the Constitution, the Legislature enacted statutes providing for a
State Tax Commission and a mortgage registry tax, and the latter statute, upon the same theory,
was held constitutional" by said Court. "The district court found that the amendment had no in fact
been adopted, and on this appeal" the Supreme Court was "required to determine the correctness of
that conclusion."

Referring to the effect of the certification of the State Board of Canvassers created by the Legislature
and of theproclamation made by the Governor based thereon, the Court held: "It will be noted that
this board does no more than tabulate the reports received from the various county board and add
up and certify the results. State v. Mason, 45 Wash. 234, 88 Pac. 126, 9 L.R.A. (U.S.) 1221. It
is settled law that the decisions of election officers, and canvassing boards are not conclusive and
that the final decision must rest with the courts, unless the law declares that the decisions of the
board shall be final" — and there is no such law in the cases at bar. "... The correctness of the
conclusion of the state board rests upon the correctness of the returns made by the county boards
and it is inconceivable that it was intended that this statement of result should be final and
conclusive regardless of the actual facts. The proclamation of the Governor adds nothing in the way
of conclusiveness to the legal effect of the action of the canvassing board. Its purpose is to formally
notify the people of the state of the result of the voting as found by the canvassing board. James on
Const. Conv. (4th Ed.) sec. 523."

In Bott v. Wartz, 73 the Court reviewed the statement of results of the election made by the
canvassing board, in order that the true results could be judicially determined. And so did the court
in Rice v. Palmer. 74

Inasmuch as Art. X of the 1935 Constitution places under the "exclusive" charge of the Commission
on Elections, "the enforcement and administration of all laws relative to the conduct of
elections," independently of the Executive, and there is not even a certification by the Commission in
support of the alleged results of the citizens' assemblies relied upon in Proclamation No. 1102 —
apart from the fact that on January 17, 1973 neither the alleged president of the Federation of
Provincial or City Barangays nor the Department of Local Governments had certified to the President
the alleged result of the citizens' assemblies all over the Philippines — it follows necessarily that,
from a constitutional and legal viewpoint, Proclamation No. 1102 is not even prima facie evidence of
the alleged ratification of the proposed Constitution.

Referring particularly to the cases before Us, it will be noted that, as pointed out in the discussion of
the preceding topic, the new or revised Constitution proposed by the 1971 Constitutional Convention
was not ratified in accordance with the provisions of the 1935 Constitution. In fact, it has not even
been, ratified in accordance with said proposed Constitution, the minimum age requirement therein
for the exercise of the right of suffrage being eighteen (18) years, apart from the fact that Art. VI of
the proposed Constitution requires "secret" voting, which was not observed in many, if not most,
Citizens' Assemblies. Besides, both the 1935 Constitution and the proposed Constitution require a
"majority of the votes cast" in an election or plebiscite called for the ratification of an amendment or
revision of the first Constitution or the effectivity of the proposed Constitution, and the phrase "votes
cast" has been construed to mean "votes made in writing not orally, as it was in many Citizens'
Assemblies. 75

Even counsel for Gil J. Puyat and Jose Roy, as respondents in L-36165, asserts openly that Art. XV
of the Constitution has not been complied with, and since the alleged substantial compliance with
the requirements thereof partakes of the nature of a defense set up by the other respondents in
these cases, the burden of proving such defense — which, if true, should be within their peculiar
knowledge — is clearly on such respondents. Accordingly, if despite the extensive notes and
documents submitted by the parties herein, the members of the Court do not know or are not
prepared to say whether or not the majority of the people or of those who took part in the Citizens'
Assemblies have assented to the proposed Constitution, the logical step would be to give due
course to these cases, require the respondents to file their answers, and the plaintiffs their reply,
and, thereafter, to receive the pertinent evidence and then proceed to the determination of the
issues raised thereby. Otherwise, we would be placing upon the petitioners the burden of disproving
a defense set up by the respondents, who have not so far established the truth of such defense.

Even more important, and decisive, than the foregoing is the circumstance that there is ample
reason to believe that many, if not most, of the people did not know that the Citizens' Assemblies
were, at the time they were held, plebiscites for the ratification or rejection of the proposed
Constitution. Hence, in Our decision in the plebiscite cases, We said, inter alia:

Meanwhile, or on December 17, 1972, the President had issued an order temporarily
suspending the effects of Proclamation No. 1081, for the purpose of free and open
debate on the Proposed Constitution. On December 23, the President announced
the postponement of the plebiscite for the ratification or rejection of the Proposed
Constitution. No formal action to this effect was taken until January 7, 1973, when
General Order No. 20 was issued, directing "that the plebiscite scheduled to be held
on January 15, 1973, be postponed until further notice." Said General Order No. 20,
moreover, "suspended in the meantime" the "order of December 17, 1972,
temporarily suspending the effects of Proclamation No. 1081 for purposes of free and
open debate on the proposed Constitution.

In view of these events relative to the postponement of the aforementioned

plebiscite, the Court deemed it fit to refrain, for the time being, from deciding the
aforementioned cases, for neither the date nor the conditions under which said
plebiscite would be held were known or announced officially. Then again, Congress
was, pursuant to the 1935 Constitution, scheduled to meet in regular session on
January 22, 1973, and since the main objection to Presidential Decree No. 73 was
that the President does not have the legislative authority to call a plebiscite and
appropriate funds therefor, which Congress unquestionably could do, particularly in
view of the formal postponement of the plebiscite by the President — reportedly after
consultation with, among others, the leaders of Congress and the Commission on
Elections — the Court deemed it more imperative to defer its final action on these
cases.

And, apparently, the parties in said cases entertained the same belief, for, on December 23, 1972 —
four (4) days after the last hearing of said cases 76 — the President announced the postponement of
the plebiscite scheduled by Presidential Decree No. 73 to be held on January 15, 1973, after
consultation with the Commission on Elections and the leaders of Congress, owing to doubts on the
sufficiency of the time available to translate the proposed Constitution into some local dialects and to
comply with some pre-electoral requirements, as well as to afford the people a reasonable
opportunity to be posted on the contents and implications of said transcendental document. On
January 7, 1973, General Order No. 20 was issued formally, postponing said plebiscite "until further
notice." How can said postponement be reconciled with the theory that the proceedings in the
Citizens' Assemblies scheduled to be held from January 10 to January 15, 1973, were "plebiscites,"
in effect, accelerated, according to the theory of the Solicitor General, for the ratification of the
proposed Constitution? If said Assemblies were meant to be the plebiscites or elections envisaged in
Art. XV of the Constitution, what, then, was the "plebiscite" postponed by General Order No. 20?
Under these circumstances, it was only reasonable for the people who attended such assemblies to
believe that the same were not an "election" or plebiscite for the ratification or adoption of said
proposed Constitution.

And, this belief is further bolstered up by the questions propounded in the Citizens' Assemblies,
namely:

[1] Do you like the New Society?

[2] Do you like the reforms under martial law?

[3] Do you like Congress again to hold sessions?

[4] Do you like the plebiscite to be held later?

[5] Do you like the way President Marcos is running the affairs of the
government? [Bulletin Today, January 10, 1973; emphasis an additional question.]

[6] Do you approve of the citizens assemblies as the base of popular government to
decide issues of national interests?

[7] Do you approve of the new Constitution?

 [8] Do you want a plebiscite to be called to ratify the new Constitution?

[9] Do you want the elections to be held in November, 1973 in accordance with the
provisions of the 1935 Constitution?

[10] If the elections would not be held, when do you want the next elections to be
called?

[11] Do you want martial law to continue? [Bulletin Today, January 11, 1973]

To begin with, questions nos. 1, 2, 3, 4, 5, 6, 9, 10 and 11 are not proper in a plebiscite for the
ratification of a proposed Constitution or of a proposed amendment thereto. Secondly, neither is the
language of question No. 7 — "Do you approve the new Constitution?" One approves "of" the act of
another which does not need such approval for the effectivity of said act, which the first person,
however, finds to be good, wise satisfactory. The approval of the majority of the votes cast in
plebiscite is, however, essential for an amendment to the Constitution to be valid as part thereof.
Thirdly, if the proceedings in the Citizens' Assemblies constituted a plebiscite question No. 8 would
have been unnecessary and improper, regardless of whether question No. 7 were answered
affirmatively or negatively. If the majority of the answers to question No. 7 were in the affirmative, the
proposed Constitution would have become effective and no other plebiscite could be held thereafter
in connection therewith, even if the majority of the answers to question No. 8 were, also, in the
affirmative. If the majority of the answers to question No. 7 were in the negative, neither may another
plebiscite be held, even if the majority of the answers to question No. 8 were in the affirmative. In
either case, not more than one plebiscite could be held for the ratification or rejection of the
proposed Constitution. In short, the insertion of said two (2) questions — apart from the other
questions adverted to above — indicates strongly that the proceedings therein did not partake of the
nature of a plebiscite or election for the ratification or rejection of the proposed Constitution.

Indeed, I can not, in good conscience, declare that the proposed Constitution has been approved or
adopted by the people in the citizens' assemblies all over the Philippines, when it is, to my mind, a
matter of judicial knowledge that there have been no such citizens' assemblies in many parts of
Manila and suburbs, not to say, also, in other parts of the Philippines. In a letter of Governor Efren B.
Pascual of Bataan, dated January 15, 1973, to the Chief Executive, the former reported:

... This report includes a resumee (sic) of the activities we undertook in effecting
the referendum on the eleven questions you wanted our people consulted on and the
Summary of Results thereof for each municipality and for the whole province.

xxx xxx xxx

... Our initial plans and preparations, however, dealt only on the original five
questions. Consequently, when we received an instruction on January 10 to
change the questions, we urgently suspended all scheduled Citizens Assembly
meetings on that day and called all Mayors, Chiefs of Offices and other government
officials to another conference to discuss with them the new set of guidelines and
materials to be used.

On January 11, ... another instruction from the top was received to include the
original five questions among those to be discussed and asked in the Citizens'
Assembly meetings. With this latest order, we again had to make modifications in our
instructions to all those managing and supervising the holding of the Citizens'
Assembly meetings throughout the province. ... Aside from the coordinators we had
from the Office of the Governor, the splendid cooperation and support extended by
almost all government officials and employees in the province, particularly of the
Department of Education, PC and PACD personnel, provided us with enough hands
to trouble shoot and implement sudden changes in the instructions anytime and
anywhere needed. ...

... As to our people, in general, their enthusiastic participation showed their

preference and readiness to accept this new method of government to
people consultation in shaping up government policies.
Thus, as late as January 10, 1973, the Bataan officials had to suspend "all scheduled Citizens'
Assembly meetings ..." and call all available officials "... to discuss with them the new set of
guidelines and materials to be used ... ." Then, "on January 11 ... another instruction from the top
was received to include the original five questions among those be discussed and asked in the
Citizens' Assembly meetings. With this latest order, we again had to make modifications in our
instructions to all those managing and supervising holding of the Citizens' Assembly meetings
throughout province. ... As to our people, in general, their enthusiastic participation showed their
preference and readiness to accept the new method of government to people consultation in
shaping up government policies."

This communication manifestly shows: 1) that, as late a January 11, 1973, the Bataan officials had
still to discuss — not put into operation — means and ways to carry out the changing instructions
from the top on how to organize the citizens' assemblies, what to do therein and even what
questions or topics to propound or touch in said assemblies; 2) that the assemblies would involve no
more than consultations or dialogues between people and government — not decisions be made by
the people; and 3) that said consultations were aimed only at "shaping up government policies" and,
hence could not, and did not, partake of the nature of a plebiscite for the ratification or rejection of a
proposed amendment of a new or revised Constitution for the latter does not entail the formulation of
a policy of the Government, but the making of decision by the people on the new way of life, as a
nation, they wish to have, once the proposed Constitution shall have been ratified.

If this was the situation in Bataan — one of the provinces nearest to Manila — as late as January 11,
1973, one can easily imagine the predicament of the local officials and people in the remote barrios
in northern and southern Luzon, in the Bicol region, in the Visayan Islands and Mindanao. In fact,
several members of the Court, including those of their immediate families and their household,
although duly registered voters in the area of Greater Manila, were not even notified that citizens'
assemblies would be held in the places where their respective residences were located. In the
Prohibition and Amendment case, 77 attention was called to the "duty cast upon the court of taking
judicial cognizance of anything affecting the existence and validity of any law or portion of the
Constitution ... ." In line with its own pronouncement in another case, the Federal Supreme Court of
the United States stressed, in Baker v. Carr, 78 that "a court is not at liberty to shut its eyes to
an obvious mistake, when the validity of the law depends upon the truth of what is declared."

In the light of the foregoing, I cannot see how the question under consideration can be answered or
resolved otherwise than in the negative.

Have the people acquiesced in the proposed Constitution?

It is urged that the present Government of the Philippines is now and has been run, since January
17, 1971, under the Constitution drafted by the 1971 Constitutional Convention; that the political
department of the Government has recognized said revised Constitution; that our foreign relations
are being conducted under such new or revised Constitution; that the Legislative Department has
recognized the same; and that the people, in general, have, by their acts or omissions, indicated
their conformity thereto.

As regards the so-called political organs of the Government, gather that respondents refer mainly to
the offices under the Executive Department. In a sense, the latter performs some functions which,
from a constitutional viewpoint, are politics in nature, such as in recognizing a new state or
government, in accepting diplomatic representatives accredited to our Government, and even in
devising administrative means and ways to better carry into effect. Acts of Congress which define
the goals or objectives thereof, but are either imprecise or silent on the particular measures to be
resorted to in order to achieve the said goals or delegate the power to do so, expressly or impliedly,
to the Executive. This, notwithstanding, the political organ of a government that purports to be
republican is essentially the Congress or Legislative Department. Whatever may be the functions
allocated to the Executive Department — specially under a written, rigid Constitution with a
republican system of Government like ours — the role of that Department is inherently, basically and
fundamentally executive in nature — to "take care that the laws be faithfully executed," in the
language of our 1935 Constitution. 79

Consequently, I am not prepared to concede that the acts the officers and offices of the Executive
Department, in line with Proclamation No. 1102, connote a recognition thereof o an acquiescence
thereto. Whether they recognized the proposed Constitution or acquiesce thereto or not is something
that cannot legally, much less necessarily or even normally, be deduced from their acts in
accordance therewith, because the are bound to obey and act in conformity with the orders of the
President, under whose "control" they are, pursuant to the 1935 Constitution. They have
absolutely no other choice, specially in view of Proclamation No. 1081 placing the Philippines under
Martial Law. Besides, by virtue of the very decrees, orders and instructions issued by the President
thereafter, he had assumed all powers of Government — although some question his authority to do
so — and, consequently, there is hardly anything he has done since the issuance of Proclamation
No. 1102, on January 17, 1973 — declaring that the Constitution proposed by the 1971
Constitutional Convention has been ratified by the overwhelming majority of the people — that he
could not do under the authority he claimed to have under Martial Law, since September 21, 1972,
except the power of supervision over inferior courts and its personnel, which said proposed
Constitution would place under the Supreme Court, and which the President has not ostensibly
exercised, except as to some minor routine matters, which the Department of Justice has continued
to handle, this Court having preferred to maintain the status quo in connection therewith pending
final determination of these cases, in which the effectivity of the aforementioned Constitution is
disputed.

Then, again, a given department of the Government cannot generally be said to have
"recognized" its own acts. Recognition normally connotes the acknowledgment by a party of the acts
of another. Accordingly, when a subordinate officer or office of the Government complies with the
commands of a superior officer or office, under whose supervision and control he or it is, the former
merely obeys the latter. Strictly speaking, and from a legal and constitutional viewpoint, there is no
act of recognition involved therein. Indeed, the lower officer or office, if he or it acted otherwise,
would just be guilty of insubordination.

Thus, for instance, the case of Taylor v. Commonwealth 80 — cited by respondents herein in support
of the theory of the people's acquiescence — involved a constitution ordained in 1902 and
"proclaimed by a convention duly called by a direct vote of the people of the state to revise and
amend the Constitution of 1869. The result of the work of that Convention has been recognized,
accepted and acted upon as the only valid Constitution of the State" by —

1. The "Governor of the State in swearing fidelity to it and proclaiming it, as directed thereby";

2. The "Legislature in its formal official act adopting a joint resolution, July 15, 1902, recognizing the
Constitution ordained by the Convention ...";

3. The "individual oaths of its members to support it, and by its having been engaged for nearly a
year, in legislating under it and putting its provisions into
operation ...";

4. The "judiciary in taking the oath prescribed thereby to support it and by enforcing its provisions ...";
and

5. The "people in their primary capacity by peacefully accepting it and acquiescing in it, by
registering as voters under it to the extent of thousands throughout the State, and by voting, under
its provisions, at a general election for their representatives in the Congress of the United States."

Note that the New Constitution of Virginia, drafted by a convention whose members were elected
directly by the people, was not submitted to the people for ratification or rejection thereof. But, it was
recognized, not by the convention itself, but by other sectors of the Government, namely, the
Governor; the Legislature — not merely by individual acts of its members, but by formal joint
resolution of its two (2) chambers; by the judiciary; and by the people, in the various ways specified
above. What is more, there was no martial law. In the present cases, none of the foregoing acts of
acquiescence was present. Worse still, there is martial law, the strict enforcement of which was
announced shortly before the alleged citizens' assemblies. To top it all, in the Taylor case, the
effectivity of the contested amendment was not contested judicially until about one (1) year after the
amendment had been put into operation in all branches of the Government, and complied with by
the people who participated in the elections held pursuant to the provisions of the new Constitution.
In the cases under consideration, the legality of Presidential Decree No. 73 calling a plebiscite to be
held on January 15, 1973, was impugned as early as December 7, 1972, or five (5)
weeks before the scheduled plebiscite, whereas the validity of Proclamation No. 1102 declaring on
January 17, 1973, that the proposed Constitution had been ratified — despite General Order No. 20,
issued on January 7, 1972, formally and officially suspending the plebiscite until further notice —
was impugned as early as January 20, 1973, when L-36142 was filed, or three (3) days after the
issuance of Proclamation No. 1102.

It is further alleged that a majority of the members of our House of Representatives and Senate have
acquiesced in the new or revised Constitution, by filing written statements opting to serve in the Ad
Interim Assembly established in the Transitory Provisions of said Constitution. Individual acts of
recognition by members of our legislature, as well as of other collegiate bodies under the
government, are invalid as acts of said legislature or bodies, unless its members have performed
said acts in session duly assembled, or unless the law provides otherwise, and there is no such law
in the Philippines. This is a well-established principle of Administrative Law and of the Law of Public
Officers, and no plausible reason has been adduced to warrant departure therefrom. 81

Indeed, if the members of Congress were generally agreeable to the proposed Constitution, why did
it become necessary to padlock its premises to prevent its meeting in session on January 22, 1973,
and thereafter as provided in the 1935 Constitution? It is true that, theoretically, the members of
Congress, if bent on discharging their functions under said Constitution, could have met in any other
place, the building in which they perform their duties being immaterial to the legality of their official
acts. The force of this argument is, however, offset or dissipated by the fact that, on or about
December 27, 1972, immediately after a conference between the Executive, on the one hand, and
members of Congress, on the other, some of whom expressed the wish to meet in session on
January 22, 1973, as provided in the 1935 Constitution, a Daily Express columnist (Primitivo Mijares)
attributed to Presidential Assistant Guillermo de Vega a statement to the effect that "'certain
members of the Senate appear to be missing the point in issue' when they reportedly insisted on
taking up first the question of convening Congress." The Daily Express of that date, 82 likewise,
headlined, on its front page, a "Senatorial Plot Against 'Martial Law Government' Disclosed". Then,
in its issue of December 29, 1972, the same paper imputed to the Executive an appeal "to diverse
groups involved in a conspiracy to undermine" his powers" under martial law to desist from
provoking a constitutional crisis ... which may result in the exercise by me of authority I have not
exercised."

No matter how good the intention behind these statement may have been, the idea implied therein
was too clear an ominous for any member of Congress who thought of organizing, holding or taking
part in a session of Congress, not to get the impression that he could hardly do so without inviting or
risking the application of Martial Law to him. Under these conditions, I do not feel justified in holding
that the failure of the members of Congress to meet since January 22, 1973, was due to their
recognition, acquiescence in or conformity with the provisions of the aforementioned Constitution, or
its alleged ratification.

For the same reasons, especially because of Proclamation No. 1081, placing the entire Philippines
under Martial Law, neither am I prepared to declare that the people's inaction as regards
Proclamation No. 1102, and their compliance with a number of Presidential orders, decrees and/or
instructions — some or many of which have admittedly had salutary effects — issued subsequently
thereto amounts, constitutes or attests to a ratification, adoption or approval of said Proclamation
No. 1102. In the words of the Chief Executive, "martial law connotespower of the gun,
meant coercion by the military, and compulsion and intimidation." 83 The failure to use the gun
against those who comply with the orders of the party wielding the weapon does not detract from the
intimidation that Martial Law necessarily connotes. It may reflect the good, reasonable and
wholesome attitude of the person who has the gun, either pointed at others, without pulling the
trigger, or merely kept in its holster, but not without warning that he may or would use it if he deemed
it necessary. Still, the intimidation is there, and inaction or obedience of the people, under these
conditions, is not necessarily an act of conformity or acquiescence. This is specially so when we
consider that the masses are, by and large, unfamiliar with the parliamentary system, the new form
of government introduced in the proposed Constitution, with the particularity that it is not even
identical to that existing in England and other parts of the world, and that even experienced lawyers
and social scientists find it difficult to grasp the full implications of some provisions incorporated
therein.

As regards the applicability to these cases of the "enrolled bill" rule, it is well to remember that the
same refers to a document certified to the President — for his action under the Constitution — by the
Senate President and the Speaker of the House of Representatives, and attested to by the
Secretary of the Senate and the Secretary of the House of Representatives, concerning legislative
measures approved by the two Houses of Congress. The argument of the Solicitor General is,
roughly, this: If the enrolled bill is entitled to full faith and credence and, to this extent, it is conclusive
upon the President and the judicial branch of the Government, why should Proclamation No. 1102
merit less consideration than in enrolled bill?

Before answering this question, I would like to ask the following: If, instead of being certified by the
aforementioned officers of Congress, the so-called enrolled bill were certified by, say, the President
of the Association of Sugar Planters and/or Millers of the Philippines, and the measure in question
were a proposed legislation concerning Sugar Plantations and Mills sponsored by said Association,
which even prepared the draft of said legislation, as well as lobbied actually for its approval, for
which reason the officers of the Association, particularly, its aforementioned president — whose
honesty and integrity are unquestionable — were present at the deliberations in Congress when the
same approved the proposed legislation, would the enrolled bill rule apply thereto? Surely, the
answer would have to be in the negative. Why? Simply, because said Association President has
absolutely no official authority to perform in connection therewith, and, hence, his certification is
legally, as good as non-existent.

Similarly, a certification, if any, of the Secretary of the Department of Local Governments and
Community Development about the tabulated results of the voting in the Citizens Assemblies
allegedly held all over the Philippines — and the records do not show that any such certification, to
the President of the Philippines or to the President Federation or National Association of presidents
of Provincial Associations of presidents of municipal association presidents of barrio or ward
assemblies of citizens — would not, legally and constitutionally, be worth the paper on which it is
written. Why? Because said Department Secretary is not the officer designated by law to
superintend plebiscites or elections held for the ratification or rejection of a proposed amendment or
revision of the Constitution and, hence, to tabulate the results thereof. Worse still, it is the
department which, according to Article X of the Constitution, should not and must not be all
participate in said plebiscite — if plebiscite there was.

After citing approvingly its ruling in United States v. Sandoval, 84 the Highest Court of the United
States that courts "will not stand impotent before an obvious instance of a manifestly unauthorized
exercise of power." 85

I cannot honestly say, therefore, that the people impliedly or expressly indicated their conformity to
the proposed Constitution.

VI

Are the Parties entitled to any relief?

Before attempting to answer this question, a few words be said about the procedure followed in
these five (5) cases. In this connection, it should be noted that the Court has not decided whether or
not to give due course to the petitions herein or to require the respondents to answer thereto.
Instead, it has required the respondents to comment on the respective petitions — with three (3)
members of the voting to dismiss them outright — and then considers comments thus submitted by
the respondents as motions to dismiss, as well as set the same for hearing. This was due to the
transcendental nature of the main issue raised, the necessity of deciding the same with utmost
dispatch, and the main defense set up by respondents herein, namely, the alleged political nature of
said issue, placing the same, according to respondents, beyond the ambit of judicial inquiry and
determination. If this defense was sustained, the cases could readily be dismissed; but, owing to the
importance of the questions involved, a reasoned resolution was demanded by public interest. At the
same time, respondents had cautioned against a judicial inquiry into the merits of the issues posed
on account of the magnitude of the evil consequences, it was claimed, which would result from a
decision thereon, if adverse to the Government.

As a matter of fact, some of those issues had been raised in the plebiscite cases, which were
dismissed as moot and academic, owing to the issuance of Proclamation No. 1102 subsequently to
the filing of said cases, although before the rendition of judgment therein. Still one of the members of
the Court (Justice Zaldivar) was of the opinion that the aforementioned issues should be settled in
said cases, and he, accordingly, filed an opinion passing upon the merits thereof. On the other hand,
three (3) members of the Court — Justices Barredo, Antonio and Esguerra — filed separate opinions
favorable to the respondents in the plebiscite cases, Justice Barredo holding "that the 1935
Constitution has pro tanto passed into history and has been legitimately supplanted by the
Constitution in force by virtue of Proclamation 1102." 86 When the petitions at bar were filed, the
same three (3) members of the Court, consequently, voted for the dismissal of said petitions. The
majority of the members of the Court did not share, however, either view, believing that the main
question that arose before the rendition of said judgment had not been sufficiently discussed and
argued as the nature and importance thereof demanded.

The parties in the cases at bar were accordingly given every possible opportunity to do so and to
elucidate on and discuss said question. Thus, apart from hearing the parties in oral argument for five
(5) consecutive days — morning and afternoon, or a total of exactly 26 hours and 31 minutes — the
respective counsel filed extensive notes on their or arguments, as well as on such additional
arguments as they wished to submit, and reply notes or memoranda, in addition to rejoinders
thereto, aside from a sizeable number of document in support of their respective contentions, or as
required by the Court. The arguments, oral and written, submitted have been so extensive and
exhaustive, and the documents filed in support thereof so numerous and bulky, that, for all intents
and purposes, the situation is as if — disregarding forms — the petitions had been given due course
and the cases had been submitted for decision.

Accordingly, the majority of the members of the Court believe that they should express their views
on the aforementioned issues as if the same were being decided on the merits, and they have done
so in their individual opinion attached hereto. Hence, the resume of the votes cast and the tenor of
the resolution, in the last pages hereof, despite the fact that technically the Court has not, as yet,
formally given due course to the petitions herein.

And, now, here are my views on the reliefs sought by the parties.

In L-36165, it is clear that we should not issue the writ of mandamus prayed for against Gil J. Puyat
and Jose Roy, President and President Pro Tempore respectively of the Senate, it being settled in
our jurisdiction, based upon the theory of separation of powers, that the judiciary will not issue such
writ to the head of a co-equal department, like the aforementioned officers of the Senate.

In all other respects and with regard to the other respondent in said case, as well as in cases L-
36142, L-36164, L-36236 and L-36283, my vote is that the petitions therein should be given due
course, there being more than prima facie showing that the proposed Constitution has not been
ratified in accordance with Article XV of the 1935 Constitution, either strictly, substantially, or has
been acquiesced in by the people or majority thereof; that said proposed Constitution is not in
force and effect; and that the 1935 Constitution is still the Fundamental Law of the Land, without
prejudice to the submission of said proposed Constitution to the people at a plebiscite for its
ratification or rejection in accordance with Articles V, X and XV of the 1935 Constitution and the
provisions of the Revised Election Code in force at the time of such plebiscite.

Perhaps others would feel that my position in these cases overlooks what they might consider to be
the demands of "judicial statesmanship," whatever may be the meaning of such phrase. I am aware
of this possibility, if not probability; but "judicial statesmanship," though consistent with Rule of
Law, cannot prevail over the latter. Among consistent ends or consistent values, there always is a
hierarchy, a rule of priority.

We must realize that the New Society has many achievements which would have been very difficult,
if not impossible, to accomplish under the old dispensation. But, in and for the judiciary,
statesmanship should not prevail over the Rule of Law. Indeed, the primacy of the law or of the Rule
of Law and faithful adherence thereto are basic, fundamental and essential parts of statesmanship
itself.

Resume of the Votes Cast and the Court's Resolution

As earlier stated, after the submittal by the members of the Court of their individual opinions and/or
concurrences as appended hereto, the writer will now make, with the concurrence of his colleagues,
a resume or summary of the votes cast by each of them.

It should be stated that by virtue of the various approaches and views expressed during the
deliberations, it was agreed to synthesize the basic issues at bar in broad general terms in five
questions for purposes of taking the votes. It was further agreed of course that each member of the
Court would expound in his individual opinion and/or concurrence his own approach to the stated
issues and deal with them and state (or not) his opinion thereon singly or jointly and with such
priority, qualifications and modifications as he may deem proper, as well as discuss thereon other
related issues which he may consider vital and relevant to the cases at bar.
The five questions thus agreed upon as reflecting the basic issues herein involved are the following:

1. Is the issue of the validity of Proclamation No. 1102 a justiciable, or political and therefore non-
justiciable, question?

2. Has the Constitution proposed by the 1971 Constitutional Convention been ratified validly (with
substantial, if not strict, compliance) conformably to the applicable constitutional and statutory
provisions?

3. Has the aforementioned proposed Constitution acquiesced in (with or without valid ratification) by
the people?

4. Are petitioners entitled to relief? and

5. Is the aforementioned proposed Constitution in force?

The results of the voting, premised on the individual views expressed by the members of the Court in
their respect opinions and/or concurrences, are as follows:

1. On the first issue involving the political-question doctrine Justices Makalintal, Zaldivar, Castro,
Fernando, Teehankee and myself, or six (6) members of the Court, hold that the issue of the validity
of Proclamation No. 1102 presents a justiciable and non-political question. Justices Makalintal and
Castro did not vote squarely on this question, but, only inferentially, in their discussion of the second
question. Justice Barredo qualified his vote, stating that "inasmuch as it is claimed there has been
approval by the people, the Court may inquire into the question of whether or not there has actually
been such an approval, and, in the affirmative, the Court should keep hands-off out of respect to the
people's will, but, in negative, the Court may determine from both factual and legal angles whether or
not Article XV of the 1935 Constitution been complied with." Justices Makasiar, Antonio, Esguerra,
or three (3) members of the Court hold that the issue is political and "beyond the ambit of judicial
inquiry."

2. On the second question of validity of the ratification, Justices Makalintal, Zaldivar, Castro,
Fernando, Teehankee and myself, or six (6) members of the Court also hold that the Constitution
proposed by the 1971 Constitutional Convention was not validly ratified in accordance with Article
XV, section 1 of the 1935 Constitution, which provides only one way for ratification, i.e., "in an
election or plebiscite held in accordance with law and participated in only by qualified and duly
registered voters. 87

Justice Barredo qualified his vote, stating that "(A)s to whether or not the 1973 Constitution has been
validly ratified pursuant to Article XV, I still maintain that in the light of traditional concepts regarding
the meaning and intent of said Article, the referendum in the Citizens' Assemblies, specially in the
manner the votes therein were cast, reported and canvassed, falls short of the requirements thereof.
In view, however, of the fact that I have no means of refusing to recognize as a judge that factually
there was voting and that the majority of the votes were for considering as approved the 1973
Constitution without the necessity of the usual form of plebiscite followed in past ratifications, I am
constrained to hold that, in the political sense, if not in the orthodox legal sense, the people may be
deemed to have cast their favorable votes in the belief that in doing so they did the part required of
them by Article XV, hence, it may be said that in its political aspect, which is what counts most, after
all, said Article has been substantially complied with, and, in effect, the 1973 Constitution has been
constitutionally ratified."

Justices Makasiar, Antonio and Esguerra, or three (3) members of the Court hold that under their
view there has been in effect substantial compliance with the constitutional requirements for valid
ratification.

3. On the third question of acquiescence by the Filipino people in the aforementioned proposed
Constitution, no majority vote has been reached by the Court.

Four (4) of its members, namely, Justices Barredo, Makasiar, Antonio and Esguerra hold that "the
people have already accepted the 1973 Constitution."

Two (2) members of the Court, namely, Justice Zaldivar and myself hold that there can be no free
expression, and there has even been no expression, by the people qualified to vote all over the
Philippines, of their acceptance or repudiation of the proposed Constitution under Martial Law.
Justice Fernando states that "(I)f it is conceded that the doctrine stated in some American decisions
to the effect that independently of the validity of the ratification, a new Constitution once accepted
acquiesced in by the people must be accorded recognition by the Court, I am not at this stage
prepared to state that such doctrine calls for application in view of the shortness of time that has
elapsed and the difficulty of ascertaining what is the mind of the people in the absence of the
freedom of debate that is a concomitant feature of martial law." 88

Three (3) members of the Court express their lack of knowledge and/or competence to rule on the
question. Justices Makalintal and Castro are joined by Justice Teehankee in their statement that
"Under a regime of martial law, with the free expression of opinions through the usual media vehicle
restricted, (they) have no means of knowing, to the point of judicial certainty, whether the people
have accepted the Constitution." 89

4. On the fourth question of relief, six (6) members of the Court, namely, Justices Makalintal, Castro,
Barredo, Makasiar, Antonio and Esguerra voted to DISMISS the petition. Justice Makalintal and
Castro so voted on the strength of their view that "(T)he effectivity of the said Constitution, in the final
analysis, is the basic and ultimate question posed by these cases to resolve which considerations
other than judicial, an therefore beyond the competence of this Court, 90 are relevant and
unavoidable." 91

Four (4) members of the Court, namely, Justices Zaldivar, Fernando, Teehankee and myself voted
to deny respondents' motion to dismiss and to give due course to the petitions.

5. On the fifth question of whether the new Constitution of 1973 is in force:

Four (4) members of the Court, namely, Justices Barredo, Makasiar, Antonio and
Esguerra hold that it is in force by virtue of the people's acceptance thereof;

Four (4) members of the Court, namely, Justices Makalintal, Castro, Fernando and
Teehankee cast no vote thereon on the premise stated in their votes on the third
question that they could not state with judicial certainty whether the people have
accepted or not accepted the Constitution; and

Two (2) members of the Court, namely, Justice Zaldivar and myself voted that the
Constitution proposed by the 1971 Constitutional Convention is not in force;

with the result that there are not enough votes to declare that the new Constitution is not in force.

ACCORDINGLY, by virtue of the majority of six (6) votes of Justices Makalintal, Castro, Barredo,
Makasiar, Antonio and Esguerra with the four (4) dissenting votes of the Chief Justice and Justices
Zaldivar, Fernando and Teehankee, all the aforementioned cases are hereby dismissed. This being
the vote of the majority, there is no further judicial obstacle to the new Constitution being considered
in force and effect.

It is so ordered.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-35546 September 17, 1974

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF BENIGNO S. AQUINO, JR.,
RAMON MITRA, JR., FRANCISCO RODRIGO, AND NAPOLEON RAMA, petitioners,
vs.
HON JUAN PONCE ENRILE, SECRETARY OF NATIONAL DEFENSE; GEN. ROMEO ESPINO,
CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES; AND GEN. FIDEL V. RAMOS,
CHIEF, PHILIPPINE CONSTABULARY, respondents.

G.R. No. L-35538 September 17, 1974

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF JOAQUIN P. ROCES,

TEODORO M. LOCSIN, SR., ROLANDO FADUL, ROSALINA GALANG, GO ENG GUAN,
MAXIMO V. SOLIVEN, RENATO CONSTANTINO, AND LUIS R. MAURICIO, petitioners,
vs.
THE SECRETARY OF NATIONAL DEFENSE; THE CHIEF OF STAFF, ARMED FORCES OF THE
PHILIPPINES; THE CHIEF, PHILIPPINE CONSTABULARY, et al., respondents.

G.R. No. L-35539 September 17, 1974

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF JOSE W. DIOKNO, CARMEN I.
DIOKNO, *1 petitioner,
vs.
JUAN PONCE ENRILE, THE SECRETARY OF NATIONAL DEFENSE; ROMEO ESPINO, THE CHIEF OF STAFF, ARMED FORCES OF
THE PHILIPPINES. respondents.

G.R. No. L-35540 September 17, 1974

MAXIMO V. SOLIVEN, NAPOLEON G. RAMA, AND JOSE MARI VELEZ, petitioners,

vs.
HON. JUAN PONCE ENRILE, SECRETARY OF NATIONAL DEFENSE; HON. FRANCISCO
TATAD, PRESS SECRETARY; AND GEN. FIDEL V. RAMOS, CHIEF, PHILIPPINE
CONSTABULARY, respondents.

G.R. No. L-35547 September 17, 1974 *2

ENRIQUE VOLTAIRE GARCIA II, petitioner,

vs.
BRIG. GEN. FIDEL RAMOS, CHIEF, PHILIPPINE CONSTABULARY; GEN. ROMEO ESPINO,
CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES; AND HON. JUAN PONCE ENRILE,
SECRETARY OF NATIONAL DEFENSE, respondents.

G.R. No. L-35556 September 17, 1974

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF VERONICA L. YUYITUNG AND
TAN CHIN HIAN, petitioners,
vs.
JUAN PONCE ENRILE, SECRETARY OF NATIONAL DEFENSE; LIEUT. GEN. ROMEO ESPINO,
CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES; AND BRIG. GEN. FIDEL V. RAMOS,
CHIEF OF THE PHILIPPINE CONSTABULARY, respondents.

G.R. No. L-35567 September 17, 1974

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF AMANDO DORONILA JUAN L.
MERCADO, HERNANDO L. ABAYA, ERNESTO GRANADA, LUIS D. BELTRAN, TAN CHIN
HIAN, BREN GUIAO, RUBEN CUSIPAG, ROBERTO ORDOÑEZ, MANUEL ALMARIO AND
WILLIE BAUN, petitioners,
vs.
HON. JUAN PONCE ENRILE, SECRETARY OF NATIONAL DEFENSE; LIEUT. GEN. ROMEO
ESPINO, CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES; AND BRIG. GEN. FIDEL V.
RAMOS, CHIEF, PHILIPPINE CONSTABULARY, respondents.

G.R. No. L-35571 September 17, 1974. *3

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF BREN Z. GUIAO, TERESITA M.
GUIAO, petitioner,
vs.
JUAN PONCE ENRILE, THE SECRETARY OF NATIONAL DEFENSE; LT. GEN. ROMEO
ESPINO, CHIEF OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES: AND BRIG. GEN.
FIDEL V. RAMOS, CHIEF OF THE PHILIPPINE CONSTABULARY, respondents.

G.R. No. L-35573 September 17, 1974

ERNESTO RONDON, petitioner,

vs.
HON. JUAN PONCE ENRILE, SECRETARY OF NATIONAL DEFENSE; GEN. FIDEL V. RAMOS,
CHIEF, PHILIPPINE CONSTABULARY; AND MAJOR RODULFO MIANA, respondents.

MAKALINTAL, C.J.:p

These cases are all petitions for habeas corpus, the petitioners having been arrested and detained by the military by virtue of the President's
Proclamation No. 1081, dated September 21, 1972.

At the outset a word of clarification is in order. This is not the decision of the Court in the sense that
a decision represents a consensus of the required majority of its members not only on the judgment
itself but also on the rationalization of the issues and the conclusions arrived at. On the final result
the vote is practically unanimous; this is a statement of my individual opinion as well as a summary
of the voting on the major issues. Why no particular Justice has been designated to write just one
opinion for the entire Court will presently be explained.

At one point during our deliberations on these cases it was suggested that as Chief Justice I should
write that opinion. The impracticability of the suggestion shortly became apparent for a number of
reasons, only two of which need be mentioned. First, the discussions, as they began to touch on
particular issues, revealed a lack of agreement among the Justices as to whether some of those
issues should be taken up although it was not necessary to do so, they being merely convenient for
the purpose of ventilating vexing questions of public interest, or whether the decision should be
limited to those issues which are really material and decisive in these cases. Similarly, there was no
agreement as to the manner the issues should be treated and developed. The same destination
would be reached, so to speak, but through different routes and by means of different vehicles of
approach. The writing of separate opinions by individual Justices was thus unavoidable, and
understandably so for still another reason, namely, that although little overt reference to it was made
at the time, the future verdict of history was very much a factor in the thinking of the members, no
other case of such transcendental significance to the life of the nation having before confronted this
Court. Second — and this to me was the insuperable obstacle — I was and am of the opinion, which
was shared by six other Justices1 at the time the question was voted upon, that petitioner Jose W.
Diokno's motion of December 28, 1973 to withdraw his petition (G.R. No. L-35539) should be
granted, and therefore I was in no position to set down the ruling of the Court on each of the
arguments raised by him, except indirectly, insofar as they had been raised likewise in the other
cases.

It should be explained at this point that when the Court voted on Diokno's motion to withdraw his
petition he was still under detention without charges, and continued to remain so up to the time the
separate opinions of the individual Justices were put in final form preparatory to their promulgation
on September 12, which was the last day of Justice Zaldivars tenure in the Court.2 Before they could
be promulgated, however, a major development supervened: petitioner Diokno was released by the
President in the morning of September 11, 1974. In view thereof all the members of this Court
except Justice Castro agreed to dismiss Diokno's petition on the ground that it had become moot,
with those who originally voted to grant the motion for withdrawal citing said motion as an additional
ground for such dismissal.

The petitioners in the other cases, except Benigno Aquino, Jr. (G.R. No. L-35546), either have been
permitted to withdraw their petitions or have been released from detention subject to certain
restrictions.3 In the case of Aquino, formal charges of murder, subversion and illegal possession of
firearms were lodged against him with a Military Commission on August 11, 1973; and on the
following August 23 he challenged the jurisdiction of said Commission as well as his continued
detention by virtue of those charges in a petition for certiorari and prohibition filed in this Court (G.R.
No.
L-37364). The question came up as to whether or not Aquino's petition for habeas corpus should be
dismissed on the ground that the case as to him should more appropriately be resolved in this new
petition. Of the twelve Justices, however, eight voted against such dismissal and chose to consider
the case on the merits.4
On Diokno's motion to withdraw his petition I voted in favor of granting it for two reasons. In the first
place such withdrawal would not emasculate the decisive and fundamental issues of public interest
that demanded to be resolved, for they were also raised in the other cases which still remained
pending. Secondly, since it was this petitioner's personal liberty that was at stake, I believed he had
the right to renounce the application for habeas corpus he initiated. Even if that right were not
absolute I still would respect his choice to remove the case from this Court's cognizance, regardless
of the fact that I disagreed with many of his reasons for so doing. I could not escape a sense of irony
in this Court's turning down the plea to withdraw on the ground, so he alleges among others, that this
is no longer the Court to which he originally applied for relief because its members have taken new
oaths of office under the 1973 Constitution, and then ruling adversely to him on the merits of his
petition.

It is true that some of the statements in the motion are an affront to the dignity of this Court and
therefore should not be allowed to pass unanswered. Any answer, however, would not be foreclosed
by allowing the withdrawal. For my part, since most of those statements are of a subjective
character, being matters of personal belief and opinion, I see no point in refuting them in these
cases. Indeed my impression is that they were beamed less at this Court than at the world outside
and designed to make political capital of his personal situation, as the publicity given to them by
some segments of the foreign press and by local underground propaganda news sheets
subsequently confirmed. It was in fact from that perspective that I deemed it proper to respond in
kind, that is, from a non-judicial forum, in an address I delivered on February 19, 1974 before the
LAWASIA, the Philippine Bar Association and the Philippine Lawyers' Association. Justice
Teehankee, it may be stated, is of the opinion that a simple majority of seven votes out of twelve is
legally sufficient to make the withdrawal of Diokno's petition effective, on the theory that the
requirement of a majority of eight votes applies only to a decision on the merits.

In any event, as it turned out, after petitioner Diokno was released by the President on September
11 all the members of this Court except Justice Castro were agreed that his petition had become
moot and therefore should no longer be considered on the merits. This notwithstanding, some of the
opinions of the individual members, particularly Justices Castro and Teehankee, should be taken in
the time setting in which they were prepared, that is, before the order for the release of Diokno was
issued.

The Cases.

The events which form the background of these nine petitions are related, either briefly or in great
detail, in the separate opinions filed by the individual Justices. The petitioners were arrested and
held pursuant to General Order No. 2 of the President (September 22, 1972), "for being participants
or for having given aid and comfort in the conspiracy to seize political and state power in the country
and to take over the Government by force ..."

General Order No. 2 was issued by the President in the exercise of the powers he assumed by
virtue of Proclamation No. 1081 (September 21, 1972) placing the entire country under martial law.
The portions of the proclamation immediately in point read as follows:

xxx xxx xxx

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 I, 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.

In addition, I do hereby order that all persons presently detained, as well as all others
who may hereafter be similarly detained for the crimes of insurrection or rebellion,
and all other crimes and offenses committed in furtherance or on the occasion
thereof, or incident thereto, or in connection therewith, for crimes against national
security and the law of nations, crimes against public order, crimes involving
usurpation of authority, rank, title and improper use of names, uniforms and insignia,
crimes committed by public officers, and for such other crimes as will be enumerated
 in orders that I shall subsequently promulgate, as well as crimes as a consequence
of any violation of any decree, order or regulation promulgated by me personally or
promulgated upon my direction shall be kept under detention until otherwise ordered
released by me or by my duly designated representative.

The provision of the 1935 Constitution referred to in the proclamation reads: "the President shall be
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, insurrection, or
rebellion. In case of invasion, insurrection, or rebellion, or imminent danger thereof, when the public
safety requires it, he may suspend the privilege of the writ of habeas corpus, or place the Philippines
or any part thereof under martial law."

1. The first major issue raised by the parties is whether this Court may inquire into the validity of
Proclamation No. 1081. Stated more concretely, is the existence of conditions claimed to justify the
exercise of the power to declare martial law subject to judicial inquiry? Is the question political or
justiciable in character?

Justices Makasiar, Antonio, Esguerra, Fernandez and Aquino hold that the question is political and
therefore its determination is beyond the jurisdiction of this Court. The reasons are given at length in
the separate opinions they have respectively signed. Justice Fernandez adds that as a member of
the Convention that drafted the 1973 Constitution he believes that "the Convention put
an imprimatur on the proposition that the validity of a martial law proclamation and its continuation is
political and non-justiciable in character."

Justice Barredo, on the other hand, believes that political questions are not per se beyond the
Court's jurisdiction, the judicial power vested in it by the Constitution being plenary and all-
embracing, but that as a matter of policy implicit in the Constitution itself the Court should abstain
from interfering with the Executive's Proclamation, dealing as it does with national security, for which
the responsibility is vested by the charter in him alone. But the Court should act, Justice Barredo
opines, when its abstention from acting would result in manifest and palpable transgression of the
Constitution proven by facts of judicial notice, no reception of evidence being contemplated for
purposes of such judicial action.

It may be noted that the postulate of non-justiciability as discussed in those opinions involves
disparate methods of approach. Justice Esguerra maintains that the findings of the President on the
existence of the grounds for the declaration of martial law are final and conclusive upon the Courts.
He disagrees vehemently with the ruling in Lansang vs. Garcia, 42 SCRA 448, December 11, 1971,
and advocates a return to Barcelon vs. Baker, 5 Phil. 87 (1905), and Montenegro vs. Castañeda, 91
Phil. 882 (1952). Justice Barredo, for his part, holds that Lansang need not be overturned, indeed
does not control in these cases. He draws a distinction between the power of the President to
suspend the privilege of the writ of habeas corpus, which was the issue in Lansang, and his power to
proclaim martial law, calling attention to the fact that while the Bill of Rights prohibits suspension of
the privilege except in the instances specified therein, it places no such prohibition or qualification
with respect to the declaration of martial law.

Justice Antonio, with whom Justices Makasiar, Fernandez and Aquino concur, finds that there is no
dispute as to the existence of a state of rebellion in the country, and on that premise emphasizes the
factor of necessity for the exercise by the President of his power under the Constitution to declare
martial law, holding that the decision as to whether or not there is such necessity is wholly confided
to him and therefore is not subject to judicial inquiry, his responsibility being directly to the people.

Arrayed on the side of justiciability are Justices Castro, Fernando, Teehankee and Muñoz Palma.
They hold that the constitutional sufficiency of the proclamation may be inquired into by the Court,
and would thus apply the principle laid down in Lansang although that case refers to the power of
the President to suspend the privilege of the writ of habeas corpus. The recognition of justiciability
accorded to the question in Lansang, it should be emphasized, is there expressly distinguished from
the power of judicial review in ordinary civil or criminal cases, and is limited to ascertaining "merely
whether he (the President) has gone beyond the constitutional limits of his jurisdiction, not to
exercise the power vested in him or to determine the wisdom of his act." The test is not whether the
President's decision is correct but whether, in suspending the writ, he did or did not act arbitrarily.
Applying this test, the finding by the Justices just mentioned is that there was no arbitrariness in the
President's proclamation of martial law pursuant to the 1935 Constitution; and I concur with them in
that finding. The factual bases for the suspension of the privilege of the writ of habeas
corpus, particularly in regard to the existence of a state of rebellion in the country, had not
disappeared, indeed had been exacerbated, as events shortly before said proclamation clearly
demonstrated. On this Point the Court is practically unanimous; Justice Teehankee merely refrained
from discussing it.

Insofar as my own opinion is concerned the cleavage in the Court on the issue of justiciability is of
not much more than academic interest for purposes of arriving at a judgment. I am not unduly
exercised by Americas decisions on the subject written in another age and political clime, or by
theories of foreign authors in political science. The present state of martial law in the Philippines is
peculiarly Filipino and fits into no traditional patterns or judicial precedents.

In the first place I am convinced (as are the other Justices), without need of receiving evidence as in
an ordinary adversary court proceeding, that a state of rebellion existed in the country when
Proclamation No. 1081 was issued. It was a matter of contemporary history within the cognizance
not only of the courts but of all observant people residing here at the time. Many of the facts and
events recited in detail in the different "Whereases" of the proclamation are of common knowledge.
The state of rebellion continues up to the present. The argument that while armed hostilities go on in
several provinces in Mindanao there are none in other regions except in isolated pockets in Luzon,
and that therefore there is no need to maintain martial law all over the country, ignores the
sophisticated nature and ramifications of rebellion in a modern setting. It does not consist simply of
armed clashes between organized and identifiable groups on fields of their own choosing. It includes
subversion of the most subtle kind, necessarily clandestine and operating precisely where there is
no actual fighting. Underground propaganda, through printed news sheets or rumors disseminated in
whispers; recruitment of armed and ideological adherents, raising of funds, procurement of arms and
material, fifth-column activities including sabotage and intelligence — all these are part of the
rebellion which by their nature are usually conducted far from the battle fronts. They cannot be
counteracted effectively unless recognized and dealt with in that context.

Secondly, my view, which coincides with that of other members of the Court as stated in their
opinions, is that the question of validity of Proclamation No. 1081 has been foreclosed by the
transitory provision of the 1973 Constitution [Art. XVII, Sec. 3(2)] that "all proclamations, orders,
decrees, instructions, and acts promulgated, issued, or done by the incumbent President shall be
part of the law of the land and shall remain valid, legal, binding and effective even after ... the
ratification of this Constitution ..." To be sure, there is an attempt in these cases to resuscitate the
issue of the effectivity of the new Constitution. All that, however, is behind us now. The question has
been laid to rest by our decision in Javellana vs. Executive Secretary (L-36142, 50 SCRA 30, March
31, 1973), and of course by the existing political realities both in the conduct of national affairs and in
our relations with other countries.

On the effect of the transitory provision Justice Muñoz Palma withholds her assent to any sweeping
statement that the same in effect validated, in the constitutional sense, all "such proclamations,
decrees, instructions, and acts promulgated, issued, or done by the incumbent President." All that
she concedes is that the transitory provision merely gives them "the imprimatur of a law but not of a
constitutional mandate," and as such therefore "are subject to judicial review when proper under the
Constitution.

Finally, the political-or-justiciable question controversy indeed, any inquiry by this Court in the
present cases into the constitutional sufficiency of the factual bases for the proclamation of martial
law — has become moot and purposeless as a consequence of the general referendum of July 27-
28, 1973. The question propounded to the voters was: "Under the (1973) Constitution, the President,
if he so desires, can continue in office beyond 1973. Do you want President Marcos to continue
beyond 1973 and finish the reforms he initiated under Martial Law?" The overwhelming majority of
those who cast their ballots, including citizens between 15 and 18 years, voted affirmatively on the
proposal. The question was thereby removed from the area of presidential power under the
Constitution and transferred to the seat of sovereignty itself. Whatever may be the nature of the
exercise of that power by the President in the beginning — whether or not purely political and
therefore non-justiciable — this Court is precluded from applying its judicial yardstick to the act of the
sovereign.

2. With respect to the petitioners who have been released from detention but have not withdrawn
their petitions because they are still subject to certain restrictions,5 the ruling of the Court is that the
petitions should be dismissed. The power to detain persons even without charges for acts related to
the situation which justifies the proclamation of martial law, such as the existence of a state of
rebellion, necessarily implies the power (subject, in the opinion of the Justices who consider
Lansang applicable, to the same test of arbitrariness laid down therein), to impose upon the released
detainees conditions or restrictions which are germane to and necessary to carry out the purposes of
the proclamation. Justice Fernando, however, "is for easing the restrictions on the right to travel of
petitioner Rodrigo" and others similarly situated and so to this extent dissents from the ruling of the
majority; while Justice Teehankee believes that those restrictions do not constitute deprivation of
physical liberty within the meaning of the constitutional provision on the privilege of the writ
of habeas corpus.

It need only be added that, to my mind, implicit in a state of martial law is the suspension of the said
privilege with respect to persons arrested or detained for acts related to the basic objective of the
proclamation, which is to suppress invasion, insurrection, or rebellion, or to safeguard public safety
against imminent danger thereof. The preservation of society and national survival take precedence.
On this particular point, that is, that the proclamation of martial law automatically suspends the
privilege of the writ as to the persons referred to, the Court is practically unanimous. Justice
Fernando, however, says that to him that is still an open question; and Justice Muñoz Palma
qualifiedly dissents from the majority in her separate opinion, but for the reasons she discusses
therein votes for the dismissal of the petitions.

IN VIEW OF ALL THE FOREGOING AND FOR THE REASONS STATED BY THE MEMBERS OF
THE COURT IN THEIR SEPARATE OPINIONS, JUDGMENT IS HEREBY RENDERED
DISMISSING ALL THE PETITIONS, EXCEPT THOSE WHICH HAVE BEEN PREVIOUSLY
WITHDRAWN BY THE RESPECTIVE PETITIONERS WITH THE APPROVAL OF THIS COURT, AS
HEREINABOVE MENTIONED. NO COSTS.

Makasiar, Esguerra, Fernandez, Muñoz Palma and Aquino, JJ., concur.

Prefatory Note

(written on September 12, 1974)

My separate opinion below in the nine cases at bar was handed to Chief Justice Querube C.
Makalintal on Monday, September 9, 1974, for promulgation (together with the individual opinions of
the Chief Justice and the other Justices) on September 12 (today) as agreed upon by the Court.

On September 11 the petitioner Jose W. Diokno was released from military custody. The
implications of this supervening event were lengthily discussed by the Court in its deliberations in the
afternoon. Eleven members thereafter voted to dismiss Diokno's petition as being "moot and
academic;" I cast the lone dissenting vote. Although perhaps in the strictest technical sense that
accords with conventional legal wisdom, the petition has become "moot" because Diokno has been
freed from physical confinement, I am nonetheless persuaded that the grave issues of law he has
posed and the highly insulting and derogatory imputations made by him against the Court and its
members constitute an inescapable residue of questions of transcendental dimension to the entire
nation and its destiny and to the future of the Court — questions that cannot and should not be
allowed to remain unresolved and unanswered.

I have thus not found it needful nor even advisable to recast my separate opinion or change a word
of it.

I invite the reader to assess my 38-page separate opinion which immediately follows, in the light of
the foregoing context and factual setting.

FRED RUIZ CASTRO

Associate Justice.

CASTRO, J.:

These nine cases are applications for writs of habeas corpus. The petitions aver in substance that
on September 21, 1972 the President of the Philippines placed the country under martial law
(Proclamation 1081); that on various dates from September 22 to September 30, 1972, the
petitioners or the persons in whose behalf the applications were made were arrested by the military
authorities and detained, some at Fort Bonifacio in Makati, Rizal, others at Camp Aguinaldo and still
others at Camp Crame, both in Quezon City; and that the arrest and detention of the petitioners
were illegal, having been effected without a valid order of a competent court of justice.

Writs of habeas corpuz were issued by the Court directing the respondents Secretary of National
Defense, Chief of Staff of the Armed Forces of the Philippines, and Chief of the Philippine
Constabulary, to produce the bodies of the petitioners in Court on designated dates and to make
returns to the writs. In due time the respondents, through the Solicitor General, filed their returns to
the writs and answers to the petitions. Admitting that the petitioners had been arrested and detained,
the respondents nevertheless justified such arrest and detention as having been legally ordered by
the President of the Philippines pursuant to his proclamation of martial law, the petitioners being
regarded as participants or as having given aid and comfort "in the conspiracy to seize political and
state power and to take over the government by force." The respondents traversed the petitioners'
contention that their arrest and detention were unconstitutional.

Hearings were held on September 26 and 29 and October 6, 1972, at which the petitioners were
produced in Court. Thereafter the parties filed memoranda.

Meanwhile, some of the petitioners, with leave of Court, withdrew their petitions;1 others, without
doing so, were subsequently released from custody under certain restrictive conditions.2 Enrique
Voltaire Garcia II, the sole petitioner in L-35547 and one of those released, having died shortly after
his release, the action was deemed abated as to him.

As of this date only Jose W. Diokno, in whose behalf the petition in L-35539 was filed, and Benigno
S. Aquino, Jr. in L35546, are still in military custody.

On August 23, 1973 the petitioner Aquino filed an action for certiorari and prohibition with this Court
alleging that on August 11, 1973 charges of murder, subversion and illegal possession of firearms
were filed against him with a military commission; that his trial by the military court which was to be
held on August 27, 29 and 31, 1973 was illegal because the proclamation of martial law was
unconstitutional; and that he could not expect a fair trial because the President of the Philippines,
having prejudged his case, could reverse any judgment of acquittal by the military court and
sentence him to death. That action, docketed as L-37364 and entitled "Benigno S. Aquino, Jr. vs.
Military Commission No. 2," is still pending consideration and decision.

On the other hand, Jose W. Diokno, on December 28, 1973, filed a motion to withdraw the petition
filed in his behalf, imputing delay in the disposition of his case, and asseverating that because of the
decision of the Court in the Ratification Cases3 and the action of the members of the Court in taking
an oath to support the new Constitution, he cannot "reasonably expect to get justice in this case."
The respondents oppose the motion on the grounds that there is a public interest in the decision of
these cases and that the reasons given for the motion to withdraw are untrue, unfair and
contemptuous.

II

The threshold question is whether to allow the withdrawal of the petition in

L-35539 filed in behalf of Diokno. In his letter to his counsel, which is the basis of the motion to
withdraw, Diokno states the following considerations: first, the delay in the disposition of his
case; second, the dismissal of the petitions in the Ratification Cases, contrary to the Court's ruling
that the 1973 Constitution was not validly ratified; and third, the action of the members of the Court
in taking an oath of allegiance to the new Constitution. Diokno asserts that "a conscience that allows
a man to rot behind bars for more than one year and three months without trial — of course, without
any charges at all — is a conscience that has become stunted, if not stultified" and that "in swearing
to support the new 'Constitution,' the five members of the Court who had held that it had not been
validly ratified, have not fulfilled our expectations." He goes on to say: "I do not blame them. I do not
know what I would have done in their place. But, at the same time, I can not continue to entrust my
case to them; and I have become thoroughly convinced that our quest for justice in my case is futile."

As already noted, the Solicitor General, in behalf of the respondents, opposes the withdrawal of the
petition on the ground of public interest, adding that the motion to withdraw cannot be granted by the
Court without in effect admitting the "unfair, untrue and contemptuous" statements contained therein.

Without passing on the liability of any party in this case for contemptuous statements made, the
Court (by a vote of 5 to 7) denied the motion.
I voted for the denial of the motion to withdraw for inescapable reasons that I now proceed to
expound.

The general rule is that in the absence of a statute expressly or impliedly prohibiting the withdrawal
of an action, the party bringing such action may dismiss it even without the consent of the defendant
or respondent where the latter will not be prejudiced, although it may be necessary to obtain leave of
court. But there are recognized exceptions: when the public interest or questions of public
importance are involved.5 For example, the fact that a final determination of a question involved in an
action is needed or will be useful as a guide for the conduct of public officers or tribunals is a
sufficient reason for retaining an action which would or should otherwise be dismissed. Likewise,
appeals may be retained if the questions involved are likely to arise frequently in the future unless
they are settled by a court of last resort.

Thus, in Gonzales vs. Commission on Elections,6 an action for declaratory judgment impugning the
validity of Republic Act No. 4880 which prohibits the early nomination of candidates for elective
offices and early election campaigns or partisan political activities became moot by reason of the
holding of the 1967 elections before decision could be rendered. Nonetheless the Court treated the
petition as one for prohibition and rendered judgment in view of "the paramount public interest and
the undeniable necessity for a ruling, the national elections [of 1969] being barely six months away.

In Krivenko vs. Register of Deeds,7 the Court denied the petition to withdraw, an appeal in view of
the public importance of the questions involved, and lest "the constitutional mandate [proscribing the
sale of lands to aliens] ... be ignored or misconceived with all the harmful consequences ... upon the
national economy."

The petitioner Diokno has made allegations to the effect that the President has "arrogated" unto
himself the powers of government by "usurping" the powers of Congress and "ousting" the courts of
their jurisdiction, thus establishing in this country a "virtual dictatorship." Diokno and his Counsel
have in fact stressed that the present trend of events in this country since the proclamation of martial
law bears a resemblance to the trend of events that led to the establishment of a dictatorship in
Germany under Hitler. There is thus a profound public interest in the resolution of the questions
raised in the cases at bar, questions that, in the phrase of Chief Justice Marshall in Marbury vs.
Madison,8 are "deeply interesting to the nation." I apprehend that in view of the import of the
allegations made by Diokno and his counsel, incalculable harm or, in the very least, great disservice
may be caused to the national interest if these cases are not decided on the merits. As the Solicitor
General has observed," petitioner's [Diokno's] arrest and detention have been so exploited in the
hate campaign that the only way to protect the integrity of the government is to insist on a decision of
this case in the forum in which the petitioner had chosen to bring them. Otherwise, like festering
sores, the issues stirred up by this litigation will continue to agitate the nation."

Prescinding from the policy considerations just discussed, I am gladdened that the Court has not
shunted aside what I regard as the inescapable moral constraints in the petitioner Diokno's motion to
withdraw his petition for habeas corpus.9 The Court repudiated the facile recourse of avoiding
resolution of the issues on the pretext that Diokno insists on withdrawing his petition. It is thus not a
mere happenstance that, notwithstanding that seven members of the Court are of the view that
Diokno has an absolute right to withdraw his petition, the Court has confronted the issues posed by
him, and now resolves them squarely, definitively and courageously. No respectable legal historian
or responsible chronicler of the nation's destiny will therefore have any reason to level the indictment
that once upon a grave national crisis the Court abdicated its constitutional prerogative of
adjudication and forswore the sacred trust reposed in it as the nation's ultimate arbiter on
transcendental, far-reaching justiciable questions.

With respect to the reasons given for the motion to withdraw, the Court is mindful that it has taken
some time to resolve these cases. In explanation let it be said that the issues presented for
resolution in these cases are of the utmost gravity and delicateness. No question of the awesome
magnitude of those here presented has ever confronted the Court in all its history. I am not aware
that any other court, except possibly the Circuit Court in Ex parte Merryman, 10 has decided like
questions during the period of the emergency that called for the proclamation of martial law.

But then in Merryman the Court there held that under the U.S. Federal Constitution the President did
not have power to suspend the privilege of the writ of habeas corpus. Otherwise, where the question
involved not power but rather the exercise of power, courts have declined to rule against the duly
lasted. As Court Glendon Schubert noted, the U.S. Supreme Court "was unwilling to [do so] until the
war was over and Lincoln was dead."
Thus, in Ex parte Milligan, 11 the decision voiding the petitioner's trial by a military court was not
announced until December 14, 1866, after the Civil War was over. The Civil War began on May 3,
1861 with the capture of Fort Sumter by Confederate forces. Lambdin Milligan was charged before a
military commission with aiding rebels, inciting insurrection, disloyal practices and violation of the
laws of war. His trial ran from September to December 1862; he was convicted on October 21, 1864
and ordered executed on May 19, 1865. On May 10, 1865 he applied for a writ of habeas
corpus from the Circuit Court of Indianapolis. On May 11, Justice Davis and Judge McDonald
certified that they differed in opinion and, therefore, pursuant to the statute of 1802, elevated their
questions to the Supreme Court. On June 3, 1865 the death sentence was commuted to life
imprisonment by President Johnson who had succeeded to the Presidency after the assassination of
Lincoln. The Supreme Court heard the parties' arguments for eight days, on March 5, 6, 7, 8, 9, 12
and 13, and April 3, 1866. On December 14, 1866 the decision of the Supreme Court voiding
Milligans trial was announced.

In In Re Moyer, 12 martial rule was proclaimed in Colorado on March 23, 1904. Application for a writ
of habeas corpus was filed with the State Supreme Court on April 14, 1904, seeking the release of
Moyer who had been detained under the Colorado governor's proclamation. On June 6, 1904 the
complaint was dismissed and the petitioner was remanded to the custody of the military authorities.
The Court held that as an incident to the proclamation of martial law, the petitioner's arrest and
detention were lawful. Moyer subsequently brought an action for damages for his imprisonment from
March 30 to June 15, 1904. The complaint was dismissed by the Circuit Court. On writ of error, the
U.S. Supreme Court affirmed, holding that "So long as such arrests are made in good faith and in
the honest belief that they are needed in order to head the insurrection off, the governor is the final
judge and cannot be subjected to an action after he is out of office, on the ground that he had no
reasonable ground for his belief." 13

Finally, in Duncan vs. Kahanamoku, 14 Hawaii was placed under martial rule on December 7, 1941,
after the Japanese sneak attack on Pearl Harbor. The petitioner Duncan was tried by a provost court
on March 2, 1944, and found guilty on April 13 of assault on two marine sentries. The other
petitioner, White, was charged on August 25, 1942, also before a provost court, with embezzling
stocks belonging to another civilian. White and Duncan questioned the power of the military tribunals
in petitions for habeas corpus filed with the District Court of Hawaii on March 14 and April 14, 1944,
respectively. Writs were granted on May 2, 1944, and after trial the District Court held the military
trials void and ordered the release of Duncan and White. On October 24, 1944 the privilege of the
writ of habeas corpus was restored and martial law was terminated in Hawaii. On appeal, the
decision of the District Court was reversed. 15 Certiorari was granted by the U.S. Supreme Court on
February 12, 1945. 16 On February 25, 1946 the Court held that the trials of White and Duncan by
the military tribunals were void.

In truth, as the Court in Milligan recognized, its decision could not have been made while the Civil
War lasted. Justice Davis wrote:

During the Wicked Rebellion, the temper of the times did not allow that calmness in
deliberation and discussion so necessary to a correct conclusion of a purely judicial
question. Then, considerations of safety were mingled with the exercise of power;
and feelings and interests prevailed which are happily terminated. Now that the
public safety is assured, this question as well as all others, can be discussed and
decided without passion or the admixture of an clement not required to form a legal
judgment. We approached the investigation of this case fully sensible of the
magnitude of the inquiry and the of full and cautious deliberation. 17

No doubt there is a point, although controversial, in the observation that in the instances just
examined a successful challenge was possible only retroactively, after the cessation of the hostilities
which would under any circumstances have justified the judgment of the military. 18

Nor did it offend against principle or ethics for the members of this Court to take an oath to support
the 1973 Constitution. After this Court declared that, with the dismissal of the petitions questioning
the validity of the ratification of the new Constitution, there was "no longer any judicial obstacle to the
new Constitution being considered in force and effect," 19 it became the duty of the members of the
Court, let alone all other government functionaries, to take an oath to support the new Constitution.
While it is true that a majority of six justices declared that the 1973 Constitution was not validly
ratified, it is equally true that a majority of six justices held that the issue of its effectivity was a
political question, which the Court was not equipped to determine, depending as it did on factors for
which the judicial process was not fit to resolve. Resolution of this question was dispositive of all the
issues presented in the Ratification Cases. It thus became untenable for the members of the Court
who held contrary opinions to press their opposition beyond the decision of those cases.
Fundamental respect for the rule of law dictated that the members of the Court take an oath to
uphold the new Constitution. There is nothing in that solemn oath that debases their individual
personal integrity or renders them unworthy or incapable of doing justice in these cases. Nor did the
environmental milieu of their adjuration in any manner demean their high offices or detract from the
legitimacy of the Court as the highest judicial collegium of the land.

III

From its Anglo-Saxon origin and throughout its slow evolution, the concept, scope and boundaries,
application, limitations and other facets of martial law have been the subject of misunderstanding,
controversy and debate. 20 To the legal scholar interested in set legal principles and precise
distinctions, martial law could be a frustrating subject. On the matter of its definition alone, it is
known to have as many definitions as there are numerous authors and court decision s (not to
discount the dissenting opinions) on the subject. The doctrinal development of martial law has relied
mainly on case law, 21 and there have been relatively few truly distinctive types of occasions where
martial law, being the extraordinary remedy that it is, has been resorted to.

In the Philippines, the only other notable instance when martial law was declared was on September
22, 1944, per Proclamation No. 29 promulgated by President Jose P. Laurel. But this was pursuant
to the constitution of the short-lived Japanese Occupation Republic, and the event has not been
known to be productive of any jurisprudential pronouncements emanating from the high court of the
land.

Notwithstanding the confused state of jurisprudence on the subject of martial law in England and in
the United States, and, consequently, in the Philippines, a useful knowledge of the law on the
subject can fairly be had from a study of its historical background and its rationale, its doctrinal
development, applicable constitutional and statutory provisions, and authoritative court decisions
and commentaries.

Legal scholars trace the genesis of martial law to England starting from the age of the Tudors and
the Stuarts in the 14th century when it was first utilized for the suppression of rebellions and
disorders. It later came to be employed in the British colonies and dominions where its frequent
exercise against British subjects gave rise to the criticism that it was being exploited as a weapon to
enhance British imperialism. 22

In the United States, martial law was declared on numerous occasions from the revolutionary period
to the Civil War, and after the turn of the century. One of the earliest instances in American history
was the declaration of martial law by Gen. Andrew Jackson before the Battle of New Orleans in
1814. Fearing that the New Orleans legislature might capitulate to the British, he placed the State
under "strict martial law" and forbade the State legislature to convene. Martial law was lifted after the
American victory over British arms. The Civil War period saw the declaration of martial law on many
occasions by both the Confederate and the Union authorities. It has also been resorted to in cases
of insurrection and rebellion, as exemplified by the Whiskey rebellion (1794 in Pennsylvania and
Virginia) and the Dorr's rebellion (1842 in Rhode Island). Martial law has also been utilized during
periods of disaster, such as the San Francisco earthquake and fire of 1906, and in industrial
disputes involving violence and disorder. It has likewise been variously instituted to police elections,
to take charge of ticket sales at a football game, to prevent the foreclosure of mortgages to close a
race track. In an extreme case, the governor of Georgia proclaimed martial law around a
government building to exclude from its premises a public official whom he was enjoined from
removing. 23

At the close of the World War I, the term "martial law" was erroneously employed to refer to the law
administered in enemy territory occupied by the allied forces pending the armistice . 21 William
Winthrop states that the earlier confusion regarding the concept of martial law, resulting partly from
the wrong definition of the term by the Duke of Wellington who had said that "it is nothing more nor
less than the will of the general," had misled even the Supreme Court of the United States. 25 In the
leading case of Ex Parte Milligan, 26 however, Chief Justice Chase, in his dissenting opinion, clarified
and laid down the classic distinctions between the types of military jurisdiction in relation to the terms
"martial law," "military law" and "military government," which to a great extent cleared the confusion
in the application of these terms.
These distinctions were later incorporated in the Manual for Courts-Martial of the United States
Army, 27 after which the Manual for Courts-Martial of the Armed Forces of the Philippines,
promulgated on December 17, 1938 pursuant to Executive Order No. 178, was patterned. In
essence, these distinctions are as follows:

a. Military jurisdiction in relation to the term military law is that exercised by a

government "in the execution of that branch of its municipal law which regulates its
military establishment." (In the U.S. and the Philippines, this refers principally to the
statutes which embody the rules of conduct and discipline of members of their
respective armed forces. In the Philippines we have for this purpose Commonwealth
Act No. 408, as amended, otherwise known as "The Article of War").

b. Military jurisdiction in relation to the term martial law is that exercised in time of
rebellion and civil war by a government temporarily governing the civil population of a
locality through its military forces, without the authority of written law, as necessity
may require. 28

c. Military jurisdiction in relation to the term military government is that "exercised by

a belligerent occupying an enemy's territory." 29 (A familiar example of a military
government was, of course, that established and administered by the Japanese
armed forces in the Philippines from 1942 to 1945).

What is the universally accepted fundamental justification of martial law? Wiener in A Practical
Manual Martial Law, 30 ventures this justification: "Martial Law is the public law of necessity.
Necessity calls it forth, necessity justifies its existence, and necessity measures the extent and
degree to which it may be employed."

Martial law is founded upon the principle that the state has a right to protect itself against those who
would destroy it, and has therefore been likened to the right of the individual to self-defense. 31 It is
invoked as an extreme measure, and rests upon the basic principle that every state has the power of
self-preservation, a power inherent in all states, because neither the state nor society would exist
without it. 32

IV

I now proceed to discuss the issues posed in these cases.

In Proclamation 1081, dated September 21, 1972, the President of the Philippines declared that
lawless elements, supported by a foreign power, were in "armed insurrection and rebellion against
the Government of the Philippines in order to forcibly seize political and state power, overthrow the
duly constituted government and supplant our existing political, social, economic and legal order with
an entirely new one ... based on the Marxist-Leninist-Maoist teachings and beliefs." He enumerated
many and varied acts of violence committed in pursuance of the insurrection and rebellion. He
therefore placed the Philippines under martial law, commanded the armed forces to suppress the
insurrection and rebellion, enforce obedience to his decrees, orders and regulations, and arrest and
detain those engaged in the insurrection and rebellion or in other crimes "in furtherance or on the
occasion thereof, or incident thereto or in connection therewith." The President invoked his powers
under article VII section 10(2) of the 1935 Constitution "to save the Republic and reform our
society." 33

By General Order No. 2 the President directed the Secretary of National Defense to "forthwith arrest
or cause the arrest ... the individuals named in the attached lists for being participants or for having
given aid and comfort in the conspiracy to seize political and state power in the country and to take
over the government by force ... in order to prevent them from further committing acts that are
inimical or injurious ..." The Secretary was directed to hold in custody the individuals so arrested
"until otherwise so ordered by me or by my duly designated representative." The arrest and
detention of the petitioners in these cases appear to have been made pursuant to this order.

I cannot blink away the stark fact of a continuing Communist rebellion in the Philippines. The Court
has repeatedly taken cognizance of this fact in several eases decided by it. In 1971, in Lansang vs.
Garcia, 34 the Court, after reviewing the history of the Communist movement in the country since the
1930s, concluded: "We entertain, therefore, no doubts about the existence of a sizeable group of
men who have publicly risen in arms to overthrow the government and have thus been and still are
engaged in rebellion against the Government of the Philippines." It affirmed this finding in 1972 35 in
sustaining the validity of the Anti-Subversion Act (Republic Act 1700). The Act is itself a
congressional recognition and acute awareness of the continuing threat of Communist subversion to
democratic institutions in this country. Enacted in 1957, it has remained in the statute books despite
periodic agitation in many quarters for its total excision.

At times the rebellion required no more than ordinary police action, coupled with criminal
prosecutions. Thus the 1932 Communist trials resulted in the conviction of the well-known
Communists of the day: Crisanto Evangelista, Jacinto G. Manahan, Dominador J. Ambrosio,
Guillermo Capadocia, Ignacio Nabong and Juan Feleo, among others, for crimes ranging from illegal
association to rebellion and sedition. 36

The end of World War II saw the resurgence of the Communist rebellion. Now with an army forged
out of the former Hukbalahaps (the armed resistance against the Japanese) and renamed Hukbong
Mapagpalaya ng Bayan or HMB, the threat to the security of the state became so malevolent that on
October 22, 1950, President Elpidio Quirino was impelled to suspend the privilege of the writ
of habeas corpus. This enabled the Government to effect the apprehension of top Communist Party
leaders Guillermo Capadocia, Flavio Nava, Amado V. Hernandez, Jesus Lava, Jose Lava, Angel
Baking and Simeon Rodriguez, among others. 37 When challenged by one of those detained under
the Presidential proclamation the suspension of the privilege of the writ of habeas corpus was
sustained by the Court. 38

The beginning of the 1970s was marked by the rise of student activism. This phenomenon swept
around the globe, and did not spare our own colleges and universities. Soon the campuses became
staging grounds for student demonstrations that generally ended in bloody and not infrequently
lethal street riots.

In Navarro vs. Villegas, 39 in upholding the power of the Mayor of Manila to determine the place and
time for the holding of public assemblies, this Court noted —

That experiences in connection with present assemblies and demonstrations do not

warrant the Court's disbelieving respondent Mayor's appraisal that a public rally at
Plaza Miranda, as compared to one at the Sunken Gardens as he suggested, poses
a clearer and more imminent danger of public disorders, breaches of the peace,
criminal acts, and even bloodshed as an aftermath of such assemblies, and
petitioner has manifested that it has no means of preventing such disorders;

That, consequently, every time that such assemblies are announced, the community
is placed in such a state of fear and tension that offices are closed early and
employees dismissed storefronts boarded up, classes suspended, and transportation
disrupted to the general detriment of the public.

Riding on the crest of student unrest, the Communist rebellion gained momentum. As the Court
noted in Lansang vs. Garcia, 40

[T]he reorganized Communist Party of the Philippines has, moreover, adopted Mao's
concept of protracted people's war, aimed at the paralyzation of the will to resist of
the government, of the political, economic and intellectual leadership, and of the
people themselves; that conformably to such concept the Party has placed special
emphasis upon most extensive and intensive program of subversion by the
establishment of front organizations in urban centers, the organization of armed city
partisans and the infiltration in student groups, labor unions, and farmer and
professional groups; that the CPP has managed to infiltrate or establish and control
nine (9) major labor organizations; that it has exploited the youth movement and
succeeded in making Communist fronts of eleven (11) major student or youth
organizations; that there are, accordingly, about thirty (30) mass organizations
actively advancing the CPP interests, among which are the Malayang Samahan ng
Magsasaka (MASAKA) the Kabataang Makabayan (KM), the Movement for the
Advancement of Nationalism (MAN), the Samahang Demokratiko ng Kabataan
(SDK), the Samahang Molave (SM), and the Malayang Pagkakaisa ng Kabataang
Pilipino (MPKP); that, as of August, 1971, the KM had two hundred forty-five (245)
operational chapters throughout the Philippines, of which seventy-three (73) were in
the Greater Manila Area, sixty (60) in Northern Luzon, forty-nine (49) in Central
Luzon, forty-two (42) in the Visayas and twenty-one (21) in Mindanao and Sulu; that
in 1970, the Party had recorded two hundred fifty-eight (258) major demonstrations,
 of which about thirty-three i33) ended in violence, resulting in fifteen (15) killed and
over five hundred (500) injured; that most of these actions were organized,
coordinated or led by the aforementioned front organizations; that the violent
demonstrations were generally instigated by a small, but well-trained group of armed
agitators; that the number of demonstrations heretofore staked in 1971 has already
exceeded those in 1970; and that twenty-four (24) of these demonstrations were
violent, and resulted in the death of fifteen (15) persons and the injury of many more.

The mounting level of violence necessitated the suspension, for the second time, of the privilege of
the writ of habeas corpus on August 21, 1971. The Government's action was questioned in Lansang
vs. Garcia. This Court found that the intensification and spread of Communist insurgency imperiled
the state. The events after the suspension of the privilege of the writ confirmed the alarming extent
of the danger to public safety:

Subsequent events — as reported — have also proven that petitioner's counsel have
underestimated the threat to public safety posed by the New People's Army. Indeed,
it appears that, since August 21, 1971, it had in Northern Luzon six (6) encounters
and staged one (1) raid, in consequence of which seven (7) soldiers lost their lives
and two (2) others were wounded, whereas the insurgents suffered five (5)
casualties; that on August 26, 1971, a well-armed group of NPA, trained by defector
Lt. Victor Corpus, attacked the very command post of TF LAWIN in Isabela,
destroying two (2) helicopters and one (1) plane, and wounding one (1) soldier; that
the NPA had in Central Luzon a total of four (4) encounters, with two (2) killed and
three (3) wounded on the side of the Government, one (1) KM-SDK leader, an
unidentified dissident, and Commander Panchito, leader of dissident group, were
killed; that on August 26, 1971, there was an encounter in the Barrio of San Pedro,
Iriga City, Camarines Sur, between the PC and the NPA, in which a PC and two (2)
KM members were killed; that the current disturbances in Cotabato and the Lanao
provinces have been rendered more complex by the involvement of the CPP/NPA
for, in mid-1971, a KM group headed by Jovencio Esparagoza, contacted the Higa-
onan tribes, in their settlement in Magsaysay, Misamis Oriental, and offered them
books, pamphlets and brochures of Mao Tse Tung, as well as conducted teach-ins in
the reservation; that Esparagoza was reportedly killed on September 22, 1971, in an
operation of the PC in said reservation; and that there are now two (2) NPA cadres in
Mindanao.

It should, also, be noted that adherents of the CPP and its front organization are
accordingly to intelligence findings, definitely capable of preparing powerful
explosives out of locally available materials; that the bomb used in the Constitutional
Convention Hall was a 'clay more' mine, a powerful explosive device used by the
U.S. Arm believed to have been one of many pilfered from the Subic Naval Base a
few days before; that the President had received intelligence information to the effect
that there was a July-August Plan involving a wave of assassinations, kidnappings,
terrorism and miss destruction of property and that an extraordinary occurrence
would signal the beginning of said event; that the rather serious condition of peace
and order in Mindanao, particularly in Cotabato and Lanao, demanded the presence
therein of forces sufficient to cope with the situation; that a sizeable part of our armed
forces discharges other functions; and that the expansion of the CPP activities from
Central Luzon to other parts of the country particularly Manila and its suburbs the
Cagayan Valley, Ifugao, Zambales, Laguna, Quezon and Bicol Region, required that
the rest of our armed forces be spread thin over a wide area. 41

By virtue of these findings, the Court, led by Chief Justice Roberto Concepcion, unanimously upheld
the suspension of the privilege of the writ of habeas corpus. The Court said:

Considering that the President was in possession of the above data — except those
related to events that happened after August 21, 1971 — when the Plaza Miranda
prompting, took place, the Court is not prepared to held that the Executive had acted
arbitrarily or gravely abused his discretion when he then concluded that public safety
and national security required the suspension of the privilege of the writ, particularly if
the NPA were to strike simultaneously with violent demonstrations staged by the two
hundred forty-five (245) KM chapters, all over the Philippines, with the assistance
and cooperation of the dozens of CPP front organizations, and the bombing of water
mains and conduits, as well as electric power plants and installations — a possibility
 which, no matter how remote, he was bound to forestall, and a danger he was under
obligation to anticipate and at rest.

He had consulted his advisers and sought their views. He had reason to feel that the
situation was critical — as, indeed, it was — and demanded immediate action. This
he took believing in good faith that public safety required it. And, in the light of the
circumstances adverted to above, he had substantial grounds to entertain such
belief." 42

The suspension of the privilege of the writ was lifted on January 7, 1972, but soon thereafter chaos
engulfed the nation again. A large area of the country was in open rebellion. The authority of the
Government was frontally challenged by a coalition of forces. It was against this backdrop of
violence and anarchy that martial law was proclaimed on September 21, 1972.

Personally I take notice of this condition, in addition to what the Court has found in cases that have
come to it for decision, and there is no cogent reason for me to say as a matter of law that the
President exceeded his powers in declaring martial law. Nor do I believe that the Solicitor General's
manifestation of May 13, 1974 to the effect that while on the whole the military challenge to the
Republic has been overcome there are still large areas of conflict which warrant the continued
imposition of law, can be satisfactorily controverted by or by any perceptive observer of the national
scene.

As I will point out in this opinion, the fact that courts are open be accepted as proof that the rebellion
and which compellingly called for the declaration of martial law, no longer imperil the public safety.
Nor are the many surface indicia adverted to by the petitioners (the increase in the number of
tourists, the choice of Manila as the conferences and of an international beauty contest) to be
regarded as evidence that the threat to public safe has abated. There is actual armed combat,
attended by the somber panoply war, raging in Sulu and Cotabato, not to not mention the region and
Cagayan Valley. 43 I am hard put to say, therefore, that the Government's claim is baseless.

I am not insensitive to the plea made here in the name of individual liberty. But to paraphrase Ex
parte Moyer, 44 if it were the liberty alone of the petitioner Diokno that is. in issue we would probably
resolve the doubt in his favor and grant his application. But the Solicitor General, who must be
deemed to represent the President and the Executive Department in this case, 45 has manifested that
in the President's judgment peace and tranquility cannot be speedily restored in the country unless
the petitioners and others like them meantime remain in military custody. For, indeed, the central
matter involved is not merely the liberty of isolated individuals, but the collective peace, tranquility
and security of the entire nation. V.

The 1935 Constitution committed to the President the determination of the public exigency or
exigencies requiring the proclamation of martial law. It provided in article VII, section 10(2) that —

The President shall be 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, 46invasion, insurrection, or rebellion. In case of invasion,
insurrection, or rebellion, or eminent danger thereof, when the public safety requires
it, he may suspend the privileges of the writ of habeas corpus, or place the
Philippines or any part thereof under martial law. 47

In the 1934 Constitutional Convention it was proposed to vest the power to suspend the privilege of
the writ of habeas corpus in the National Assembly. The proposal, sponsored by Delegate Araneta,
would give this power to the President only in cases where the Assembly was not in session and
then only with the consent of the Supreme Court. But the majority of the delegates entertained the
fear that the Government would be powerless in the face of danger. 48 They rejected the Araneta
proposal and adopted instead the provisions of the Jones Law of 1916. The framers of the
Constitution realized the need for a strong Executive, and therefore chose to retain the provisions of
the former organic acts, 49 which, adapted to the exigencies of colonial administration , naturally
made the Governor General a strong Executive.

Construing a similar provision of the Philippine Bill of 1902 which authorized the Governor General,
with the approval of the Philippine Commission, to suspend the privilege of the writ of habeas
corpus "when in cases of rebellion, insurrection, or invasion the public safety may require it," this
Court held that the Governor General's finding as to the necessity for such action was "conclusive
and final" on the judicial department. 50 This ruling was affirmed in 1952 in Montenegro vs.
Castañeda, 51 this Court stating that —

the authority to decide whether the exigency has arisen requiring, the suspension
belongs to the President and 'his decision is final and conclusive' upon the courts
and upon all other persons.

It is true that in Lansang vs. Garcia 52 there is language that appears to detract from the uniform
course of judicial construction of the Commander-in-Chief Clause. But a close reading of the opinion
in that case shows that in the main there was adherence to precedents. To be sure, the Court there
asserted the power to inquire into the "existence of the factual bases [for the suspension of the
privilege of the writ of habeas corpus] in order to determine the sufficiency thereof," But this broad
assertion of power is qualified by the Court's unambiguous statement that "the function of the Court
is, merely to check not to — supplant — the Executive, or to ascertain merely whether he has gone
beyond the constitutional limits of his jurisdiction, not to exercise the power vested in him or to
determine the wisdom of his act." For this reason this Court announced that the test was not whether
the President acted correctly but whether he acted arbitrarily. In fact this Court
read Barcelon and Montenegro as authorizing judicial inquiry into "whether or not there really was a
rebellion, as stated in the proclamation therein contested."

Of course the judicial department can determine the existence of the conditions for the exercise of
the President's powers and is not bound by the recitals of his proclamation. But whether in the
circumstances obtaining public safety requires the suspension of the privilege of the writ of habeas
corpus or the proclamation of martial law is initially for the President to decide. Considerations of
commitment of the power to the executive branch of the Government and the lack of accepted
standards for dealing with incommensurable factors, suggest the wisdom of considering the
President's finding as to necessity persuasive upon the courts. This conclusion results from the
nature of the power vested in the President and from the evident object contemplated. For that
power is intended to enable the Government to cope with sudden emergencies and meet great
occasions of state under circumstances that may be crucial to the life of the nation. 53

The fact that courts are open and in the unobstructed discharge of their functions is pointed to as
proof of the absence of any justification for martial law. The ruling in Milligan 54 and Duncan 55 is
invoked. In both cases the U.S. Supreme Court reversed convictions by military commissions. In
Milligan the Court stated that "martial law cannot arise from a threatened invasion. The necessity
must be actual and present, the invasion real, such as effectually closes the courts and deposes the
civil administration." In Duncan a similar expression was made: "The phrase 'martial law' ... while
intended to authorize the military to act vigorously for the maintenance of an orderly civil government
and for the defense of the Islands against actual or threatened rebellion or invasion, was not
intended to authorize the supplanting of courts by military tribunals."

But Milligan and Duncan were decided on the basis of a widely disparate constitutional provision.
What is more, to the extent that they may be regarded as embodying what the petitioners call an
"open court" theory, they are of doubtful applicability in the context of present-day subversion.

Unlike the detailed provision of our Constitution, the U.S. Federal Constitution does not explicitly
authorize the U.S. President to proclaim martial law. It simply states in its article II, section 2 that "the
President shall be Commander-in-Chief of the Army and Navy of the United States, and of the Militia
of the several States, when called into the actual Service of the United States. ..." On the other hand,
our Constitution authorizes the proclamation of martial law in cases not only of actual invasion,
insurrection or rebellion but also of "imminent danger" thereof.

It is true that in Duncan the U.S. Supreme Court dealt with a U.S. statute that in terms was similar to
the Philippine Constitution. Section 67 of the Hawaiian Organic Act provided that "[the Territorial
Governor] may, in case of invasion, or imminent danger thereof, when public safety requires it,
suspend the privilege of the writ of habeas corpus, or place the Territory, or any part thereof under
martial law until communication can be had with the President [of the United States] and his decision
thereof made known." In fact the Hawaiian Organic Act, that of Puerto Rico, and the Jones law of
1916, from which latter law, as I have earlier noted, the Commander-in-Chief Clause of our
Constitution was adopted, were part of the legislation of the U.S. Congress during the colonial
period. But again, unlike the Jones Law, the Hawaiian Organic Act also provided in its section 5 that
the U.S. Federal Constitution "shall have the same force and effect in the territory [of Hawaii] as
elsewhere in the United States. For this reason it was held in Duncan that "imminent danger" of
invasion or rebellion was not a ground for authorizing the trial of civilians by a military tribunal.
Had Duncan been decided solely on the basis of section 67 of the Hawaiian Organic Act and had the
petitioners in that case been tried for offenses connected with the prosecution of the war, 56the prison
sentences imposed by the military tribunals would in all probability had been upheld. As a matter of
fact those who argued in Duncan that the power of the Hawaiian governor to proclaim martial law
comprehended not only actual rebellion or invasion but also "imminent danger thereof" were faced
with the problem of reconciling, the two parts of the Hawaiian Organic Act. They contended that "if
any paint of section 67 would otherwise be unconstitutional section 5 must be construed as
extending the [U.S.] Constitution to Hawaii subject to the qualifications or limitations contained in
section 67." 57

Forsooth, if the power to proclaim martial law is at all recognized in American federal constitutional
law, it is only by implication from the necessity of self-preservation and then subject to the narrowest
possible construction.

Nor is there any State Constitution in the United States, as the appended list indicates
(see Appendix), which in scope and explicitness can compare with the Commander-in-Chief Clause
of our Constitution. The Alaska Constitution, for example, authorizes the governor to proclaim martial
law when the public safety requires it in case of rebellion or actual or imminent invasion. But even
then it also provides that martial law shall not last longer than twenty days unless approved by a
majority of the legislature in joint session. On the other hand, the present Constitution of Hawaii does
not grant to the State governor the power to suspend the writ of habeas corpus or to proclaim martial
law as did its Organic Act before its admission as a State to the American Union.

An uncritical reading of Milligan and Duncan is likely to overlook these crucial differences in textual
concepts between the Philippine Constitution, on the one hand, and the Federal and State
Constitutions of the United States, on the other. In our case then the inclusion of the "imminent
danger" phrase as a ground for the suspension of the privilege of the writ of habeas corpus and for
the proclamation of martial law was a matter of deliberate choice and renders the language of
Milligan ("martial law cannot arise from a threatened invasion") inapposite and therefore inapplicable.

The Philippine Bill of 1902 provided in its section 2, paragraph 7 —

that the privilege of the writ of habeas corpus shall not be suspended unless when in
cases of rebellion, insurrection, or invasion the public safety may require it, in either
of which events the same may be suspended by the President, or by the Governor
General with the approval of the Philippine Commission, wherever during such
period the necessity for such suspension shall exist.

The Jones Law of 1916 substantially reenacted this provision. Thus section 3, paragraph 7 thereof
provided:

That the privilege of the writ of habeas corpus shall not be suspended, unless when
in cases of rebellion, insurrection, or invasion the public safety may require it, in
either of which events the same may be suspended by the President or by the
Governor General, wherever during such period the necessity for such suspension
shall exist.

In addition, the Jones Law provided in its section 21 that —

... [The Governor General] may, in case of rebellion or invasion, or imminent danger
thereof, when the public safety requires it, suspend the privileges of the writ
of habeas corpus or place the Islands, or any part thereof, under martial
law: Provided That whenever the Governor General shall exercise this authority, he
shall at once notify the President of the United States thereof, together with the
attending facts and circumstances, and the President shall have power to modify or
vacate the action of the Governor General.

Note that with respect to the suspension of the privilege of the writ of habeas corpus, section 21
mentions, as ground therefor, "imminent danger" of invasion or rebellion. When the Constitution was
drafted in 1934, its framers, as I have already noted, decided to adopt these provisions of the Jones
Law. What was section 3, paragraph 7, in the Jones Law became section 1(14) of article III (Bill of
Rights) of the Constitution; and what was section 21 became article VII, section 10(2) (Commander-
in-Chief Clause). Thus, the Bill of Rights provision reads:
 The privilege of the writ of habeas corpus shall not be suspended except in cases of
invasion, insurrection, or rebellion, when the public safety requires it, in any of 'which
events the same may be suspended wherever during such period the necessity for
such suspension shall exist.

On the other hand, the Commander-in-Chief Clause states:

The President shall be 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, insurrection, or rebellion. In case of invasion,
insurrection, or rebellion, or imminent danger thereof, when the public safety requires
it, he may suspend the privileges of the writ of habeas corpus, or place the
Philippines or any part thereof under martial law.

The attention of the 1934 Convention was drawn to the apparent inconsistency between the Bill of
Rights provision and the Commander-in-Chief Clause. Some delegates tried to harmonize the two
provisions by inserting the phrase "imminent danger thereof" in the Bill of Rights provision, but on
reconsideration the Convention deleted the phrase from the draft of the Bill of Rights provision, at
the same time retaining it in the Commander-in Chief Clause.

When this apparent inconsistency was raised in a suit 58 questioning the validity of President Quirino
suspension of the privilege of the writ of habeas corpus, this Court sustained the President's power
to suspend the privilege of the writ even on the ground of imminent danger of invasion, insurrection
or rebellion. It held that as the Commander-in-Chief Clause was last in the order of time and local
position it should be deemed controlling. This rationalization has evoked the criticism that the
Constitution was approved as a whole and not in parts, but in result the decision in that case is
certainly consistent with the conception of a strong Executive to which the 1934 Constitutional
Convention was committed.

The 1973 Constitution likewise authorizes the suspension of the privilege of the writ of habeas
corpus on the ground of imminent danger of invasion, insurrection and rebellion.

The so-called "open court" theory does not apply to the Philippine situation because our 1935 and
1973 Constitutions expressly authorize the declaration of martial law even where the danger to
public safety arises merely from the imminence of invasion, insurrection, or rebellion. Moreover, the
theory is too simplistic for our day, what with the universally recognized insidious nature of
Communist subversion and its covert operations.

Indeed the theory has been dismissed as unrealistic by perceptive students of Presidential powers.

Charles Fairman says:

These measures are unprecedented but so is the danger that called them into being.
Of course we are not without law, even in time of crisis. Yet the cases to which one is
cited in the digests disclose such confusion of doctrine as to perplex a lawyer who
suddenly tries to find his bearings. Hasty recollection of Ex parte Milligan recalls the
dictum that 'Martial rule cannot arise from a threatened invasion. The necessity must
be actual and present; the invasion real, such as effectually closes the courts and
deposes the civil administration.' Not even the aerial attack upon Pearl Harbor closed
the courts or of its own force deposed the civil administration; yet it would be the
common understanding of men that those agencies which are charged with the
national defense surely must have authority to take on the spot some measures
which in normal times would be ultra vires. And whilst college sophomores are taught
that the case stands as a constitutional landmark, the hard fact is that of late
governors have frequently declared 'martial law' and 'war' and have been judicially
sustained in their measures. Undoubtedly, many of these cases involving the
suspension of strikers went much too far. But just as certainly — so it will be argued
here — the doctrine of the majority in Ex parte Milligan does not go far enough to
meet the conditions of modern war. 59

Clinton Rossiter writes:

 It is simply not true that 'martial law cannot arise from a threatened invasion,' or that
martial rule can never exist where the courts are open.' These statements do not
present an accurate definition of the allowable limits of the martial powers of the
President and Congress in the face of alien threats of internal disorder. Nor was
Davis' dictum on the specific power of Congress in this matter any more accurate.
And, however eloquent quotable his words on the untouchability of the Constitution in
time of actual crisis, and did not then, express the realities of American constitutional
law. 60

William Winthrop makes these thoughtful observations:

It has been declared by the Supreme Court in Ex parte Milligan that martial law' is
confined to the locality of actual war,' and also that it 'can never exist when the courts
are open and in the proper and unobstructed exercise of their jurisdiction.' But this
ruling was made by a bare majority — five — of the court, at a time of great political
excitement and the opinion of the four other members, as delivered by the Chief
Justice, was to the effect that martial law is not necessarily limited to time of war, but
may be exercised at other periods of 'public danger,' and that the fact that the civil
courts are open is not controlling against such exercise, since they 'might be open
and undisturbed in the execution of their functions and yet wholly incompetent to
avert threatened danger or to punish with adequate promptitude and certainty the
guilty.' It is the opinion of the author that the of the view of the minority of the court is
the sounder and more reasonable one, and that the dictum of the majority was
influenced by a confusing of martial law proper with that military government which
exists only at a time and on the theater of war, and which was clearly distinguished
from martial law by the Chief Justice in the dissenting opinion — the first complete
judicial definition of the subject. 61 (emphasis supplied)

In Queen vs. Bekker (on the occasion of the Boer War) Justice Maasdorp categorically affirmed that
"the existence of civil courts is no proof that martial law has become unnecessary. 62

VI

Given then the validity of the proclamation of martial law, the arrest and detention of those
reasonably believed to be engaged in the disorder or in formenting it is well nigh beyond
questioning. Negate the power to make such arrest and detention, and martial law would be "mere
parade, and rather encourage attack than repel it." 63 Thus, in Moyer vs. Peabody, 64 the Court
sustained the authority of a State governor to hold temporarily in custody one whom he believed to
be engaged in formenting trouble, and denied recovery against the governor for the imprisonment. It
was said that, as the governor "may kill persons who resist," he may use the milder measure of
seizing the bodies of those whom he considers in the way of restoring peace. Such arrests are not
necessarily for punishment, but are by way of precaution to prevent the exercise of hostile power. So
long as such arrests are made in good faith and in the honest belief that they are needed in order to
head the insurrection off, the Governor is the final judge and cannot be subjected to an action after
he is out of office on the ground that he had no reasonable ground for his belief."

It is true that in Sterling vs. Contantin 65 the same Court set aside the action of a State governor
taken under martial law. But the decision in that case rested on the ground that the action set aside
had no direct relation to the quelling of the uprising. There the governor of Texas issued a
proclamation stating that certain counties were in a state of insurrection and declaring martial law in
that territory. The proclamation recited that there was an organized group of oil and gas producers in
insurrection against conservation laws of the State and that this condition had brought such a state
of public feeling that if the State government could not protect the public's interest they would take
the law into their own hands. The proclamation further recited that it was necessary that the Railroad
Commission be given time to make orders regarding oil production. When the Commission issued
an order limiting oil production, the complainants brought suit iii the District Court which issued
restraining orders, whereupon Governor Sterling ordered General Wolters of the Texas National
Guards to enforce a limit on oil production. It was this order of the State governor that the District
Court enjoined. On appeal the U.S. Supreme Court affirmed. After assuming that the governor had
the power to declare martial law, the Court held that the order restricting oil production was not
justified by the exigencies of the situation.

... Fundamentally, the question here is not the power of the governor to proclaim that
a state of insurrection, or tumult or riot, or breach of the peace exists, and that it is
 necessary to call military force to the aid of the civil power. Nor does the question
relate to the quelling of disturbance and the overcoming of unlawful resistance to civil
authority. The question before us is simply with respect to the Governor's attempt to
regulate by executive order the lawful use of complainants' properties in the
production of oil. Instead of affording them protection in the exercise of their rights as
determined by the courts, he sought, by his executive orders, to make that exercise
impossible.

On the other hand, what is involved here is the validity of the detention order under which the
petitioners were ordered arrested. Such order is, as I have already stated, a valid incident of martial
law. With respect to such question Constantin held that "measures, conceived in good faith, in the
face of the emergency and directly related to the quelling of the disorder or the prevention of its
continuance, fall within the discretion of the Executive in the exercise of his authority to maintain
peace."

In the cases at bar, the respondents have justified the arrest and detention of the petitioners on the
ground of reasonable belief in their complicity in the rebellion and insurrection. Except Diokno and
Aquino, all the petitioners have been released from custody, although subject to defined restrictions
regarding personal movement and expression of views. As the danger to public safety has not
abated, I cannot say that the continued detention of Diokno and Aquino and the restrictions on the
personal freedoms of the other petitioners are arbitrary, just as I am not prepared to say that the
continued imposition of martial rule is unjustified.

As the Colorado Supreme Court stated in denying the writ of habeas corpus in Moyer: 66

His arrest and detention in such circumstances are merely to prevent him from taking
part or aiding in a continuation of the conditions which the governor, in the discharge
of his official duties and in the exercise of the authority conferred by law, is
endeavoring to suppress.

VII

While courts may inquire into or take judicial notice of the existence of conditions claimed to justify
the exercise of the power to declare martial law, 67 the determination of the necessity for the exercise
of such power is within the periphery of the constitutional domain of the President; and as long as
the measures he takes are reasonably related to the occasion involved, interference by the courts is
officious.

I am confirmed in this construction of Presidential powers by the consensus of the 1971

Constitutional Convention to strengthen the concept of a strong Executive and by the confirmation of
the validity of acts taken or done after the proclamation of martial law in this country. The 1973
Constitution expressly authorizes the suspension of the privilege of the writ of habeas corpus as well
as the imposition of martial law not only on the occasion of actual invasion, insurrection or rebellion,
but also where the danger thereof is imminent. 68 Acrimonious discussion on this matter has thus
become pointless and should therefore cease.

The new Constitution as well provides that —

All proclamations, orders, decrees, instructions, and acts promulgated, issued, or

done by the incumbent President shall be part of the law of the land, and shall
remain valid, legal, binding, and effective even after lifting of martial law or the
ratification of this constitution, unless modified, revoked, or superseded by
subsequent proclamations, orders, decrees, instructions, or other acts of the
incumbent President, or unless expressly aid explicitly modified or repealed by the
regular National Assembly. 69

The effectivity of the new Constitution is now beyond all manner of debate in view of the Court's
decision in the Ratification Cases 70 as well as the demonstrated acquiescence therein by the
Filipino people in the historic July 1973 national referendum.

VIII
It is thus evident that suspension of the privilege of the writ of habeas corpus is unavoidable
subsumed in a declaration of martial law, since one basic objective of martial rule is to neutralize
effectively — by arrest and continued detention (and possibly trial at the proper and opportune time)
— those who are reasonably believed to be in complicity or are particeps criminis in the insurrection
or rebellion. That this is so and should be so is ineluctable to deny this postulate is to negate the
very fundamental of martial law: the preservation of society and the survival of the state. To
recognize the imperativeness and reality of martial law and at the same time dissipate its efficacy by
withdrawing from its ambit the suspension of the privilege of the writ of habeas corpus is a
proposition I regard as fatuous and therefore repudiate.

Invasion and insurrection, both of them conditions of violence, are the factual
prerequisites of martial law ... The rights of person and property present no
obstruction to the authorities acting under such a regime, if the acts which encroach
upon them are necessary to the preservation or restoration of public order and
safety. Princeps et res publica ex justa causa possunt rem meam auferre. All the
procedures which are recognized adjuncts of executive crisis government ... are
open to the persons who bear official authority under martial law. The government
may wield arbitrary powers of police to allay disorder, arrest and detain without trial
all citizens taking part in this disorder and even punish them (in other words, suspend
the [privilege of the] writ of habeas corpus), institute searches and seizures without
warrant, forbid public assemblies, set curfew hours, suppress all freedom of
expression, institute courts martial for the summary trial of crimes perpetrated in the
course of this regime and calculated to defeat its purposes ... 71 (emphasis supplied)

The point here is whether martial law is simply a shorthand expression denoting the
suspension of the writ, or whether martial law involves not only the suspension of the
writ but much more besides. ... The latter view is probably sounder because martial
law certainly in the present state of its development, is not at all dependent on a
suspension of the writ of habeas corpus. ... Where there has been violence or
disorder in fact, continued detention of offenders by the military is so far proper as to
result in a denial by the courts of writs releasing those detained. ... 72

IX.

Although the respondents, in their returns to the writs and in their answers to the several petitions,
have insisted on a disclaimer of the jurisdiction of this Court, on the basis of General Orders Nos. 3
and 3-A, 73 their subsequent manifestations urging decision of these cases amount to an
abandonment of this defense. In point of fact President Marco has written, in unmistakable phrase,
that "Our martial law is unique in that it is based on the supremacy of the civilian authority over the
military and on complete submission of the decision of the Supreme Court. ... For who is the dictator
who would submit himself to a higher body like the Supreme Court on the question of the
constitutionality or validity of his actions?" 74 Construing this avowal of the President and the
repeated urgings of the respondents in the light of the abovequoted provision of the 1973
Constitution (Art. XVII, sec. 3(2)), it is my submission that General Orders Nos. 3 and 3-A must be
deemed revoked in so far as they tended to oust the judiciary of jurisdiction over cases involving the
constitutionality of proclamations, decrees, orders or acts issued or done by the President.

In sum and substance, I firmly adhere to these views: (1) that the proclamation of martial law in
September 1972 by the President was well within the aegis of the 1935 Constitution; (2) that
because the Communist rebellion had not abated and instead the evil ferment of subversion had
proliferated throughout the archipelago and in many places had exploded into the roar of armed and
searing conflict with all the sophisticated panoply of war, the imposition of martial law was an
"imperative of national survival;" (3) that the arrest and detention of persons who were "participants
or gave aid and comfort in the conspiracy to seize political and state power and to take over the
government by force," were not unconstitutional nor arbitrary; (4) that subsumed in the declaration of
martial law is the suspension of the privilege of the writ of habeas corpus; (5) that the fact that the
regular courts of justice are open cannot be accepted as proof that the rebellion. and insurrection,
which compellingly called for the declaration of martial law, no longer imperil the public safety; (6)
that actual armed combat has been and still is raging in Cotabato, Lanao, Sulu and Zamboanga, not
to mention the Bicol Region and Cagayan Valley, and nationwide Communist subversion continues
unabated; (7) that the host of doubts that had plagued this Court with respect to the validity of the
ratification and consequent effectivity of the 1973 Constitution has been completely dispelled by
every rational evaluation of the national referendum of July 1973, at which the people conclusively
albeit quietly, demonstrated nationwide acquiescence in. the new Constitution; and (8) that the issue
of the validity and constitutionality of the arrest and detention of all the petitioners and of the
restrictions imposed upon those who were subsequently freed, is now foreclosed by the transitory
provision of the 1973 Constitution (Art, XVII. Sec. 3(2)) which efficaciously validates all acts made,
done or taken by the President, or by others upon his instructions, under the regime of martial law,
prior to the ratification of the said Constitution.

XI

It is not a mere surreal suspicion on the part of the petitioner Diokno that the incumbent members of
this highest Tribunal of the land have removed themselves from a level of conscience to pass
judgment upon his petition for habeas corpus or afford him relief from his predicament. He has
actually articulated it as a formal indictment. I venture to say that his obsessional preoccupation on
the ability of this Court to reach a fair judgment in relation to him has been, in no small measure,
engendered by his melancholy and bitter and even perhaps traumatic detention. And even as he
makes this serious indictment, he at the same time would withdraw his petition for habeas corpus —
hoping thereby to achieve martyrdom, albeit dubious and amorphous. As a commentary on this
indictment, I here that for my part — and I am persuaded that all the other members of this Court are
situated similarly — I avow fealt to the full intendment and meaning of the oath I have taken as a
judicial magistrate. Utilizing the modest endowments that God has granted me, I have endeavored in
the past eighteen years of my judicial career — and in the future will always endeavor — to
discharge faithfully the responsibilities appurtenant to my high office, never fearing, wavering or
hesitating to reach judgments that accord with my conscience.

ACCORDINGLY, I vote to dismiss all the petitions.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 183591 --- The Province of North Cotabato, et al., petitioners, versus The Government
of the Republic of the Philippines Peace Panel on Ancestral Domain (GRP), et al., respondents.

G.R. No. 183752 --- City Government of Zamboanga, et al., petitioners, versus The Government
of the Republic of the Philippines Peace Negotiating Panel (GRP), et al., respondents.

G.R. No. 183893 --- The City of Iligan, petitioner, versus The Government of the Republic of the
Philippines Peace Panel on Ancestral Domain (GRP), et al., respondents.

G.R. No. 183951 --- The Provincial Government of Zamboanga del Norte, et
al., petitioners, versus The Government of the Republic of the Philippines Peace Negotiating
Panel (GRP), et al., respondents.

G.R. No. 183962 --- Ernesto M. Maceda, et al., Petitioners, versus The Government of the
Republic of the Philippines Peace Negotiating Panel, et al., respondents.

Promulgated:

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

SEPARATE CONCURRING OPINION

YNARES-SANTIAGO, J.:

I join the majority opinion and concur in the views expressed in the ponencia. More particularly, I
register my agreement in prohibiting respondents and their agents from signing and executing the
Memorandum of Agreement on Ancestral Domain (MOA-AD), or any similar instruments. The said
MOA-AD contains provisions which are repugnant to the Constitution and which will result in the
virtual surrender of part of the Philippines' territorial sovereignty, which our people has spent
decades fighting for and which scores of men in uniform have valiantly defended.

While the ponencia exhaustively discusses the grounds upon which the Court must invalidate and
strike down the many questionable provisions of the MOA-AD, I wish to add some important points
which, I hope, will serve to further highlight and underscore the serious constitutional flaws in the
MOA-AD.

Only after certain quarters took notice and raised a clamor, and only after this Court has issued a
temporary restraining order enjoining the signing of the MOA-AD, did respondents, through the
Office of the Solicitor General and the Executive Secretary, openly declare that the MOA-AD or any
similar instrument will not be signed by the GRP. On this basis, respondents assert that the petitions
have become moot and academic. This, to my mind, was a mere afterthought. For were it not for the
timely exposure of the MOA-AD in the public light, the signing thereof would have gone ahead as
planned.

Furthermore, respondents' protestations that the petitions have become moot and academic in view
of the disclosure and non-signing of the MOA-AD is unavailing, as it is well-recognized that
mootness, as a ground for dismissal of a case, is subject to certain exceptions. In David v. Pres.
Arroyo,1 we held that the Court will decide cases, otherwise moot and academic, if: (1) there is a
grave violation of the Constitution; (2) the situation is exceptional in character and paramount public
interest is involved; (3) the constitutional issues raised requires formulation of controlling principles
to guide the bench, the bar and the public; and (4) the case is capable of repetition yet evading
review. To my mind, all of these circumstances are present in the cases at bar.

It is beyond cavil that these petitions involve matters that are of paramount public interest and
concern. As shown by recent events, the MOA-AD has spawned violent conflicts in Mindanao and
has polarized our nation over its real import and effects. The controversy over the agreement has
resulted in unnecessary loss of lives, destruction of property and general discord in that part of our
country. Strong reasons of public policy and the importance of these cases to the public demands
that we settle the issues promptly and definitely, brushing aside, if we must, technicalities of
procedure.

The petitions also allege that the GRP panel committed grave violations of the Constitution when it
negotiated and agreed to terms that directly contravene the fundamental law. The basic issue which
emerged from all the assertions of the parties is not only whether the MOA-AD should be disclosed
or signed at all but, more significantly, whether the GRP panel exceeded its powers in negotiating an
agreement that contains unconstitutional stipulations. Considering that it has been widely announced
that the peace process will continue, and that a new panel may be constituted to enter into similar
negotiations with the MILF, it is necessary to resolve the issue on the GRP panel's authority in order
to establish guiding and controlling principles on its extent and limits. By doing so, a repetition of the
unfortunate events which transpired in the wake of the MOA-AD can hopefully be avoided.

There is also the possibility that an agreement with terms similar to the MOA-AD may again be
drafted in the future. Indeed, respondents cannot prevent this Court from determining the extent of
the GRP panel's authority by the simple expedient of claiming that such an agreement will not be
signed or that the peace panel will be dissolved. There will be no opportunity to finally the settle the
question of whether a negotiating panel can freely stipulate on terms that transgress our laws and
our Constitution. It can thus be said that respondents' act of negotiating a peace agreement similar
to the MOA-AD is capable of repetition yet evading review.2

The ultimate issue in these cases is whether the GRP panel went beyond its powers when it
negotiated terms that contravene the Constitution. It is claimed that the panel stipulated on matters
that were outside of its authority and under the exclusive prerogative of Congress. In other words,
the constitutional as well as legal limits of executive authority in the drafting of a peace agreement
have been squarely put in issue. This involves a genuine constitutional question that the Court has
the right and duty to resolve.

Respondents insist that it is not necessary to discuss the constitutionality of each provision of the
MOA-AD, because the latter is but a codification of consensus points which creates no rights and
obligations between the parties. The MOA-AD allegedly has no legal effects, even if it is signed,
because it is merely a preliminary agreement whose effectivity depends on subsequent legal
processes such as the formulation of a Comprehensive Compact, the holding of a plebiscite, the
amendment of laws by Congress as well as constitutional amendments. Consequently, it would be
premature for the Court to pass upon the constitutional validity of the MOA-AD since it is neither self-
executory nor is it the final peace agreement between the GRP and MILF.

A reading of the MOA-AD shows that its pertinent provisions on the basic concepts, territory,
resources and governance of the Bangsamoro Juridical Entity (BJE) have been made to depend for
its effectivity on "changes to the legal framework." Paragraph 7 on the provisions on Governance
states:

7. The parties agree that the mechanisms and modalities for the actual implementation of
this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps
to enable it to occur effectively.

Any provisions of the MOA-AD requiring amendments to the existing legal framework shall
come into force upon signing of a Comprehensive Compact and upon effecting the
necessary changes to the legal framework with due regard to non-derogation of prior
agreements and within the stipulated timeframe to be contained in the Comprehensive
Compact.

The provisions of the MOA-AD which require "amendments to the existing legal framework" include
practically all the substantive terms of the document. It is not difficult to foresee that the material
provisions of the MOA-AD will require either an amendment to the Constitution or to existing laws to
become legally effective. Some of the required constitutional or statutory amendments are the
following:

a) Article I, Section 13 of the Constitution has to be amended to segregate the BJE territory
from the rest of the Republic of the Philippines, as the MOA-AD delineates the Bangsamoro
homeland under its paragraph 14on Territory;

b) Section 1, Article X5 of the Constitution will have to include the BJE as among the five
kinds of political subdivisions recognized under the fundamental law. The provision of an
Autonomous Region for Muslim Mindanao (ARMM) will also have to be removed as the
same is incorporated in the BJE per paragraph 2.c6 of the MOA-AD provisions on Territory;

c) The provision in Section 15, Article X7 of the Constitution which declares the creation of
the ARMM "within the framework of this Constitution and the national sovereignty as well as
territorial integrity of the Republic of the Philippines" must also be changed since there is no
provision in the MOA-AD that subjects the BJE to the authority, territory and sovereignty of
the Republic of the Philippines;

d) Section 16, Article X8 of the Constitution which gives the President power to supervise
autonomous regions will have to be amended since the MOA-AD does not provide for such
supervision over the BJE;

e) Section 18, Article X9 of the Constitution which requires personal, family and property laws
of autonomous regions to comply with the Constitution and laws will have to be changed as
the MOA-AD grants the BJE the power to make its own laws;

f) An overhaul of the various constitutional provisions relating to the Executive, Judicial and
Legislative Departments as well as the independent constitutional commissions must be
undertaken to accommodate paragraph 810 of the MOA-AD provision on Governance which
grants the BJE the power to create its own civil institutions;

g) Section 3, Article II of the Constitution which declares the Armed Forces of the Philippines
as protector of the people and the State will have to be changed because the MOA-AD
provides that the BJE shall have its own internal security force11 and the AFP will only defend
the Bangsamoro homeland against external aggression;12

h) Section 2, Article XII13 of the Constitution must be changed to allow the BJE to manage,
explore, develop, and utilize the natural resources within the Bangsamoro territory, pursuant
to paragraphs 2.f 14, g (1)15 and h16 on Territory and paragraphs 117 and 218 on Resources of
the MOA-AD;
 i) Section 21, Article VII19 of the Constitution has to be amended to exempt the BJE from the
ratification requirements of treaties and international agreements since it is given the power
to enter into its own economic and trade agreements with other countries;

j) The Bangsamoro homeland will have to be exempted from the power of the President to
exercise general supervision of all local governments under Section 4, Article X20 of the
Constitution because the MOA-AD does not provide for any such stipulation;

k) Since the BJE will have its own laws, it is not subject to limitations imposed by Congress
on its taxing powers under Section 5, Article X21 of the Constitution;

l) R.A. No. 6734 and R.A. No. 9054, or the ARMM Organic Acts, have to be amended to
allow for the existing ARMM to be included within the Bangsamoro homeland to be governed
by the BJE;

m) The Bangsamoro people will have to be exempted from the application of R.A. No. 8371
or the Indigenous Peoples Rights Act (IPRA) insofar as the MOA-AD declares the
Bangsamoro territory as ancestral domain and recognizes in the Bangsamoro people rights
pertaining to indigenous peoples under the IPRA;

n) Existing laws which regulate mining rights and the exploitation of natural resources will
also have to exempt the BJE from its coverage, as the MOA-AD grants the BJE the power to
utilize, develop and exploit natural resources within its territory as well as the authority to
revoke or grant forest concessions, timber licenses and mining agreements; and

o) The BJE will also have to be exempted from existing agrarian statutes as the BJE is
empowered to enact its own agrarian laws and program under paragraph 2.e22 on
Resources.

From the foregoing, it is clear that the substantive provisions of the MOA-AD directly contravene the
fundamental law and existing statutes. Otherwise, it would not be necessary to effect either statutory
or constitutional amendments to make it effective. Moreover, as correctly pointed out by petitioners,
the GRP panel exceeded its authority when it categorically undertook to make these statutory and
constitutional changes in order to fully implement the MOA-AD.

Paragraph 7 of the MOA-AD on Governance states that provisions therein which require
amendments to the existing legal framework shall come into force upon signing of the
Comprehensive Compact and upon effecting the necessary changes to the legal framework. These
"necessary changes" shall be undertaken "with due regard to non-derogation of prior
agreements and within the stipulated timeframe to be contained in the Comprehensive
Compact."

The language of the aforesaid paragraph 7 on Governance, in relation to paragraph 2 (d) on

Territory, indicates that the GRP panel committed itself to cause the necessary changes to the legal
framework within a stipulated timeframe for the MOA-AD to become effective. Paragraph 2(d) on
Territory reads:

2. Toward this end, the Parties enter into the following stipulations:

xxxx

d. Without derogating from the requirements of prior agreements, the Government stipulates
to conduct and deliver, using all possible legal measures, within twelve (12) months following
the signing of the MOA-AD, a plebiscite covering the areas as enumerated in the list and
depicted in the map as Category A attached herein (the Annex). The Annex constitutes an
integral part of this framework agreement. Toward this end, the Parties shall endeavor
to complete the negotiations and resolve all outstanding issues on the Comprehensive
Compact within fifteen (15) months from the signing of the MOA-AD.

Pursuant to the above, the GRP panel bound itself to "complete the negotiations and resolve all
outstanding issues on the Comprehensive Compact within fifteen (15) months from the signing of the
MOA-AD." On the other hand, it is explicitly provided in paragraph 7 on Governance that the
Comprehensive Compact shall contain a stipulated timeframe within which to effect the necessary
changes to the legal framework. In other words, the GRP panel undertook to change the legal
framework within a contemplated period to be agreed upon within fifteen (15) months from the
signing of the MOA-AD.

It should also be noted that, in accordance with paragraph 2 (a)23 on Territory, the GRP panel
committed itself "to the full and mutual implementation of this framework agreement on territory."
To fully realize the MOA-AD stipulations on territory, it would be necessary to effect both statutory
and constitutional amendments as well as complete negotiations on the Comprehensive Compact.
The plebiscite envisioned under paragraph 2 (c) on Territory, for instance, would require not only an
amendment of the ARMM Organic Acts, but also a constitutional amendment that would allow for the
very creation of the BJE. Thus, the full implementation of the territory provisions of the MOA-AD
presupposes changes in the legal framework, which the GRP panel guaranteed under paragraph 7
on Governance.

Additionally, paragraph 7 on Governance provides that necessary changes to the legal framework
shall likewise be effected "with due regard to non-derogation of prior agreements." This can only
mean that any change to the legal framework should not diminish or detract from agreements
previously entered into by the parties. It also implies that provisions of prior agreements are already
final and binding, as these serve as take-off points for the necessary changes that will be effected to
fully implement the MOA-AD.

In my opinion, the MOA-AD is intended to be included among the prior agreements whose terms
cannot be decreased by any of the changes that are necessary for it to come into force. More
specifically, by the time the Comprehensive Compact shall have prescribed the timeframe for
effecting these changes, the MOA-AD shall have become a prior agreement that is subject to the
non-derogation clause found in paragraph 7 on Governance. This signifies that any change in the
legal framework should adapt to the terms of the MOA-AD. The latter becomes the parameter of any
statutory or constitutional amendments which are necessary to make the MOA-AD effective.

As such, it cannot be denied that the GRP panel committed itself to the full implementation of the
MOA-AD by effecting changes to the legal framework. Respondents cannot deny this by saying that
the parties further undertook to negotiate a Comprehensive Compact or a final peace agreement.
Although it may be conceded that the parties have yet to enter into a Comprehensive Compact
subsequent to the signing of the MOA-AD, the nature of this compact shows that the MOA-AD was
intended as the controlling document for the essential terms of the Comprehensive Compact.
Paragraphs 3 and 7 of the MOA-AD provisions on Governance invariably describe the
Comprehensive Compact as merely embodying details for the effective enforcement and actual
implementationof the MOA-AD. Thus, the Comprehensive Compact will simply lay down the
particulars of the parties' final commitments, as expressed in the assailed agreement.

Consequently, paragraph 7 on Governance in relation to paragraph 2 (a) on Territory contradict

respondents' assertion that the MOA-AD is merely a preparatory agreement devoid of any real
effects. The language employed in these provisions do not support respondents' contention that the
MOA-AD is just a reference for future negotiations or consists of mere proposals that are subject to
renegotiation. The words used in these provisions are categorical in stating that the GRP panel
committed itself to the full implementation of the MOA-AD by effecting changes to the legal
framework within a stipulated timeframe. In other words, these are definite propositions that would
have to be undertaken under the agreement of the parties.

The foregoing discussion demonstrates that the MOA-AD is not merely a draft of consensus points
that is subject to further negotiations between the GRP panel and the MILF. The language of the
MOA-AD shows that the GRP panel made a real and actual commitment to fully implement the
MOA-AD by effecting the necessary amendments to existing laws and the Constitution. The GRP
panel's obligation to fully implement the provisions on Territory and to effect these "necessary
changes" is in itself not dependent on any statutory or constitutional amendment. It is only subject to
a timeframe that will be specified in the Comprehensive Compact, per stipulation of the parties.

At this point, it is worth noting that the MOA-AD cannot even be subjected to subsequent legal
processes, such as a plebiscite or statutory and constitutional amendments. The MOA-AD cannot be
validated by any of these means considering that the GRP panel does not even have the power to
make these legal processes occur. This is because the panel is not authorized to commit to statutory
and constitutional changes to fully implement the MOA-AD. Thus, it is not legally possible to
undertake these legal processes under the circumstances provided in the agreement.
To emphasize, the GRP panel had neither power nor authority to commit the government to
statutory and constitutional changes. The power to amend laws and to cause amendments or
revisions to the Constitution belongs to Congress and, to a certain extent, the people under a system
of initiative and referendum. Only Congress and the people have the competence to effect statutory
and constitutional changes in the appropriate manner provided by law. The GRP panel, as a mere
organ of the Executive branch, does not possess any such prerogative.

In the matter of legislation, it is settled that the power of Congress under Article VI, Section 124 of the
Constitution is plenary and all-encompassing. The legislature alone determines when to propose or
amend laws, what laws to propose or amend, and the proper circumstances under which laws are
proposed or amended. As held in Ople v. Torres:25

... Legislative power is "the authority, under the Constitution, to make laws, and to alter and
repeal them." The Constitution, as the will of the people in their original, sovereign and
unlimited capacity, has vested this power in the Congress of the Philippines. The grant of
legislative power to Congress is broad, general and comprehensive. The legislative body
possesses plenary power for all purposes of civil government.

Similarly, the power to amend or revise the Constitution also pertains to Congress in the exercise of
its constituent functions. The same power is also reserved to the people under a system of initiative,
pursuant to Article XVII26 of the Constitution. In Lambino v. COMELEC,27 the Court stated that there
are three modes of amending the Constitution under Article XVII. The first mode is through
Congress, acting as a constituent assembly, upon three-fourth's vote of all its Members; the second
mode is through a constitutional convention created under a law passed by Congress; and the third
mode is through a people's initiative. Nowhere in the Constitution does it state that the Executive or
any of its organs can effect constitutional changes, as assumed by the GRP panel under the MOA-
AD.

Notwithstanding the apparent lack of power or authority, the GRP panel undertook to effect changes
to the Constitution and to statutes in order to fully implement the MOA-AD. In doing so, the GRP
panel pre-empted Congress by determining, firsthand, the wisdom of effecting these changes as well
as the nature of the required amendments to laws and the Constitution. It encroached upon the
exclusive prerogative of Congress by assuming to exercise a discretion that it did not possess. It
thus exceeded its authority and acted without jurisdiction.

It should have been evident to the GRP panel that it could not bargain away laws enacted by
Congress or the people's sovereign will as expressed in the Constitution. Apart from the fact that it
had no power to do so, its acts were in clear disregard of the instructions of the President as stated
in the Memorandum of Instructions From the President dated March 1, 2001. The President clearly
directed therein that "(t)he negotiations shall be conducted in accordance with the mandates of the
Philippine Constitution, the Rule of Law, and the principles of sovereignty and territorial integrity of
the Republic of the Philippines." The GRP panel did otherwise and failed to act in accordance with
this directive.

The GRP panel derives its authority from the Chief Executive, whose sworn duty is to faithfully
execute the laws and uphold the Constitution. In negotiating the terms of the MOA-AD, however, the
GRP panel violated our Constitution and our laws by subscribing to stipulations that could very well
lead to their emasculation. The GRP panel agreed to illegal and unconstitutional concessions and
guaranteed the performance of a prestation that it could not deliver. This constitutes manifest grave
abuse of discretion amounting to lack or excess of jurisdiction.

It is beyond question that the MOA-AD is patently unconstitutional. Had it been signed by the parties,
it would have bound the government to the creation of a separate Bangsamoro state having its own
territory, government, civil institutions and armed forces. The concessions that respondents made to
the MILF would have given the latter leverage to demand that the Bangsamoro homeland be
recognized as a state before international bodies. It could insist that the MOA-AD is in fact a treaty
and justify compliance with its provisions, under the international law principle of pacta sunt
servanda. The sovereignty and territorial integrity of the Philippines would have been compromised.

For these reasons, I vote to grant the petitions. Respondents must be prohibited and permanently
enjoined from negotiating, executing and entering into a peace agreement with terms similar to the
MOA-AD. Although respondents have manifested that the MOA-AD will not be signed "in its present
form or in any other form," the agreement must nonetheless be declared unconstitutional and,
therefore, void ab initio, to remove any doubts regarding its binding effect on the Republic. Under no
circumstance could the MOA-AD acquire legitimacy and force against the entire nation, and no less
than a categorical declaration to this effect should put the issue to rest.

I so vote.

CONSUELO YNARES-SANTIAGO
Associate Justice

Footnotes

1 G.R. No. 171396, May 3, 2006, 489 SCRA 160, 214-215.

2 Alunan v. Mirasol, 342 Phil. 467, 476-477 (1997).

3 Article I, Section 1. The national territory comprises the Philippine Archipelago, with all the
islands and waters embraced therein, and all other territories over which the Philippines has
sovereignty or jurisdiction, consisting of its terrestrial, fluvial and aerial domains, including its
territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas, the
waters around, between, and connecting the islands of the archipelago, regardless of their
breadth and dimensions, form part of the internal waters of the Philippines.

41. The Bangsamoro homeland and historic territory refer to the land mass as well as the
maritime, terrestrial, fluvial and alluvial domains, and the aerial domain, the atmospheric
space above it, embracing the Mindanao-Sulu-Palawan geographic region. However,
delimitations are contained in the agreed Schedules (Categories).

5Article X, Section 1. The territorial and political subdivisions of the Republic of the
Philippines are the provinces, cities, municipalities and barangays. There shall be
autonomous regions in Muslim Mindanao and the Cordillera as hereinafter provided.

6 The provision states:

c. The parties affirm that the core of the BJE shall constitute the present geographic area of
the ARMM, including the municipalities of Baloi, Munai, Nunungan, Pantar, Tagoloan and
Tangkal in the province of Lanao Del Norte that voted for inclusion in the ARMM during the
2001 plebiscite.

7Section 15. There shall be created Autonomous Regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities and geographic areas sharing
common and distinctive historical and cultural heritage, economic and social structures, and
other relevant characteristics within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines.

8
Article X, Section 16. The President shall exercise general supervision over autonomous
regions to ensure that the laws are faithfully executed.

9Article X, Section 18. The Congress shall enact an organic act for each autonomous region
with the assistance and participation of the regional consultative commission composed of
representatives appointed by the President from a list of nominees from multisectoral bodies.
The organic act shall define the basic structure of government for the region consisting of
executive department and legislative assembly. Both of which shall be elective and
representative of the constituent political units. The organic acts shall likewise provide for
special courts with personal, family, and property law jurisdiction consistent with the
Constitution and national laws. x x x

10Paragraph 8, Governance. The parties agree that the BJE shall be empowered to build,
develop and maintain its own institutions, inclusive of civil service, electoral, financial and
banking, education, legislation, legal, economic, and police and internal security force,
judicial system and correctional institutions, necessary for developing a progressive
Bangsamoro society, the details of which shall be discussed in the negotiation of the
Comprehensive Compact.

11 Id.

12 Paragraph 4, Resources. The BJE is free to enter into any economic cooperation and
trade relations with foreign countries: provided, however, that such relationships and
understandings do not include aggression against the Government of the Republic of the
Philippines; provided, further that it shall remain the duty and obligation of the Central
Government to take charge of external defense. Without prejudice to the right of the
Bangsamoro juridical entity to enter into agreement and environmental cooperation with any
friendly country affecting its jurisdiction.

13Article XII, Section 2. All lands of the public domain, waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna and other natural resources are owned by the State. With the exception of agricultural
lands, all other natural resources shall not be alienated. The exploration, development, and
utilization of natural resources shall be under the full control and supervision of the State. x x
x

14 Paragraph 2.f., Territory. Internal Waters:

The BJE shall have jurisdiction over the management, conservation, development,
protection, utilization and disposition of all natural resources, living and non-living,
within its internal waters extending fifteen (15) kilometers from the coastline of the
BJE area.

15 Paragraph 2.g(1), Territory. Territorial Waters:

(1) The territorial waters of the BJE shall stretch beyond the BJE internal waters up
to the Republic of the Philippines (RP) baselines southeast and southwest of
Mainland Mindanao. Beyond the fifteen (15) kilometers internal waters, the Central
Government and the BJE shall exercise joint jurisdiction, authority and management
over areas and all natural resources x x x.

16 Paragraph 2.h., Territory. Sharing of Minerals on Territorial Waters:

Consistent with paragraphs 5 and 6 of the provisions on Resources, all potential sources of
energy, petroleum in situ, hydrocarbon, natural gas and other minerals, including deposits or
fields found within territorial waters, shall be shared between the Central Government and
the BJE in favor of the latter through production sharing agreement or economic cooperation
agreement.

17Paragraph 1, Resources. The BJE is empowered with authority and responsibility for the
land use, development, conservation and disposition of the natural resources within the
homeland. Upon entrenchment of the BJE, the land tenure and use of such resources and
wealth must reinforce their economic self-sufficiency. x x x

18Paragraph 2, Resources. The Bangsamoro People through their appropriate juridical entity
shall, among others, exercise power or authority over the natural resources within its
territorial jurisdiction:

1. To explore, exploit, use or utilize and develop their ancestral domain and ancestral
lands within their territorial jurisdiction, inclusive of their right of occupation,
possession, conservation, and exploitation of all natural resources found therein;

2. x x x

3. To utilize, develop, and exploit its natural resources found in their ancestral
domain or enter into joint development, utilization, and exploitation of natural
resources, specifically on strategic minerals, designed as commons or shared
resources, which is tied up to the final setting of appropriate institutions;
 To revoke of grant forest concessions, timber license, contracts or agreements in the
utilization and exploitation of natural resources designated as commons or shared resources,
mechanisms for economic cooperation with respect to strategic minerals, falling within the
territorial jurisdiction of the BJE; x x x

19Article VII, Section 21. No treaty or international agreement shall be valid and effective
unless concurred in by at least two-thirds of all Members of the Senate.

20Article X, Section 4. The President of the Philippines shall exercise general supervision
over local governments. x x x

21 Article X, Section 5. Each local government unit shall have the power to create its own
sources of revenues and to levy taxes, fees, and charges subject to such guidelines and
limitations as the Congress may provide, consistent with the basic policy of local autonomy.
Such taxes, fees and charges shall accrue exclusively to the local government.

22
Paragraph 2.e, Resources states that the BJE shall have the power:

e. To enact agrarian laws and programs suitable to the special circumstances of the
Bangsamoro people prevailing in their ancestral lands within the established
territorial boundaries of the Bangsamoro homeland and ancestral territory within the
competence of the BJE; x x x

23 Paragraph 2.a, Territory states:

a. The GRP and MILF as the Parties to this Agreement commit themselves to the full
and mutual implementation of this framework agreement on territory with the aim of
resolving outstanding issues that emanate from the consensus points on Ancestral
Domain.

24Article VI, Section 1. The legislative power shall be vested in the Congress of the
Philippines which shall consist of a Senate and a House of Representatives, except to the
extent reserved to the people by the provision on initiative and referendum.

25 354 Phil. 948, 966 (1998).

26 Article XVII - Amendments or Revisions

Sec. 1. Any amendment to, or revision of, this Constitution may be proposed by:

(1) The Congress, upon a vote of three-fourths of all its Members, or

(2) A constitutional convention.

Sec. 2. Amendments to this Constitution may likewise be directly proposed by the

people through initiative x x x.

27 G.R. No. 174153, October 25, 2006, 505 SCRA 160, 247.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R No. 187167 August 16, 2011

PROF. MERLIN M. MAGALLONA, AKBAYAN PARTY-LIST REP. RISA HONTIVEROS, PROF.

HARRY C. ROQUE, JR., AND UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW
STUDENTS, ALITHEA BARBARA ACAS, VOLTAIRE ALFERES, CZARINA MAY ALTEZ,
FRANCIS ALVIN ASILO, SHERYL BALOT, RUBY AMOR BARRACA, JOSE JAVIER BAUTISTA,
ROMINA BERNARDO, VALERIE PAGASA BUENAVENTURA, EDAN MARRI CAÑETE, VANN
ALLEN DELA CRUZ, RENE DELORINO, PAULYN MAY DUMAN, SHARON ESCOTO, RODRIGO
FAJARDO III, GIRLIE FERRER, RAOULLE OSEN FERRER, CARLA REGINA GREPO, ANNA
MARIE CECILIA GO, IRISH KAY KALAW, MARY ANN JOY LEE, MARIA LUISA MANALAYSAY,
MIGUEL RAFAEL MUSNGI, MICHAEL OCAMPO, JAKLYN HANNA PINEDA, WILLIAM
RAGAMAT, MARICAR RAMOS, ENRIK FORT REVILLAS, JAMES MARK TERRY RIDON,
JOHANN FRANTZ RIVERA IV, CHRISTIAN RIVERO, DIANNE MARIE ROA, NICHOLAS
SANTIZO, MELISSA CHRISTINA SANTOS, CRISTINE MAE TABING, VANESSA ANNE TORNO,
MARIA ESTER VANGUARDIA, and MARCELINO VELOSO III, Petitioners,
vs.
HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, HON. ALBERTO
ROMULO, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS,
HON. ROLANDO ANDAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF
BUDGET AND MANAGEMENT, HON. DIONY VENTURA, IN HIS CAPACITY AS
ADMINISTRATOR OF THE NATIONAL MAPPING & RESOURCE INFORMATION AUTHORITY,
and HON. HILARIO DAVIDE, JR., IN HIS CAPACITY AS REPRESENTATIVE OF THE
PERMANENT MISSION OF THE REPUBLIC OF THE PHILIPPINES TO THE UNITED
NATIONS,Respondents.

DECISION

CARPIO, J.:

The Case

This original action for the writs of certiorari and prohibition assails the constitutionality of Republic
Act No. 95221(RA 9522) adjusting the country’s archipelagic baselines and classifying the baseline
regime of nearby territories.

The Antecedents

In 1961, Congress passed Republic Act No. 3046 (RA 3046)2 demarcating the maritime baselines of
the Philippines as an archipelagic State.3 This law followed the framing of the Convention on the
Territorial Sea and the Contiguous Zone in 1958 (UNCLOS I),4 codifying, among others, the
sovereign right of States parties over their "territorial sea," the breadth of which, however, was left
undetermined. Attempts to fill this void during the second round of negotiations in Geneva in 1960
(UNCLOS II) proved futile. Thus, domestically, RA 3046 remained unchanged for nearly five
decades, save for legislation passed in 1968 (Republic Act No. 5446 [RA 5446]) correcting
typographical errors and reserving the drawing of baselines around Sabah in North Borneo.

In March 2009, Congress amended RA 3046 by enacting RA 9522, the statute now under scrutiny.
The change was prompted by the need to make RA 3046 compliant with the terms of the United
Nations Convention on the Law of the Sea (UNCLOS III),5 which the Philippines ratified on 27
February 1984.6 Among others, UNCLOS III prescribes the water-land ratio, length, and contour of
baselines of archipelagic States like the Philippines7 and sets the deadline for the filing of application
for the extended continental shelf.8 Complying with these requirements, RA 9522 shortened one
baseline, optimized the location of some basepoints around the Philippine archipelago and classified
adjacent territories, namely, the Kalayaan Island Group (KIG) and the Scarborough Shoal, as
"regimes of islands" whose islands generate their own applicable maritime zones.

Petitioners, professors of law, law students and a legislator, in their respective capacities as
"citizens, taxpayers or x x x legislators,"9 as the case may be, assail the constitutionality of RA 9522
on two principal grounds, namely: (1) RA 9522 reduces Philippine maritime territory, and logically,
the reach of the Philippine state’s sovereign power, in violation of Article 1 of the 1987
Constitution,10 embodying the terms of the Treaty of Paris11 and ancillary treaties,12 and (2) RA 9522
opens the country’s waters landward of the baselines to maritime passage by all vessels and
aircrafts, undermining Philippine sovereignty and national security, contravening the country’s
nuclear-free policy, and damaging marine resources, in violation of relevant constitutional
provisions.13

In addition, petitioners contend that RA 9522’s treatment of the KIG as "regime of islands" not only
results in the loss of a large maritime area but also prejudices the livelihood of subsistence
fishermen.14 To buttress their argument of territorial diminution, petitioners facially attack RA 9522 for
what it excluded and included – its failure to reference either the Treaty of Paris or Sabah and its use
of UNCLOS III’s framework of regime of islands to determine the maritime zones of the KIG and the
Scarborough Shoal.

Commenting on the petition, respondent officials raised threshold issues questioning (1) the
petition’s compliance with the case or controversy requirement for judicial review grounded on
petitioners’ alleged lack of locus standi and (2) the propriety of the writs of certiorari and prohibition
to assail the constitutionality of RA 9522. On the merits, respondents defended RA 9522 as the
country’s compliance with the terms of UNCLOS III, preserving Philippine territory over the KIG or
Scarborough Shoal. Respondents add that RA 9522 does not undermine the country’s security,
environment and economic interests or relinquish the Philippines’ claim over Sabah.

Respondents also question the normative force, under international law, of petitioners’ assertion that
what Spain ceded to the United States under the Treaty of Paris were the islands and all the
waters found within the boundaries of the rectangular area drawn under the Treaty of Paris.

We left unacted petitioners’ prayer for an injunctive writ.

The Issues

The petition raises the following issues:

1. Preliminarily –

1. Whether petitioners possess locus standi to bring this suit; and

2. Whether the writs of certiorari and prohibition are the proper remedies to assail the
constitutionality of RA 9522.

2. On the merits, whether RA 9522 is unconstitutional.

The Ruling of the Court

On the threshold issues, we hold that (1) petitioners possess locus standi to bring this suit as
citizens and (2) the writs of certiorari and prohibition are proper remedies to test the constitutionality
of RA 9522. On the merits, we find no basis to declare RA 9522 unconstitutional.

On the Threshold Issues

Petitioners Possess Locus
Standi as Citizens

Petitioners themselves undermine their assertion of locus standi as legislators and taxpayers
because the petition alleges neither infringement of legislative prerogative15 nor misuse of public
funds,16 occasioned by the passage and implementation of RA 9522. Nonetheless, we recognize
petitioners’ locus standi as citizens with constitutionally sufficient interest in the resolution of the
merits of the case which undoubtedly raises issues of national significance necessitating urgent
resolution. Indeed, owing to the peculiar nature of RA 9522, it is understandably difficult to find other
litigants possessing "a more direct and specific interest" to bring the suit, thus satisfying one of the
requirements for granting citizenship standing.17

The Writs of Certiorari and Prohibition

Are Proper Remedies to Test
the Constitutionality of Statutes

In praying for the dismissal of the petition on preliminary grounds, respondents seek a strict
observance of the offices of the writs of certiorari and prohibition, noting that the writs cannot issue
absent any showing of grave abuse of discretion in the exercise of judicial, quasi-judicial or
ministerial powers on the part of respondents and resulting prejudice on the part of petitioners.18

Respondents’ submission holds true in ordinary civil proceedings. When this Court exercises its
constitutional power of judicial review, however, we have, by tradition, viewed the writs of certiorari
and prohibition as proper remedial vehicles to test the constitutionality of statutes,19 and indeed, of
acts of other branches of government.20 Issues of constitutional import are sometimes crafted out of
statutes which, while having no bearing on the personal interests of the petitioners, carry such
relevance in the life of this nation that the Court inevitably finds itself constrained to take cognizance
of the case and pass upon the issues raised, non-compliance with the letter of procedural rules
notwithstanding. The statute sought to be reviewed here is one such law.

RA 9522 is Not Unconstitutional

RA 9522 is a Statutory Tool
to Demarcate the Country’s
Maritime Zones and Continental
Shelf Under UNCLOS III, not to
Delineate Philippine Territory

Petitioners submit that RA 9522 "dismembers a large portion of the national territory"21 because it
discards the pre-UNCLOS III demarcation of Philippine territory under the Treaty of Paris and related
treaties, successively encoded in the definition of national territory under the 1935, 1973 and 1987
Constitutions. Petitioners theorize that this constitutional definition trumps any treaty or statutory
provision denying the Philippines sovereign control over waters, beyond the territorial sea
recognized at the time of the Treaty of Paris, that Spain supposedly ceded to the United States.
Petitioners argue that from the Treaty of Paris’ technical description, Philippine sovereignty over
territorial waters extends hundreds of nautical miles around the Philippine archipelago, embracing
the rectangular area delineated in the Treaty of Paris.22

Petitioners’ theory fails to persuade us.

UNCLOS III has nothing to do with the acquisition (or loss) of territory. It is a multilateral treaty
regulating, among others, sea-use rights over maritime zones (i.e., the territorial waters [12 nautical
miles from the baselines], contiguous zone [24 nautical miles from the baselines], exclusive
economic zone [200 nautical miles from the baselines]), and continental shelves that UNCLOS III
delimits.23 UNCLOS III was the culmination of decades-long negotiations among United Nations
members to codify norms regulating the conduct of States in the world’s oceans and submarine
areas, recognizing coastal and archipelagic States’ graduated authority over a limited span of waters
and submarine lands along their coasts.

On the other hand, baselines laws such as RA 9522 are enacted by UNCLOS III States parties to
mark-out specific basepoints along their coasts from which baselines are drawn, either straight or
contoured, to serve as geographic starting points to measure the breadth of the maritime zones and
continental shelf. Article 48 of UNCLOS III on archipelagic States like ours could not be any clearer:

Article 48. Measurement of the breadth of the territorial sea, the contiguous zone, the exclusive
economic zone and the continental shelf. – The breadth of the territorial sea, the contiguous zone,
the exclusive economic zone and the continental shelf shall be measured from archipelagic
baselines drawn in accordance with article 47. (Emphasis supplied)

Thus, baselines laws are nothing but statutory mechanisms for UNCLOS III States parties to delimit
with precision the extent of their maritime zones and continental shelves. In turn, this gives notice to
the rest of the international community of the scope of the maritime space and submarine areas
within which States parties exercise treaty-based rights, namely, the exercise of sovereignty over
territorial waters (Article 2), the jurisdiction to enforce customs, fiscal, immigration, and sanitation
laws in the contiguous zone (Article 33), and the right to exploit the living and non-living resources in
the exclusive economic zone (Article 56) and continental shelf (Article 77).

Even under petitioners’ theory that the Philippine territory embraces the islands and all the
waters within the rectangular area delimited in the Treaty of Paris, the baselines of the Philippines
would still have to be drawn in accordance with RA 9522 because this is the only way to draw the
baselines in conformity with UNCLOS III. The baselines cannot be drawn from the boundaries or
other portions of the rectangular area delineated in the Treaty of Paris, but from the "outermost
islands and drying reefs of the archipelago."24

UNCLOS III and its ancillary baselines laws play no role in the acquisition, enlargement or, as
petitioners claim, diminution of territory. Under traditional international law typology, States acquire
(or conversely, lose) territory through occupation, accretion, cession and prescription,25 not by
executing multilateral treaties on the regulations of sea-use rights or enacting statutes to comply with
the treaty’s terms to delimit maritime zones and continental shelves. Territorial claims to land
features are outside UNCLOS III, and are instead governed by the rules on general international
law.26

RA 9522’s Use of the Framework

of Regime of Islands to Determine the
Maritime Zones of the KIG and the
Scarborough Shoal, not Inconsistent
with the Philippines’ Claim of Sovereignty
Over these Areas

Petitioners next submit that RA 9522’s use of UNCLOS III’s regime of islands framework to draw the
baselines, and to measure the breadth of the applicable maritime zones of the KIG, "weakens our
territorial claim" over that area.27Petitioners add that the KIG’s (and Scarborough Shoal’s) exclusion
from the Philippine archipelagic baselines results in the loss of "about 15,000 square nautical miles
of territorial waters," prejudicing the livelihood of subsistence fishermen.28 A comparison of the
configuration of the baselines drawn under RA 3046 and RA 9522 and the extent of maritime space
encompassed by each law, coupled with a reading of the text of RA 9522 and its congressional
deliberations, vis-à-vis the Philippines’ obligations under UNCLOS III, belie this view.
1avv phi 1

The configuration of the baselines drawn under RA 3046 and RA 9522 shows that RA 9522 merely
followed the basepoints mapped by RA 3046, save for at least nine basepoints that RA 9522
skipped to optimize the location of basepoints and adjust the length of one baseline (and thus
comply with UNCLOS III’s limitation on the maximum length of baselines). Under RA 3046, as under
RA 9522, the KIG and the Scarborough Shoal lie outside of the baselines drawn around the
Philippine archipelago. This undeniable cartographic fact takes the wind out of petitioners’ argument
branding RA 9522 as a statutory renunciation of the Philippines’ claim over the KIG, assuming that
baselines are relevant for this purpose.

Petitioners’ assertion of loss of "about 15,000 square nautical miles of territorial waters" under RA
9522 is similarly unfounded both in fact and law. On the contrary, RA 9522, by optimizing the
location of basepoints, increased the Philippines’ total maritime space (covering its internal waters,
territorial sea and exclusive economic zone) by 145,216 square nautical miles, as shown in the table
below:29

Extent of maritime
area using RA 3046, Extent of maritime
as amended, taking area using RA 9522,
into account the taking into account
Treaty of Paris’ UNCLOS III (in
delimitation (in square nautical
square nautical miles)
miles)
Internal or
archipelagic
waters 166,858 171,435
Territorial Sea 274,136 32,106
Exclusive
Economic Zone 382,669
TOTAL 440,994 586,210

Thus, as the map below shows, the reach of the exclusive economic zone drawn under RA 9522
even extends way beyond the waters covered by the rectangular demarcation under the Treaty of
Paris. Of course, where there are overlapping exclusive economic zones of opposite or adjacent
States, there will have to be a delineation of maritime boundaries in accordance with UNCLOS III.30
Further, petitioners’ argument that the KIG now lies outside Philippine territory because the
baselines that RA 9522 draws do not enclose the KIG is negated by RA 9522 itself. Section 2 of the
law commits to text the Philippines’ continued claim of sovereignty and jurisdiction over the KIG and
the Scarborough Shoal:

SEC. 2. The baselines in the following areas over which the Philippines likewise exercises
sovereignty and jurisdiction shall be determined as "Regime of Islands" under the Republic of the
Philippines consistent with Article 121 of the United Nations Convention on the Law of the Sea
(UNCLOS):

a) The Kalayaan Island Group as constituted under Presidential Decree No. 1596 and

b) Bajo de Masinloc, also known as Scarborough Shoal. (Emphasis supplied)

Had Congress in RA 9522 enclosed the KIG and the Scarborough Shoal as part of the Philippine
archipelago, adverse legal effects would have ensued. The Philippines would have committed a
breach of two provisions of UNCLOS III. First, Article 47 (3) of UNCLOS III requires that "[t]he
drawing of such baselines shall not depart to any appreciable extent from the general configuration
of the archipelago." Second, Article 47 (2) of UNCLOS III requires that "the length of the baselines
shall not exceed 100 nautical miles," save for three per cent (3%) of the total number of baselines
which can reach up to 125 nautical miles.31

Although the Philippines has consistently claimed sovereignty over the KIG32 and the Scarborough
Shoal for several decades, these outlying areas are located at an appreciable distance from the
nearest shoreline of the Philippine archipelago,33 such that any straight baseline loped around them
from the nearest basepoint will inevitably "depart to an appreciable extent from the general
configuration of the archipelago."

The principal sponsor of RA 9522 in the Senate, Senator Miriam Defensor-Santiago, took pains to
emphasize the foregoing during the Senate deliberations:

What we call the Kalayaan Island Group or what the rest of the world call[] the Spratlys and the
Scarborough Shoal are outside our archipelagic baseline because if we put them inside our
baselines we might be accused of violating the provision of international law which states: "The
drawing of such baseline shall not depart to any appreciable extent from the general configuration of
the archipelago." So sa loob ng ating baseline, dapat magkalapit ang mga islands. Dahil malayo ang
Scarborough Shoal, hindi natin masasabing malapit sila sa atin although we are still allowed by
international law to claim them as our own.

This is called contested islands outside our configuration. We see that our archipelago is defined by
the orange line which [we] call[] archipelagic baseline. Ngayon, tingnan ninyo ang maliit na circle
doon sa itaas, that is Scarborough Shoal, itong malaking circle sa ibaba, that is Kalayaan Group or
the Spratlys. Malayo na sila sa ating archipelago kaya kung ilihis pa natin ang dating archipelagic
baselines para lamang masama itong dalawang circles, hindi na sila magkalapit at baka hindi na
tatanggapin ng United Nations because of the rule that it should follow the natural configuration of
the archipelago.34 (Emphasis supplied)

Similarly, the length of one baseline that RA 3046 drew exceeded UNCLOS III’s limits. The need to
1avv phi 1

shorten this baseline, and in addition, to optimize the location of basepoints using current maps,
became imperative as discussed by respondents:

[T]he amendment of the baselines law was necessary to enable the Philippines to draw the outer
limits of its maritime zones including the extended continental shelf in the manner provided by Article
47 of [UNCLOS III]. As defined by R.A. 3046, as amended by R.A. 5446, the baselines suffer from
some technical deficiencies, to wit:

1. The length of the baseline across Moro Gulf (from Middle of 3 Rock Awash to Tongquil
Point) is 140.06 nautical miles x x x. This exceeds the maximum length allowed under Article
47(2) of the [UNCLOS III], which states that "The length of such baselines shall not exceed
100 nautical miles, except that up to 3 per cent of the total number of baselines enclosing
any archipelago may exceed that length, up to a maximum length of 125 nautical miles."

2. The selection of basepoints is not optimal. At least 9 basepoints can be skipped or deleted
from the baselines system. This will enclose an additional 2,195 nautical miles of water.

3. Finally, the basepoints were drawn from maps existing in 1968, and not established by
geodetic survey methods. Accordingly, some of the points, particularly along the west coasts
of Luzon down to Palawan were later found to be located either inland or on water, not on
low-water line and drying reefs as prescribed by Article 47.35

Hence, far from surrendering the Philippines’ claim over the KIG and the Scarborough Shoal,
Congress’ decision to classify the KIG and the Scarborough Shoal as "‘Regime[s] of Islands’ under
the Republic of the Philippines consistent with Article 121"36 of UNCLOS III manifests the Philippine
State’s responsible observance of its pacta sunt servanda obligation under UNCLOS III. Under
Article 121 of UNCLOS III, any "naturally formed area of land, surrounded by water, which is above
water at high tide," such as portions of the KIG, qualifies under the category of "regime of islands,"
whose islands generate their own applicable maritime zones.37

Statutory Claim Over Sabah under

RA 5446 Retained

Petitioners’ argument for the invalidity of RA 9522 for its failure to textualize the Philippines’ claim
over Sabah in North Borneo is also untenable. Section 2 of RA 5446, which RA 9522 did not repeal,
keeps open the door for drawing the baselines of Sabah:

Section 2. The definition of the baselines of the territorial sea of the Philippine Archipelago as
provided in this Act is without prejudice to the delineation of the baselines of the territorial sea
around the territory of Sabah, situated in North Borneo, over which the Republic of the
Philippines has acquired dominion and sovereignty. (Emphasis supplied)

UNCLOS III and RA 9522 not

Incompatible with the Constitution’s
Delineation of Internal Waters

As their final argument against the validity of RA 9522, petitioners contend that the law
unconstitutionally "converts" internal waters into archipelagic waters, hence subjecting these waters
to the right of innocent and sea lanes passage under UNCLOS III, including overflight. Petitioners
extrapolate that these passage rights indubitably expose Philippine internal waters to nuclear and
maritime pollution hazards, in violation of the Constitution.38

Whether referred to as Philippine "internal waters" under Article I of the Constitution39 or as

"archipelagic waters" under UNCLOS III (Article 49 [1]), the Philippines exercises sovereignty over
the body of water lying landward of the baselines, including the air space over it and the submarine
areas underneath. UNCLOS III affirms this:

Article 49. Legal status of archipelagic waters, of the air space over archipelagic waters and of their
bed and subsoil. –

1. The sovereignty of an archipelagic State extends to the waters enclosed by the

archipelagic baselines drawn in accordance with article 47, described as archipelagic
waters, regardless of their depth or distance from the coast.

2. This sovereignty extends to the air space over the archipelagic waters, as well as to
their bed and subsoil, and the resources contained therein.

xxxx

4. The regime of archipelagic sea lanes passage established in this Part shall not in other
respects affect the status of the archipelagic waters, including the sea lanes, or the
exercise by the archipelagic State of its sovereignty over such waters and their air
space, bed and subsoil, and the resources contained therein. (Emphasis supplied)

The fact of sovereignty, however, does not preclude the operation of municipal and international law
norms subjecting the territorial sea or archipelagic waters to necessary, if not marginal, burdens in
the interest of maintaining unimpeded, expeditious international navigation, consistent with the
international law principle of freedom of navigation. Thus, domestically, the political branches of the
Philippine government, in the competent discharge of their constitutional powers, may pass
legislation designating routes within the archipelagic waters to regulate innocent and sea lanes
passage.40 Indeed, bills drawing nautical highways for sea lanes passage are now pending in
Congress.41

In the absence of municipal legislation, international law norms, now codified in UNCLOS III, operate
to grant innocent passage rights over the territorial sea or archipelagic waters, subject to the treaty’s
limitations and conditions for their exercise.42 Significantly, the right of innocent passage is a
customary international law,43 thus automatically incorporated in the corpus of Philippine law.44 No
modern State can validly invoke its sovereignty to absolutely forbid innocent passage that is
exercised in accordance with customary international law without risking retaliatory measures from
the international community.

The fact that for archipelagic States, their archipelagic waters are subject to both the right of
innocent passage and sea lanes passage45 does not place them in lesser footing vis-à-
vis continental coastal States which are subject, in their territorial sea, to the right of innocent
passage and the right of transit passage through international straits. The imposition of these
passage rights through archipelagic waters under UNCLOS III was a concession by archipelagic
States, in exchange for their right to claim all the waters landward of their baselines, regardless of
their depth or distance from the coast, as archipelagic waters subject to their territorial sovereignty.
More importantly, the recognition of archipelagic States’ archipelago and the waters enclosed by
their baselines as one cohesive entity prevents the treatment of their islands as separate islands
under UNCLOS III.46 Separate islands generate their own maritime zones, placing the waters
between islands separated by more than 24 nautical miles beyond the States’ territorial sovereignty,
subjecting these waters to the rights of other States under UNCLOS III.47

Petitioners’ invocation of non-executory constitutional provisions in Article II (Declaration of

Principles and State Policies)48 must also fail. Our present state of jurisprudence considers the
provisions in Article II as mere legislative guides, which, absent enabling legislation, "do not embody
judicially enforceable constitutional rights x x x."49 Article II provisions serve as guides in formulating
and interpreting implementing legislation, as well as in interpreting executory provisions of the
Constitution. Although Oposa v. Factoran50 treated the right to a healthful and balanced ecology
under Section 16 of Article II as an exception, the present petition lacks factual basis to substantiate
the claimed constitutional violation. The other provisions petitioners cite, relating to the protection of
marine wealth (Article XII, Section 2, paragraph 251 ) and subsistence fishermen (Article XIII, Section
752 ), are not violated by RA 9522.

In fact, the demarcation of the baselines enables the Philippines to delimit its exclusive economic
zone, reserving solely to the Philippines the exploitation of all living and non-living resources within
such zone. Such a maritime delineation binds the international community since the delineation is in
strict observance of UNCLOS III. If the maritime delineation is contrary to UNCLOS III, the
international community will of course reject it and will refuse to be bound by it.

UNCLOS III favors States with a long coastline like the Philippines. UNCLOS III creates a sui
generis maritime space – the exclusive economic zone – in waters previously part of the high seas.
UNCLOS III grants new rights to coastal States to exclusively exploit the resources found within this
zone up to 200 nautical miles.53 UNCLOS III, however, preserves the traditional freedom of
navigation of other States that attached to this zone beyond the territorial sea before UNCLOS III.

RA 9522 and the Philippines’ Maritime Zones

Petitioners hold the view that, based on the permissive text of UNCLOS III, Congress was not bound
to pass RA 9522.54 We have looked at the relevant provision of UNCLOS III55 and we find petitioners’
reading plausible. Nevertheless, the prerogative of choosing this option belongs to Congress, not to
this Court. Moreover, the luxury of choosing this option comes at a very steep price. Absent an
UNCLOS III compliant baselines law, an archipelagic State like the Philippines will find itself devoid
of internationally acceptable baselines from where the breadth of its maritime zones and continental
shelf is measured. This is recipe for a two-fronted disaster: first, it sends an open invitation to the
seafaring powers to freely enter and exploit the resources in the waters and submarine areas around
our archipelago; and second, it weakens the country’s case in any international dispute over
Philippine maritime space. These are consequences Congress wisely avoided.

The enactment of UNCLOS III compliant baselines law for the Philippine archipelago and adjacent
areas, as embodied in RA 9522, allows an internationally-recognized delimitation of the breadth of
the Philippines’ maritime zones and continental shelf. RA 9522 is therefore a most vital step on the
part of the Philippines in safeguarding its maritime zones, consistent with the Constitution and our
national interest.

WHEREFORE, we DISMISS the petition.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

ARTURO D. BRION DIOSDADO M. PERALTA

 Associate Justice Associate Justice

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ JOSE C. MENDOZA

Associate Justice Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

CERTIFICATION

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

RENATO C. CORONA
Chief Justice

CONCURRING OPINION

VELASCO, JR., J.:

I concur with the ponencia and add the following complementary arguments and observations:

A statute is a product of hard work and earnest studies of Congress to ensure that no constitutional
provision, prescription or concept is infringed. Withal, before a law, in an appropriate proceeding, is
nullified, an unequivocal breach of, or a clear conflict with, the Constitution must be demonstrated in
such a way as to leave no doubt in the mind of the Court.1 In the same token, if a law runs directly
afoul of the Constitution, the Court’s duty on the matter should be clear and simple: Pursuant to its
judicial power and as final arbiter of all legal questions,2 it should strike such law down, however
laudable its purpose/s might be and regardless of the deleterious effect such action may carry in its
wake.

Challenged in these proceedings is the constitutionality of Republic Act (RA 9522) entitled "An Act to
Amend Certain Provisions of [RA] 3046, as Amended by [RA] 5446 to Define the Archipelagic
Baselines Of The Philippines and for Other Purposes." For perspective, RA 3046, "An Act to Define
the Baselines of the Territorial Sea of the Philippines, was enacted in 1961 to comply with the United
Nations Convention on the Law of the Sea (UNCLOS) I. Eight years later, RA 5446 was enacted to
amend typographical errors relating to coordinates in RA 3046. The latter law also added a provision
asserting Philippine sovereignty over Sabah.

As its title suggests, RA 9522 delineates archipelagic baselines of the country, amending in the
process the old baselines law, RA 3046. Everybody is agreed that RA 9522 was enacted in
response to the country’s commitment to conform to some 1982 Law of the Sea Convention (LOSC)
or UNCLOS III provisions to define new archipelagic baselines through legislation, the Philippines
having signed3 and eventually ratified4 this multilateral treaty. The Court can take judicial notice that
RA 9522 was registered and deposited with the UN on April 4, 2009.

As indicated in its Preamble,5 1982 LOSC aims, among other things, to establish, with due regard for
the sovereignty of all States, "a legal order for the seas and oceans which will facilitate international
communication, and will promote the peaceful uses of the seas and oceans." One of the measures
to attain the order adverted to is to have a rule on baselines. Of particular relevance to the
Philippines, as an archipelagic state, is Article 47 of UNCLOS III which deals with baselines:

1. An archipelagic State may draw straight archipelagic baselines joining the outermost
points of the outermost islands and drying reefs of the archipelago provided that within such
 baselines are included the main islands and an area in which the ratio of the area of the
water to the area of the land, including atolls, is between 1 to 1 and 9 to 1.

2. The length of such baseline shall not exceed 100 nautical miles, except that up to 3 per
cent of the total number of baselines enclosing any archipelago may exceed that length, up
to a maximum length of 125 nautical miles.

3. The drawing of such baselines shall not depart to any appreciable extent from the general
configuration of the archipelago.

xxxx

9. The archipelagic State shall give due publicity to such charts or lists of geographical co-
ordinates and shall deposit a copy of each such chart or list with the Secretary-General of
the United Nations.6 (Emphasis added.)

To obviate, however, the possibility that certain UNCLOS III baseline provisions would, in their
implementation, undermine its sovereign and/or jurisdictional interests over what it considers its
territory,7 the Philippines, when it signed UNCLOS III on December 10, 1982, made the following
"Declaration" to said treaty:

The Government of the Republic of the Philippines [GRP] hereby manifests that in signing the 1982
United Nations Convention on the Law of the Sea, it does so with the understandings embodied in
this declaration, made under the provisions of Article 310 of the Convention, to wit:

The signing of the Convention by the [GRP] shall not in any manner impair or prejudice the
sovereign rights of the [RP] under and arising from the Constitution of the Philippines;

Such signing shall not in any manner affect the sovereign rights of the [RP] as successor of the
United States of America [USA], under and arising out of the Treaty of Paris between Spain and the
United States of America of December 10, 1898, and the Treaty of Washington between the [USA]
and Great Britain of January 2, 1930;

xxxx

Such signing shall not in any manner impair or prejudice the sovereignty of the [RP] over any
territory over which it exercises sovereign authority, such as the Kalayaan Islands, and the waters
appurtenant thereto;

The Convention shall not be construed as amending in any manner any pertinent laws and
Presidential Decrees or Proclamations of the Republic of the Philippines. The [GRP] maintains and
reserves the right and authority to make any amendments to such laws, decrees or proclamations
pursuant to the provisions of the Philippine Constitution;

The provisions of the Convention on archipelagic passage through sea lanes do not nullify or impair
the sovereignty of the Philippines as an archipelagic state over the sea lanes and do not deprive it of
authority to enact legislation to protect its sovereignty independence and security;

The concept of archipelagic waters is similar to the concept of internal waters under the Constitution
of the Philippines, and removes straits connecting these waters with the economic zone or high sea
from the rights of foreign vessels to transit passage for international navigation.8 (Emphasis added.)

Petitioners challenge the constitutionality of RA 9522 on the principal ground that the law violates
Section 1, Article I of the 1987 Constitution on national territory which states:

Section 1. The national territory comprises the Philippine archipelago, with all the islands and waters
embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction,
consisting of its terrestrial, fluvial and aerial domains, including its territorial sea, the seabed, the
subsoil, the insular shelves, and other submarine areas. The waters around, between, and
connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of
the internal waters of the Philippines. (Emphasis supplied.)
According to Fr. Joaquin Bernas, S.J., himself a member of the 1986 Constitutional Commission
which drafted the 1987 Constitution, the aforequoted Section 1 on national territory was "in
substance a copy of its 1973 counterpart."9 Art. I of the 1973 Constitution reads:

Section 1. The national territory comprises the Philippine archipelago, with all the islands and waters
embraced therein, and all other territories belonging to the Philippines by historic right or legal title,
including the territorial sea, the air space, the subsoil, the insular shelves, and other submarine
areas over which the Philippines has sovereignty or jurisdiction. The waters around, between, and
connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of
the internal waters of the Philippines. (Emphasis added.)

As may be noted both constitutions speak of the "Philippine archipelago," and, via the last sentence
of their respective provisions, assert the country’s adherence to the "archipelagic principle." Both
constitutions divide the national territory into two main groups: (1) the Philippine archipelago and (2)
other territories belonging to the Philippines. So what or where is Philippine archipelago
contemplated in the 1973 and 1987 Constitutions then? Fr. Bernas answers the poser in the
following wise:

Article I of the 1987 Constitution cannot be fully understood without reference to Article I of the 1973
Constitution. x x x

xxxx

x x x To understand [the meaning of national territory as comprising the Philippine archipelago], one
must look into the evolution of [Art. I of the 1973 Constitution] from its first draft to its final form.

Section 1 of the first draft submitted by the Committee on National Territory almost literally
reproduced Article I of the 1935 Constitution x x x. Unlike the 1935 version, however, the draft
designated the Philippines not simply as the Philippines but as "the Philippine archipelago.10 In
response to the criticism that the definition was colonial in tone x x x, the second draft further
designated the Philippine archipelago, as the historic home of the Filipino people from its
beginning.11

After debates x x x, the Committee reported out a final draft, which became the initially approved
version: "The national territory consists of the Philippine archipelago which is the ancestral home of
the Filipino people and which is composed of all the islands and waters embraced therein…"

What was the intent behind the designation of the Philippines as an "archipelago"? x x x Asked by
Delegate Roselller Lim (Zamboanga) where this archipelago was, Committee Chairman Quintero
answered that it was the area delineated in the Treaty of Paris. He said that objections to the
colonial implication of mentioning the Treaty of Paris was responsible for the omission of the express
mention of the Treaty of Paris.

Report No. 01 of the Committee on National Territory had in fact been explicit in its delineation of the
expanse of this archipelago. It said:

Now if we plot on a map the boundaries of this archipelago as set forth in the Treaty of Paris, a huge
or giant rectangle will emerge, measuring about 600 miles in width and 1,200 miles in length. Inside
this giant rectangle are the 7,100 islands comprising the Philippine Islands. From the east coast of
Luzon to the eastern boundary of this huge rectangle in the Pacific Ocean, there is a distance of
over 300 miles. From the west coast of Luzon to the western boundary of this giant rectangle in the
China sea, there is a distance of over 150 miles.

When the [US] Government enacted the Jones Law, the Hare-Hawes Cutting Law and the Tydings
McDuffie Law, it in reality announced to the whole world that it was turning over to the Government
of the Philippine Islands an archipelago (that is a big body of water studded with islands), the
boundaries of which archipelago are set forth in Article III of the Treaty of Paris. It also announced to
the whole world that the waters inside the giant rectangle belong to the Philippines – that they are
not part of the high seas.

When Spain signed the Treaty of Paris, in effect she announced to the whole world that she was
ceding to the [US] the Philippine archipelago x x x, that this archipelago was bounded by lines
specified in the treaty, and that the archipelago consisted of the huge body of water inside the
boundaries and the islands inside said boundaries.

The delineation of the extent of the Philippine archipelago must be understood in the context of the
modifications made both by the Treaty of Washington of November 7, 1900, and of the Convention
of January 12, 1930, in order to include the Islands of Sibutu and of Cagayan de Sulu and the Turtle
and Mangsee Islands. However, x x x the definition of the archipelago did not include the Batanes
group[, being] outside the boundaries of the Philippine archipelago as set forth in the Treaty of Paris.
In literal terms, therefore, the Batanes islands would come not under the Philippine archipelago but
under the phrase "all other territories belong to the Philippines."12 x x x (Emphasis added.)

From the foregoing discussions on the deliberations of the provisions on national territory, the
following conclusion is abundantly evident: the "Philippine archipelago" of the 1987 Constitution is
the same "Philippine archipelago" referred to in Art. I of the 1973 Constitution which in turn
corresponds to the territory defined and described in Art. 1 of the 1935 Constitution,13 which
pertinently reads:

Section 1. The Philippines comprises all the territory ceded to the [US] by the Treaty of Paris
concluded between the [US] and Spain on the tenth day of December, [1898], the limits of which are
set forth in Article III of said treaty, together with all the islands in the treaty concluded at
Washington, between the [US] and Spain on November [7, 1900] and the treaty concluded between
the [US] and Great Britain x x x.

While the Treaty of Paris is not mentioned in both the 1973 and 1987 Constitutions, its mention, so
the nationalistic arguments went, being "a repulsive reminder of the indignity of our colonial past,"14 it
is at once clear that the Treaty of Paris had been utilized as key reference point in the definition of
the national territory.

On the other hand, the phrase "all other territories over which the Philippines has sovereignty or
jurisdiction," found in the 1987 Constitution, which replaced the deleted phrase "all territories
belonging to the Philippines by historic right or legal title"15 found in the 1973 Constitution, covers
areas linked to the Philippines with varying degrees of certainty.16 Under this category would fall: (a)
Batanes, which then 1971 Convention Delegate Eduardo Quintero, Chairperson of the Committee
on National Territory, described as belonging to the Philippines in all its history;17 (b) Sabah, over
which a formal claim had been filed, the so-called Freedomland (a group of islands known as
Spratleys); and (c) any other territory, over which the Philippines had filed a claim or might acquire in
the future through recognized modes of acquiring territory.18 As an author puts it, the deletion of the
words "by historic right or legal title" is not to be interpreted as precluding future claims to areas over
which the Philippines does not actually exercise sovereignty.19

Upon the foregoing perspective and going into specifics, petitioners would have RA 9522 stricken
down as unconstitutional for the reasons that it deprives the Philippines of what has long been
established as part and parcel of its national territory under the Treaty of Paris, as supplemented by
the aforementioned 1900 Treaty of Washington or, to the same effect, revises the definition on or
dismembers the national territory. Pushing their case, petitioners argue that the constitutional
definition of the national territory cannot be remade by a mere statutory act.20 As another point,
petitioners parlay the theory that the law in question virtually weakens the country’s territorial claim
over the Kalayaan Island Group (KIG) and Sabah, both of which come under the category of "other
territories" over the Philippines has sovereignty or jurisdiction. Petitioners would also assail the law
on grounds related to territorial sea lanes and internal waters transit passage by foreign vessels.

It is remarkable that petitioners could seriously argue that RA 9522 revises the Philippine territory as
defined in the Constitution, or worse, constitutes an abdication of territory.

It cannot be over-emphasized enough that RA 9522 is a baseline law enacted to implement the 1982
LOSC, which in turn seeks to regulate and establish an orderly sea use rights over maritime zones.
Or as the ponencia aptly states, RA 9522 aims to mark-out specific base points along the Philippine
coast from which baselines are drawn to serve as starting points to measure the breadth of the
territorial sea and maritime zones.21 The baselines are set to define the sea limits of a state, be it
coastal or archipelagic, under the UNCLOS III regime. By setting the baselines to conform to the
prescriptions of UNCLOS III, RA 9522 did not surrender any territory, as petitioners would insist at
every turn, for UNCLOS III is concerned with setting order in the exercise of sea-use rights, not the
acquisition or cession of territory. And let it be noted that under UNCLOS III, it is recognized that
countries can have territories outside their baselines. Far from having a dismembering effect, then,
RA 9522 has in a limited but real sense increased the country’s maritime boundaries. How this
situation comes about was extensively explained by then Minister of State and head of the Philippine
delegation to UNCLOS III Arturo Tolentino in his sponsorship speech22on the concurrence of the
Batasang Pambansa with the LOSC:

xxxx

Then, we should consider, Mr. Speaker, that under the archipelagic principle, the whole area inside
the archipelagic base lines become a unified whole and the waters between the islands which
formerly were regarded by international law as open or international seas now become waters under
the complete sovereignty of the Filipino people. In this light there would be an additional area of
141,800 square nautical miles inside the base lines that will be recognized by international law as
Philippine waters, equivalent to 45,351,050 hectares. These gains in the waters of the sea,
45,211,225 hectares outside the base lines and 141,531,000 hectares inside the base lines, total
93,742,275 hectares as a total gain in the waters under Philippine jurisdiction.

From a pragmatic standpoint, therefore, the advantage to our country and people not only in terms of
the legal unification of land and waters of the archipelago in the light of international law, but also in
terms of the vast resources that will come under the dominion and jurisdiction of the Republic of the
Philippines, your Committee on Foreign Affairs does not hesitate to ask this august Body to concur
in the Convention by approving the resolution before us today.

May I say it was the unanimous view of delegations at the Conference on the Law of the Sea that
archipelagos are among the biggest gainers or beneficiaries under the Convention on the Law of the
Sea.

Lest it be overlooked, the constitutional provision on national territory, as couched, is broad enough
to encompass RA 9522’s definition of the archipelagic baselines. To reiterate, the laying down of
baselines is not a mode of acquiring or asserting ownership a territory over which a state exercises
sovereignty. They are drawn for the purpose of defining or establishing the maritime areas over
which a state can exercise sovereign rights. Baselines are used for fixing starting point from which
the territorial belt is measured seawards or from which the adjacent maritime waters are measured.
Thus, the territorial sea, a marginal belt of maritime waters, is measured from the baselines
extending twelve (12) nautical miles outward.23 Similarly, Art. 57 of the 1982 LOSC provides that the
Exclusive Economic Zone (EEZ) "shall not extend beyond 200 nautical miles from the baselines from
which the breadth of the territorial sea is measured."24 Most important to note is that the baselines
indicated under RA 9522 are derived from Art. 47 of the 1982 LOSC which was earlier quoted.

Since the 1987 Constitution’s definition of national territory does not delimit where the Philippine’s
baselines are located, it is up to the political branches of the government to supply the deficiency.
Through Congress, the Philippines has taken an official position regarding its baselines to the
international community through RA 3046,25as amended by RA 544626 and RA 9522. When the
Philippines deposited a copy of RA 9522 with the UN Secretary General, we effectively complied in
good faith with our obligation under the 1982 LOSC. A declaration by the Court of the
constitutionality of the law will complete the bona fides of the Philippines vis-a-vis the law of the sea
treaty.

It may be that baseline provisions of UNCLOS III, if strictly implemented, may have an imposing
impact on the signatory states’ jurisdiction and even their sovereignty. But this actuality, without
more, can hardly provide a justifying dimension to nullify the complying RA 9522. As held by the
Court in Bayan Muna v. Romulo,27 treaties and international agreements have a limiting effect on the
otherwise encompassing and absolute nature of sovereignty. By their voluntary acts, states may
decide to surrender or waive some aspects of their sovereignty. The usual underlying consideration
in this partial surrender may be the greater benefits derived from a pact or reciprocal undertaking.
On the premise that the Philippines has adopted the generally accepted principles of international
law as part of the law of the land, a portion of sovereignty may be waived without violating the
Constitution.

As a signatory of the 1982 LOSC, it behooves the Philippines to honor its obligations thereunder.
Pacta sunt servanda, a basic international law postulate that "every treaty in force is binding upon
the parties to it and must be performed by them in good faith."28 The exacting imperative of this
principle is such that a state may not invoke provisions in its constitution or its laws as an excuse for
failure to perform this duty."29
The allegation that Sabah has been surrendered by virtue of RA 9522, which supposedly repealed
the hereunder provision of RA 5446, is likewise unfounded.

Section 2. The definition of the baselines of the territorial sea of the Philippine Archipelago as
provided in this Act is without prejudice to the delineation of the baselines of the territorial sea
around the territory of Sabah, situated in North Borneo, over which the Republic of the Philippines
has acquired dominion and sovereignty.

There is nothing in RA 9522 indicating a clear intention to supersede Sec. 2 of RA 5446. Petitioners
obviously have read too much into RA 9522’s amendment on the baselines found in an older law.
Aside from setting the country’s baselines, RA 9522 is, in its Sec. 3, quite explicit in its reiteration of
the Philippines’ exercise of sovereignty, thus:

Section 3. This Act affirms that the Republic of the Philippines has dominion, sovereignty and
jurisdiction over all portions of the national territory as defined in the Constitution and by provisions
of applicable laws including, without limitation, Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, as amended.

To emphasize, baselines are used to measure the breadth of the territorial sea, the contiguous zone,
the exclusive economic zone and the continental shelf. Having KIG and the Scarborough Shoal
outside Philippine baselines will not diminish our sovereignty over these areas. Art. 46 of UNCLOS
III in fact recognizes that an archipelagic state, such as the Philippines, is a state "constituted wholly
by one or more archipelagos and may include other islands." (emphasis supplied) The "other
islands" referred to in Art. 46 are doubtless islands not forming part of the archipelago but are
nevertheless part of the state’s territory.

The Philippines’ sovereignty over KIG and Scarborough Shoal are, thus, in no way diminished.
Consider: Other countries such as Malaysia and the United States have territories that are located
outside its baselines, yet there is no territorial question arising from this arrangement. 30

It may well be apropos to point out that the Senate version of the baseline bill that would become RA
9522 contained the following explanatory note: The law "reiterates our sovereignty over the
Kalayaan Group of Islands declared as part of the Philippine territory under Presidential Decree No.
1596. As part of the Philippine territory, they shall be considered as a ‘regime of islands’ under
Article 121 of the Convention."31 Thus, instead of being in the nature of a "treasonous surrender" that
petitioners have described it to be, RA 9522 even harmonizes our baseline laws with our
international agreements, without limiting our territory to those confined within the country’s
baselines.

Contrary to petitioners’ contention, the classification of KIG and the Scarborough Shoal as falling
under the Philippine’s regime of islands is not constitutionally objectionable. Such a classification
serves as compliance with LOSC and the Philippines’ assertion of sovereignty over KIG and
Scarborough Shoal. In setting the baseline in KIG and Scarborough Shoal, RA 9522 states that
these are areas "over which the Philippines likewise exercises sovereignty and jurisdiction." It is,
thus, not correct for petitioners to claim that the Philippines has lost 15,000 square nautical miles of
territorial waters upon making this classification. Having 15,000 square nautical miles of Philippine
waters outside of our baselines, to reiterate, does not translate to a surrender of these waters. The
Philippines maintains its assertion of ownership over territories outside of its baselines. Even China
views RA 9522 as an assertion of ownership, as seen in its Protest32 filed with the UN Secretary-
General upon the deposit of RA 9522.

We take judicial notice of the effective occupation of KIG by the Philippines. Petitioners even point
out that national and local elections are regularly held there. The classification of KIG as under a
"regime of islands" does not in any manner affect the Philippines’ consistent position with regard to
sovereignty over KIG. It does not affect the Philippines’ other acts of ownership such as occupation
or amend Presidential Decree No. 1596, which declared KIG as a municipality of Palawan.

The fact that the baselines of KIG and Scarborough Shoal have yet to be defined would not detract
to the constitutionality of the law in question. The resolution of the problem lies with the political
departments of the government.

All told, the concerns raised by the petitioners about the diminution or the virtual dismemberment of
the Philippine territory by the enactment of RA 9522 are, to me, not well grounded. To repeat,
UNCLOS III pertains to a law on the seas, not territory. As part of its Preamble,33 LOSC recognizes
"the desirability of establishing through this Convention, with due regard for the sovereignty of all
States, a legal order for the seas and oceans x x x."

This brings me to the matter of transit passage of foreign vessels through Philippine waters.

Apropos thereto, petitioners allege that RA 9522 violates the nuclear weapons-free policy under Sec.
8, in relation to Sec. 16, Art. II of the Constitution, and exposes the Philippines to marine pollution
hazards, since under the LOSC the Philippines supposedly must give to ships of all states the right
of innocent passage and the right of archipelagic sea-lane passage.

The adverted Sec. 8, Art. II of the 1987 Constitution declares the adoption and pursuit by the
Philippines of "a policy of freedom from nuclear weapons in its territory." On the other hand, the
succeeding Sec. l6 underscores the State’s firm commitment "to protect and advance the right of the
people to a balanced and healthful ecology in accord with the rhythm and harmony of nature."
Following the allegations of petitioners, these twin provisions will supposedly be violated inasmuch
as RA 9522 accedes to the right of innocent passage and the right of archipelagic sea-lane passage
provided under the LOSC. Therefore, ships of all nations––be they nuclear-carrying warships or
neutral commercial vessels transporting goods––can assert the right to traverse the waters within
our islands.

A cursory reading of RA 9522 would belie petitioners’ posture. In context, RA 9522 simply seeks to
conform to our international agreement on the setting of baselines and provides nothing about the
designation of archipelagic sea-lane passage or the regulation of innocent passage within our
waters. Again, petitioners have read into the amendatory RA 9522 something not intended.

Indeed, the 1982 LOSC enumerates the rights and obligations of archipelagic party-states in terms
of transit under Arts. 51 to 53, which are explained below:

To safeguard, in explicit terms, the general balance struck by [Articles 51 and 52] between the need
for passage through the area (other than straits used for international navigation) and the
archipelagic state’s need for security, Article 53 gave the archipelagic state the right to regulate
where and how ships and aircraft pass through its territory by designating specific sea lanes. Rights
of passage through these archipelagic sea lanes are regarded as those of transit passage:

(1) An archipelagic State may designate sea lanes and air routes thereabove, suitable for
safe, continuous and expeditious passage of foreign ships and aircraft through or over its
archipelagic waters and the adjacent territorial sea.

(2) All ships and aircraft enjoy the right of archipelagic sea lanes passage in such sea lanes
and air routes.

(3) Archipelagic sea lanes passage is the exercise in accordance with the present
Convention of the rights of navigation and overflight in the normal mode solely for the
purpose of continuous, expeditious and unobstructed transit between one part of the high
seas or an exclusive economic zone and another part of the high seas or an exclusive
economic zone.34

But owing to the geographic structure and physical features of the country, i.e., where it is
"essentially a body of water studded with islands, rather than islands with water around them,"35 the
Philippines has consistently maintained the conceptual unity of land and water as a necessary
element for territorial integrity,36 national security (which may be compromised by the presence of
warships and surveillance ships on waters between the islands),37and the preservation of its
maritime resources. As succinctly explained by Minister Arturo Tolentino, the essence of the
archipelagic concept is "the dominion and sovereignty of the archipelagic State within its baselines,
which were so drawn as to preserve the territorial integrity of the archipelago by the inseparable
unity of the land and water domain."38 Indonesia, like the Philippines, in terms of geographic reality,
has expressed agreement with this interpretation of the archipelagic concept. So it was that in 1957,
the Indonesian Government issued the Djuanda Declaration, therein stating :

[H]istorically, the Indonesian archipelago has been an entity since time immemorial. In view of the
1avv phi 1

territorial entirety and of preserving the wealth of the Indonesian state, it is deemed necessary to
consider all waters between the islands and entire entity.
 x x x On the ground of the above considerations, the Government states that all waters
around, between and connecting, the islands or parts of islands belonging to the Indonesian
archipelago irrespective of their width or dimension are natural appurtenances of its land
territory and therefore an integral part of the inland or national waters subject to the absolute
sovereignty of Indonesia.39 (Emphasis supplied.)

Hence, the Philippines maintains the sui generis character of our archipelagic waters as
equivalent to the internal waters of continental coastal states. In other words, the landward
waters embraced within the baselines determined by RA 9522, i.e., all waters around,
between, and connecting the islands of the archipelago, regardless of their breadth and
dimensions, form part of the internal waters of the Philippines.40Accordingly, such waters are
not covered by the jurisdiction of the LOSC and cannot be subjected to the rights granted to
foreign states in archipelagic waters, e.g., the right of innocent passage,41 which is allowed
only in the territorial seas, or that area of the ocean comprising 12 miles from the baselines
of our archipelago; archipelagic sea-lane passage;42 over flight;43 and traditional fishing
rights.44

Our position that all waters within our baselines are internal waters, which are outside the
jurisdiction of the 1982 LOSC,45 was abundantly made clear by the Philippine Declaration at
the time of the signing of the LOSC on December 10, 1982. To reiterate, paragraphs 5, 6
and 7 of the Declaration state:

5. The Convention shall not be construed as amending in any manner any pertinent laws and
Presidential decrees of Proclamation of the republic of the Philippines; the Government x x x
maintains and reserves the right and authority to make any amendments to such laws,
decrees or proclamations pursuant to the provisions of the Philippine Constitution;

6. The provisions of the Convention on archipelagic passage through sea lanes do not nullify
or impair the sovereignty of the Philippines as an archipelagic State over the sea lanes and
do not deprive it of authority to enact legislation to protect its sovereignty, independence and
security;

7. The concept of archipelagic waters is similar to the concept of internal waters under the
Constitution of the Philippines and removes straits connecting this water with the economic
zone or high seas from the rights of foreign vessels to transit passage for international
navigation. (Emphasis supplied.)46

More importantly, by the ratification of the 1987 Constitution on February 2, 1987, the integrity of the
Philippine state as comprising both water and land was strengthened by the proviso in its first article,
viz: "The waters around, between, and connecting the islands of the [Philippine] archipelago,
regardless of their breadth and dimensions, form part of the internal waters of the Philippines.
(emphasis supplied)

In effect, contrary to petitioners’ allegations, the Philippines’ ratification of the 1982 LOSC did not
matter-of-factly open our internal waters to passage by foreign ships, either in the concept of
innocent passage or archipelagic sea-lane passage, in exchange for the international community’s
recognition of the Philippines as an archipelagic state. The Filipino people, by ratifying the 1987
Constitution, veritably rejected the quid pro quo petitioners take as being subsumed in that treaty.

Harmonized with the Declaration and the Constitution, the designation of baselines made in RA
9522 likewise designates our internal waters, through which passage by foreign ships is not a right,
but may be granted by the Philippines to foreign states but only as a dissolvable privilege.

In view of the foregoing, I vote to DISMISS the Petition.

PRESBITERO J. VELASCO, JR.

Associate Justice

United States Supreme Court

 POINDEXTER v. GREENHOW(1885)

No. 20

Argued: Decided: April 20, 1885

[114 U.S. 270, 272] A. H. Garland, R. T. Merrick, and F. S. Blair, Atty. Gen., for defendant
in error.

Wm. L. Royall, D. H. Chamberlain, Wm. M. Evarts, and Wager Swayne, for plaintiff in
error. [114 U.S. 270, 273]

MATTHEWS, J.

The plaintiff in error, who was also plaintiff below, brought his action in detinue on the
twenty-sixth day of April, 1883, against Samuel C. Greenhow, for the recovery of
specific personal property, to-wit, one office desk of the value of $30, before a police
justice in the city of Richmond, who dismissed the same for want of Jurisdiction. An
appeal was taken by the plaintiff to the hustings court for the city of Richmond, where
the facts were found by agreement of parties to be as follows: That the plaintiff was a
resident of the city of Richmond, in the state of Virginia; that he owed to the state of
Virginia, for taxes on property owned by him in said city for the year 1882, $12.45,
which said t xes were due and leviable for, under the laws of Virginia, on the first day of
December, 1882; that the defendant, Samuel C. Greenhow, was the treasurer of the city
of Richmond, and as such is charged by law with the duty of collecting taxes due to the
state of Virginia by all residents of said city; that on the twenty-fifth day of April, 1883,
the defendant, as such treasurer and collector of taxes, made upon the plaintiff demand
for the payment of the taxes due by him to the state as aforesaid; that the plaintiff, when
demand was so made for payment of his taxes, tendered to the defendant in payment
thereof 45 cents in lawful money of the United States, and coupons issued by the state
of Virginia under the provisions of the act of the general assembly of that state of March
30, 1871, entitled 'An act to provide for the funding and payment of the public debt;' that
said coupons so tendered by plaintiff were all due and past maturity, and amounted in
the aggregate to $12, and were all cut from bonds issued by the said state of Virginia
under the provisions of the said act of March 30, 1871; that the said coupons and
money so tendered by the plaintiff amounted together to exactly the sum so due the
state by the plaintiff for taxes; that the defendant refused to receive the said coupons
and money so tendered in payment of the plaintiff's taxes; that the defendant, after said
tender was made, as he deemed himself required to do by the acts of assembly of
Virginia, entered the plaintiff's place of business in said city, [114 U.S. 270, 274] and
levied upon, and took possession of the desk, the property of the plaintiff now sued for,
for the purpose of selling the same to pay the taxes due from him; and that the said
desk is of the value of $30, and still remains in possession of the defendant for the
purpose aforesaid, he having refused to return the same to the plaintiff on demand.

The hustings court was of the opinion that the police justice erred in deciding that he
had no jurisdiction, and that the issue in the action might have been tried by him, and
that it should be tried by that court on the appeal; but it was also of the opinion that in
tendering to the defendant, as part of the tender in payment of the plaintiff's taxes, the
coupons mentioned and described, the plaintiff did not tender what the law required, nor
what the defendant was, as treasurer, obliged to or should have received in payment of
the plaintiff's taxes, under the provisions of the act of the general assembly ov Virginia,
approved January 26, 1882, entitled 'An act to provide for the more efficient collection of
the revenue to support government, maintain the public schools, and to pay interest on
the public debt;' that the plaintiff's remedy for the failure of the defendant, as treasurer,
to receive coupons in payment of taxes, was to be found in the provisions of said act of
January 26, 1882; and that, therefore, the defendant does not unlawfully or wrongfully
detain the plaintiff's property levied on by the defendant, as treasurer of the city of
Richmond, for the plaintiff's taxes; and judgment was accordingly rendered for the
defendant.

It appears from the record that there was drawn in question the validity of the said act of
the general assembly of Virginia, approved January 26, 1882, and of the eighteenth
section of the act of the general assembly of the state of Virginia, approved April 1,
1879, which authorizes the collection of delinquent taxes by distraint of personal
property, upon the ground that these acts are repugnant to section 10 of article 1 of the
constitution of the United States, which declares that no state shall pass any law
impairing the obligation of contracts, the judgment of the court being in favor of the
validity of said acts and against the rights claimed by the plaintiff under the [114 U.S. 270,
275] constitution of the United States. The hustings court is the highest court of the
state to which the said cause could be taken.

The act of January 26, 1882, the validity of which is thus questioned, is as ollows:

'Be it enacted by the general assembly of the state of Virginia, that the several
tax collectors of this commonwealth shall receive, in discharge of the taxes,
license taxes, and other dues, gold, silver, United States treasury notes, national
bank currency, and nothing else; provided that in all cases in which an officer
charged by law with the collection of revenue due the state, shall take any steps
for the collection of same, claimed to be due from any citizen or tax-payer, such
person against whom such step is taken, if he conceives the same to be unjust or
illegal, or against any statute, or to be unconstitutional, may pay the same under
protest, and under such payment the officer collecting the same shall pay such
revenue into the state treasury, giving notice at the time of such payment to the
treasurer that the same was paid under protest. The person so paying such
revenue may, at any time within 30 days after making such payment, and not
longer thereafter, sue the said officer so collecting such revenue in the court
having jurisdiction of the parties and amounts.
'If it be determined that the same was wrongfully collected, for any reason going
to the merits of the same, then the court trying the case may certify of record that
the same was wrongfully paid and ought to be refunded; and, thereupon, the
auditor of public accounts shall issue his proper warrant for the same, which shall
be paid in preference to other claims on the treasury, except such as have
priority by constitutional requirement.
'There shall be no other remedy in any case of the collection of revenue, or the
attempt to collect revenues illegally, or the attempt to collect revenue in funds
only receivable by said officers under this law, the same being other and different
funds than the tax-payer may tender or claim the right to pay, than such as are
herein provided; and no writ for the prevention of any revenue claim, or to hinder
or delay the collection [114 U.S. 270, 276] of the same, shall in anywise issue,
either injunction, supersedeas, mandamus, prohibition, or any other writ or
process whatever; but in all cases, if, for any reason, any person shall claim that
the revenue so collected of him was wrongfully or illegally collected, the remedy
for such person shall be as above provided, and in no other manner. In all such
cases If the court certify of record that the officer defendant acted in good faith
and diligently defended the action, the necessary costs incurred by him shall be
taxed to and paid by the state, as in criminal cases. The commonwealth attorney
for the county or corporation in which suit is brought, shall appear and represent
the defense. In every case where judgment is rendered for the defendant, a fee
of five dollars shall be taxed in favor of said attorney and against the plaintiff; and
whenever the court shall refuse to certify the good faith and diligence of the
officer defending the case, a like fee of five dollars shall be taxed against said
officer. Any officer charged with the collection of revenue, who shall receive
 payment thereof in anything other than that hereinbefore provided, shall be
deemed guilty of a misdemeanor, and fined not less than one hundred nor more
than five hundred dollars, in the discretion of the court; but nothing herein
contained shall be construed to subject any officer of the state to any suit, other
than as hereinbefore provided, for any refusal on his part to accept in payment of
revenue due the state any kind or description of funds, security, or paper not
authorized by this act.
'(2) This act shall be in force from and after the first day of December, eighteen
hundred and eighty-two.'

The eighteenth section of the act of April 1, 1879, (Acts 1878-79, p. 318,) so far as
material, is that 'it shall be the duty of the treasurer, after the first day of December, to
call upon each person chargeable with taxes and levies, who has not paid the same
prior to that time, or upon the agent of such person resident within the county or
corporat on, and, upon failure or refusal of such person or agent to pay the same, he
shall proceed to collect by distress or otherwise.' Goods and chattels distrained by an
officer, by provisions of other statutes then in force, were required to be sold at public
sale after due notice, as prescribed. [114 U.S. 270, 277] The act of January 26, 1882, was
amended by an act which was passed and took effect March 13, 1884, by the addition
of the following sections:

'Sec. 2. Whenever any papers, purporting to be coupons cut from bonds of this
state, shall be tendered to the collecting officer in payment of any taxes due to
the state by any party desiring to bring a suit under this statute, it shall be the
duty of the collecting officer to place the coupons so tendered in an envelope, to
seal the said envelope, write his name across the seal thereof, indorse it with the
numbers of the coupons inclosed, and return it to the taxpayer. Upon the trial of
any proceeding under this act, the said coupons, inclosed in the said envelope so
sealed and indorsed, must be produced in evidence to prove the tender. If the
court shall certify that the money paid under protest ought to be refunded, the
said coupons shall be delivered to the auditor of public accounts, to be canceled
simltaneously with the issue of his warrant.
'Sec. 3. No action of trespass or trespass on the case shall be brought or
maintained against any collecting officer for levying upon the property of any tax-
payer who may have tendered in payment, in whole or in part, any coupon, or
paper purporting to be a coupon, cut from bonds of this state for such taxes, and
who shall refuse to pay his taxes in gold, silver, United States treasury notes, or
national bank-notes. The suit contemplated by this act shall be commenced by a
petition filed at rules, upon which a summons shall be issued to the collecting
officer; and the said suit shall be regularly matured like other actions at law, and
the coupons tendered shall be filed with said petition.'

The contract which the plaintiff in error alleges has been violated is with the state of
Virginia, and is contained in the act of March 30, 1871, known as the 'Funding Act.'
entitled 'An act to provide for the funding and payment of the public debt,' and in the
bonds and coupons issued under its authority. It provided for the funding of two-thirds of
the existing state debt, and of two-thirds of the interest accrued thereon to July 1, 1871,
in new 6 per cent. bonds, to run 34 years, the bonds, coupon or registered, payable
to [114 U.S. 270, 278] order or bearer, and the coupons to bearer, and declared that the
coupons should be payable semi-annually, and 'be receivable at and after maturity for
all taxes, debts, dues, and demands due the state,' and that this should be expressed
on their face. For the remaining one-third, certificates were to be issued to the creditors
to hold as claims against the state of West Virginia, that being assumed as her just
proportion of the entire debt. 'Under this act,' it was said by this court, in Hartman v.
Greenhow, 102 U.S. 672 , 679, 'a large number of the creditors of the state, holding
bonds amounting, including interest thereon, to about thirty millions of dollars,
surrendered them and took new bonds with interest coupons annexed for two-thirds of
their amount, and certificates for the balance. A contract was thus consummated
between the state and the holders of the new bonds and the holders of the coupons,
from the obligation of which she could not, without their consent, release herself by any
subsequent legislation. She thus bound herself, not only to pay the bonds when they
became due, but to receive the interest coupons from the bearer at and after their
maturity, to their full amount, for any taxes or dues by him to the state. This receivability
of the coupons for such taxes and dues was written on their face, and accompanied
them in whatever hands they passed. It constituted their chief value, and was the main
consideration offered to the holders f the old bonds to surrender them and accept new
bonds for two-thirds of their amount.'

The same view had been taken by the supreme court of appeals of Virginia in the cases
of Antoni v. Wright, 22 Grat. 833; Wise v. Rogers, 24 Grat. 169; and Clarke v. Tyler, 30
Grat. 134; in the last of which cases it was declared to be the settled law of the state. It
was repeated by this court in Antoni v. Greenhow, 107 U.S. 769 , S. C. 2 SUP. CT.
REP. 91, where it was said, (page 775:) 'The right of the coupon-holder is to have his
coupon received for taxes when offered;' and (page 771) 'any act of the state which
forbids the receipt of these coupons for taxes is a violation of the contract, and void as
against coupon-holders.' Upon these propositions there was an entire agreement
between the majority and minority of the court in that case. [114 U.S. 270, 279] The nature
and value of this contract right to the coupon-holder deserve to be further explained. It
was evidently a part of the consideration on which the creditors of the state were
induced to accept, under the act of March 30, 1871, from the state of Virginia, new
obligations for two-thirds of their claim, in exchange for the surrender of the original
bonds. The latter depended for their payment, as to both principle and interest, upon the
continued good faith of the state in making, from time to time, necessary appropriations
out of the public treasury, to meet its recurring liabilities, by positive legislation to that
effect. In case of default, there was no remedy by legal process. The state itself could
not be sued. Its bare promises to pay had no sanction but the public sense of duty to
the public creditors. The only security for their performance was the public faith.

But immediately on the passage of the act of March 30, 1871, and thereafter,
occasional or continued default in the payment of interest on the bonds issued in
pursuance of its provisions by reason of failures to provide by laws necessary
appropriations for its payment, was met, if not obviated, by a self-executing remedy
lodged by the law in the hands of the creditor himself. For, from that time it became the
legal duty of every tax collector to receive coupons from these bonds, offered for that
purpose by tax-payers, in payment of taxes, upon an equal footing, at an equal value,
and with equal effect, as though they were gold or silver or legal-tender treasury notes.
They were by that act reduced, in effect, into money, and, as between the state and its
tax-payers, were a legal tender as money. And, being not only a law, but a contract, it
became, by force of the constitution of the United States, irrepealable, and therefore is
to-day, what it was when first enacted, the unchangeable law of Virginia. After a tender
of such coupons by a tax-payer in payment of taxes, and a refusal by a tax collector to
receive them, the situation and rights of the tax-payer and coupon-holder were precisely
what they would have been if he had made a like tender in gold coin and it had been
refused. What they would be we shall have occasion presently to inquire. In the mean
time, it is clear that the con- [114 U.S. 270, 280] tract obligation embodied in the quality
imparted by law to these coupons, of being receivable in payment of taxes, is a distinct,
collateral, and real security, placed in the hands of the creditor, intended to enable him
to collect them without process of law. As long as the annual taxes of the state are
sufficient in amount to absorb all coupons that are overdue and unpaid, a certain market
is created for them which will maintain them at or near their par value. In the hands of
the tax-payer who buys them for tender, they are practically no longer choses in action,
but equal in value and quality to money, and equivalent to receipts for taxes already
paid.
At the time of the passage of the act of March 30, 1871, there existed a remedy by
mandamus, in case a tax collector refused to receive the coupons, issued under that act
tendered in payment of taxes, to compel him specifically to do so. The case of Hartman
v. Greenhow, 102 U.S. 672 , was one in which that relief was administered; and in
Antoni v. Greenhow, 107 U.S. 769 , S. C. 2 SUP. CT. REP. 91, it is stated to have been
the settled practice of the supreme court of appeals of Virginia to entertain suits for
similar relief. By an act of January 14, 1882, the general assembly of that state modified
the proceedings in mandamus is such cases so as to require the tax-payer first to pay
his taxes in money, and then the coupons endered having, in another proceeding, been
determined to be genuine, he was entitled to a judgment upon the mandamus, requiring
them to be received in payment of the taxes, and the money previously paid refunded.
The validity of this act became the question in Antoni v. Greenhow, ubi supra, and it
was affirmed on the ground that, for the purpose of specifically enforcing the right to
have the coupons received in payment of taxes, the new remedy was substantially
equivalent to the old one. The court were not willing to decide that it was a suit against
the state in which the mode of proceeding could be modified, or the remedy taken away
altogether, at the pleasure of the state. And it affirmed the right of the coupon-holder to
have his coupon received for taxes when offered. 'The question here,' said the court, 'is
not as to that right, but as to the remedy the holder has for its enforcement when
denied.' 'The ques- [114 U.S. 270, 281] tion,' said the chief justice, delivering the opinion
of the court, 'we are now to consider is not whether, if the coupon tendered is in fact
genuine and such as ought under the contract to be received, and the tender is kept
good, the treasurer can proceed to collect the tax by distraint, or such other process as
the law allows, without making himself personally responsible for any trespass he may
commit, but whether the act of 1882 violates any implied obligation of the state in
respect to the remedies that may be employed for the enforcement of its contract, if the
collector refuses to take the coupon.'

That was a case in which it was sought, by mandamus, specifically to enforce the
contract of the state with the coupon-holder, by compelling, by affirmative action and
process of law the collector actually to receive the coupons tendered in satisfaction of
taxes. It left unaffected the right of the coupon-holder and tax-payer, after his tender had
been unlawfully refused, to stand upon his contract and the law, in defense of his rights,
both of person and property, against all unlawful assaults and seizures. In the former he
was an actor, seeking affirmative relief, to compel the specific performance of the
contract. In the latter he is a defendant, passively resting on his rights, and resisting
olny demands and exactions sought to be enforced against him in denial of them. He
has himself, in all things, performed the contract on his part, and obeyed the law, and
simply insists that if more is illegally exacted and taken from him, he shall have the
remedy which the law gives to every other citizen, not himself in default, against the
wrongdoer, who, under color of law, but without law, disturbs or dispossesses him. As
we have seen, the coupon- holder, whose tender of genuine coupons in payment of
taxes has been refused, stands upon the same footing, in this respect, as though he
had tendered gold coin in similar circumstances and with like result.

The question next in order is whether he has any, and, if any, what remedy for the
recovery of property distrained to pay the same tax which he has thus already offered
and attempted to pay in money or its equivalent. It is well settled by many decisions of
this court that, for the purpose of affect- [114 U.S. 270, 282] ing proceedings to enforce
the payment of taxes, a lawful tender of payment is equivalent to actual payment, either
being sufficient to deprive the collecting officer of all authority for further action, and
making every subsequent step illegal and void. In Woodruff v. Trapnall, 10 How. 190,
208, it was held that a tender of the notes of the bank of the state of Arkansas, by law
and a contract with the note holders made receivable in payment of public dues to the
state, was equivalent to payment, in extinguishing the judgment in satisfaction of which
they were offered. The court said: 'The law of tender which avoids future interest and
costs has no application in this case. The right to make payment to the state in this
paper arises out of a continuing contract, which is limited in time by the circulation of the
notes to be received They may be offered in payment of debts due to the state, in its
own right, before or after judgment, and without regard to the cause of indebtment.' In
the case of U. S. v. Lee, 106 U.S. 196 , S. C. 1 SUP. CT. REP. 240, it was held that a
certificate of a sale of land for taxes, made by commissioners, which by law was
rendered impeachable by proof that the taxes had been paid previous to sale, was
rendered void by proof that the commissioners had refused to receive the taxes, without
proof of an actual tender, where the commissioners had waived it by a previous notice
that they would not accept it. In the opinion of the court it is said: 'This court has, in a
series of cases, established the proposition that where the commissioners refused to
receive such taxes, their action in thus preventing payment was the equivalent of
payment in its effect upon the certificate of sale;' citing Bennett v. Hunter, 9 Wall. 326;
Tacey v. Irwin, 18 Wall. 549; Atwood v. Weems, 99 U.S. 183 ; and Hills v. Exchange
Bank, 105 U.S. 319 .

The case, then, of the plaintiff below is reduced to this: He had paid the taxes
demanded of him by a lawful tender. The defendant had no authority of law thereafter to
attempt to enforce other payment by seizing his property. In doing so he ceased to be
an officer of the law, and became a private wrongdoer. It is the simple case in which the
defendant, a natural private person, has unlawfully, with force and arms, seized, [114
U.S. 270, 283] taken, and detained the personal property of another. That an action of
detinue will lie in such a case, according to the law of Virginia, has not been questioned.
The right of recovery would seem to be complete, unless this case can be met and
overthrown on some of the grounds maintained in argument by counsel for the
defendant in error. These we proceed now to examine in their order.

It is objected, in the first place, that the law and contract, by which the quality of being
receivable in payment of taxes to the state is imputed to the coupons, is itself in
violation of that clause of the constitution of the United States (article 1, 10) which
declares that no state shall 'emit bills of credit,' and is therefore void. The coupons in
question are in the ordinary form, and one of them reads as follows:

'Receivable at and after maturity for all taxes, debts, and demands due the state.
'The commonwealth of Virginia will pay the bearer thirty dollars, interest due first
January, 1884, on bond No. 2,731.
'Coupon No. 20.

GEO. RYE, Treasurer.'

It is contended that this is a bill of credit in the sense of the constitution, because, being
receivable in payment of debts due the state, and negotiable by delivery merely, it was
intended to pass from hand to hand and circulate as money. The meaning of the term
'bills of credit,' as used in the constitution, has been settled by decisions of this court. By
a sound rule of interpretation it has been construed in the light of the historical
circumstances which are known to have led to the adoption of the clause prohibiting
their emission by the states, and in view of the great public and private mischiefs
experienced during and prior to the period of the war of independence, in consequence
of unrestrained issues, by the colonial and state governments, of paper money, based
alone upon credit. The definition thus deduced was not founded on the abstract
meaning of the words, so as to include everything in the [114 U.S. 270, 284] nature of an
obligation to pay money, reposing on the public faith, and subject to future redemption,
but was limited to those particular forms of evidences of debt which had been so
abused to the detriment of both private and public interests. Accordingly, Chief Justice
MARSHALL, in Craig v. Missouri, 4 Pet. 410, 432, said that 'bills of credit signify a paper
medium intended to circulate between individuals, and between government and
individuals, for the ordinary purposes of society.' This definition was made more exact
by merely expressing, however, its implications, in Briscoe v. Bank of Kentucky, 11 Pet.
257, 314, where it was said: 'The definiion, then, which does include all classes of bills
of credit, emitted by the colonies or states, is a paper issued by the sovereign power,
containing a pledge of its faith and designed to circulate as money.' And again, page
318: 'To constitute a bill of credit, within the constitution, it must be issued by a state, on
the faith of the state, and be designed to circulate as money. It must be a paper which
circulates on the credit of the state, and is so received and used in the ordinary
business of life.' The definition was repeated in Darrington v. Bank of Alabama, 13 How.
12.

It is very plain to us that the coupons in question are not embraced within these terms.
They are not bills of credit in the sense of this constitutional prohibition. They are issued
by the state,

It is very plain to us that the coupons pay money. Their payment and redemption are
based on the credit of the state, but they were not emitted by the state in the sense in
which a government emits its treasury notes, or a bank its bank-notes-a circulating
medium or paper currency-as a substitute for money. And there is nothing on the face of
the instruments, nor in their form or nature, nor in the terms of the law which authorize
their issue, nor in the circumstances of their creation or use, as shown by the record, on
which to found an inference that these coupons were designed to circulate in the
common transactions of business, as money, nor that in fact they were so used. The
only feature relied on to show such a design or to prove such a use is that they are
made receivable in payment of taxes and other dues to the state. From this, [114 U.S.
270, 285] it is argued that they would obtain such a circulation from hand to hand as
money as the demand for them, based upon such a quality, would naturally give. But
this falls far short of their fitness for general circulation in the community, as a
representative and substitute for money, in the common transactions of business, which
is necessary to bring them within the constitutional prohibition against bills of credit. The
notes of the bank of the state of Arkansas, which were the subject of controversy in
Woodruff v. Trapnall, 10 How. 190, were, by law, receivable by the state in payment of
all dues to it, and this circumstance was not supposed to make them bills of credit. It is
true, however, that in that case it was held they were not so because they were not
issued by the state and in its name, although the entire stock of the bank was owned by
the state, which furnished the whole capital, and was entitled to all the profits. In this
case the coupons were issued by the state of Virginia and in its name, and were
obligations based on its credit, and which it had agreed, as one mode of redemption, to
receive in payment of all dues to itself in the hands of any holder; but they were not
issued as and for money, nor was this quality impressed upon them to fit them for use
as money, or with the design to facilitate their circulation as such. It was conferred, as is
apparent from all the circumstances of their creation and issue, merely as an
assurance, by way of contract with the holder, of the certainty of their due redemption in
the ordinary transactions between the state treasury nd the tax-payers. They do not
become receivable in payment of taxes till they are due, and the design, we are bound
to presume, was that they would be paid at maturity. This necessarily excludes the idea
that they were intended for circulation at all.

It is next objected that the suit of the plaintiff below could not be maintained, because it
is substantially an action against the state of Virginia, to which it has not assented. It is
said that the tax collector who is sued, was an officer and agent of the state, engaged in
collecting its revenue under a valid law, and that the tax he sought to collect from the
plaintiff was lawfully due; that, consequently, he was guilty of no personal wrong, but
acted only in an official capacity representing[114 U.S. 270, 286] the state, and, in
refusing to receive the coupons tendered, simply obeyed the commands of his principal
whom he was lawfully bound to obey; and that if any wrong has been done, it has been
done by the state in refusing to perform its contract, and for that wrong the state is alone
liable, but is exempted from suit by the eleventh article of amendment to the constitution
of the United States, which declares that 'the judicial power of the United States shall
not be construed to extend to any suit in law or equity, commenced or prosecuted
against one of the United States by citizens of another state, or by citizens or subjects
of any foreign state.'

This immunity from suit secured to the states, is undoubtedly a part of the constitution of
equal authority with every other, but no greater, and to be construed and applied in
harmony with all the provisions of that instrument. That immunity, however, does not
exempt the state from the operation of the constitutional provision that no state shall
pass any law impairing the obligation of contracts; for it has long been settled that
contracts between a state and an individual are as fully protected by the constitution as
contracts between two individuals. It is true that no remedy for a breach of its contract
by a state, by way of damages as compensation, or by means of process to compel its
performance, is open under the constitution in the courts of the United States by a direct
suit against the state itself, on the part of the injured party, being a citizen of another
state, or a citizen or subject of a foreign state. But it is equally true that whenever, in a
controversy between parties to a suit, of which these courts have jurisdiction, the
question arises upon the validity of a law by a state impairing the obligation of its
contract, the jurisdiction is not thereby ousted, but must be exercised with whatever
legal consequences to the rights of the litigants, may be the result of the determination.
The cases establishing these propositions, which have been decided by this court since
the adoption of the eleventh amendment to the constitution, are numerous. Fletcher v.
Peck, 6 Cranch, 87; New Jersey v. Wilson, 7 Cranch, 164; Green v. Biddle, 8 Wheat. 1,
84; Providence Bank v. Billings, 4 Pet. 514; Woodruff v. Trapnall, 10 [114 U.S. 270,
287] How. 190; Wolff v. New Orleans, 103 U.S. 358 ; Jefferson Branch Bank v. Skelly, 1
Black, 436.

It is also true that the question whether a suit is within the prohibiting of the eleventh
amendment is not always determined by reference to the nominal parties on the record.
The provision is to be substantially applied in furtherance of its intention, and not to be
evaded by technical and trivial subtleties. Accordingly, it was held in New Hampshire v.
Louisiana, and New York v. Louisiana, 108 U.S. 76 , S. C. 2 SUP. CT. REP. 176, that,
although the judicial power of the United States extends to 'controversies between two
or more states,' it did not embrace a suit in which, although nominally between two
states, the plaintiff state had merely permitted the use of its name for the benefit of its
citizens in the prosecution of their claims, for the enforcement of which they ould not
sue in their own names. So, on the other hand, in Cunningham v. Macon & B. R. Co.
109 U.S. 446 , S. C. 3 SUP. CT. REP. 292, 609, where the state of Georgia was not
nominally a party on the record, it was held that, as it clearly appeared that the state
was so interested in the property that final relief could not be granted without making it a
party, the court was without jurisdiction. In that case, the general question was
discussed in the light of the authorities, and the cases in which the court has taken
jurisdiction, when the objection has been interposed, that a state was a necessary party
to enable the court to grant relief, were examined and classified. The second head of
that classification is thus described: 'Another class of cases is where an individual is
sued in tort for some act injurious to another in regard to person or property, to which
his defense is that he has acted under the orders of the government. In these cases he
is not sued as, or because he is, the officer of the government, but as an individual, and
the court is not ousted of jurisdiction because he asserts authority as such officer. To
make out his defense he must show that his authority was sufficient in law to protect
him.' And in illustration of this principle reference was made to Mitchell v. Harmony, 13
How. 115; Bates v. Clark, 95 U.S. 204 ; Meigs v. McClung's Lessee, 9 Cranch, 11;
Wilcox v. Jackson, 13 Pet. 498; Brown v. Huger, 21 How. 315; [114 U.S. 270, 288] Grisar
v. McDowell, 6 Wall. 363; and U. S. v Lee, 106 U.S. 196 ; S. C. 1 SUP. CT. REP. 240.

The ratio decidendi in this class of cases is very plain. A defendant sued as a wrong-
doer, who seeks to substitute the state in his place, or to justify by the authority of the
state, or to defend on the ground that the state has adopted his act and exonerated him,
cannot rest on the bare assertion of his defense. He is bound to establish it. The state is
a political corporate body, can act only through agents, and can command only by laws.
It is necessary, therefore, for such a defendant, in order to complete his defense, to
produce a law of the state which constitutes his commission as its agent, and a warrant
for his act. This the defendant, in the present case, undertook to do. He relied on the act
of January 26, 1882, requiring him to collect taxes in gold, silver, United States treasury
notes, national bank currency, and nothing else, and thus forbidding his receipt of
coupons in lieu of money. That, it is true, is a legislative act of the government of
Virginia, but it is not a law of the state of Virginia. The state has passed no such law, for
it cannot; and what it cannot do, it certainly, in contemplation of law, has not done. The
constitution of the United States, and its own contract, both irrepealable by any act on
its part, are the law of Virginia; and that law made it the duty of the defendant to receive
the coupons tendered in payment of taxes, and declared every step to enforce the tax,
thereafter taken, to be without warrant of law, and therefore a wrong. He stands, then,
stripped of his official character, and, confessing a personal violation of the plaintiff's
rights, for which he must personally answer, he is without defense.

No better illustration of this principle can be found than than which is furnished by the
case of U. S. v. Lee, 106 U.S. 196 , S. C. 1 SUP. CT. REP. 240, in which it was applied
to a claim made on behalf of the national government. The action was one in ejectment,
to recover possession of lands, to which the plaintiff claimed title. The defendants were
natural persons, whose defense was that they were in possession as officers of the
United States under the orders of the government and for its [114 U.S. 270, 289] uses.
The attorney general called this aspect of the case to the attention of the court, but
without making the United States a party defendant. It was decided by this court that to
sustain the defense, and to d feat the plaintiff's cause of action, it was necessary to
show that the defendants were in possession under the United States, and on their
behalf, by virtue of some valid authority. As this could not be shown, the contrary clearly
appearing, possession of lands, actually in use as a national cemetery, was adjudged to
the plaintiffs. The decision in that case was rested largely upon the authority of Osborn
v. Bank of U. S. 9 Wheat. 738, which was a suit in equity against an officer of the state
of Ohio, who sought to enforce one of her statutes which was in violation of rights
secured to the bank by the constitution of the United States. The defendants, Osborn
and others, denied the jurisdiction of the court, upon the ground that the state was the
real party in interest and could not be sued, and that a suit against her officers, who
were executing her will, was in violation of the eleventh amendment of the constitution.
To this objection, Chief Justice MARSHALL replied: 'If the state of Ohio could have
been made a party defendant, it can scarcely be denied that this would be a strong case
for an injunction. The objection is that, as the real party cannot be brought before the
court, a suit cannot be sustained against the agents of that party; and cases have been
cited to show that a court of chancery will not make a decree unless all those who are
substantially interested be made parties to the suit. This is certainly true where it is in
the power of the plaintiff to make them parties; but if the person who is the real
principal,-the person who is the true source of the mischief, by whose power and for
whose advantage it is done, be himself above the law, be exempt from all judicial
process, it would be subversive of the best- established principles to say that the laws
could not afford the same remedies against the agent employed in doing the wrong
which they would afford against him could his principal be joined in the suit.' This
language, it may be observed, was quoted with approval in U. S. v. Lee. The principle
which it enunciates con- [114 U.S. 270, 290] stitutes the very foundation upon which the
decision in that case rested.

In the discussion of such questions, the distinction between the government of a state
and the state itself is important, and should be observed. In common speech and
common apprehension they are usually regarded as identical; and as ordinarily the acts
of the government are the acts of the state, because within the limits of its delegation of
power, the government of the state is generally confounded with the state itself, and
often the former is meant when the latter is mentioned. The state itself is an ideal
person, intangible, invisible, immutable. The government is an agent, and, within the
sphere of the agency, a perfect representative; but outside of that, it is a lawless
usurpation. The constitution of the state is the limit of the authority of its government,
and both government and state are subject to the supremacy of the constitution of the
United States, and of the laws made in pursuance thereof. So that, while it is true in
respect to the government of a state, as was said in Langford v. U. S. 101 U.S. 341 ,
that the maxim, that the king can do no wrong, has no place in our system of
government; yet it is also true, in respect to the state itself, that whatever wrong is
attempted in its name is imputable to its government, and not to the state, for, as it can
speak and act only by law, whatever it does say and do must be lawful. That which,
therefore, is unlawful because made so by the supreme law, the constitution of the
United States, is not the word or deed of the state, but is the mere wrong and trespass
of those individual persons who falsely speak and act in its name. It was upon the
ground of this important distinction that this court proceeded in the case of Texas v.
White, 7 Wall. 700, when it adjudged that the acts of secession, which constituted the
civil war of 1861, were the unlawful acts of usurping state governments, and not the
acts of the states themselves, inasmuch as 'the constitution, in all its provisions, looks to
an indestructible Union, composed of indestructible states;' and that, consequently, the
war itself was not a war between the states, nor a war of the United States against
states, but a war of the United States against [114 U.S. 270, 291] unlawful and usurping
governments, representing not the states, but a rebellion against the United States. This
is, in substance, what was said by Chief Justice CHASE, delivering the opinion of the
court in Thorington v. Smith, 8 Wall. 1, 9, when he declared, speaking of the
confederate government, that 'it was regarded as simply the military representative of
the insurrection against the authority of the United States.' The same distinction was
declared and enforced in Williams v. Bruffy, 96 U.S. 176 , 192, and in Horn v. Lockhart,
17 Wall. 570, both of which were referred to and approved in Keith v. Clark, 97 U.S. 454
, 465.

This distinction is essential to the idea of constitutional government. To deny it or blot it

out obliterates the line of demarcation that separates constitutional government from
absolutism, free self- government based on the sovereignty of the people from that
despotism, whether of the one or the many, which enables the agent of the state to
declare and decree that he is the state; to say 'L'Etat, c'est moi.' Of what avail are
written constitutions, whose bills of right, for the security of individual liberty, have been
written too often with the blood of martyrs shed upon the battle-field and the scaffold, if
their limitations and restraints upon power may be overpassed with impunity by the very
agencies created and appointed to guard, defend, and enforce them; and that, too, with
the sacred authority of law, not only compelling obedience, but entitled to respect? And
how else can these principles of individual liberty and right be maintained, if, when
violated, the judicial tribunals are forbidden to visit penalties upon individual offenders,
who are the instruments of wrong, whenever they interpose the shield of the state? The
doctrine is not to be tolerated. The whole frame and scheme of the political institutions
of this country, state and federal, protest against it. Their continued existence is not
compatible with it. It is the doctrine of absolutism, pure, simple, and naked, and of
communism which is its twin, the double progeny of the same evil birth.

It was said by Chief Justice CHASE, speaking for the whole court in Lane Co. v.
Oregon, 7 Wall. 71, 76, that the peo- [114 U.S. 270, 292] ple, through the constitution of
the United States, 'established a more perfect union by substituting a national
government, acting, with ample power, directly upon the citizens, instead of the
confederate government, which acted with powers, greatly restricted, only upon the
states.' In no other way can the supremacy of that constitution be maintained. It creates
a government in fact as well as in name, because its constitution is the supreme law of
the land, 'anything in the constitution or laws of any state to the contrary
notwithstanding;' and its authority is enforced by its power to regulate and govern the
conduct of individuals, even where its prohibitions are laid only upon the states
themselves. The mandate of the state affords no justification for the invasion of rights
secured by the constitution of the United States; otherwise, that constitution would not
be the supreme law of the land. When, therefore, an individual defendant pleads a
statute of a state, which is in violation of the constitution of the United States, as his
authority for taking or holding property, to which the citizen asserts title, and for the
protection or possession of which he appeals to the courts, to say that the judicial
enforcement of the supreme law of the land, as between the individual parties, is to
coerce the state, ignores the fundamental principles on which the constitution rest , as
contrasted with the articles of confederation, which it displaced, and practically makes
the statutes of the states the supreme law of the land within their respective limits.

When, therefore, by the act of March 30, 1871, the contract was made, by which it was
agreed that the coupons issued under that act should thereafter be receivable in
payment of taxes, it was the contract of the state of Virginia, because, though made by
the agency of the government, for the time being, of the state, that government was
acting within the scope of its authority, and spoke with its voice as its true
representative; and inasmuch as, by the constitution of the United States, which is also
the supreme law of Virginia, that contract, when made, became thereby unchangeable
and irrepealable by the state, the subsequent act of January 26, 1882, and all other like
acts, which deny the obligation of that* con- [114 U.S. 270, 293] tract and forbid its
performance, are not the acts of the state of Virginia. The true and real commonwealth
which contracted the obligation is incapable in law of doing anything in derogation of it.
Whatever having that effect, if operative, has been attempted or done, is the work of its
government acting without authority, in violation of its fundamental law, and must be
looked upon, in all courts of justice, as if it were not and never had been. The argument,
therefore, which seeks to defeat the present action, for the reason that it is a suit
against the state of Virginia, because the nominal defendant is merely its officer and
agent, acting in its behalf, in its name, and for its interest, and amenable only to it, falls
to the ground, because its chief postulate fails. The state of Virginia has done none of
these things with which this defense charges her. The defendant in error is not her
officer, her agent, or her representative, in the matter complained of; for he has acted
not only without her authority, but contrary to her express commands. The plaintiff in
error, in fact and in law, is representing her as he seeks to establish her law, and
vindicates her integrity as he maintains his own right.

Tried by every test which has been judicially suggested for the determination of the
question, this cannot be considered to be a suit against the state. The state is not
named as a party in the record; the action is not directly upon the contract; it is not for
the purpose of controlling the discretion of executive officers, or administering funds
actually in the public treasury, as was held to be the case in Louisiana v. Jumel, 107
U.S. 711 ; S. C. 2 SUP. CT. REP. 128; it is not an attempt to compel officers of the state
to do the acts which constitute a performance of its contract by the state, as suggested
by a minority of the court in Antoni v. Greenhow, 107 U.S. 769 , 783; S. C. 2 SUP. CT.
REP. 91; nor is it a case where the state is a necessary party, that the defendant may
be protected from liability to it, after having answered to the present plaintiff. For, on this
supposition, if the accounting officers of the state government refuse to credit the tax
collector with coupons received by him in payment of taxes, or seek to hold him
responsible for a failure to execute the void statute, which required him to refuse
coupons in payment of taxes, in any action or [114 U.S. 270, 294] prosecution brought
against him in the name of the state, the grounds of the judgment rendered in favor of
the present plaintiff will constitute his perfect defense. And as that defense, made in any
cause, though brought in a state court, would present a question arising under the
constitution and laws of the United States, it would be within the jurisdiction of this court
to give it effect, upon a writ of error, without regard to the amount or value in dispute.
In the case of Osborn v. Bank of U. S. 9 Wheat, 738, 853, Chief Justice MARSHALL
put, by way of argument and illustration, the very case we are now considering. He said:
'Controversies respecting boundary have l tely existed between Virginia and
Tennessee, between Kentucky and Tennessee, and now exist between New York and
New Jersey. Suppose, while such a controversy is pending, the collecting officer of one
state should seize property for taxes belonging to a man who supposes himself to
reside in the other state, and who seeks redress in the federal court of that state in
which the officer resides. The interest of the state is obvious. Yet it is admitted that in
such a case the action would lie, because the officer might be treated as a trespasser,
and the verdict and judgment against him would not act directly on the property of the
state. That it would not so act, may, perhaps, depend on circumstances. The officer
may retain the amount of the taxes in his hands, and, on the proceedings of the state
against him, may plead in bar the judgment of a court of competent jurisdiction. If this
plea ought to be sustained, and it is far from being certain that it ought not, the judgment
so pleaded would have acted directly on the revenue of the state in the hands of its
officers. And yet the argument admits that the action, in such a case, would be
sustained. But suppose, in such a case, the party conceiving himself to be injured,
instead of bringing an action sounding in damages, should sue for the specific thing,
while yet in possession of the seizing officer. It being admitted, in argument, that the
action sounding in damages would lie, we are unable to perceive the line of distinction
between that and the action of detinue. Yet the latter action would claim the specific
article seized for the tax, [114 U.S. 270, 295] and would obtain it, should the seizure be
deemed unlawful.'

Although the plaintiff below was nominally the actor, the action itself is purely defensive.
Its object is merely to resist an attempted wrong, and to restore the status in quo as it
was when the right to be vindicated was invaded. In this respect, it is upon the same
footing with the preventive remedy of injunction in equity, when that jurisdiction is
invoked, and of which a conspicuous example, constantly followed in the courts of the
United States, was the case of Osborn v. Bank of U. S., ubi supra. In that case the
taxing power of the state was resisted on the ground that its exercise threatened to
deprive the complainant of a right conferred by the constitution of the United States. The
jurisidiction has been constantly exerted by the courts of the United States to prevent
the illegal taxation of national banks by the officers of the states. And in Cummings v.
National Bank, 101 U.S. 153 , 157, it was laid down as a general principle of equity
jurisidiction 'that when a rule or system of valuation is adopted by those whose duty it is
to make the assessment, which is designed to operate unequally and to violate a
fundamental principle of the constitution, and when this rule is applied not solely to one
individual, but to a large class of individuals or corporations, equity may properly
interfere to restrain the operation of this unconstitutional exercise of power.' And it is no
objection to the remedy in such cases that the statute, whose application in the
particular case is sought to be restrained is not void on its face, but is complained of
only because its operation in the particular instance works a violation of a constitutional
right; for the cases are numerous where the tax laws of a state, which in their general
and proper application are perfectly valid, have been held to become void in particular
cases, either as unconstitutional regulations of commerce, or as violations of contracts
prohibited by the constitution, or because in some other way they operate to deprive the
party complaining of a right secured to him by the constitution of the United States. At
the present term of this court, at least three cases have been decided, in which railroad
companies [114 U.S. 270, 296] have been complaints in equity, seeking to restrain officers
of states from collecting taxes, on the ground of an exem tion by contract, and no
question of jurisdiction has been raised. The practice has become common, and is well
settled on incontestable principles of equity procedure. Memphis R. R. v. Railroad
Com'rs, 112 U.S. 609 ; S. C. ante, 299; St. Louis, etc., Ry. Co. v. Berry, 113 U.S. 465 ;
S. C. ante, 529; Chesapeake & O. R. R. Co. v. Miller, 114 U. S. --; S. C. ante, 813.
It is still urged upon us, however, in argument, that, notwithstanding all that has been or
can be said, it still remains that the controversy disclosed by the record is between an
individual and the state; that the state alone has any real interest in its determination;
that the practical effect of such determination is to control the action of the state in the
regular and orderly administration of its public affairs; and that, therefore, the suit is and
must be regarded as a suit against the state, within the prohibition of the eleventh
amendment to the constitution. Omitting for the time being the consideration already
enforced, of the fallacy that lies at the bottom of this objection, arising from the
distinction to be kept in view between the government of a state and the state itself, the
premises which it assumes may all be admitted, but the conclusion would not follow.
The same argument was employed in the name of the United States in the Lee Case,
and did not prevail. It was pressed with the greatest force of which it was susceptible in
the case of Osborn v. Bank of U. S., and was met and overcome by the masterly
reasoning of Chief Justice MARSHALL. It appeared early in the history of this court, in
1799, in the case of Fowler v. Lindsey, 3 Dall. 411, in which that able magistrate, Mr.
Justice WASHINGTON, pronounced his first reported opinion. On a motion to remove
the cause by certiorari from the circuit court, on the ground that it was a suit in which a
state was a party, it being an ejectment for lands, the title to which was claimed under
grants from different states, he said: 'A case which belongs to the jurisdiction of the
supreme court on account of the interest that a state has in the controversy must be a
case in which a state is either nominally or substantially the party. [114 U.S. 270, 297] It is
not sufficient that a state may be consequentially affected, for in such case (as where
the grants of different states are brought into litigation) the circuit court has clearly a
jurisdiction. And this remark furnishes an answer to the suggestions that have been
founded on the remote interest of the state in making retribution to her grantees upon
the event of an eviction.'

The thing prohibited by the eleventh amendment is the exercise of jurisidiction in a 'suit
in law or equity commenced or prosecuted against one of the United States by citizens
of another state, or by citizens or subjects of any foreign state.' Nothing else is touched;
and suits between individuals, unless the state is the party, in a substantial sense, are
left untouched, no matter how much their determination may incidentally and
consequentially affect the interests of a state, or the operations of its government. The
fancied inconvenience of an interference with the collection of its taxes by the
government of Virginia, by suits against its tax collectors, vanishes at once upon the
suggestion that such interference is not possible, except when that government seeks
to enforce the collection of its taxes contrary to the law and contract of the state, and in
violation of the constitution of the United States. The immunity from suit by the state,
now invoked, vainly, to protect the individual wrong-doers, finds no warrant in the
eleventh amendment to the constitution, and is, in fact, a protest against the
enforcement of that other provision which forbids any state from passing laws impairing
the obligation of contracts. To accomplish that result requires a new amendment, which
would not forbid any state from passing laws impairing the obligation of its own
contracts.

What we are a ked to do is, in effect, to overrule the doctrine in Fletcher v. Peck, 6
Cranch, 87, and hold that a state is not under a constitutional obligation to perform its
contracts, for it is equivalent to that to say that it is not subject to the consequences
when that constitutional prohibition is applied to suits between individuals. We could not
stop there. We should be required to go still further, and reverse the doctrine on which
that constitutional provision rests, stated by Chief Justice MAR- [114 U.S. 270,
298] SHALL in that case, when he said: 'When, then, a law is in its nature a contract,
when absolute rights have vested under that contract, a repeal of the law cannot divest
those rights; and the act of annulling them, if legitimate, is rendered so by a power
applicable to the case of every individual in the community. It may well be doubted
whether the nature of society and of government does not prescribe some limits to the
legislative power; and, if any be prescribed, where are they to be found if the property of
an individual, fairly and honestly acquired, may be seized without compensation? To the
legislature all legislative power is granted; but the question, whether the act of
transferring the property of an individual to the public be in the nature of legislative
power, is well worthy of serious reflection.' And in view of such a contention, we may
well add the impressive and weighty words of the same illustrious man, when he said, in
Marbury v. Madison, 1 Cranch, 137: 'The government of the United States has been
emphatically termed a government of laws and not of men. It will certainly cease to
deserve this high appellation if the laws furnish no remedy for the violation of a vested
legal right.'

It is contended, however, in behalf of the defendant in error, that the act of January 26,
1882, under which he justified his refusal of the tender of coupons, does not impair the
obligation of the contract between the couponholder and the state of Virginia, inasmuch
as it secures to him a remedy equal in legal value to all that it takes away, and that,
consequently, as the state may lawfully legislate by changing remedies so that it does
not destroy rights, the remedy thus provided is exclusive, and must defeat the plaintiff's
action. The remedy thus substituted and declared exclusive is one that requires the tax-
payer demanding to have coupons received in payment of taxes, first, to pay the taxes
due from him in money, under protest, when, within thirty days thereafter, he may sue
the officer to recover back the amount paid, which, on obtaining judgment therefor, shall
be refunded by the auditor of public accounts out of the treasury. By the amendment
passed March 13, 1884, the coupons tendered are required to [114 U.S. 270, 299] be
sealed up and marked for identification, filed with the petition at the commencement of
the suit, produced on the trial as evidence of the tender, and delivered to the auditor of
public accounts, to be canceled when he issues his warrant for the amount of the
judgment.

It is contended that, in view of this remedy, the case is ruled by the decision of this court
in Antoni v. Greenhow, 107 U.S. 769 ; S. C. 2 SUP. CT. REP. 91. We have, however,
already shown, by extracts from the opinion of the court in that case, that the question
involved in the present proceeding was not covered by that judgment. In that case the
plaintiff in error was seeking to compel the officer specifically to receive his coupons in
payment of taxes by mandamus, on the ground that he was entitled to that remedy
when the contract was made by the law of March 30, 1871. The law giving that remedy
was subsequently amended, requiring the petitioner to pay the taxes in money in the
first instance, and permitting the writ to issue only after a trial, in which the genuineness
of the coupons tendered had been established. The court held that he might have been
put to the same proof in the former mode of proceeding, and that the amendment did
not destroy the eff ciency of the remedy.

But here the plaintiff did not seek any compulsory process against the officer to require
him specifically to receive the coupons tendered. He offered them and they were
refused. He chose to stand upon the defensive, and maintain his rights as they might be
assailed. His right was to have his coupon received for taxes when offered. That was
the contract. To refuse to receive them was an open breach of its obligation. It is no
remedy for this that he may acquiesce in the wrong, pay his taxes in money which he
was entitled to pay in coupons, and bring suit to recover it back. His tender, as we have
already seen, was equivalent to payment, so far as concerns the legality of all
subsequent steps by the collector to enforce payment by distraint of his property. He
has the right to say he will not pay the amount a second time, even for the privilege of
recovering it back. And if he chooses to stand upon a lawful payment once made, he
asks no remedy to recover back taxes illegally collected, but may resist the exaction,
and treat [114 U.S. 270, 300] as a wrongdoer the officer who seizes his property to
enforce it.

It is suggested that the right to have coupons received in payment of taxes is a mere
right of set-off, and is itself but a remedy subject to the control of legislation. Ordinarily,
it is true, the right to set off mutual independent debts, by way of compensation and
satisfaction, is dependent on the general law, does not enter into the contract, although
it may be the lex loci contractus, and is dependent for its enforcement upon the lex fori,
when suit is brought, and consequently may be changed by the legislature, without
impairing vested rights. But in such cases the right is entirely dependent upon the
general law, and changes with it. It is defferent, when, as in many cases of equitable
set-off, it inheres in the transaction, or arises out of the relations of the parties; and it
may in any case, as it was in this, be made the subject of contract between parties.
When this is done, it stands upon the footing of every other lawful contract, upon
valuable consideration, the obligation of which cannot be impaired by subsequent
legislation.

It is urged upon us, however, that in a revenue system, a provision of law which gives to
a party complaining of an illegal exaction of taxes, the right to recover back the amount
in dispute only after previous payment under protest, as the sole remedy, against either
the officer or the government, is a just and reasonable rule, sufficiently securing private
rights, and convenient, if not necessary, to the interests of the public. We are referred to
the revenue laws of the United States for illustration and example, and the question is
put, why a similar provision, as it is assumed to be, should not be considered adequate
as a remedy for the holders of coupons in Virginia, who have been denied the right to
use them in payment of taxes.

The answer is obvious and complete. Virginia, by a contract which the constitution of
the United States disables her from impairing, has bound herself that it shall be
otherwise. The state has agreed that the coupons cut from her bonds shall be received
in payment of taxes due to her, as though they were money. When the tax-payer has
tendered such coupons, he has complied with the agreement, and in legal
contemplation [114 U.S. 270, 301] has paid the debt he owed the state. So far as that tax
is concerned, and every step taken for enforcing its payment in disregard of that tender,
the coupon-holder is with drawn from the power and jurisdiction of the state. He is free
from all further disturbance, and is securely shielded by the constitution in his immunity.
No proceeding, whatever its pretext, which does not respect this right, can be judicially
upheld. The question is not of the reasonableness of a remedy for a breach of the
contract to receive the tendered coupons in payment of the tax; it is whether the right to
have them so received, and the use of that right as a defense a ainst all further efforts to
exact and compel payment of the tax, in denial and defiance of that right, can be taken
away without a violation of that provision of the constitution which prohibits the states
from passing laws which impair the obligation of contracts. Certainly, a law which takes
from the party his whole contract, and all the rights which it was intended to confer,
must be regarded as a law impairing its obligation.

Another point remains for consideration. Section 721, Rev. St., provides that 'the laws of
the several states, except where the constitution, treaties, or statutes of the United
States otherwise require or provide, shall be regarded as rules of decision in trials at
common law, in the courts of the United States, in cases where they apply;' and section
914, Rev. St., declares that 'the practice, pleadings, and forms and modes of
proceeding in civil causes, other that equity and admiralty causes, in the circuit and
district courts, shall conform, as near as may be, to the practice, pleadings, and forms
and modes of proceeding existing at the time in like causes in the courts of record of the
state within which such circuit or district courts are held, any rule of court to the contrary
notwithstanding.' Upon these sections it is argued that, admitting the acts of the general
assembly of Virginia of January 26, 1882, and the amendment by the act of March 13,
1884, to be unconstitutional and void, so far as they forbid tax collectors from receiving
coupons in payment of taxes, nevertheless, as the state has control over the forms of
action and modes of proceeding by way of remedy, and has forbidden, in cases where
the tax collector has refused [114 U.S. 270, 302] coupons in payment of taxes, any
personal action against him other than the suit to recover back the tax demanded and
paid under protest, the same law, by force of the Revised Statutes of the United States,
must govern in the courts of the United States.

It is not entirely clear, on the face of the act of January 26, 1882, that it does forbid
actions against the officer for illegally levying upon the property of the coupon-holder for
the tax which he has offered to pay. The language of the act seems to embrace only
such suits as are framed with the direct object of preventing or restraining him from
taking steps to collect the tax. And this uncertainty is not made clear by the amendatory
act of March 13, 1884, which, by expressly forbidding actions of trespass or trespass on
the case to be brought or maintained against any collecting officer for levying upon the
property of any tax-payer who may have tendered coupons in payment of the tax
demanded, would seem to have left the action of detinue, which was authorized in such
cases by the previously existing law of Virginia, untouched by the prohibition. We shall
assume, however, for the purposes of this opinion, that these acts of the general
assembly of Virginia were intended to and do forbid every action, of whatever kind,
against the collecting officer, for the recovery of specific property taken by distraint, or of
damages for its caption or detention, and leaves to the coupon-holder, as his sole right
of action, the suit to recover back the money illegally collected from him.

This action, as we have already seen, is no remedy whatever for the loss of the specific
right of paying his taxes with coupons. It does not even profess so to be. Neither is it a
remedy for the loss of the right sought to be vindicated in this and other personal
actions against the collector for unlawfully taking from the plaintiff his property. And,
upon the supposition made, this wrong is without remedy by any law of Virginia. The
direct result, then, of giving effect to these provisions of the act in question is to defeat
entirely the right of the [114 U.S. 270, 303] coupon-holder to pay his taxes with his
coupons, which we have already said avoids that part of the acts in question which
forbids it in terms, and to take from him that right as a defense against the wrongs and
trespasses committed upon him and his property in denial and defiance of it. All
persons, whose property is unlawfully taken, otherwise than to enforce payment of
taxes, are secured in their right of section for redress. But the coupon-holder, to whom
the constitution of the United States guaranties the right, conferred upon him by the law
and contract of Virginia, to pay his taxes in coupons, is excepted. The discrimination is
made against him in order to deprive him of that right, and, if permitted, will have the
effect of denying to him all redress for a deprivation of a right secured to him by the
constitution. To take away all remedy for the enforcement of a right is to take away the
right itself. But that is not within the power of the state.

Section 721, Rev. St., it will be observed, makes an express exception, in reference to
the adoption of state laws as rules of decision, of cases where the constitution
otherwise requires, which it does wherever the adoption of the state law deprives a
complaining party of a remedy essential to the vindication of a right, and that right is
derived from or protected by the constitution of the United States. The same exception
is implied in section 914, the language of which, indeed, is not imperative, as the
conformity required in the practice and procedure of the courts of the United States with
that of the state courts needs only to be 'as near as may be.' No one would contend that
a law of a state, forbidding all redress by actions at law for injuries to property, would be
upheld in the courts of the United States, for that would be to deprive one of his property
without due process of law. This is exactly what the statutes in question undertake to
do, in respect to that class of persons whose property is taken from them for the offense
of asserting, under the protection of the constitution, the right to pay their taxes in
coupons. The contract with Virginia was not only that the coupons should be received in
payment of taxes, but, by necessary implication, that the tax- payer making such a
tender should not be molested further, as though he were a [114 U.S. 270,
304] delinquent, and that for every illegal attempt subsequently to enforce the collection
of the tax, by the seizure of property, he should have the remedies of the law in force
when the contract was made, for redress, or others equally effective. 'The obligation of a
contract,' said this court, in McCracken v. Hayward, 2 How. 608, 612, 'consists in its
binding force on the party who makes it. This depends on the laws in existence when it
is made. These are necessarily referred to in all contracts, and forming a part of them,
as the measure of the obligation to perform them by the one party and the right acquired
by the other. There can be no other standard by which to ascertain the extent of either
than that which the terms of the contract indicate, according to their settled legal
meaning; when it becomes consummated, the law defines the duty and the right,
compels one party to perform the thing contracted for, and gives the other a right to
enforce the performance by the remedies then in force. If any subsequent law affect to
diminish the duty or to impair the right, it necessarily bears on the obligation of the
contract, in favor of one party to the injury of the other; hence any law which in its
operation amounts to a denial or obstruction of the rights accruing by a contract, though
professing to act only on the remedy, is directly obnoxious to the prohibition of the
constitution.'

The acts of assembly in question must be taken together, as one is but ar amendment
to the other. The scheme of the whole is indivisible. It cannot be separated into parts. It
must stand or fall together. The substantive part of it, which forbids the tax collector to
receive coupons in payment of taxes, as we have already declared, as, indeed, on all
sides is admitted, cannot stand, because it is not consistent with the constitution. That
which is merely auxiliary to the main design must also fall with the princi al of which it is
merely an incident; and it follows that the acts in question are not laws of Virginia, and
are therefore not within the sections of the Revised Statutes referred to, nor obligatory
upon the courts of the United States.

It is undoubtedly true that there may be cases where one part of a statute may be
enforced as constitutional, and another[114 U.S. 270, 305] be declared inoperative and
void, because unconstitutional; but these are cases where the parts are so distinctly
separable that each can stand alone, and where the court is able to see, and to declare,
that the intention of the legislature was that the part pronounced valid should be
enforceable, even though the other part should fail. To hold otherwise would be to
substitute for the law intended by the legislature one they may never have been willing
by itself to enact. An illustration of this principle is found in the Trade-mark Cases, 100
U.S. 82 , where an act of congress, which, it was claimed, would have been valid as a
regulation of commerce with foreign nations and among the states, was held to be void
altogether, because it embraced all commerce, including that between citizens of the
same state, which was not within the jurisdiction of congress, and its language could not
be restrained to that which was subject to the control of congress. 'If we should,' said
the court in that case, (page 99,) 'in the case before us undertake to make, by judicial
construction, a law which congress did not make, it is quite probable we should do what,
if the matter were now before that body, it would be un willing to do.'

Indeed, it is quite manifest from the face of the laws themselves that they are together
but parts of a larger whole. By an act of the general assembly of Virginia, passed
February 14, 1882, the legislature restated the account between the state and its
creditors on a basis of readjustment which reduced it to the sum of $21,035,377.15,
including interest in arrears to July 1, 1882, which was thereby declared to be her
equitable share of the debt of the old and entire state, and on which it was also declared
that the state was not able to pay interest for the future at a larger rate than 3 per cent.
per annum. The outstanding debt, of which this was a reduction, was then classified,
and bonds of the state were authorized to be issued, bearing interest at the rate of 3 per
cent. per annum, in exchange for outstanding bonds of the different classes, scaled at
rates of 53 per cent., 60 per cent., 69 per cent., 63 per cent., and, as to one class, as
high as 80 per cent., which were to be retired [114 U.S. 270, 306] and canceled. The
coupons on the new bonds were not made receivable in payment of taxes. To coerce
creditors holding bonds issued under the act of March 30, 1871, to exchange them for
these new bonds, at these reduced rates, and with them to give up their security for the
payment of interest arising out of the receivability of coupons in payment of taxes, is the
evident purpose of the acts of January 26, 1882, and of March 13, 1884, and all
together form a single scheme, the undisguised object of which is to enable the state to
rid itself of a considerable portion of its public debt, and to place the remainder on terms
to suit its own convenience, without regard to the obligation it owes to its creditors.

The whole legislation, in all its parts, as to creditors affected by it and not consenting to
it, must be pronounced null and void. Such is the sentence of the constitution itself, the
fundamental and supreme law for Virginia, as for all the states and for all the people,
both of the states separately and of the United States, and which speaks with sovereign
and commanding voice, expecting and receiving ready and cheerful obedience, not so
much for the display of its power, as on account of the majesty of its authority and the
justice of its mandates.

The judgment of the hustings court of the city of Richmond is accordingly reversed, and
the cause will be remanded, with directions to re der judgment upon the agreed
statement of facts in favor of the plaintiff; and it is so ordered.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-32052 July 25, 1975

PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS, , respondents.

Gov't. Corp. Counsel Leopoldo M. Abellera, Trial Attorneys Manuel M. Lazaro and Vicente
Constantine, Jr., for petitioner.

Renato B. Kare and Simeon C. Sato for private respondents.

FERNANDO, J.:

The principal issue that calls for resolution in this appeal by certiorari from an order of respondent
Court of Industrial Relations is one of constitutional significance. It is concerned with the expanded
role of government necessitated by the increased responsibility to provide for the general welfare.
More specifically, it deals with the question of whether petitioner, the Philippine Virginia Tobacco
Administration, discharges governmental and not proprietary functions. The landmark opinion of the
then Justice, row Chief Justice, Makalintal in Agricultural Credit and Cooperative Financing
Administration v. Confederation of Unions in Government Corporations and offices, points the way to
the right answer.1 It interpreted the then fundamental law as hostile to the view of a limited or
negative state. It is antithetical to the laissez faire concept. For as noted in an earlier decision, the
welfare state concept "is not alien to the philosophy of [the 1935] Constitution."2 It is much more so
under the present Charter, which is impressed with an even more explicit recognition of social and
economic rights.3 There is manifest, to recall Laski, "a definite increase in the profundity of the social
conscience," resulting in "a state which seeks to realize more fully the common good of its
members."4 It does not necessarily follow, however, just because petitioner is engaged in
governmental rather than proprietary functions, that the labor controversy was beyond the
jurisdiction of the now defunct respondent Court. Nor is the objection raised that petitioner does not
come within the coverage of the Eight-Hour Labor Law persuasive.5 We cannot then grant the
reversal sought. We affirm.
The facts are undisputed. On December 20, 1966, claimants, now private respondents, filed with
respondent Court a petition wherein they alleged their employment relationship, the overtime
services in excess of the regular eight hours a day rendered by them, and the failure to pay them
overtime compensation in accordance with Commonwealth Act No. 444. Their prayer was for the
differential between the amount actually paid to them and the amount allegedly due them.6 There
was an answer filed by petitioner Philippine Virginia Tobacco Administration denying the allegations
and raising the special defenses of lack of a cause of action and lack of jurisdiction.7 The issues
were thereafter joined, and the case set for trial, with both parties presenting their evidence.8 After
the parties submitted the case for decision, the then Presiding Judge Arsenio T. Martinez of
respondent Court issued an order sustaining the claims of private respondents for overtime services
from December 23, 1963 up to the date the decision was rendered on March 21, 1970, and directing
petitioner to pay the same, minus what it had already paid.9 There was a motion for reconsideration, but respondent
Court en banc denied the same. 10 Hence this petition for certiorari.

Petitioner Philippine Virginia Tobacco Administration, as had been noted, would predicate its plea for
the reversal of the order complained of on the basic proposition that it is beyond the jurisdiction of
respondent Court as it is exercising governmental functions and that it is exempt from the operation
of Commonwealth Act No. 444. 11 While, to repeat, its submission as to the governmental character
of its operation is to be given credence, it is not a necessary consequence that respondent Court is
devoid of jurisdiction. Nor could the challenged order be set aside on the additional argument that
the Eight-Hour Labor Law is not applicable to it. So it was, at the outset, made clear.

1. A reference to the enactments creating petitioner corporation suffices to demonstrate the merit of
petitioner's plea that it performs governmental and not proprietary functions. As originally established
by Republic Act No. 2265, 12 its purposes and objectives were set forth thus: "(a) To promote the
effective merchandising of Virginia tobacco in the domestic and foreign markets so that those
engaged in the industry will be placed on a basis of economic security; (b) To establish and maintain
balanced production and consumption of Virginia tobacco and its manufactured products, and such
marketing conditions as will insure and stabilize the price of a level sufficient to cover the cost of
production plus reasonable profit both in the local as well as in the foreign market; (c) To create,
establish, maintain, and operate processing, warehousing and marketing facilities in suitable centers
and supervise the selling and buying of Virginia tobacco so that the farmers will enjoy reasonable
prices that secure a fair return of their investments; (d) To prescribe rules and regulations governing
the grading, classifying, and inspecting of Virginia tobacco; and (e) To improve the living and
economic conditions of the people engaged in the tobacco industry." 13The amendatory statute,
Republic Act No. 4155, 14 renders even more evident its nature as a governmental agency. Its first
section on the declaration of policy reads: "It is declared to be the national policy, with respect to the
local Virginia tobacco industry, to encourage the production of local Virginia tobacco of the qualities
needed and in quantities marketable in both domestic and foreign markets, to establish this industry
on an efficient and economic basis, and, to create a climate conducive to local cigarette manufacture
of the qualities desired by the consuming public, blending imported and native Virginia leaf tobacco
to improve the quality of locally manufactured cigarettes." 15 The objectives are set forth thus: "To
attain this national policy the following objectives are hereby adopted: 1. Financing; 2. Marketing; 3.
The disposal of stocks of the Agricultural Credit Administration (ACA) and the Philippine Virginia
Tobacco Administration (PVTA) at the best obtainable prices and conditions in order that a
reinvigorated Virginia tobacco industry may be established on a sound basis; and 4. Improving the
quality of locally manufactured cigarettes through blending of imported and native Virginia leaf
tobacco; such importation with corresponding exportation at a ratio of one kilo of imported to four
kilos of exported Virginia tobacco, purchased by the importer-exporter from the Philippine Virginia
Tobacco Administration." 16

It is thus readily apparent from a cursory perusal of such statutory provisions why petitioner can
rightfully invoke the doctrine announced in the leading Agricultural Credit and Cooperative Financing
Administration decision 17 and why the objection of private respondents with its overtones of the
distinction between constituent and ministrant functions of governments as set forth in Bacani v.
National Coconut Corporation 18 if futile. The irrelevance of such a distinction considering the needs
of the times was clearly pointed out by the present Chief Justice, who took note, speaking of the
reconstituted Agricultural Credit Administration, that functions of that sort "may not be strictly what
President Wilson described as "constituent" (as distinguished from "ministrant"),such as those
relating to the maintenance of peace and the prevention of crime, those regulating property and
property rights, those relating to the administration of justice and the determination of political duties
of citizens, and those relating to national defense and foreign relations. Under this traditional
classification, such constituent functions are exercised by the State as attributes of sovereignty, and
not merely to promote the welfare, progress and prosperity of the people — these latter functions
being ministrant, the exercise of which is optional on the part of the government." 19Nonetheless, as
he explained so persuasively: "The growing complexities of modern society, however, have rendered
this traditional classification of the functions of government quite unrealistic, not to say obsolete. The
areas which used to be left to private enterprise and initiative and which the government was called
upon to enter optionally, and only "because it was better equipped to administer for the public
welfare than is any private individual or group of individuals", continue to lose their well-defined
boundaries and to be absorbed within activities that the government must undertake in its sovereign
capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere else
the tendency is undoubtedly towards a greater socialization of economic forces. Here of course this
development was envisioned, indeed adopted as a national policy, by the Constitution itself in its
declaration of principle concerning the promotion of social justice." 20 Thus was laid to rest the
doctrine in Bacani v. National Coconut Corporation, 21 based on the Wilsonian classification of the
tasks incumbent on government into constituent and ministrant in accordance with the laissez
faire principle. That concept, then dominant in economics, was carried into the governmental sphere,
as noted in a textbook on political science, 22 the first edition of which was published in 1898, its
author being the then Professor, later American President, Woodrow Wilson. He took pains to
emphasize that what was categorized by him as constituent functions had its basis in a recognition
of what was demanded by the "strictest [concept of] laissez faire, [as they] are indeed the very bonds
of society." 23 The other functions he would minimize as ministrant or optional.

It is a matter of law that in the Philippines, the laissez faire principle hardly commanded the
authoritative position which at one time it held in the United States. As early as 1919, Justice
Malcolm in Rubi v. Provincial Board 24 could affirm: "The doctrines of laissez faire and of unrestricted
freedom of the individual, as axioms of economic and political theory, are of the past. The modern
period has shown a widespread belief in the amplest possible demonstration of government
activity." 25 The 1935 Constitution, as was indicated earlier, continued that approach. As noted in Edu
v. Ericta:26 "What is more, to erase any doubts, the Constitutional Convention saw to it that the
concept of laissez-faire was rejected. It entrusted to our government the responsibility of coping with
social and economic problems with the commensurate power of control over economic affairs.
Thereby it could live up to its commitment to promote the general welfare through state
action." 27 Nor did the opinion in Edu stop there: "To repeat, our Constitution which took effect in
1935 erased whatever doubts there might be on that score. Its philosophy is a repudiation of laissez-
faire. One of the leading members of the Constitutional Convention, Manuel A. Roxas, later the first
President of the Republic, made it clear when he disposed of the objection of Delegate Jose Reyes
of Sorsogon, who noted the "vast extensions in the sphere of governmental functions" and the
"almost unlimited power to interfere in the affairs of industry and agriculture as well as to compete
with existing business" as "reflections of the fascination exerted by [the then] current tendencies' in
other jurisdictions. He spoke thus: "My answer is that this constitution has a definite and well defined
philosophy, not only political but social and economic.... If in this Constitution the gentlemen will find
declarations of economic policy they are there because they are necessary to safeguard the interest
and welfare of the Filipino people because we believe that the days have come when in self-
defense, a nation may provide in its constitution those safeguards, the patrimony, the freedom to
grow, the freedom to develop national aspirations and national interests, not to be hampered by the
artificial boundaries which a constitutional provision automatically imposes." 28

It would be then to reject what was so emphatically stressed in the Agricultural Credit Administration
decision about which the observation was earlier made that it reflected the philosophy of the 1935
Constitution and is even more in consonance with the expanded role of government accorded
recognition in the present Charter if the plea of petitioner that it discharges governmental function
were not heeded. That path this Court is not prepared to take. That would be to go backward, to
retreat rather than to advance. Nothing can thus be clearer than that there is no constitutional
obstacle to a government pursuing lines of endeavor, formerly reserved for private enterprise. This is
one way, in the language of Laski, by which through such activities, "the harsh contract which [does]
obtain between the levels of the rich and the poor" may be minimized. 29 It is a response to a trend
noted by Justice Laurel in Calalang v. Williams 30 for the humanization of laws and the promotion of
the interest of all component elements of society so that man's innate aspirations, in what was so
felicitously termed by the First Lady as "a compassionate society" be attained. 31

2. The success that attended the efforts of petitioner to be adjudged as performing governmental
rather than proprietary functions cannot militate against respondent Court assuming jurisdiction over
this labor dispute. So it was mentioned earlier. As far back as Tabora v. Montelibano, 32 this Court,
speaking through Justice Padilla, declared: The NARIC was established by the Government to
protect the people against excessive or unreasonable rise in the price of cereals by unscrupulous
dealers. With that main objective there is no reason why its function should not be deemed
governmental. The Government owes its very existence to that aim and purpose — to protect the
people." 33 In a subsequent case, Naric Worker's Union v. Hon. Alvendia, 34 decided four years later,
this Court, relying on Philippine Association of Free Labor Unions v. Tan, 35 which specified the cases
within the exclusive jurisdiction of the Court of Industrial Relations, included among which is one that
involves hours of employment under the Eight-Hour Labor Law, ruled that it is precisely respondent
Court and not ordinary courts that should pass upon that particular labor controversy. For Justice J.
B. L. Reyes, the ponente, the fact that there were judicial as well as administrative and executive
pronouncements to the effect that the Naric was performing governmental functions did not suffice to
confer competence on the then respondent Judge to issue a preliminary injunction and to entertain a
complaint for damages, which as pointed out by the labor union, was connected with an unfair labor
practice. This is emphasized by the dispositive portion of the decision: "Wherefore, the restraining
orders complained of, dated May 19, 1958 and May 27, 1958, are set aside, and the complaint is
ordered dismissed, without prejudice to the National Rice and Corn Corporation's seeking whatever
remedy it is entitled to in the Court of Industrial Relations." 36 Then, too, in a case involving petitioner
itself, Philippine Virginia Tobacco Administration, 37 where the point in dispute was whether it was
respondent Court or a court of first instance that is possessed of competence in a declaratory relief
petition for the interpretation of a collective bargaining agreement, one that could readily be thought
of as pertaining to the judiciary, the answer was that "unless the law speaks clearly and
unequivocally, the choice should fall on the Court of Industrial Relations." 38 Reference to a number
of decisions which recognized in the then respondent Court the jurisdiction to determine labor
controversies by government-owned or controlled corporations lends to support to such an
approach. 39 Nor could it be explained only on the assumption that proprietary rather than
governmental functions did call for such a conclusion. It is to be admitted that such a view was not
previously bereft of plausibility. With the aforecited Agricultural Credit and Cooperative Financing
Administration decision rendering obsolete the Bacani doctrine, it has, to use a Wilsonian phrase,
now lapsed into "innocuous desuetude." 40 Respondent Court clearly was vested with jurisdiction.

3. The contention of petitioner that the Eight-Hour Labor Law 41 does not apply to it hardly deserves
any extended consideration. There is an air of casualness in the way such an argument was
advanced in its petition for review as well as in its brief. In both pleadings, it devoted less than a full
page to its discussion. There is much to be said for brevity, but not in this case. Such a terse and
summary treatment appears to be a reflection more of the inherent weakness of the plea rather than
the possession of an advocate's enviable talent for concision. It did cite Section 2 of the Act, but its
very language leaves no doubt that "it shall apply to all persons employed in any industry or
occupation, whether public or private ... ." 42 Nor are private respondents included among the
employees who are thereby barred from enjoying the statutory benefits. It cited Marcelo v. Philippine
National Red Cross 43 and Boy Scouts of the Philippines v. Araos.44 Certainly, the activities to which
the two above public corporations devote themselves can easily be distinguished from that engaged
in by petitioner. A reference to the pertinent sections of both Republic Acts 2265 and 2155 on which
it relies to obtain a ruling as to its governmental character should render clear the differentiation that
exists. If as a result of the appealed order, financial burden would have to be borne by petitioner, it
has only itself to blame. It need not have required private respondents to render overtime service. It
can hardly be surmised that one of its chief problems is paucity of personnel. That would indeed be
a cause for astonishment. It would appear, therefore, that such an objection based on this ground
certainly cannot suffice for a reversal. To repeat, respondent Court must be sustained.

WHEREFORE, the appealed Order of March 21, 1970 and the Resolution of respondent Court en
banc of May 8, 1970 denying a motion for reconsideration are hereby affirmed. The last sentence of
the Order of March 21, 1970 reads as follows: "To find how much each of them [private respondents]
is entitled under this judgment, the Chief of the Examining Division, or any of his authorized
representative, is hereby directed to make a reexamination of records, papers and documents in the
possession of respondent PVTA pertinent and proper under the premises and to submit his report of
his findings to the Court for further disposition thereof." Accordingly, as provided by the New Labor
Code, this case is referred to the National Labor Relations Commission for further proceedings
conformably to law. No costs.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
G.R. No. 101083 July 30, 1993

JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and
represented by their parents ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA,
minor, represented by her parents CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD
and PATRISHA, all surnamed FLORES, minors and represented by their parents ENRICO and
NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and
DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and
represented by their parents GEORGE and MYRA MISA, BENJAMIN ALAN V. PESIGAN,
minor, represented by his parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO,
minor, represented by her parents JOSE and MARIA VIOLETA ALFARO, MARIA
CONCEPCION T. CASTRO, minor, represented by her parents FREDENIL and JANE CASTRO,
JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T.
NARVASA, minor, represented by his parents GREGORIO II and CRISTINE CHARITY
NARVASA, MA. MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE, all
surnamed SAENZ, minors, represented by their parents ROBERTO and AURORA SAENZ,
KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING, minors,
represented by their parents MARIO and HAYDEE KING, DAVID, FRANCISCO and THERESE
VICTORIA, all surnamed ENDRIGA, minors, represented by their parents BALTAZAR and
TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA, minors, represented
by their parents ANTONIO and MARICA ABAYA, MARILIN, MARIO, JR. and MARIETTE, all
surnamed CARDAMA, minors, represented by their parents MARIO and LINA CARDAMA,
CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed OPOSA, minors and
represented by their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN
JOHN and ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their parents JOSE
MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and FRANCISCO, all
surnamed BIBAL, minors, represented by their parents FRANCISCO, JR. and MILAGROS
BIBAL, and THE PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the
Department of Environment and Natural Resources, and THE HONORABLE ERIBERTO U.
ROSARIO, Presiding Judge of the RTC, Makati, Branch 66, respondents.

Oposa Law Office for petitioners.

The Solicitor General for respondents.

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology
which the petitioners dramatically associate with the twin concepts of "inter-generational
responsibility" and "inter-generational justice." Specifically, it touches on the issue of whether the
said petitioners have a cause of action to "prevent the misappropriation or impairment" of Philippine
rainforests and "arrest the unabated hemorrhage of the country's vital life support systems and
continued rape of Mother Earth."

The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati,
Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The principal
plaintiffs therein, now the principal petitioners, are all minors duly represented and joined by their
respective parents. Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc.
(PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia,
engaging in concerted action geared for the protection of our environment and natural resources.
The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the
Department of Environment and Natural Resources (DENR). His substitution in this petition by the
new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the
petitioners.1 The complaint2 was instituted as a taxpayers' class suit3 and alleges that the plaintiffs
"are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and
enjoyment of the natural resource treasure that is the country's virgin tropical forests." The same was
filed for themselves and others who are equally concerned about the preservation of said resource
but are "so numerous that it is impracticable to bring them all before the Court." The minors further
asseverate that they "represent their generation as well as generations yet unborn."4 Consequently,
it is prayed for that judgment be rendered:

. . . ordering defendant, his agents, representatives and other persons acting in his
behalf to —

(1) Cancel all existing timber license agreements in the country;

(2) Cease and desist from receiving, accepting, processing, renewing or approving
new timber license agreements.

and granting the plaintiffs ". . . such other reliefs just and equitable under the premises."5

The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands
has a land area of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant
rainforests in which varied, rare and unique species of flora and fauna may be found; these
rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are also the
habitat of indigenous Philippine cultures which have existed, endured and flourished since time
immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology,
the country's land area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest
cover and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other uses;
the distortion and disturbance of this balance as a consequence of deforestation have resulted in a
host of environmental tragedies, such as (a) water shortages resulting from drying up of the water
table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of
the water table as a result of the intrusion therein of salt water, incontrovertible examples of which
may be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and
the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded
estimated at one billion (1,000,000,000) cubic meters per annum — approximately the size of the
entire island of Catanduanes, (d) the endangering and extinction of the country's unique, rare and
varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the
disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and
consequential destruction of corals and other aquatic life leading to a critical reduction in marine
resource productivity, (g) recurrent spells of drought as is presently experienced by the entire
country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i)
the floodings of lowlands and agricultural plains arising from the absence of the absorbent
mechanism of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams
constructed and operated for the purpose of supplying water for domestic uses, irrigation and the
generation of electric power, and (k) the reduction of the earth's capacity to process carbon dioxide
gases which has led to perplexing and catastrophic climatic changes such as the phenomenon of
global warming, otherwise known as the "greenhouse effect."

Plaintiffs further assert that the adverse and detrimental consequences of continued and
deforestation are so capable of unquestionable demonstration that the same may be submitted as a
matter of judicial notice. This notwithstanding, they expressed their intention to present expert
witnesses as well as documentary, photographic and film evidence in the course of the trial.

As their cause of action, they specifically allege that:

CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares
of rainforests constituting roughly 53% of the country's land mass.

9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million
hectares of said rainforests or four per cent (4.0%) of the country's land area.

10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth
rainforests are left, barely 2.8% of the entire land mass of the Philippine archipelago
and about 3.0 million hectares of immature and uneconomical secondary growth
forests.
11. Public records reveal that the defendant's, predecessors have granted timber
license agreements ('TLA's') to various corporations to cut the aggregate area of 3.89
million hectares for commercial logging purposes.

A copy of the TLA holders and the corresponding areas covered is hereto attached
as Annex "A".

12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25
hectares per hour — nighttime, Saturdays, Sundays and holidays included — the
Philippines will be bereft of forest resources after the end of this ensuing decade, if
not earlier.

13. The adverse effects, disastrous consequences, serious injury and irreparable
damage of this continued trend of deforestation to the plaintiff minor's generation and
to generations yet unborn are evident and incontrovertible. As a matter of fact, the
environmental damages enumerated in paragraph 6 hereof are already being felt,
experienced and suffered by the generation of plaintiff adults.

14. The continued allowance by defendant of TLA holders to cut and deforest the
remaining forest stands will work great damage and irreparable injury to plaintiffs —
especially plaintiff minors and their successors — who may never see, use, benefit
from and enjoy this rare and unique natural resource treasure.

This act of defendant constitutes a misappropriation and/or impairment of the natural

resource property he holds in trust for the benefit of plaintiff minors and succeeding
generations.

15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology
and are entitled to protection by the State in its capacity as the parens patriae.

16. Plaintiff have exhausted all administrative remedies with the defendant's office.
On March 2, 1990, plaintiffs served upon defendant a final demand to cancel all
logging permits in the country.

A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".

17. Defendant, however, fails and refuses to cancel the existing TLA's to the
continuing serious damage and extreme prejudice of plaintiffs.

18. The continued failure and refusal by defendant to cancel the TLA's is an act
violative of the rights of plaintiffs, especially plaintiff minors who may be left with a
country that is desertified (sic), bare, barren and devoid of the wonderful flora, fauna
and indigenous cultures which the Philippines had been abundantly blessed with.

19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to

the public policy enunciated in the Philippine Environmental Policy which, in pertinent
part, states that it is the policy of the State —

(a) to create, develop, maintain and improve conditions under which man and nature
can thrive in productive and enjoyable harmony with each other;

(b) to fulfill the social, economic and other requirements of present and future
generations of Filipinos and;

(c) to ensure the attainment of an environmental quality that is conductive to a life of

dignity and well-being. (P.D. 1151, 6 June 1977)

20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's

is contradictory to the Constitutional policy of the State to —

a. effect "a more equitable distribution of opportunities, income and wealth" and
"make full and efficient use of natural resources (sic)." (Section 1, Article XII of the
Constitution);
 b. "protect the nation's marine wealth." (Section 2, ibid);

c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section
14, Article XIV, id.);

d. "protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature." (Section 16, Article II, id.)

21. Finally, defendant's act is contrary to the highest law of humankind — the natural
law — and violative of plaintiffs' right to self-preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy in law other than the
instant action to arrest the unabated hemorrhage of the country's vital life support
systems and continued rape of Mother Earth. 6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the
complaint based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against him
and (2) the issue raised by the plaintiffs is a political question which properly pertains to the
legislative or executive branches of Government. In their 12 July 1990 Opposition to the Motion, the
petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the
motion is dilatory and (3) the action presents a justiciable question as it involves the defendant's
abuse of discretion.

On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to
dismiss.7 In the said order, not only was the defendant's claim — that the complaint states no cause
of action against him and that it raises a political question — sustained, the respondent Judge further
ruled that the granting of the relief prayed for would result in the impairment of contracts which is
prohibited by the fundamental law of the land.

Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of
Court and ask this Court to rescind and set aside the dismissal order on the ground that the
respondent Judge gravely abused his discretion in dismissing the action. Again, the parents of the
plaintiffs-minors not only represent their children, but have also joined the latter in this case.8

On 14 May 1992, We resolved to give due course to the petition and required the parties to submit
their respective Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf
of the respondents and the petitioners filed a reply thereto.

Petitioners contend that the complaint clearly and unmistakably states a cause of action as it
contains sufficient allegations concerning their right to a sound environment based on Articles 19, 20
and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating
the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy),
Section 16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and
healthful ecology, the concept of generational genocide in Criminal Law and the concept of man's
inalienable right to self-preservation and self-perpetuation embodied in natural law. Petitioners
likewise rely on the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard
the people's right to a healthful environment.

It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in
granting Timber License Agreements (TLAs) to cover more areas for logging than what is available
involves a judicial question.

Anent the invocation by the respondent Judge of the Constitution's non-impairment clause,
petitioners maintain that the same does not apply in this case because TLAs are not contracts. They
likewise submit that even if TLAs may be considered protected by the said clause, it is well settled
that they may still be revoked by the State when the public interest so requires.

On the other hand, the respondents aver that the petitioners failed to allege in their complaint a
specific legal right violated by the respondent Secretary for which any relief is provided by law. They
see nothing in the complaint but vague and nebulous allegations concerning an "environmental right"
which supposedly entitles the petitioners to the "protection by the state in its capacity as parens
patriae." Such allegations, according to them, do not reveal a valid cause of action. They then
reiterate the theory that the question of whether logging should be permitted in the country is a
political question which should be properly addressed to the executive or legislative branches of
Government. They therefore assert that the petitioners' resources is not to file an action to court, but
to lobby before Congress for the passage of a bill that would ban logging totally.

As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done
by the State without due process of law. Once issued, a TLA remains effective for a certain period of
time — usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor
cancelled unless the holder has been found, after due notice and hearing, to have violated the terms
of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the requirements of due
process.

Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil
Case No. 90-777 as a class suit. The original defendant and the present respondents did not take
issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class suit.
The subject matter of the complaint is of common and general interest not just to several, but to all
citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes
impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that
the plaintiffs therein are numerous and representative enough to ensure the full protection of all
concerned interests. Hence, all the requisites for the filing of a valid class suit under Section 12, Rule
3 of the Revised Rules of Court are present both in the said civil case and in the instant petition, the
latter being but an incident to the former.

This case, however, has a special and novel element. Petitioners minors assert that they represent
their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for
themselves, for others of their generation and for the succeeding generations, file a class suit. Their
personality to sue in behalf of the succeeding generations can only be based on the concept of
intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned.
Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety.9 Such rhythm
and harmony indispensably include, inter alia, the judicious disposition, utilization, management,
renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources to the end that their exploration, development and utilization be
equitably accessible to the present as well as future generations. 10Needless to say, every generation
has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a
balanced and healthful ecology. Put a little differently, the minors' assertion of their right to a sound
environment constitutes, at the same time, the performance of their obligation to ensure the
protection of that right for the generations to come.

The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits
of the petition.

After a careful perusal of the complaint in question and a meticulous consideration and evaluation of
the issues raised and arguments adduced by the parties, We do not hesitate to find for the
petitioners and rule against the respondent Judge's challenged order for having been issued with
grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions of the said order
reads as follows:

xxx xxx xxx

After a careful and circumspect evaluation of the Complaint, the Court cannot help
but agree with the defendant. For although we believe that plaintiffs have but the
noblest of all intentions, it (sic) fell short of alleging, with sufficient definiteness, a
specific legal right they are seeking to enforce and protect, or a specific legal wrong
they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the
Court notes that the Complaint is replete with vague assumptions and vague
conclusions based on unverified data. In fine, plaintiffs fail to state a cause of action
in its Complaint against the herein defendant.

Furthermore, the Court firmly believes that the matter before it, being impressed with
political color and involving a matter of public policy, may not be taken cognizance of
by this Court without doing violence to the sacred principle of "Separation of Powers"
of the three (3) co-equal branches of the Government.
 The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing
timber license agreements in the country and to cease and desist from receiving,
accepting, processing, renewing or approving new timber license agreements. For to
do otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law. 11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient
definiteness a specific legal right involved or a specific legal wrong committed, and that the
complaint is replete with vague assumptions and conclusions based on unverified data. A reading of
the complaint itself belies these conclusions.

The complaint focuses on one specific fundamental legal right — the right to a balanced and
healthful ecology which, for the first time in our nation's constitutional history, is solemnly
incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly provides:

Sec. 16. The State shall protect and advance the right of the people to a balanced
and healthful ecology in accord with the rhythm and harmony of nature.

This right unites with the right to health which is provided for in the preceding section
of the same article:

Sec. 15. The State shall protect and promote the right to health of the people and
instill health consciousness among them.

While the right to a balanced and healthful ecology is to be found under the Declaration of Principles
and State Policies and not under the Bill of Rights, it does not follow that it is less important than any
of the civil and political rights enumerated in the latter. Such a right belongs to a different category of
rights altogether for it concerns nothing less than self-preservation and self-perpetuation — aptly and
fittingly stressed by the petitioners — the advancement of which may even be said to predate all
governments and constitutions. As a matter of fact, these basic rights need not even be written in the
Constitution for they are assumed to exist from the inception of humankind. If they are now explicitly
mentioned in the fundamental charter, it is because of the well-founded fear of its framers that
unless the rights to a balanced and healthful ecology and to health are mandated as state policies by
the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a
solemn obligation to preserve the first and protect and advance the second, the day would not be too
far when all else would be lost not only for the present generation, but also for those to come —
generations which stand to inherit nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlative duty to refrain from
impairing the environment. During the debates on this right in one of the plenary sessions of the
1986 Constitutional Commission, the following exchange transpired between Commissioner Wilfrido
Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question:

MR. VILLACORTA:

Does this section mandate the State to provide sanctions against all
forms of pollution — air, water and noise pollution?

MR. AZCUNA:

Yes, Madam President. The right to healthful (sic) environment

necessarily carries with it the correlative duty of not impairing the
same and, therefore, sanctions may be provided for impairment of
environmental balance. 12

The said right implies, among many other things, the judicious management and conservation of the
country's forests.

Without such forests, the ecological or environmental balance would be irreversiby disrupted.

Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as
well as the other related provisions of the Constitution concerning the conservation, development
and utilization of the country's natural resources, 13 then President Corazon C. Aquino promulgated
on 10 June 1987 E.O. No. 192, 14 Section 4 of which expressly mandates that the Department of
Environment and Natural Resources "shall be the primary government agency responsible for the
conservation, management, development and proper use of the country's environment and natural
resources, specifically forest and grazing lands, mineral, resources, including those in reservation
and watershed areas, and lands of the public domain, as well as the licensing and regulation of all
natural resources as may be provided for by law in order to ensure equitable sharing of the benefits
derived therefrom for the welfare of the present and future generations of Filipinos." Section 3
thereof makes the following statement of policy:

Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure
the sustainable use, development, management, renewal, and conservation of the
country's forest, mineral, land, off-shore areas and other natural resources, including
the protection and enhancement of the quality of the environment, and equitable
access of the different segments of the population to the development and the use of
the country's natural resources, not only for the present generation but for future
generations as well. It is also the policy of the state to recognize and apply a true
value system including social and environmental cost implications relative to their
utilization, development and conservation of our natural resources.

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of
1987,15 specifically in Section 1 thereof which reads:

Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the
Filipino people, the full exploration and development as well as the judicious
disposition, utilization, management, renewal and conservation of the country's
forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural
resources, consistent with the necessity of maintaining a sound ecological balance
and protecting and enhancing the quality of the environment and the objective of
making the exploration, development and utilization of such natural resources
equitably accessible to the different segments of the present as well as future
generations.

(2) The State shall likewise recognize and apply a true value system that takes into
account social and environmental cost implications relative to the utilization,
development and conservation of our natural resources.

The above provision stresses "the necessity of maintaining a sound ecological balance and
protecting and enhancing the quality of the environment." Section 2 of the same Title, on the other
hand, specifically speaks of the mandate of the DENR; however, it makes particular reference to the
fact of the agency's being subject to law and higher authority. Said section provides:

Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall
be primarily responsible for the implementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge of carrying out the
State's constitutional mandate to control and supervise the exploration, development,
utilization, and conservation of the country's natural resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as
the bases for policy formulation, and have defined the powers and functions of the DENR.

It may, however, be recalled that even before the ratification of the 1987 Constitution, specific
statutes already paid special attention to the "environmental right" of the present and future
generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152
(Philippine Environment Code) were issued. The former "declared a continuing policy of the State (a)
to create, develop, maintain and improve conditions under which man and nature can thrive in
productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other
requirements of present and future generations of Filipinos, and (c) to insure the attainment of an
environmental quality that is conducive to a life of dignity and well-being." 16 As its goal, it speaks of
the "responsibilities of each generation as trustee and guardian of the environment for succeeding
generations." 17 The latter statute, on the other hand, gave flesh to the said policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is
as clear as the DENR's duty — under its mandate and by virtue of its powers and functions under
E.O. No. 192 and the Administrative Code of 1987 — to protect and advance the said right.

A denial or violation of that right by the other who has the corelative duty or obligation to respect or
protect the same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs,
which they claim was done with grave abuse of discretion, violated their right to a balanced and
healthful ecology; hence, the full protection thereof requires that no further TLAs should be renewed
or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legal right or rights of the other;
and its essential elements are legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in violation of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails
to state a cause of action, 19 the question submitted to the court for resolution involves the sufficiency
of the facts alleged in the complaint itself. No other matter should be considered; furthermore, the
truth of falsity of the said allegations is beside the point for the truth thereof is deemed hypothetically
admitted. The only issue to be resolved in such a case is: admitting such alleged facts to be true,
may the court render a valid judgment in accordance with the prayer in the complaint? 20 In Militante
vs. Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care
and circumspection in passing upon a motion to dismiss on the ground of the absence thereof
[cause of action] lest, by its failure to manifest a correct appreciation of the facts alleged and
deemed hypothetically admitted, what the law grants or recognizes is effectively nullified. If that
happens, there is a blot on the legal order. The law itself stands in disrepute."

After careful examination of the petitioners' complaint, We find the statements under the introductory
affirmative allegations, as well as the specific averments under the sub-heading CAUSE OF
ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On the
basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears stressing,
however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as
party defendants, the grantees thereof for they are indispensable parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy
formulation or determination by the executive or legislative branches of Government is not squarely
put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already
formulated and expressed in legislation. It must, nonetheless, be emphasized that the political
question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the
impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The
second paragraph of section 1, Article VIII of the Constitution states that:

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government.

Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says:

The first part of the authority represents the traditional concept of judicial power,
involving the settlement of conflicting rights as conferred as law. The second part of
the authority represents a broadening of judicial power to enable the courts of justice
to review what was before forbidden territory, to wit, the discretion of the political
departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme
Court, the power to rule upon even the wisdom of the decisions of the executive and
the legislature and to declare their acts invalid for lack or excess of jurisdiction
because tainted with grave abuse of discretion. The catch, of course, is the meaning
of "grave abuse of discretion," which is a very elastic phrase that can expand or
contract according to the disposition of the judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:

In the case now before us, the jurisdictional objection becomes even less tenable
and decisive. The reason is that, even if we were to assume that the issue presented
before us was political in nature, we would still not be precluded from revolving it
under the expanded jurisdiction conferred upon us that now covers, in proper cases,
even the political question. Article VII, Section 1, of the Constitution clearly provides:
...

The last ground invoked by the trial court in dismissing the complaint is the non-impairment of
contracts clause found in the Constitution. The court a quo declared that:

The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing
timber license agreements in the country and to cease and desist from receiving,
accepting, processing, renewing or approving new timber license agreements. For to
do otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law. 24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent Secretary did not, for obvious reasons, even
invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted
with utmost infidelity to the Government by providing undue and unwarranted benefits and
advantages to the timber license holders because he would have forever bound the Government to
strictly respect the said licenses according to their terms and conditions regardless of changes in
policy and the demands of public interest and welfare. He was aware that as correctly pointed out by
the petitioners, into every timber license must be read Section 20 of the Forestry Reform Code (P.D.
No. 705) which provides:

. . . Provided, That when the national interest so requires, the President may amend,
modify, replace or rescind any contract, concession, permit, licenses or any other
form of privilege granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not
a contract, property or a property right protested by the due process clause of the
Constitution. In Tan vs. Director of Forestry, 25 this Court held:

. . . A timber license is an instrument by which the State regulates the utilization and
disposition of forest resources to the end that public welfare is promoted. A timber
license is not a contract within the purview of the due process clause; it is only a
license or privilege, which can be validly withdrawn whenever dictated by public
interest or public welfare as in this case.

A license is merely a permit or privilege to do what otherwise would be unlawful, and

is not a contract between the authority, federal, state, or municipal, granting it and
the person to whom it is granted; neither is it property or a property right, nor does it
create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the
granting of license does not create irrevocable rights, neither is it property or property
rights (People vs. Ong Tin, 54 O.G. 7576).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26

. . . Timber licenses, permits and license agreements are the principal instruments by
which the State regulates the utilization and disposition of forest resources to the end
that public welfare is promoted. And it can hardly be gainsaid that they merely
evidence a privilege granted by the State to qualified entities, and do not vest in the
latter a permanent or irrevocable right to the particular concession area and the
forest products therein. They may be validly amended, modified, replaced or
rescinded by the Chief Executive when national interests so require. Thus, they are
not deemed contracts within the purview of the due process of law clause
[See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v.
Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].
Since timber licenses are not contracts, the non-impairment clause, which reads:

Sec. 10. No law impairing, the obligation of contracts shall be passed. 27

cannot be invoked.

In the second place, even if it is to be assumed that the same are contracts, the instant case does
not involve a law or even an executive issuance declaring the cancellation or modification of existing
timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting
further that a law has actually been passed mandating cancellations or modifications, the same
cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very
nature and purpose, such as law could have only been passed in the exercise of the police power of
the state for the purpose of advancing the right of the people to a balanced and healthful ecology,
promoting their health and enhancing the general welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:

The freedom of contract, under our system of government, is not meant to be

absolute. The same is understood to be subject to reasonable legislative regulation
aimed at the promotion of public health, moral, safety and welfare. In other words,
the constitutional guaranty of non-impairment of obligations of contract is limited by
the exercise of the police power of the State, in the interest of public health, safety,
moral and general welfare.

The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American
Life Insurance Co. vs. Auditor General,30 to wit:

Under our form of government the use of property and the making of contracts are
normally matters of private and not of public concern. The general rule is that both
shall be free of governmental interference. But neither property rights nor contract
rights are absolute; for government cannot exist if the citizen may at will use his
property to the detriment of his fellows, or exercise his freedom of contract to work
them harm. Equally fundamental with the private right is that of the public to regulate
it in the common interest.

In short, the non-impairment clause must yield to the police power of the state. 31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with
respect to the prayer to enjoin the respondent Secretary from receiving, accepting, processing,
renewing or approving new timber licenses for, save in cases of renewal, no contract would have as
of yet existed in the other instances. Moreover, with respect to renewal, the holder is not entitled to it
as a matter of right.

WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the
challenged Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby
set aside. The petitioners may therefore amend their complaint to implead as defendants the holders
or grantees of the questioned timber license agreements.

No pronouncement as to costs.

SO ORDERED.

Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ.,
concur.

Narvasa, C.J., Puno and Vitug, JJ., took no part.

 Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case
which, to my mind, is one of the most important cases decided by this Court in the last few years.
The seminal principles laid down in this decision are likely to influence profoundly the direction and
course of the protection and management of the environment, which of course embraces the
utilization of all the natural resources in the territorial base of our polity. I have therefore sought to
clarify, basically to myself, what the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing
and, maintenance of this suit (Decision, pp. 11-12). Locus standi is not a function of petitioners' claim
that their suit is properly regarded as a class suit. I understand locus standi to refer to the legal
interest which a plaintiff must have in the subject matter of the suit. Because of the very broadness
of the concept of "class" here involved — membership in this "class" appears to
embrace everyone living in the country whether now or in the
future — it appears to me that everyone who may be expected to benefit from the course of action
petitioners seek to require public respondents to take, is vested with the necessary locus standi. The
Court may be seen therefore to be recognizing a beneficiaries' right of action in the field of
environmental protection, as against both the public administrative agency directly concerned and
the private persons or entities operating in the field or sector of activity involved. Whether such
beneficiaries' right of action may be found under any and all circumstances, or whether some failure
to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior
exhaustion of administrative remedies"), is not discussed in the decision and presumably is left for
future determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one specific
fundamental legal right — the right to a balanced and healthful ecology" (Decision, p. 14). There is
no question that "the right to a balanced and healthful ecology" is "fundamental" and that,
accordingly, it has been "constitutionalized." But although it is fundamental in character, I suggest,
with very great respect, that it cannot be characterized as "specific," without doing excessive
violence to language. It is in fact very difficult to fashion language more comprehensive in scope and
generalized in character than a right to "a balanced and healthful ecology." The list of particular
claims which can be subsumed under this rubic appears to be entirely open-ended: prevention and
control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil,
chemical effluents, garbage and raw sewage into rivers, inland and coastal waters by vessels, oil
rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open
land, streets and thoroughfares; failure to rehabilitate land after strip-mining or open-pit
mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other living sea
resources through the use of dynamite or cyanide and other chemicals; contamination of ground
water resources; loss of certain species of fauna and flora; and so on. The other statements pointed
out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book
IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 — all appear to be
formulations of policy, as general and abstract as the constitutional statements of basic policy in
Article II, Section 16 ("the right — to a balanced and healthful ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the
other hand, a compendious collection of more "specific environment management policies" and
"environment quality standards" (fourth "Whereas" clause, Preamble) relating to an extremely wide
range of topics:

(a) air quality management;

(b) water quality management;

(c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

 (ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has
identified the particular provision or provisions (if any) of the Philippine Environment Code which give
rise to a specific legal right which petitioners are seeking to enforce. Secondly, the Philippine
Environment Code identifies with notable care the particular government agency charged with the
formulation and implementation of guidelines and programs dealing with each of the headings and
sub-headings mentioned above. The Philippine Environment Code does not, in other words, appear
to contemplate action on the part of private persons who are beneficiaries of implementation of that
Code.

As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in
the constitutional statements above noted, the Court is in effect saying that Section 15 (and Section
16) of Article II of the Constitution are self-executing and judicially enforceable even in their present
form. The implications of this doctrine will have to be explored in future cases; those implications are
too large and far-reaching in nature even to be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right
— a right cast in language of a significantly lower order of generality than Article II (15) of the
Constitution — that is or may be violated by the actions, or failures to act, imputed to the public
respondent by petitioners so that the trial court can validly render judgment granting all or part of the
relief prayed for. To my mind, the Court should be understood as simply saying that such a more
specific legal right or rights may well exist in our corpus of law, considering the general policy
principles found in the Constitution and the existence of the Philippine Environment Code, and that
the trial court should have given petitioners an effective opportunity so to demonstrate, instead of
aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause of action be
a specific, operable legal right, rather than a constitutional or statutory policy, for at least two (2)
reasons. One is that unless the legal right claimed to have been violated or disregarded is given
specification in operational terms, defendants may well be unable to defend themselves intelligently
and effectively; in other words, there are due process dimensions to this matter.

The second is a broader-gauge consideration — where a specific violation of law or applicable

regulation is not alleged or proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution
which reads:

Section 1. . . .

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government.
(Emphasis supplied)

When substantive standards as general as "the right to a balanced and healthy ecology" and
"the right to health" are combined with remedial standards as broad ranging as "a grave
abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is
respectfully submitted, to propel courts into the uncharted ocean of social and economic
policy making. At least in respect of the vast area of environmental protection and
management, our courts have no claim to special technical competence and experience and
professional qualification. Where no specific, operable norms and standards are shown to
 exist, then the policy making departments — the legislative and executive departments —
must be given a real and effective opportunity to fashion and promulgate those norms and
standards, and to implement them before the courts should intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession
agreements or TLA's petitioners demand public respondents should cancel, must be impleaded in
the proceedings below. It might be asked that, if petitioners' entitlement to the relief demanded
is not dependent upon proof of breach by the timber companies of one or more of the specific terms
and conditions of their concession agreements (and this, petitioners implicitly assume), what will
those companies litigate about? The answer I suggest is that they may seek to dispute the existence
of the specific legal right petitioners should allege, as well as the reality of the claimed factual nexus
between petitioners' specific legal rights and the claimed wrongful acts or failures to act of public
respondent administrative agency. They may also controvert the appropriateness of the remedy or
remedies demanded by petitioners, under all the circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment, including the
forest cover of our territory, is of extreme importance for the country. The doctrines set out in the
Court's decision issued today should, however, be subjected to closer examination.

# Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case
which, to my mind, is one of the most important cases decided by this Court in the last few years.
The seminal principles laid down in this decision are likely to influence profoundly the direction and
course of the protection and management of the environment, which of course embraces the
utilization of all the natural resources in the territorial base of our polity. I have therefore sought to
clarify, basically to myself, what the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing
and, maintenance of this suit (Decision, pp. 11-12). Locus standi is not a function of petitioners' claim
that their suit is properly regarded as a class suit. I understand locus standi to refer to the legal
interest which a plaintiff must have in the subject matter of the suit. Because of the very broadness
of the concept of "class" here involved — membership in this "class" appears to
embrace everyone living in the country whether now or in the
future — it appears to me that everyone who may be expected to benefit from the course of action
petitioners seek to require public respondents to take, is vested with the necessary locus standi. The
Court may be seen therefore to be recognizing a beneficiaries' right of action in the field of
environmental protection, as against both the public administrative agency directly concerned and
the private persons or entities operating in the field or sector of activity involved. Whether such
beneficiaries' right of action may be found under any and all circumstances, or whether some failure
to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior
exhaustion of administrative remedies"), is not discussed in the decision and presumably is left for
future determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one specific
fundamental legal right — the right to a balanced and healthful ecology" (Decision, p. 14). There is
no question that "the right to a balanced and healthful ecology" is "fundamental" and that,
accordingly, it has been "constitutionalized." But although it is fundamental in character, I suggest,
with very great respect, that it cannot be characterized as "specific," without doing excessive
violence to language. It is in fact very difficult to fashion language more comprehensive in scope and
generalized in character than a right to "a balanced and healthful ecology." The list of particular
claims which can be subsumed under this rubic appears to be entirely open-ended: prevention and
control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil,
chemical effluents, garbage and raw sewage into rivers, inland and coastal waters by vessels, oil
rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open
land, streets and thoroughfares; failure to rehabilitate land after strip-mining or open-pit
mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other living sea
resources through the use of dynamite or cyanide and other chemicals; contamination of ground
water resources; loss of certain species of fauna and flora; and so on. The other statements pointed
out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book
IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 — all appear to be
formulations of policy, as general and abstract as the constitutional statements of basic policy in
Article II, Section 16 ("the right — to a balanced and healthful ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the
other hand, a compendious collection of more "specific environment management policies" and
"environment quality standards" (fourth "Whereas" clause, Preamble) relating to an extremely wide
range of topics:

(a) air quality management;

(b) water quality management;

(c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

(ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has
identified the particular provision or provisions (if any) of the Philippine Environment Code which give
rise to a specific legal right which petitioners are seeking to enforce. Secondly, the Philippine
Environment Code identifies with notable care the particular government agency charged with the
formulation and implementation of guidelines and programs dealing with each of the headings and
sub-headings mentioned above. The Philippine Environment Code does not, in other words, appear
to contemplate action on the part of private persons who are beneficiaries of implementation of that
Code.

As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in
the constitutional statements above noted, the Court is in effect saying that Section 15 (and Section
16) of Article II of the Constitution are self-executing and judicially enforceable even in their present
form. The implications of this doctrine will have to be explored in future cases; those implications are
too large and far-reaching in nature even to be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right
— a right cast in language of a significantly lower order of generality than Article II (15) of the
Constitution — that is or may be violated by the actions, or failures to act, imputed to the public
respondent by petitioners so that the trial court can validly render judgment granting all or part of the
relief prayed for. To my mind, the Court should be understood as simply saying that such a more
specific legal right or rights may well exist in our corpus of law, considering the general policy
principles found in the Constitution and the existence of the Philippine Environment Code, and that
the trial court should have given petitioners an effective opportunity so to demonstrate, instead of
aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause of action be
a specific, operable legal right, rather than a constitutional or statutory policy, for at least two (2)
reasons. One is that unless the legal right claimed to have been violated or disregarded is given
specification in operational terms, defendants may well be unable to defend themselves intelligently
and effectively; in other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration — where a specific violation of law or applicable
regulation is not alleged or proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution
which reads:

Section 1. . . .

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government.
(Emphasis supplied)

When substantive standards as general as "the right to a balanced and healthy ecology" and
"the right to health" are combined with remedial standards as broad ranging as "a grave
abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is
respectfully submitted, to propel courts into the uncharted ocean of social and economic
policy making. At least in respect of the vast area of environmental protection and
management, our courts have no claim to special technical competence and experience and
professional qualification. Where no specific, operable norms and standards are shown to
exist, then the policy making departments — the legislative and executive departments —
must be given a real and effective opportunity to fashion and promulgate those norms and
standards, and to implement them before the courts should intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession
agreements or TLA's petitioners demand public respondents should cancel, must be impleaded in
the proceedings below. It might be asked that, if petitioners' entitlement to the relief demanded
is not dependent upon proof of breach by the timber companies of one or more of the specific terms
and conditions of their concession agreements (and this, petitioners implicitly assume), what will
those companies litigate about? The answer I suggest is that they may seek to dispute the existence
of the specific legal right petitioners should allege, as well as the reality of the claimed factual nexus
between petitioners' specific legal rights and the claimed wrongful acts or failures to act of public
respondent administrative agency. They may also controvert the appropriateness of the remedy or
remedies demanded by petitioners, under all the circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment, including the
forest cover of our territory, is of extreme importance for the country. The doctrines set out in the
Court's decision issued today should, however, be subjected to closer examination.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 167614 March 24, 2009

ANTONIO M. SERRANO, Petitioner,

vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of
poverty. Their earnings have built houses, provided health care, equipped schools and planted the
seeds of businesses. They have woven together the world by transmitting ideas and knowledge from
country to country. They have provided the dynamic human link between cultures, societies and
economies. Yet, only recently have we begun to understand not only how much international
migration impacts development, but how smart public policies can magnify this effect.
 United Nations Secretary-General Ban Ki-Moon
Global Forum on Migration and Development
Brussels, July 10, 20071

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section
10, Republic Act (R.A.) No. 8042,2 to wit:

Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less.

x x x x (Emphasis and underscoring supplied)

does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but
exacerbates the hardships borne by them by unduly limiting their entitlement in case of illegal
dismissal to their lump-sum salary either for the unexpired portion of their employment contract "or
for three months for every year of the unexpired term, whichever is less" (subject clause). Petitioner
claims that the last clause violates the OFWs' constitutional rights in that it impairs the terms of their
contract, deprives them of equal protection and denies them due process.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December
8, 2004 Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the
subject clause, entreating this Court to declare the subject clause unconstitutional.

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd.
(respondents) under a Philippine Overseas Employment Administration (POEA)-approved Contract
of Employment with the following terms and conditions:

Duration of contract 12 months

Position Chief Officer

Basic monthly salary US$1,400.00

Hours of work 48.0 hours per week

Overtime US$700.00 per month

Vacation leave with pay 7.00 days per month5

On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000.00, upon
the assurance and representation of respondents that he would be made Chief Officer by the end of
April 1998.6

Respondents did not deliver on their promise to make petitioner Chief Officer.7 Hence, petitioner
refused to stay on as Second Officer and was repatriated to the Philippines on May 26, 1998.8

Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March
19, 1999, but at the time of his repatriation on May 26, 1998, he had served only two (2) months and
seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23)
days.

Petitioner filed with the Labor Arbiter (LA) a Complaint9 against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73, broken down
as follows:

May US$ 413.90

27/31,
1998 (5
days)
incl.
Leave
pay
June 2,590.00
01/30,
1998
July 2,590.00
01/31,
1998
August 2,590.00
01/31,
1998
Sept. 2,590.00
01/30,
1998
Oct. 2,590.00
01/31,
1998
Nov. 2,590.00
01/30,
1998
Dec. 2,590.00
01/31,
1998
Jan. 2,590.00
01/31,
1999
Feb. 2,590.00
01/28,
1999
Mar. 1,640.00
1/19,
1999
(19
days)
incl.
leave
pay
--------------------------------------------------------------------------------
25,382.23
Amount
adjusted
to chief
mate's
salary
(March 1,060.5010
19/31,
1998 to
April
1/30,
1998) +
----------------------------------------------------------------------------------------------
TOTAL US$ 26,442.7311
CLAIM
as well as moral and exemplary damages and attorney's fees.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal
and awarding him monetary benefits, to wit:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the

dismissal of the complainant (petitioner) by the respondents in the above-entitled case was
illegal and the respondents are hereby ordered to pay the complainant [petitioner], jointly and
severally, in Philippine Currency, based on the rate of exchange prevailing at the time of
payment, the amount of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS
(US $8,770.00), representing the complainant’s salary for three (3) months of the
unexpired portion of the aforesaid contract of employment. 1avvphi1

The respondents are likewise ordered to pay the complainant [petitioner], jointly and
severally, in Philippine Currency, based on the rate of exchange prevailing at the time of
payment, the amount of FORTY FIVE U.S. DOLLARS (US$ 45.00),12 representing the
complainant’s claim for a salary differential. In addition, the respondents are hereby ordered
to pay the complainant, jointly and severally, in Philippine Currency, at the exchange rate
prevailing at the time of payment, the complainant’s (petitioner's) claim for attorney’s fees
equivalent to ten percent (10%) of the total amount awarded to the aforesaid employee
under this Decision.

The claims of the complainant for moral and exemplary damages are hereby DISMISSED for
lack of merit.

All other claims are hereby DISMISSED.

SO ORDERED.13 (Emphasis supplied)

In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on

the salary period of three months only -- rather than the entire unexpired portion of nine
months and 23 days of petitioner's employment contract - applying the subject clause.
However, the LA applied the salary rate of US$2,590.00, consisting of petitioner's "[b]asic
salary, US$1,400.00/month + US$700.00/month, fixed overtime pay, + US$490.00/month,
vacation leave pay = US$2,590.00/compensation per month."14

Respondents appealed15 to the National Labor Relations Commission (NLRC) to question

the finding of the LA that petitioner was illegally dismissed.

Petitioner also appealed16 to the NLRC on the sole issue that the LA erred in not applying the
ruling of the Court in Triple Integrated Services, Inc. v. National Labor Relations
Commission17 that in case of illegal dismissal, OFWs are entitled to their salaries for the
unexpired portion of their contracts.18

In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:

WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby
ordered to pay complainant, jointly and severally, in Philippine currency, at the prevailing rate
of exchange at the time of payment the following:

1. Three (3) months salary

$1,400 x 3 US$4,200.00
2. Salary differential 45.00

US$4,245.00

3. 10% Attorney’s fees 424.50

TOTAL US$4,669.50

The other findings are affirmed.

SO ORDERED.19

The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing
the applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 "does not
provide for the award of overtime pay, which should be proven to have been actually performed, and
for vacation leave pay."20

Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality
of the subject clause.21 The NLRC denied the motion.22

Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against
the subject clause.24 After initially dismissing the petition on a technicality, the CA eventually gave
due course to it, as directed by this Court in its Resolution dated August 7, 2003 which granted the
petition for certiorari, docketed as G.R. No. 151833, filed by petitioner.

In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the
applicable salary rate; however, the CA skirted the constitutional issue raised by petitioner.25

His Motion for Reconsideration26 having been denied by the CA,27 petitioner brings his cause to this
Court on the following grounds:

The Court of Appeals and the labor tribunals have decided the case in a way not in accord with
applicable decision of the Supreme Court involving similar issue of granting unto the migrant worker
back wages equal to the unexpired portion of his contract of employment instead of limiting it to
three (3) months

II

In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their
interpretation of Section 10 of Republic Act No. 8042, it is submitted that the Court of Appeals
gravely erred in law when it failed to discharge its judicial duty to decide questions of substance not
theretofore determined by the Honorable Supreme Court, particularly, the constitutional issues
raised by the petitioner on the constitutionality of said law, which unreasonably, unfairly and
arbitrarily limits payment of the award for back wages of overseas workers to three (3) months.

III

Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the
Court of Appeals gravely erred in law in excluding from petitioner’s award the overtime pay and
vacation pay provided in his contract since under the contract they form part of his salary.28

On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and
sickly, and he intends to make use of the monetary award for his medical treatment and
medication.29 Required to comment, counsel for petitioner filed a motion, urging the court to allow
partial execution of the undisputed monetary award and, at the same time, praying that the
constitutional question be resolved.30

Considering that the parties have filed their respective memoranda, the Court now takes up the full
merit of the petition mindful of the extreme importance of the constitutional question raised therein.

On the first and second issues

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not
disputed. Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all
three fora. What remains disputed is only the computation of the lump-sum salary to be awarded to
petitioner by reason of his illegal dismissal.

Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at
the monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion of
nine months and 23 days of his employment contract or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the
US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of
US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his
employment contract, computed at the monthly rate of US$2,590.00.31

The Arguments of Petitioner

Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom
of OFWs to negotiate for and stipulate in their overseas employment contracts a determinate
employment period and a fixed salary package.32 It also impinges on the equal protection clause, for
it treats OFWs differently from local Filipino workers (local workers) by putting a cap on the amount
of lump-sum salary to which OFWs are entitled in case of illegal dismissal, while setting no limit to
the same monetary award for local workers when their dismissal is declared illegal; that the
disparate treatment is not reasonable as there is no substantial distinction between the two
groups;33and that it defeats Section 18,34 Article II of the Constitution which guarantees the protection
of the rights and welfare of all Filipino workers, whether deployed locally or overseas.35

Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with
existing jurisprudence on the issue of money claims of illegally dismissed OFWs. Though there are
conflicting rulings on this, petitioner urges the Court to sort them out for the guidance of affected
OFWs.36

Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no
other purpose but to benefit local placement agencies. He marks the statement made by the Solicitor
General in his Memorandum, viz.:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the
event that jurisdiction over the foreign employer is not acquired by the court or if the foreign
employer reneges on its obligation. Hence, placement agencies that are in good faith and which
fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect
them and to promote their continued helpful contribution in deploying Filipino migrant workers,
liability for money claims was reduced under Section 10 of R.A. No. 8042. 37 (Emphasis supplied)

Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause
sacrifices the well-being of OFWs. Not only that, the provision makes foreign employers better off
than local employers because in cases involving the illegal dismissal of employees, foreign
employers are liable for salaries covering a maximum of only three months of the unexpired
employment contract while local employers are liable for the full lump-sum salaries of their
employees. As petitioner puts it:

In terms of practical application, the local employers are not limited to the amount of backwages they
have to give their employees they have illegally dismissed, following well-entrenched and
unequivocal jurisprudence on the matter. On the other hand, foreign employers will only be limited to
giving the illegally dismissed migrant workers the maximum of three (3) months unpaid salaries
notwithstanding the unexpired term of the contract that can be more than three (3) months.38

Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of
the salaries and other emoluments he is entitled to under his fixed-period employment contract.39

The Arguments of Respondents

In their Comment and Memorandum, respondents contend that the constitutional issue should not
be entertained, for this was belatedly interposed by petitioner in his appeal before the CA, and not at
the earliest opportunity, which was when he filed an appeal before the NLRC.40

The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its
provisions could not have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042
having preceded petitioner's contract, the provisions thereof are deemed part of the minimum terms
of petitioner's employment, especially on the matter of money claims, as this was not stipulated upon
by the parties.42
Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their
employment, such that their rights to monetary benefits must necessarily be treated differently. The
OSG enumerates the essential elements that distinguish OFWs from local workers: first, while local
workers perform their jobs within Philippine territory, OFWs perform their jobs for foreign employers,
over whom it is difficult for our courts to acquire jurisdiction, or against whom it is almost impossible
to enforce judgment; and second, as held in Coyoca v. National Labor Relations Commission43 and
Millares v. National Labor Relations Commission,44 OFWs are contractual employees who can never
acquire regular employment status, unlike local workers who are or can become regular employees.
Hence, the OSG posits that there are rights and privileges exclusive to local workers, but not
available to OFWs; that these peculiarities make for a reasonable and valid basis for the
differentiated treatment under the subject clause of the money claims of OFWs who are illegally
dismissed. Thus, the provision does not violate the equal protection clause nor Section 18, Article II
of the Constitution.45

Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted
to mitigate the solidary liability of placement agencies for this "redounds to the benefit of the migrant
workers whose welfare the government seeks to promote. The survival of legitimate placement
agencies helps [assure] the government that migrant workers are properly deployed and are
employed under decent and humane conditions."46

The Court's Ruling

The Court sustains petitioner on the first and second issues.

When the Court is called upon to exercise its power of judicial review of the acts of its co-equals,
such as the Congress, it does so only when these conditions obtain: (1) that there is an actual case
or controversy involving a conflict of rights susceptible of judicial determination;47 (2) that the
constitutional question is raised by a proper party48 and at the earliest opportunity;49 and (3) that the
constitutional question is the very lis mota of the case,50otherwise the Court will dismiss the case or
decide the same on some other ground.51

Without a doubt, there exists in this case an actual controversy directly involving petitioner who is
personally aggrieved that the labor tribunals and the CA computed his monetary award based on the
salary period of three months only as provided under the subject clause.

The constitutional challenge is also timely. It should be borne in mind that the requirement that a
constitutional issue be raised at the earliest opportunity entails the interposition of the issue in the
pleadings before a competent court, such that, if the issue is not raised in the pleadings before that
competent court, it cannot be considered at the trial and, if not considered in the trial, it cannot be
considered on appeal.52 Records disclose that the issue on the constitutionality of the subject clause
was first raised, not in petitioner's appeal with the NLRC, but in his Motion for Partial
Reconsideration with said labor tribunal,53 and reiterated in his Petition for Certiorari before the
CA.54Nonetheless, the issue is deemed seasonably raised because it is not the NLRC but the CA
which has the competence to resolve the constitutional issue. The NLRC is a labor tribunal that
merely performs a quasi-judicial function – its function in the present case is limited to determining
questions of fact to which the legislative policy of R.A. No. 8042 is to be applied and to resolving
such questions in accordance with the standards laid down by the law itself;55 thus, its foremost
function is to administer and enforce R.A. No. 8042, and not to inquire into the validity of its
provisions. The CA, on the other hand, is vested with the power of judicial review or the power to
declare unconstitutional a law or a provision thereof, such as the subject clause.56 Petitioner's
interposition of the constitutional issue before the CA was undoubtedly seasonable. The CA was
therefore remiss in failing to take up the issue in its decision.

The third condition that the constitutional issue be critical to the resolution of the case likewise
obtains because the monetary claim of petitioner to his lump-sum salary for the entire unexpired
portion of his 12-month employment contract, and not just for a period of three months, strikes at the
very core of the subject clause.

Thus, the stage is all set for the determination of the constitutionality of the subject clause.

Does the subject clause violate Section 10,

Article III of the Constitution on non-impairment
of contracts?
The answer is in the negative.

Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the
term of his employment and the fixed salary package he will receive57 is not tenable.

Section 10, Article III of the Constitution provides:

No law impairing the obligation of contracts shall be passed.

The prohibition is aligned with the general principle that laws newly enacted have only a prospective
operation,58and cannot affect acts or contracts already perfected;59 however, as to laws already in
existence, their provisions are read into contracts and deemed a part thereof.60 Thus, the non-
impairment clause under Section 10, Article II is limited in application to laws about to be enacted
that would in any way derogate from existing acts or contracts by enlarging, abridging or in any
manner changing the intention of the parties thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of
the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued
that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties.
Rather, when the parties executed their 1998 employment contract, they were deemed to have
incorporated into it all the provisions of R.A. No. 8042.

But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in
the exercise of the police power of the State to regulate a business, profession or calling, particularly
the recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the
dignity and well-being of OFWs wherever they may be employed.61Police power legislations adopted
by the State to promote the health, morals, peace, education, good order, safety, and general
welfare of the people are generally applicable not only to future contracts but even to those already
in existence, for all private contracts must yield to the superior and legitimate measures taken by the
State to promote public welfare.62

Does the subject clause violate Section 1,

Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor
as a protected sector?

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:

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 law.

Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without
distinction as to place of deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar
category, while all monetary obligations should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in
like circumstances.65

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it
sees fit, a system of classification into its legislation; however, to be valid, the classification must
comply with these requirements: 1) it is based 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 class.66

There are three levels of scrutiny at which the Court reviews the constitutionality of a classification
embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification
needs only be shown to be rationally related to serving a legitimate state interest;67 b) the middle-tier
or intermediate scrutiny in which the government must show that the challenged classification serves
an important state interest and that the classification is at least substantially related to serving that
interest;68 and c) strict judicial scrutiny69 in which a legislative classification which impermissibly
interferes with the exercise of a fundamental right70 or operates to the peculiar disadvantage of a
suspect class71 is presumed unconstitutional, and the burden is upon the government to prove that
the classification is necessary to achieve a compelling state interest and that it is the least
restrictive means to protect such interest.72

Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications73 based
on race74 or gender75 but not when the classification is drawn along income categories.76

It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas,77 the constitutionality of a provision in the charter of
the Bangko Sentral ng Pilipinas(BSP), a government financial institution (GFI), was challenged for
maintaining its rank-and-file employees under the Salary Standardization Law (SSL), even when the
rank-and-file employees of other GFIs had been exempted from the SSL by their respective
charters. Finding that the disputed provision contained a suspect classification based on salary
grade, the Court deliberately employed the standard of strict judicial scrutiny in its review of the
constitutionality of said provision. More significantly, it was in this case that the Court revealed the
broad outlines of its judicial philosophy, to wit:

Congress retains its wide discretion in providing for a valid classification, and its policies should be
accorded recognition and respect by the courts of justice except when they run afoul of the
Constitution. The deference stops where the classification violates a fundamental right,
or prejudices persons accorded special protection by the Constitution. When these violations
arise, this Court must discharge its primary role as the vanguard of constitutional guaranties, and
require a stricter and more exacting adherence to constitutional limitations. Rational basis should not
suffice.

Admittedly, the view that prejudice to persons accorded special protection by the Constitution
requires a stricter judicial scrutiny finds no support in American or English jurisprudence.
Nevertheless, these foreign decisions and authorities are not per se controlling in this jurisdiction. At
best, they are persuasive and have been used to support many of our decisions. We should not
place undue and fawning reliance upon them and regard them as indispensable mental crutches
without which we cannot come to our own decisions through the employment of our own
endowments. We live in a different ambience and must decide our own problems in the light of our
own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with
our own concept of law and justice. Our laws must be construed in accordance with the intention of
our own lawmakers and such intent may be deduced from the language of each law and the context
of other local legislation related thereto. More importantly, they must be construed to serve our own
public interest which is the be-all and the end-all of all our laws. And it need not be stressed that our
public interest is distinct and different from others.

xxxx

Further, the quest for a better and more "equal" world calls for the use of equal protection as a tool of
effective judicial intervention.

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble
proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society.
The command to promote social justice in Article II, Section 10, in "all phases of national
development," further explicitated in Article XIII, are clear commands to the State to take affirmative
action in the direction of greater equality. x x x [T]here is thus in the Philippine Constitution no lack of
doctrinal support for a more vigorous state effort towards achieving a reasonable measure of
equality.

Our present Constitution has gone further in guaranteeing vital social and economic rights to
marginalized groups of society, including labor. Under the policy of social justice, the law bends over
backward to accommodate the interests of the working class on the humane justification that those
with less privilege in life should have more in law. And the obligation to afford protection to labor is
incumbent not only on the legislative and executive branches but also on the judiciary to translate
this pledge into a living reality. Social justice calls for the humanization of laws and the equalization
of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated.
xxxx

Under most circumstances, the Court will exercise judicial restraint in deciding questions of
constitutionality, recognizing the broad discretion given to Congress in exercising its legislative
power. Judicial scrutiny would be based on the "rational basis" test, and the legislative discretion
would be given deferential treatment.

But if the challenge to the statute is premised on the denial of a fundamental right, or the
perpetuation of prejudice against persons favored by the Constitution with special
protection, judicial scrutiny ought to be more strict. A weak and watered down view would call
for the abdication of this Court’s solemn duty to strike down any law repugnant to the Constitution
and the rights it enshrines. This is true whether the actor committing the unconstitutional act is a
private person or the government itself or one of its instrumentalities. Oppressive acts will be struck
down regardless of the character or nature of the actor.

xxxx

In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-
employee status. It is akin to a distinction based on economic class and status, with the higher
grades as recipients of a benefit specifically withheld from the lower grades. Officers of the BSP now
receive higher compensation packages that are competitive with the industry, while the poorer, low-
salaried employees are limited to the rates prescribed by the SSL. The implications are quite
disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the SSL while
employees higher in rank - possessing higher and better education and opportunities for career
advancement - are given higher compensation packages to entice them to stay. Considering that
majority, if not all, the rank-and-file employees consist of people whose status and rank in life are
less and limited, especially in terms of job marketability, it is they - and not the officers - who have
the real economic and financial need for the adjustment . This is in accord with the policy of the
Constitution "to free the people from poverty, provide adequate social services, extend to them a
decent standard of living, and improve the quality of life for all." Any act of Congress that runs
counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass
muster. (Emphasis supplied)

Imbued with the same sense of "obligation to afford protection to labor," the Court in the present
case also employs the standard of strict judicial scrutiny, for it perceives in the subject clause a
suspect classification prejudicial to OFWs.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
However, a closer examination reveals that the subject clause has a discriminatory intent against,
and an invidious impact on, OFWs at two levels:

First, OFWs with employment contracts of less than one year vis-à-vis OFWs with
employment contracts of one year or more;

Second, among OFWs with employment contracts of more than one year; and

Third, OFWs vis-à-vis local workers with fixed-period employment;

OFWs with employment contracts of less than one year vis-à-vis OFWs with employment
contracts of one year or more

As pointed out by petitioner,78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations
Commission79(Second Division, 1999) that the Court laid down the following rules on the application
of the periods prescribed under Section 10(5) of R.A. No. 804, to wit:

A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an
illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired
portion of his employment contract or three (3) months’ salary for every year of the unexpired
term, whichever is less, comes into play only when the employment contract concerned has a
term of at least one (1) year or more. This is evident from the words "for every year of the
unexpired term" which follows the words "salaries x x x for three months." To follow
petitioners’ thinking that private respondent is entitled to three (3) months salary only simply because
it is the lesser amount is to completely disregard and overlook some words used in the statute while
giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in
interpreting a statute, care should be taken that every part or word thereof be given effect since the
law-making body is presumed to know the meaning of the words employed in the statue and to have
used them advisedly. Ut res magis valeat quam pereat.80 (Emphasis supplied)

In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but
was awarded his salaries for the remaining 8 months and 6 days of his contract.

Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on
Section 10(5). One was Asian Center for Career and Employment System and Services v. National
Labor Relations Commission (Second Division, October 1998),81 which involved an OFW who was
awarded a two-year employment contract, but was dismissed after working for one year and two
months. The LA declared his dismissal illegal and awarded him SR13,600.00 as lump-sum salary
covering eight months, the unexpired portion of his contract. On appeal, the Court reduced the
award to SR3,600.00 equivalent to his three months’ salary, this being the lesser value, to wit:

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just,
valid or authorized cause is entitled to his salary for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.

In the case at bar, the unexpired portion of private respondent’s employment contract is eight (8)
months. Private respondent should therefore be paid his basic salary corresponding to three (3)
months or a total of SR3,600.82

Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third
Division, December 1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was
originally granted a 12-month contract, which was deemed renewed for another 12 months. After
serving for one year and seven-and-a-half months, respondent Osdana was illegally dismissed, and
the Court awarded her salaries for the entire unexpired portion of four and one-half months of her
contract.

The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:

Case Title Contract Period of Unexpired Period Applied in

Period Service Period the Computation
of the Monetary
Award

Skippers v. 6 months 2 months 4 months 4 months

Maguad84
Bahia Shipping 9 months 8 months 4 months 4 months
v. Reynaldo
Chua 85

Centennial 9 months 4 months 5 months 5 months

Transmarine v.
dela Cruz l86

Talidano v. 12 months 3 months 9 months 3 months

Falcon87

Univan v. CA 88 12 months 3 months 9 months 3 months

Oriental v. 12 months more than 2 10 months 3 months

CA 89 months

PCL v. NLRC90 12 months more than 2 more or less 9 3 months

months months
Olarte v. 12 months 21 days 11 months and 9 3 months
Nayona91 days
JSS v.Ferrer92 12 months 16 days 11 months and 3 months
24 days
 Pentagon v. 12 months 9 months and 2 months and 23 2 months and 23
Adelantar93 7 days days days

Phil. Employ v. 12 months 10 months 2 months Unexpired portion

Paramio, et
al.94
Flourish 2 years 26 days 23 months and 4 6 months or 3
Maritime v. days months for each
Almanzor 95 year of contract

Athenna 1 year, 10 1 month 1 year, 9 months 6 months or 3

Manpower v. months and and 28 days months for each
Villanos 96 28 days year of contract

As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The
first category includes OFWs with fixed-period employment contracts of less than one year; in case
of illegal dismissal, they are entitled to their salaries for the entire unexpired portion of their contract.
The second category consists of OFWs with fixed-period employment contracts of one year or more;
in case of illegal dismissal, they are entitled to monetary award equivalent to only 3 months of the
unexpired portion of their contracts.

The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent
OFW worked for only 2 months out of his 6-month contract, but was awarded his salaries for the
remaining 4 months. In contrast, the respondent OFWs in Oriental and PCL who had also worked for
about 2 months out of their 12-month contracts were awarded their salaries for only 3 months of the
unexpired portion of their contracts. Even the OFWs involved in Talidano and Univan who
had worked for a longer period of 3 months out of their 12-month contracts before being illegally
dismissed were awarded their salaries for only 3 months.

To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an
employment contract of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical
OFW-B with an employment contract of 15 months with the same monthly salary rate of
US$1,000.00. Both commenced work on the same day and under the same employer, and were
illegally dismissed after one month of work. Under the subject clause, OFW-A will be entitled to
US$9,000.00, equivalent to his salaries for the remaining 9 months of his contract, whereas OFW-B
will be entitled to only US$3,000.00, equivalent to his salaries for 3 months of the unexpired portion
of his contract, instead of US$14,000.00 for the unexpired portion of 14 months of his contract, as
the US$3,000.00 is the lesser amount.

The disparity becomes more aggravating when the Court takes into account jurisprudence
that, prior to the effectivity of R.A. No. 8042 on July 14, 1995,97 illegally dismissed OFWs, no
matter how long the period of their employment contracts, were entitled to their salaries for the entire
unexpired portions of their contracts. The matrix below speaks for itself:

Case Title Contract Period of Unexpired Period Applied in the

Period Service Period Computation of the
Monetary Award
ATCI v. CA, et 2 years 2 months 22 months 22 months
al.98
Phil. Integrated 2 years 7 days 23 months 23 months and 23
v. NLRC99 and 23 days days

JGB v. NLC100 2 years 9 months 15 months 15 months

Agoy v. 2 years 2 months 22 months 22 months
NLRC101

EDI v. NLRC, 2 years 5 months 19 months 19 months

et al.102
Barros v. 12 months 4 months 8 months 8 months
NLRC, et al.103
 Philippine 12 months 6 months 5 months and 5 months and 18 days
Transmarine v. and 22 days 18 days
Carilla104

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired
portions thereof, were treated alike in terms of the computation of their monetary benefits in case of
illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries
multiplied by the entire unexpired portion of their employment contracts.

The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation
of the money claims of illegally dismissed OFWs based on their employment periods, in the
process singling out one category whose contracts have an unexpired portion of one year or more
and subjecting them to the peculiar disadvantage of having their monetary awards limited to their
salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the while sparing
the other category from such prejudice, simply because the latter's unexpired contracts fall short of
one year.

Among OFWs With Employment Contracts of More Than One Year

Upon closer examination of the terminology employed in the subject clause, the Court now has
misgivings on the accuracy of the Marsaman interpretation.

The Court notes that the subject clause "or for three (3) months for every year of the unexpired
term, whichever is less" contains the qualifying phrases "every year" and "unexpired term." By its
ordinary meaning, the word "term" means a limited or definite extent of time.105 Corollarily, that
"every year" is but part of an "unexpired term" is significant in many ways: first, the unexpired term
must be at least one year, for if it were any shorter, there would be no occasion for such unexpired
term to be measured by every year; and second, the original term must be more than one year, for
otherwise, whatever would be the unexpired term thereof will not reach even a year. Consequently,
the more decisive factor in the determination of when the subject clause "for three (3) months
for every year of the unexpired term, whichever is less" shall apply is not the length of the original
contract period as held in Marsaman,106 but the length of the unexpired portion of the contract period
-- the subject clause applies in cases when the unexpired portion of the contract period is at least
one year, which arithmetically requires that the original contract period be more than one year.

Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs whose
contract periods are for more than one year: those who are illegally dismissed with less than one
year left in their contracts shall be entitled to their salaries for the entire unexpired portion thereof,
while those who are illegally dismissed with one year or more remaining in their contracts shall be
covered by the subject clause, and their monetary benefits limited to their salaries for three months
only.

To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court
assumes hypothetical OFW-C and OFW-D, who each have a 24-month contract at a salary rate of
US$1,000.00 per month. OFW-C is illegally dismissed on the 12th month, and OFW-D, on the 13th
month. Considering that there is at least 12 months remaining in the contract period of OFW-C, the
subject clause applies to the computation of the latter's monetary benefits. Thus, OFW-C will be
entitled, not to US$12,000,00 or the latter's total salaries for the 12 months unexpired portion of the
contract, but to the lesser amount of US$3,000.00 or the latter's salaries for 3 months out of the 12-
month unexpired term of the contract. On the other hand, OFW-D is spared from the effects of the
subject clause, for there are only 11 months left in the latter's contract period. Thus, OFW-D will be
entitled to US$11,000.00, which is equivalent to his/her total salaries for the entire 11-month
unexpired portion.

OFWs vis-à-vis Local Workers

With Fixed-Period Employment

As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary
awards of illegally dismissed OFWs was in place. This uniform system was applicable even to local
workers with fixed-term employment.107

The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of
Commerce (1888),108 to wit:
Article 299. If the contracts between the merchants and their shop clerks and employees should
have been made of a fixed period, none of the contracting parties, without the consent of the other,
may withdraw from the fulfillment of said contract until the termination of the period agreed upon.

Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the
exception of the provisions contained in the following articles.

In Reyes v. The Compañia Maritima,109 the Court applied the foregoing provision to determine the
liability of a shipping company for the illegal discharge of its managers prior to the expiration of their
fixed-term employment. The Court therein held the shipping company liable for the salaries of its
managers for the remainder of their fixed-term employment.

There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of
Commerce which provides:

Article 605. If the contracts of the captain and members of the crew with the agent should be for a
definite period or voyage, they cannot be discharged until the fulfillment of their contracts, except for
reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and damage
caused to the vessel or to its cargo by malice or manifest or proven negligence.

Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie,110 in

which the Court held the shipping company liable for the salaries and subsistence allowance of its
illegally dismissed employees for the entire unexpired portion of their employment contracts.

While Article 605 has remained good law up to the present,111 Article 299 of the Code of Commerce
was replaced by Art. 1586 of the Civil Code of 1889, to wit:

Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a
certain work cannot leave or be dismissed without sufficient cause, before the fulfillment of the
contract. (Emphasis supplied.)

Citing Manresa, the Court in Lemoine v. Alkan112 read the disjunctive "or" in Article 1586 as a
conjunctive "and" so as to apply the provision to local workers who are employed for a time certain
although for no particular skill. This interpretation of Article 1586 was reiterated in Garcia Palomar v.
Hotel de France Company.113 And in both Lemoine and Palomar, the Court adopted the general
principle that in actions for wrongful discharge founded on Article 1586, local workers are entitled to
recover damages to the extent of the amount stipulated to be paid to them by the terms of their
contract. On the computation of the amount of such damages, the Court in Aldaz v. Gay114 held:

The doctrine is well-established in American jurisprudence, and nothing has been brought to our
attention to the contrary under Spanish jurisprudence, that when an employee is wrongfully
discharged it is his duty to seek other employment of the same kind in the same community, for the
purpose of reducing the damages resulting from such wrongful discharge. However, while this is the
general rule, the burden of showing that he failed to make an effort to secure other employment of a
like nature, and that other employment of a like nature was obtainable, is upon the defendant. When
an employee is wrongfully discharged under a contract of employment his prima facie damage is the
amount which he would be entitled to had he continued in such employment until the termination of
the period. (Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School
District No. 2, 98 Mich., 43.)115(Emphasis supplied)

On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment:
Section 2 (Obligations with a Period), Chapter 3, Title I, and Sections 2 (Contract of Labor) and 3
(Contract for a Piece of Work), Chapter 3, Title VIII, Book IV.116 Much like Article 1586 of the Civil
Code of 1889, the new provisions of the Civil Code do not expressly provide for the remedies
available to a fixed-term worker who is illegally discharged. However, it is noted that in Mackay
Radio & Telegraph Co., Inc. v. Rich,117 the Court carried over the principles on the payment of
damages underlying Article 1586 of the Civil Code of 1889 and applied the same to a case involving
the illegal discharge of a local worker whose fixed-period employment contract was entered into in
1952, when the new Civil Code was already in effect.118

More significantly, the same principles were applied to cases involving overseas Filipino workers
whose fixed-term employment contracts were illegally terminated, such as in First Asian Trans &
Shipping Agency, Inc. v. Ople,119involving seafarers who were illegally discharged. In Teknika Skills
and Trade Services, Inc. v. National Labor Relations Commission,120 an OFW who was illegally
dismissed prior to the expiration of her fixed-period employment contract as a baby sitter, was
awarded salaries corresponding to the unexpired portion of her contract. The Court arrived at the
same ruling in Anderson v. National Labor Relations Commission,121 which involved a foreman hired
in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine
months on the job -- the Court awarded him salaries corresponding to 15 months, the unexpired
portion of his contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission,122 a
Filipino working as a security officer in 1989 in Angola was awarded his salaries for the remaining
period of his 12-month contract after he was wrongfully discharged. Finally, in Vinta Maritime Co.,
Inc. v. National Labor Relations Commission,123 an OFW whose 12-month contract was illegally cut
short in the second month was declared entitled to his salaries for the remaining 10 months of his
contract.

In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were
illegally discharged were treated alike in terms of the computation of their money claims: they were
uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the
enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed
OFWs with an unexpired portion of one year or more in their employment contract have since been
differently treated in that their money claims are subject to a 3-month cap, whereas no such
limitation is imposed on local workers with fixed-term employment.

The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more
in their contracts, but none on the claims of other OFWs or local workers with fixed-term
employment. The subject clause singles out one classification of OFWs and burdens it with a
peculiar disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the
Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a
compelling state interest through the least restrictive means.

What constitutes compelling state interest is measured by the scale of rights and powers arrayed in
the Constitution and calibrated by history.124 It is akin to the paramount interest of the state125 for
which some individual liberties must give way, such as the public interest in safeguarding health or
maintaining medical standards,126 or in maintaining access to information on matters of public
concern.127

In the present case, the Court dug deep into the records but found no compelling state interest that
the subject clause may possibly serve.

The OSG defends the subject clause as a police power measure "designed to protect the
employment of Filipino seafarers overseas x x x. By limiting the liability to three months [sic], Filipino
seafarers have better chance of getting hired by foreign employers." The limitation also protects the
interest of local placement agencies, which otherwise may be made to shoulder millions of pesos in
"termination pay."128

The OSG explained further:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the
event that jurisdiction over the foreign employer is not acquired by the court or if the foreign
employer reneges on its obligation. Hence, placement agencies that are in good faith and which
fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect
them and to promote their continued helpful contribution in deploying Filipino migrant workers,
liability for money are reduced under Section 10 of RA 8042.

This measure redounds to the benefit of the migrant workers whose welfare the government seeks
to promote. The survival of legitimate placement agencies helps [assure] the government that
migrant workers are properly deployed and are employed under decent and humane
conditions.129 (Emphasis supplied)

However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception
of the state interest sought to be served by the subject clause.
The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in
sponsorship of House Bill No. 14314 (HB 14314), from which the law originated;130 but the speech
makes no reference to the underlying reason for the adoption of the subject clause. That is only
natural for none of the 29 provisions in HB 14314 resembles the subject clause.

On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit:

Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of the complaint, the claim arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for
overseas employment including claims for actual, moral, exemplary and other forms of damages.

The liability of the principal and the recruitment/placement agency or any and all claims under this
Section shall be joint and several.

Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of

damages under this Section shall not be less than fifty percent (50%) of such money
claims: Provided, That any installment payments, if applicable, to satisfy any such compromise or
voluntary settlement shall not be more than two (2) months. Any compromise/voluntary agreement in
violation of this paragraph shall be null and void.

Non-compliance with the mandatory period for resolutions of cases provided under this Section shall
subject the responsible officials to any or all of the following penalties:

(1) The salary of any such official who fails to render his decision or resolution within the
prescribed period shall be, or caused to be, withheld until the said official complies therewith;

(2) Suspension for not more than ninety (90) days; or

(3) Dismissal from the service with disqualification to hold any appointive public office for five
(5) years.

Provided, however, That the penalties herein provided shall be without prejudice to any liability
which any such official may have incurred under other existing laws or rules and regulations as a
consequence of violating the provisions of this paragraph.

But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money
claims.

A rule on the computation of money claims containing the subject clause was inserted and
eventually adopted as the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined the
rationale of the subject clause in the transcripts of the "Bicameral Conference Committee
(Conference Committee) Meetings on the Magna Carta on OCWs (Disagreeing Provisions of Senate
Bill No. 2077 and House Bill No. 14314)." However, the Court finds no discernible state interest, let
alone a compelling one, that is sought to be protected or advanced by the adoption of the subject
clause.

In fine, the Government has failed to discharge its burden of proving the existence of a compelling
state interest that would justify the perpetuation of the discrimination against OFWs under the
subject clause.

Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
employment of OFWs by mitigating the solidary liability of placement agencies, such callous and
cavalier rationale will have to be rejected. There can never be a justification for any form of
government action that alleviates the burden of one sector, but imposes the same burden on another
sector, especially when the favored sector is composed of private businesses such as placement
agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the
Constitution commands. The idea that private business interest can be elevated to the level of a
compelling state interest is odious.
Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement
agencies vis-a-vistheir foreign principals, there are mechanisms already in place that can be
employed to achieve that purpose without infringing on the constitutional rights of OFWs.

The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based
Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring
foreign employers who default on their contractual obligations to migrant workers and/or their
Philippine agents. These disciplinary measures range from temporary disqualification to preventive
suspension. The POEA Rules and Regulations Governing the Recruitment and Employment of
Seafarers, dated May 23, 2003, contains similar administrative disciplinary measures against erring
foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local
placement agencies in enforcing the solidary liability of their foreign principals.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right
of petitioner and other OFWs to equal protection. 1avvphi1

Further, there would be certain misgivings if one is to approach the declaration of the
unconstitutionality of the subject clause from the lone perspective that the clause directly violates
state policy on labor under Section 3,131Article XIII of the Constitution.

While all the provisions of the 1987 Constitution are presumed self-executing,132 there are some
which this Court has declared not judicially enforceable, Article XIII being one,133 particularly
Section 3 thereof, the nature of which, this Court, in Agabon v. National Labor Relations
Commission,134 has described to be not self-actuating:

Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as
self-executing in the sense that these are automatically acknowledged and observed without need
for any enabling legislation. However, to declare that the constitutional provisions are enough to
guarantee the full exercise of the rights embodied therein, and the realization of ideals therein
expressed, would be impractical, if not unrealistic. The espousal of such view presents the
dangerous tendency of being overbroad and exaggerated. The guarantees of "full protection to
labor" and "security of tenure", when examined in isolation, are facially unqualified, and the broadest
interpretation possible suggests a blanket shield in favor of labor against any form of removal
regardless of circumstance. This interpretation implies an unimpeachable right to continued
employment-a utopian notion, doubtless-but still hardly within the contemplation of the framers.
Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure
the protection and promotion, not only the rights of the labor sector, but of the employers' as well.
Without specific and pertinent legislation, judicial bodies will be at a loss, formulating their own
conclusion to approximate at least the aims of the Constitution.

Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive
enforceable right to stave off the dismissal of an employee for just cause owing to the failure to
serve proper notice or hearing. As manifested by several framers of the 1987 Constitution, the
provisions on social justice require legislative enactments for their enforceability.135 (Emphasis
added)

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for
the violation of which the questioned clause may be declared unconstitutional. It may unwittingly risk
opening the floodgates of litigation to every worker or union over every conceivable violation of so
broad a concept as social justice for labor.

It must be stressed that Section 3, Article XIII does not directly bestow on the working class any
actual enforceable right, but merely clothes it with the status of a sector for whom the Constitution
urges protection through executive or legislative action and judicial recognition. Its utility is best
limited to being an impetus not just for the executive and legislative departments, but for the judiciary
as well, to protect the welfare of the working class. And it was in fact consistent with that
constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now Chief Justice
Reynato S. Puno, formulated the judicial precept that when the challenge to a statute is premised on
the perpetuation of prejudice against persons favored by the Constitution with special protection --
such as the working class or a section thereof -- the Court may recognize the existence of a suspect
classification and subject the same to strict judicial scrutiny.
The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central
Bank Employee Association exaggerate the significance of Section 3, Article XIII is a groundless
apprehension. Central Bank applied Article XIII in conjunction with the equal protection clause.
Article XIII, by itself, without the application of the equal protection clause, has no life or force of its
own as elucidated in Agabon.

Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's
right to substantive due process, for it deprives him of property, consisting of monetary benefits,
without any existing valid governmental purpose.136

The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the
entitlement of OFWs to their three-month salary in case of illegal dismissal, is to give them a better
chance of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is
nothing in the text of the law or the records of the deliberations leading to its enactment or the
pleadings of respondent that would indicate that there is an existing governmental purpose for the
subject clause, or even just a pretext of one.

The subject clause does not state or imply any definitive governmental purpose; and it is for that
precise reason that the clause violates not just petitioner's right to equal protection, but also her right
to substantive due process under Section 1,137 Article III of the Constitution.

The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired
period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence
prior to the enactment of R.A. No. 8042.

On the Third Issue

Petitioner contends that his overtime and leave pay should form part of the salary basis in the
computation of his monetary award, because these are fixed benefits that have been stipulated into
his contract.

Petitioner is mistaken.

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like
petitioner, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract
of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and
other bonuses; whereas overtime pay is compensation for all work "performed" in excess of the
regular eight hours, and holiday pay is compensation for any work "performed" on designated rest
days and holidays.

By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and
holiday pay in the computation of petitioner's monetary award, unless there is evidence that he
performed work during those periods. As the Court held in Centennial Transmarine, Inc. v. Dela
Cruz,138

However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in
Cagampan v. National Labor Relations Commission, to wit:

The rendition of overtime work and the submission of sufficient proof that said was actually
performed are conditions to be satisfied before a seaman could be entitled to overtime pay which
should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision
guarantees the right to overtime pay but the entitlement to such benefit must first be established.

In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is
unwarranted since the same is given during the actual service of the seamen.

WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three months for every
year of the unexpired term, whichever is less" in the 5th paragraph of Section 10 of Republic Act No.
8042 is DECLAREDUNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005
Resolution of the Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his
salaries for the entire unexpired portion of his employment contract consisting of nine months and 23
days computed at the rate of US$1,400.00 per month.
No costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO

Associate Justice Associate Justice

ANTONIO T. CARPIO RENATO C. CORONA

Associate Justice Associate Justice

CONCHITA CARPIO MORALES DANTE O. TINGA

Associate Justice Associate Justice

(On leave)
PRESBITERO J. VELASCO, JR.
MINITA V. CHICO-NAZARIO
Associate Justice
Associate Justice

ANTONIO EDUARDO B. NACHURA TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

(see concurring opinion)

DIOSDADO M. PERALTA
ARTURO D. BRION
Associate Justice
Associate Justice

CERTIFICATION

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

REYNATO S. PUNO
Chief Justice

G.R. No. 178160 February 26, 2009

BASES CONVERSION AND DEVELOPMENT AUTHORITY, Petitioner,

vs.
COMMISSION ON AUDIT, Respondent.

DECISION

CARPIO, J.:

The Case

This is a petition for certiorari1 with prayer for the issuance of a temporary restraining order and a writ
of preliminary injunction. The petition seeks to nullify Decision No. 2007-0202 dated 12 April 2007 of
the Commission on Audit (COA).
 The Facts

On 13 March 1992, Congress approved Republic Act (RA) No. 72273 creating the Bases Conversion
and Development Authority (BCDA). Section 9 of RA No. 7227 states that the BCDA Board of
Directors (Board) shall exercise the powers and functions of the BCDA. Under Section 10, the
functions of the Board include the determination of the organizational structure and the adoption of a
compensation and benefit scheme at least equivalent to that of the Bangko Sentral ng Pilipinas
(BSP). Accordingly, the Board determined the organizational structure of the BCDA and adopted a
compensation and benefit scheme for its officials and employees.

On 20 December 1996, the Board adopted a new compensation and benefit scheme which included
a ₱10,000 year-end benefit granted to each contractual employee, regular permanent employee,
and Board member. In a memorandum4 dated 25 August 1997, Board Chairman Victoriano A. Basco
(Chairman Basco) recommended to President Fidel V. Ramos (President Ramos) the approval of
the new compensation and benefit scheme. In a memorandum5 dated 9 October 1997, President
Ramos approved the new compensation and benefit scheme.

In 1999, the BSP gave a ₱30,000 year-end benefit to its officials and employees. In 2000, the BSP
increased the year-end benefit from ₱30,000 to ₱35,000. Pursuant to Section 10 of RA No. 7227
which states that the compensation and benefit scheme of the BCDA shall be at least equivalent to
that of the BSP, the Board increased the year-end benefit of BCDA officials and employees from
₱10,000 to ₱30,000. Thus in 2000 and 2001, BCDA officials and employees received a ₱30,000
year-end benefit, and, on 1 October 2002, the Board passed Resolution No. 2002-10-1936 approving
the release of a ₱30,000 year-end benefit for 2002.

Aside from the contractual employees, regular permanent employees, and Board members, the full-
time consultants of the BCDA also received the year-end benefit.

On 20 February 2003, State Auditor IV Corazon V. Españo of the COA issued Audit Observation
Memorandum (AOM) No. 2003-0047 stating that the grant of year-end benefit to Board members
was contrary to Department of Budget and Management (DBM) Circular Letter No. 2002-2 dated 2
January 2002. In Notice of Disallowance (ND) No. 03-001-BCDA-(02)8 dated 8 January 2004,
Director IV Rogelio D. Tablang (Director Tablang), COA, Legal and Adjudication Office-Corporate,
disallowed the grant of year-end benefit to the Board members and full-time consultants. In Decision
No. 2004-0139 dated 13 January 2004, Director Tablang "concurred" with AOM No. 2003-004 and
ND No. 03-001-BCDA-(02).

In a letter10 dated 20 February 2004, BCDA President and Chief Executive Officer Rufo Colayco
requested the reconsideration of Decision No. 2004-013. In a Resolution11 dated 22 June 2004,
Director Tablang denied the request. The BCDA filed a notice of appeal12 dated 8 September 2004
and an appeal memorandum13 dated 23 December 2004 with the COA.

The COA’s Ruling

In Decision No. 2007-020,14 the COA affirmed the disallowance of the year-end benefit granted to
the Board members and full-time consultants and held that the presumption of good faith did not
apply to them. The COA stated that:

The granting of YEB x x x is not without x x x limitation. DBM Circular Letter No. 2002-02 dated
January 2, 2002 stating, viz:

"2.0 To clarify and address issues/requests concerning the same, the following
compensation policies are hereby reiterated:

2.1 PERA, ADCOM, YEB and retirement benefits, are personnel benefits granted in addition
to salaries. As fringe benefits, these shall be paid only when the basic salary is also paid.

2.2 Members of the Board of Directors of agencies are not salaried officials of the
government. As non-salaried officials they are not entitled to PERA, ADCOM, YEB and
retirement benefits unless expressly provided by law.

2.3 Department Secretaries, Undersecretaries and Assistant Secretaries who serve as Ex-
officio Members of the Board of Directors are not entitled to any remuneration in line with the
 Supreme Court ruling that their services in the Board are already paid for and covered by the
remuneration attached to their office." (underscoring ours)

Clearly, as stated above, the members and ex-officio members of the Board of Directors are
not entitled to YEB, they being not salaried officials of the government. The same goes
with full time consultants wherein no employer-employee relationships exist between them and the
BCDA. Thus, the whole amount paid to them totaling ₱342,000 is properly disallowed in audit.

Moreover, the presumption of good faith may not apply to the members and ex-officio members of
the Board of Directors because despite the earlier clarification on the matter by the DBM thru the
issuance on January 2, 2002 of DBM Circular Letter No. 2002-02, still, the BCDA Board of Directors
enacted Resolution No. 2002-10-93 on October 1, 2002 granting YEB to the BCDA personnel
including themselves. Full time consultants, being non-salaried personnel, are also not entitled to
such presumption since they knew from the very beginning that they are only entitled to the amount
stipulated in their contracts as compensation for their services. Hence, they should be made to
refund the disallowed YEB.15 (Boldfacing in the original)

Hence, this petition.

The Court’s Ruling

The Board members and full-time consultants of the BCDA are not entitled to the year-end benefit.

First, the BCDA claims that the Board can grant the year-end benefit to its members and full-time
consultants because, under Section 10 of RA No. 7227, the functions of the Board include the
adoption of a compensation and benefit scheme.

The Court is not impressed. The Board’s power to adopt a compensation and benefit scheme is not
unlimited. Section 9 of RA No. 7227 states that Board members are entitled to a per diem:

Members of the Board shall receive a per diem of not more than Five thousand pesos
(₱5,000) for every board meeting: Provided, however, That the per diem collected per month
does not exceed the equivalent of four (4) meetings: Provided, further, That the amount of per
diem for every board meeting may be increased by the President but such amount shall not be
increased within two (2) years after its last increase. (Emphasis supplied) 1awphi1

Section 9 specifies that Board members shall receive a per diem for every board meeting; limits the
amount of per diem to not more than ₱5,000; and limits the total amount of per diem for one month
to not more than four meetings. In Magno v. Commission on Audit,16 Cabili v. Civil Service
Commission,17 De Jesus v. Civil Service Commission,18Molen, Jr. v. Commission on
Audit,19 and Baybay Water District v. Commission on Audit,20 the Court held that the specification
of compensation and limitation of the amount of compensation in a statute indicate that
Board members are entitled only to the per diem authorized by law and no other. In Baybay
Water District, the Court held that:

By specifying the compensation which a director is entitled to receive and by limiting the amount
he/she is allowed to receive in a month, x x x the law quite clearly indicates that directors x x x are
authorized to receive only the per diem authorized by law and no other compensation or allowance
in whatever form.21

Also, DBM Circular Letter No. 2002-2 states that, "Members of the Board of Directors of agencies
are not salaried officials of the government. As non-salaried officials they are not entitled
to PERA, ADCOM, YEBand retirement benefits unless expressly provided by law." RA No. 7227
does not state that the Board members are entitled to a year-end benefit.

With regard to the full-time consultants, DBM Circular Letter No. 2002-2 states that, "YEB and
retirement benefits, are personnel benefits granted in addition to salaries. As fringe benefits,
these shall be paid only when the basic salary is also paid." The full-time consultants are not
part of the BCDA personnel and are not paid the basic salary. The full-time consultants’ consultancy
contracts expressly state that there is no employer-employee relationship between the BCDA and
the consultants, and that the BCDA shall pay the consultants a contract price. For example, the
consultancy contract22 of a certain Dr. Faith M. Reyes states:
SECTION 2. Contract Price. For and in consideration of the services to be performed by the
CONSULTANT (16 hours/week), BCDA shall pay her the amount of TWENTY THOUSAND PESOS
and 00/100 (₱20,000.00), Philippine currency, per month.

xxxx

SECTION 4. Employee-Employer Relationship. It is understood that no employee-employer

relationship shall exist between BCDA and the CONSULTANT.

SECTION 5. Period of Effectivity. This CONTRACT shall have an effectivity period of one (1) year,
from January 01, 2002 to December 31, 2002, unless sooner terminated by BCDA in accordance
with Section 6 below.

SECTION 6. Termination of Services. BCDA, in its sole discretion may opt to terminate this
CONTRACT when it sees that there is no more need for the services contracted for. (Boldfacing in
the original)

Since full-time consultants are not salaried employees of BCDA, they are not entitled to the year-end
benefit which is a "personnel benefit granted in addition to salaries" and which is "paid only when
the basic salary is also paid."

Second, the BCDA claims that the Board members and full-time consultants should be granted the
year-end benefit because the granting of year-end benefit is consistent with Sections 5 and 18,
Article II of the Constitution. Sections 5 and 18 state:

Section 5. The maintenance of peace and order, the protection of life, liberty, and property, and the
promotion of the general welfare are essential for the enjoyment by all people of the blessings of
democracy.

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.

The Court is not impressed. Article II of the Constitution is entitled Declaration of Principles and
State Policies. By its very title, Article II is a statement of general ideological principles and policies.
It is not a source of enforceable rights.23 In Tondo Medical Center Employees Association v. Court of
Appeals,24 the Court held that Sections 5 and 18, Article II of the Constitution are not self-
executing provisions. In that case, the Court held that "Some of the constitutional provisions
invoked in the present case were taken from Article II of the Constitution — specifically, Sections 5 x
x x and 18 — the provisions of which the Court categorically ruled to be non self-executing."

Third, the BCDA claims that the denial of year-end benefit to the Board members and full-time
consultants violates Section 1, Article III of the Constitution.25 More specifically, the BCDA claims
that there is no substantial distinction between regular officials and employees on one hand, and
Board members and full-time consultants on the other. The BCDA states that "there is here only a
distinction, but no difference" because both "have undeniably one common goal as humans, that is x
x x ‘to keep body and soul together’" or, "[d]ifferently put, both have mouths to feed and stomachs to
fill."

The Court is not impressed. Every presumption should be indulged in favor of the
constitutionality of RA No. 7227 and the burden of proof is on the BCDA to show that there is
a clear and unequivocal breach of the Constitution.26 In Abakada Guro Party List v.
Purisima,27 the Court held that:

A law enacted by Congress enjoys the strong presumption of constitutionality. To justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a doubtful and
unequivocal one. To invalidate [a law] based on x x x baseless supposition is an affront to the
wisdom not only of the legislature that passed it but also of the executive which approved it.

The BCDA failed to show that RA No. 7227 unreasonably singled out Board members and full-time
consultants in the grant of the year-end benefit. It did not show any clear and unequivocal breach of
the Constitution. The claim that there is no difference between regular officials and employees, and
Board members and full-time consultants because both groups "have mouths to feed and stomachs
to fill" is fatuous. Surely, persons are not automatically similarly situated — thus, automatically
deserving of equal protection of the laws — just because they both "have mouths to feed and
stomachs to fill." Otherwise, the existence of a substantial distinction would become forever highly
improbable.

Fourth, the BCDA claims that the Board can grant the year-end benefit to its members and the full-
time consultants because RA No. 7227 does not expressly prohibit it from doing so.

The Court is not impressed. A careful reading of Section 9 of RA No. 7227 reveals that the Board is
prohibited from granting its members other benefits. Section 9 states:

Members of the Board shall receive a per diem of not more than Five thousand pesos
(₱5,000) for every board meeting: Provided, however, That the per diem collected per month
does not exceed the equivalent of four (4) meetings: Provided, further, That the amount of per
diem for every board meeting may be increased by the President but such amount shall not be
increased within two (2) years after its last increase. (Emphasis supplied)

Section 9 specifies that Board members shall receive a per diem for every board meeting; limits the
amount of per diem to not more than ₱5,000; limits the total amount of per diem for one month to not
more than four meetings; and does not state that Board members may receive other benefits.
In Magno,28 Cabili,29 De Jesus,30 Molen, Jr.,31 and Baybay Water District,32 the Court held that the
specification of compensation and limitation of the amount of compensation in a statute
indicate that Board members are entitled only to the per diem authorized by law and no other.

The specification that Board members shall receive a per diem of not more than ₱5,000 for every
meeting and the omission of a provision allowing Board members to receive other benefits lead the
Court to the inference that Congress intended to limit the compensation of Board members to
the per diem authorized by law and no other. Expressio unius est exclusio alterius. Had Congress
intended to allow the Board members to receive other benefits, it would have expressly stated
so.33 For example, Congress’ intention to allow Board members to receive other benefits besides
the per diem authorized by law is expressly stated in Section 1 of RA No. 9286:34

SECTION 1. Section 13 of Presidential Decree No. 198, as amended, is hereby amended to read as
follows:

"SEC. 13. Compensation. — Each director shall receive per diem to be determined by the Board, for
each meeting of the Board actually attended by him, but no director shall receive per diems in any
given month in excess of the equivalent of the total per diem of four meetings in any given month.

Any per diem in excess of One hundred fifty pesos (₱150.00) shall be subject to the approval of the
Administration. In addition thereto, each director shall receive allowances and benefits as the
Board may prescribe subject to the approval of the Administration." (Emphasis supplied)

The Court cannot, in the guise of interpretation, enlarge the scope of a statute or insert into a statute
what Congress omitted, whether intentionally or unintentionally.35

When a statute is susceptible of two interpretations, the Court must "adopt the one in consonance
with the presumed intention of the legislature to give its enactments the most reasonable and
beneficial construction, the one that will render them operative and effective."36 The Court always
presumes that Congress intended to enact sensible statutes.37 If the Court were to rule that the
Board could grant the year-end benefit to its members, Section 9 of RA No. 7227 would become
inoperative and ineffective — the specification that Board members shall receive a per diem of not
more than ₱5,000 for every meeting; the specification that the per diem received per month shall not
exceed the equivalent of four meetings; the vesting of the power to increase the amount of per
diem in the President; and the limitation that the amount of per diem shall not be increased within
two years from its last increase would all become useless because the Board could always grant its
members other benefits.

With regard to the full-time consultants, DBM Circular Letter No. 2002-2 states that, "YEB and
retirement benefits, are personnel benefits granted in addition to salaries. As fringe benefits,
these shall be paid only when the basic salary is also paid." The full-time consultants are not
part of the BCDA personnel and are not paid the basic salary. The full-time consultants’ consultancy
contracts expressly state that there is no employer-employee relationship between BCDA and the
consultants and that BCDA shall pay the consultants a contract price. Since full-time consultants are
not salaried employees of the BCDA, they are not entitled to the year-end benefit which is a
"personnel benefit granted in addition to salaries" and which is "paid only when the basic salary
is also paid."

Fifth, the BCDA claims that the Board members and full-time consultants are entitled to the year-end
benefit because (1) President Ramos approved the granting of the benefit to the Board members,
and (2) they have been receiving it since 1997.

The Court is not impressed. The State is not estopped from correcting a public officer’s erroneous
application of a statute, and an unlawful practice, no matter how long, cannot give rise to any vested
right.38

The Court, however, notes that the Board members and full-time consultants received the year-end
benefit in good faith. The Board members relied on (1) Section 10 of RA No. 7227 which authorized
the Board to adopt a compensation and benefit scheme; (2) the fact that RA No. 7227 does not
expressly prohibit Board members from receiving benefits other than the per diem authorized by law;
and (3) President Ramos’ approval of the new compensation and benefit scheme which included the
granting of a year-end benefit to each contractual employee, regular permanent employee, and
Board member. The full-time consultants relied on Section 10 of RA No. 7227 which authorized the
Board to adopt a compensation and benefit scheme. There is no proof that the Board members and
full-time consultants knew that their receipt of the year-end benefit was unlawful. In keeping
with Magno,39 De Jesus,40 Molen, Jr.,41 and Kapisanan ng mga Manggagawa sa Government Service
Insurance System (KMG) v. Commission on Audit,42 the Board members and full-time consultants
are not required to refund the year-end benefits they have already received.

WHEREFORE, the petition is PARTIALLY GRANTED. Commission on Audit Decision No. 2007-020
dated 12 April 2007 is AFFIRMED with the MODIFICATION that the Board members and full-time
consultants of the Bases Conversion and Development Authority are not required to refund the year-
end benefits they have already received.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

(On official leave)

LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO*
Associate Justice Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA

Associate Justice Associate Justice

(On official leave)

CONCHITA CARPIO MORALES DANTE O. TINGA*
Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA ARTURO D. BRION

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO DIOSDADO M. PERALTA

Associate Justice Associate Justice
 CERTIFICATION

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

REYNATO S. PUNO
Chief Justice

G.R. No. 169815 August 13, 2008

BUREAU OF FISHERIES AND AQUATIC RESOURCES (BFAR) EMPLOYEES UNION, REGIONAL

OFFICE NO. VII, CEBU CITY, petitioner,
vs.
COMMISSION ON AUDIT, respondent.

DECISION

PUNO, C.J.:

On appeal are the Decision1 dated April 8, 2005 of respondent Commission on Audit (COA) in LAO-N-
2005-119 upholding the disallowance by the COA Legal and Adjudication Office (COA-LAO), Regional
Office No. VII, Cebu City of the P10,000.00 Food Basket Allowance granted by BFAR to each of its
employees in 1999, and COA Resolution2 dated August 5, 2005, denying petitioner’s motion for
reconsideration of said Decision.

First, the facts:

On October 18, 1999, petitioner Bureau of Fisheries and Aquatic Resources (BFAR) Employees Union,
Regional Office No. VII, Cebu City issued Resolution No. 01, series of 1999 requesting the BFAR Central
Office for a Food Basket Allowance. It justified its request on the high cost of living, i.e., "the increase in
prices of petroleum products which catapulted the cost of food commodities, has greatly affected the
economic conditions and living standard of the government employees of BFAR Region VII and could
hardly sustain its need to cope up with the four (4) basic needs, i.e., food, shelter, clothing and
education."3 It also relied on the Employees Suggestions and Incentive Awards System (ESIAS),
pursuant to Book V of Executive Order No. 292, or the Administrative Code of 1987, and approved by the
Civil Service Commission on December 3, 1996. The ESIAS "includes the granting of incentives that will
help employees overcome present economic difficulties, boost their morale, and further commitment and
dedication to public service."4 Regional Director Corazon M. Corrales of BFAR Region VII indorsed the
Resolution, and Malcolm I. Sarmiento, Jr., Director of BFAR recommended its approval. Honorable Cesar
M. Drilon, Jr., Undersecretary for Fisheries and Livestock of the Department of Agriculture, approved the
request for Authority to Grant a Gift Check or the Food Basket Allowance at the rate of P10,000.00 each
to the 130 employees of BFAR Region VII, or in the total amount of P1,322,682.00.5 On the strength of
the approval, Regional Director Corrales released the allowance to the BFAR employees.

On post audit, the Commission on Audit – Legal and Adjudication Office (COA-LAO) Regional Office No.
VII, Cebu City disallowed the grant of Food Basket Allowance under Notice of Disallowance No. 2003-
022-101 (1999) dated September 19, 2003. It ruled that the allowance had no legal basis and that it
violated: a) Sec. 15(d) of the General Appropriations Act of 1999, prohibiting the payment of honoraria,
allowances, or other forms of compensation to any government official or employee, except those
specifically authorized by law; b) par. 4.5 of Budget Circular No. 16 dated November 28, 1998, prohibiting
the grant of food, rice, gift checks, or any other form of incentives/allowances, except those authorized via
Administrative Order by the Office of the President; and c) Sec. 12 of Republic Act (R.A.) No. 6758, or the
Salary Standardization Law of 1989, which includes all allowances in the standardized salary rates,
subject to certain exceptions.

On February 26, 2004, BFAR Regional Office No. VII, through Regional Director Corrales, moved for
reconsideration and prayed for the lifting of the disallowance. It argued that the grant of Food Basket
Allowance would enhance the welfare and productivity of the employees. Further, it contended that the
approval by the Honorable Drilon, Undersecretary for Fisheries and Livestock, of the said benefit was the
law itself which vested the specific authority for its release. The Commission on Audit – Legal and
Adjudication Office (COA-LAO) Regional Office No. VII, Cebu City denied the motion.
Petitioner appealed to the Commission on Audit – Legal and Adjudication Office (COA-LAO) National,
Quezon City. The appeal was denied in a Decision dated April 8, 2005. Petitioner’s motion for
reconsideration was likewise denied in a Resolution dated August 5, 2005.

Hence, this appeal.

Petitioner cites the following grounds for its appeal:

1. The disallowance in question is unconstitutional as it contravenes the fundamental principle of

the State enshrined under Sections 9 and 10, Article II of the 1987 Constitution, which provide as
follows:

SEC. 9. The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through
policies that provide adequate social services, promote full employment, a rising standard
of living, and an improved quality of life for all.

SEC. 10. The State shall promote social justice in all phases of national development. 6

2. The Undersecretary for Fisheries and Livestock is an extension of the Secretary of Agriculture
who is an alter-ego of the President. His approval was tantamount to the authority from the Office
of the President, as contemplated in DBM Budget Circular No. 16, dated November 28, 1998.7

3. The grant of the Food Basket Allowance is in conformity with Sec. 12 of the Salary
Standardization Law.8

We deny the petition.

First, we rule on the issue of constitutionality. Petitioner invokes the provisions of the 1987 Constitution on
social justice to warrant the grant of the Food Basket Allowance. Time and again, we have ruled that the
social justice provisions of the Constitution are not self-executing principles ready for enforcement
through the courts. They are merely statements of principles and policies. To give them effect, legislative
enactment is required. As we held in Kilosbayan, Incorporated v. Morato,9 the principles and state
policies enumerated in Article II and some sections of Article XII are "not self-executing provisions, the
disregard of which can give rise to a cause of action in the courts. They do not embody judicially
enforceable constitutional rights but guidelines for legislation."10

Second, petitioner contends that the approval of the Department of Agriculture (DA) Undersecretary for
Fisheries and Livestock of the Food Basket Allowance is the law which authorizes its release. It is crystal
clear that the DA Undersecretary has no authority to grant any allowance to the employees of BFAR.
Section 4.5 of Budget Circular No. 16 dated November 28, 1998 states:

All agencies are hereby prohibited from granting any food, rice, gift checks, or any other form of
incentives/allowances except those authorized via Administrative Order by the Office of the
President.

In the instant case, no Administrative Order has been issued by the Office of the President to exempt
BFAR from the express prohibition against the grant of any food, rice, gift checks, or any other form of
incentive/allowance to its employees.

Petitioner argues that the grant of the Food Basket Allowance does not violate Sec. 12 of R.A. No. 6758
or the Salary Standardization Law. This law was passed to standardize salary rates among government
personnel and do away with multiple allowances and other incentive packages and the resulting
differences in compensation among them.11 Sec. 12 of the law provides:

Consolidation of Allowances and Compensation. — All allowances, except for representation and
transportation allowances; clothing and laundry allowances; subsistence allowance of marine
officers and crew on board government vessels and hospital personnel; hazard pay; allowances
of foreign service personnel stationed abroad; and such other additional compensation not
otherwise specified herein as may be determined by the DBM [Department of Budget and
Management], shall be deemed included in the standardized salary rates herein prescribed. Such
other additional compensation, whether in cash or in kind, being received by incumbents only as
of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.
 Existing additional compensation of any national government official or employee paid from local
funds of a local government unit shall be absorbed into the basic salary of said official or
employee and shall be paid by the National Government.

Under Sec. 12, as quoted, all kinds of allowances are integrated in the standardized salary rates. The
exceptions are:

1. representation and transportation allowance (RATA);

2. clothing and laundry allowance;

3. subsistence allowance of marine officers and crew on board government vessels;

4. subsistence allowance of hospital personnel;

5. hazard pay;

6. allowances of foreign service personnel stationed abroad; and

7. such other additional compensation not otherwise specified herein as may be determined by
the DBM.

Petitioner contends that the Food Basket Allowance falls under the 7th category above, that of "other
additional compensation not otherwise specified herein as may be determined by the DBM."

The Court has had the occasion to interpret Sec. 12 of R.A. No. 6758. In National Tobacco
Administration v. Commission on Audit,12 we held that under the first sentence of Section 12, the
benefits excluded from the standardized salary rates are the "allowances" or those which are usually
granted to officials and employees of the government to defray or reimburse the expenses incurred in the
performance of their official functions. These are the RATA, clothing and laundry allowance, subsistence
allowance of marine officers and crew on board government vessels and hospital personnel, hazard pay,
and others, as enumerated in the first sentence of Section 12. We further ruled that the phrase "and such
other additional compensation not otherwise specified herein as may be determined by the DBM" is a
catch-all proviso for benefits in the nature of allowances similar to those enumerated. In Philippine Ports
Authority v. Commission on Audit,13 we explained that if these allowances were consolidated with the
standardized salary rates, then government officials or employees would be compelled to spend their
personal funds in attending to their duties.

In the instant case, the Food Basket Allowance is definitely not in the nature of an allowance to reimburse
expenses incurred by officials and employees of the government in the performance of their official
functions. It is not payment in consideration of the fulfillment of official duty. It is a form of financial
assistance to all officials and employees of BFAR. Petitioner itself stated that the Food Basket Allowance
has the purpose of alleviating the economic condition of BFAR employees.

Next, petitioner relies on National Compensation Circular No. 59 dated September 30, 1989, issued by
the DBM, which is the "List of Allowances/Additional Compensation of Government Officials and
Employees which shall be Deemed Integrated into the Basic Salary." The list enumerates the following
allowances/additional compensation which shall be incorporated in the basic salary, hence, may no
longer be granted to government employees:

1. Cost of Living Allowance (COLA);

2. Inflation connected allowance;

3. Living Allowance;

4. Emergency Allowance;

5. Additional Compensation of Public Health Nurses assigned to public health nursing;

6. Additional Compensation of Rural Health Physicians;

7. Additional Compensation of Nurses in Malacañang Clinic;

 8. Nurses Allowance in the Air Transportation Office;

9. Assignment Allowance of School Superintendents;

10. Post allowance of Postal Service Office employees;

11. Honoraria/allowances which are regularly given except the following:

a. those for teaching overload;

b. in lieu of overtime pay;

c. for employees on detail with task forces/special projects;

d. researchers, experts and specialists who are acknowledged authorities in their field of
specialization;

e. lecturers and resource persons;

f. Municipal Treasurers deputized by the Bureau of Internal Revenue to collect and remit
internal revenue collections; and

g. Executive positions in State Universities and Colleges filled by designation from among
their faculty members.

12. Subsistence Allowance of employees except those authorized under EO [Executive Order]
No. 346 and uniformed personnel of the Armed Forces of the Philippines and Integrated National
Police;

13. Laundry Allowance of employees except those hospital/sanitaria personnel who attend
directly to patients and who by the nature of their duties are required to wear uniforms, prison
guards and uniformed personnel of the Armed Forces of the Philippines and Integrated National
Police; and

14. Incentive allowance/fee/pay except those authorized under the General Appropriations Act
and Section 33 of P.D. No. 807.

Petitioner invokes the rule of statutory construction that "what is not included is excluded." Inclusio unius
est exclusio alterius. Petitioner claims that the Food Basket Allowance is distinct and separate from the
specific allowances/additional compensation listed in the circular.

Again, we reject petitioner’s contention. The Food Basket Allowance falls under the 14 th category, that of
incentive allowance/fee/pay. Petitioner itself justified the Food Basket Allowance as an incentive to the
employees to encourage them to be more productive and efficient.14 Under National Compensation
Circular No. 59, exceptions to the incentive allowance/fee/pay category are those authorized under the
General Appropriations Act (GAA) and Section 33 of Presidential Decree (P.D.) No. 807. Sec. 15(d) of the
GAA for Fiscal Year 1999 or R.A. No. 8745 clearly prohibits the payment of honoraria, allowances or
other forms of compensation to any government official or employee, except those specifically authorized
by law. There is no law authorizing the grant of the subject Food Basket Allowance. Further, Sec. 33 of
P.D. No. 807 or the Civil Service Decree of the Philippines does not exempt the Food Basket Allowance
from the general rule. Sec. 33 states:

Section 33. Employee Suggestions and Incentive Award System. There shall be established a
government-wide employee suggestions and incentive awards system which shall be
administered under such rules, regulations, and standards as may be promulgated by the
Commission.

In accordance with rules, regulations, and standards promulgated by the Commission, the
President or the head of each department or agency is authorized to incur whatever necessary
expenses involved in the honorary recognition of subordinate officers and employees of the
government who by their suggestions, inventions, superior accomplishment, and other personal
efforts contribute to the efficiency, economy, or other improvement of government operations, or
who perform such other extraordinary acts or services in the public interest in connection with, or
in relation to, their official employment.
We are not convinced that the Food Basket Allowance falls under the incentive award system
contemplated above. The decree speaks of suggestions, inventions, superior accomplishments, and
other personal efforts contributed by an employee to the efficiency, economy, or other improvement of
government operations, or other extraordinary acts or services performed by an employee in the public
interest in connection with, or in relation to, his official employment. In the instant case, the Food Basket
Allowance was granted to all BFAR employees, without distinction. It was not granted due to any
extraordinary contribution or exceptional accomplishment by an employee. The Food Basket Allowance
was primarily an economic monetary assistance to the employees.

Lastly, we note, as the Office of the Solicitor General, on behalf of respondent did, that petitioner failed to
exhaust its administrative remedies. It stopped seeking remedies at the level of respondent’s Legal and
Adjudication Office. It failed to appeal the latter’s adverse decision to the Commission on Audit proper.
The consequence for failure to exhaust administrative remedies is clear: the disallowance, as ruled by the
Commission on Audit – Legal and Adjudication Office Regional Office No. VII, Cebu City and upheld by
the Commission on Audit – Legal and Adjudication Office National, Quezon City, became final and
executory. Sections 48 and 51 of Presidential Decree No. 1445, or the Government Auditing Code of the
Philippines provide:

Section 48. Appeal from decision of auditors. – Any person aggrieved by the decision of an
auditor of any government agency in the settlement of an account or claim may, within six months
from receipt of a copy of the decision, appeal in writing to the Commission.

Section 51. Finality of decisions of the Commission or any auditor. – A decision of the
Commission or of any auditor upon any matter within its or his jurisdiction, if not appealed as
herein provided, shall be final and executory.

IN VIEW WHEREOF, the petition is DENIED. The Decision and Resolution of the Commission on Audit –
Legal and Adjudication Office dated April 8, 2005 and August 5, 2005, respectively, in LAO-N-2005-119,
are AFFIRMED.

SO ORDERED.

G.R. No. L-11524 October 12, 1916

THE GOVERNMENT OF THE PHILIPPINE ISLANDS,Plaintiff-Appellee,

vs. EL MONTE DE PIEDAD Y CAJA DE AHORROS DE
MANILA, Defendant-Appellant.

William A. Kincaid and Thomas L. Hartigan for appellant.

Attorney-General Avaceña for appellee.

MORELAND, J.:

This is an appeal from a judgment of the Court of First Instance of

the city of Manila in favor of the plaintiff and against the defendant
for the sum of P138,790.12, with interest at 6 per cent per annum
from the 4th day of March 1915. chanroblesv irtualawl ibra ry cha nroble s virtual law l ib rary

The action is to recover internal revenue taxes assessed on the

monthly deposits and the capital employed by the defendant bank
in the business of banking from the first day of August, 1904, to
June 30, 1914, together with the statutory penalties for refusing to
pay the taxes as required by law. chanrob lesvi rtualaw lib rary chanrobles vi rt ual law li bra ry

The case is before us on a stipulation of facts. Some evidence, both

oral and documentary, was introduced. chanrob lesvi rtua lawlib rary cha nrob les vi rtua l law lib rary
From the agreed facts it appears that the Monte de Piedad y Caja de
Ahorros de Manila is an institution organized in accordance with the
canon law, having been created by the the royal order of the King of
Spain of July 8, 1880, made under the royal patronate powers then
existing in the Crown of Spain. Various decrees affecting the
organization of the defendant had been promulgated by the
Governor-General of the Philippine Islands, as vice royal patron
prior to the royal order of the 8th of July 1880, which decrees were
referred to and continued in said royal order. chanroblesvi rt ualawlib ra ry chan robles v irt ual law li bra ry

The royal order referred to created, according to the purpose

expressed therein, an institution for the safe investment of the
savings of the poor classes and to assist the needy in time of need
by loaning such savings to them at a low rate of interest. Its
statutes and by-laws are subject to the will of the Catholic
Archbishop of Manila, and may be changed by him at his pleasure.
They provide for an annual interest of 4 per cent to the depositors,
which is the limit to which the depositors are entitled to participate
in the profits or earnings of the institution. chanroble svirtualawl ibra ry chan roble s virtual law lib rary

During the entire period for which the taxes in litigation are
assessed, defendant had a place of business in the city of Manila
where credits were opened by the deposit or collection of money or
currency subject to be paid by order. chanro blesvi rt ualawlib ra ry chan robles v irt ual law li bra ry

The theory on which the tax involved in this suit is assessed and
sought to be collected is that the defendant institution is a bank
within the definition of section 110 of Act No. 1189, known as the
Internal Revenue Law, and that, as such, it is subject to a tax of
one-eighteenth of one per centum each month upon the average
amount of deposits of money, subject to payment by check or draft,
or represented by certificates of deposit or otherwise, whether
payable on demand or at some future day, imposed by section 111
of said Act, and to a further tax of one-twenty-fourth of one per
centum each month upon the capital employed by the defendant in
the business of banking, imposed by paragraph 2 of said section
111.chanroblesvi rtualaw lib rary cha nrob les vi rtual law lib rary

The defendant seeks to escape the payment of the tax on its

deposits by a claim that it is a savings bank as denied by the
exception contained in paragraph 4 of section 111 which provides
that:

The deposits in associations or companies known as provident

institutions, savings banks, savings funds, or savings institutions,
having no capital stock and which do no other business than
receiving deposits to be loaned or invested for the sole benefit of
the parties making such deposits and without profit or
compensation to the association or company, shall be exempt from
this tax on so much of their deposits as such institutions have
invested in securities satisfactory to the Insular Treasurer, and on
all deposits, not exceeding four thousand pesos, made in the name
of any person.

The particular reason urged why there should be no tax on the

capital employed by the defendant is that it has none. chanro blesvi rt ualawlib ra ry chan robles v irt ual law li bra ry

There is no real denial of the fact that defendant is engaged in

banking business. Neither is there any contention as to the amount
of the tax or the penalties imposed provided the right to tax be
established. The amount of the deposits is admitted, as is also the
amount of the accrued profits, surplus or capital of the
defendant. chanroblesv irt ualawli bra ry chan robles v irt ual law l ibra ry

It stands substantially conceded, therefore, that the decision of the

lower court is correct in every particular, except those wherein it
holds that the defendant does not fall within the exception
contained in paragraph 4 of section 111 of Act No. 1189, and that
the so called accrued profits or surplus falls within the definition of
capital found in the Internal Revenue Law referred to. chanroble svirtualawl ibra ry chan roble s virtual law l ibra ry

It being undenied that the defendant is engaged in the banking

business and, therefore, presumptively, at least, liable to the
payment of the taxes imposed on banks, the burden is on the
defendant to show clearly that it falls within the exception created
by the statute imposing the taxes. In the performance of this
obligation an attempt was made to demonstrate that the defendant
is a savings bank as denied by the exception referred to. The trial
court held that it was not a savings bank for the reason that its
deposits were not "to be loaned or invested for the sole benefit of
the parties making such deposits and without profit or
compensation to the association or company." chanroble s virtual law l ibrary

We are of the opinion that no successful attacks can be made on

this finding. It is undisputed in this case that the defendant is a
profit making institution, although it may not have been designed as
such, and that the profits derived from the investment or the
deposits go and belong to the institution itself. The only
participation of the depositors in the results of the business of the
institution is the right to a return of the deposits with interest at 4
per cent. In this particular respect the defendant is not different
from any other banking institution. Whatever profit is made
belongs, as in the case of an ordinary bank, to the bank itself. In
that profit the depositor has no interest or participation; and it is
conceded that, if the defendant institution were wound up today ,
the so-called surplus, or reserve, or accrued profits of P549,912.52,
on which one of the taxes imposed in this case was assessed, would
belong and be turned over to the defendant institution. That being
the case, the defendant bank is a profit making institution and has
been such during the period for which the taxes involved in this
case were imposed. As a necessary result the finding of the trial
court that it did not fall within the exception of the statute was
correct.chanroblesvi rtua lawlib rary c hanro bles vi rt ual law li bra ry

The appellant argues that, inasmuch as various persons holding the

office of Collector of Internal Revenue during the ten years for which
the taxes in suit were imposed failed to levy and assess them
against the defendant, such failure is a practical construction of the
statute by officials charged with its execution, and that that
construction should be followed in this case. chanroblesv irt ualawli bra ry chan robles v irt ual law l ibra ry

That would be a strong argument if the statute alleged to be so

construed needed construction. The statute itself is perfectly clear
as to what is and what is not a savings bank; and, accordingly,
needs no construction to determine whether a given institution is or
is not a savings bank. The constitution of the bank itself, its by-laws
and its method of doing business, together with the destination of
the profits made in the conduct of its business, determine whether it
falls within the definition of the exception. In making that
determination a construction of the statute is unnecessary. The
elements which an institution must possess to be savings bank are
set out with perfect clearness in the statute. The difficulty in the
case is not that resulting from an ambiguity in the statute but is
met in determining whether a given institution has those elements.
The question is in one aspect a question of fact. The statute clearly
and distinctly specifies all of the requisites of a savings bank.
Whether or not an institution has those requisites does not depend
upon an interpretation of the statute. If, in stating those elements,
the Legislature had fallen into ambiguity of expression, or had used
language the import of which is doubtful, there would then be
presented an opportunity for interpretation or construction, or both.
But where the language of the statute is clear and unambiguous no
interpretation or construction is necessary; for, the determination of
whether a given institution has the requisites named by the statute,
does not involve, primarily, an interpretation or a construction of
the statute. chanroble svi rtualawl ib rary chan rob les vi rtual law lib rary

Even giving this contention all the weight that is claimed for it we
still would hesitate to apply it with all its force in the present case.
The conditions under which the tax laws of the Philippine Islands
were administered and executed during the first years of American
civil government, immediately following the change of sovereignty
brought about by force of arms, were such as to relieve the
government, in a measure at least, from the burden of a
presumption which, under ordinary conditions, arises from the
practical construction of a statute given by the officials charged with
its execution. Everything was new and strange; the officials were
confronted with a system of laws theretofore unknown to them;they
were met by institutions they had never seen before; a strange
country, a strange people, and strange laws left them, in some
instances embarrassed, in others uncertain. The fact that they did
not meet all of their obligations with that fullness required should
not be urged too strongly against either them or the
Government. chanroble svirtualawl ibra ry chan roble s virtual law l ib rary

It might be added, in this connection, that there was never a direct

or press ruling on the question by any official. The mere fact that no
tax was levied or assessed is the main reliance. chanroble svirtualawl ibra ry chan roble s virtual l aw lib rary

The appellant also complains of the finding of the trial court to the
effect that:

The estimate and the assessment of the Collector of Internal

Revenue carries with it a presumption, not only of the correctness
of the taxes, but also of other matters affecting defendant's liability,
thereby making it necessary for it to assume the burden of showing
any illegal defect or grounds of non-liability upon which it relies to
defeat the action.

Even though the complaint in this regard were well founded, it

would have little bearing on the result of the litigation when we take
into consideration the universal rule that he who claims an
exemption from his share of the common burden of taxation must
justify his claim by showing that the Legislature intended to exempt
him by words too plain to be mistaken. It being undisputed in this
case that the defendant is a bank engaged in the banking business
it immediately falls within the imposing clause of the statute placing
certain taxes on banks and institutions doing a banking business. To
escape that imposition the defendant must produce an Act of the
Legislature showing an intention to exempt it from the operation of
the imposing clause by words too plain to be mistaken. That being
the case it matters little whether we say that the assessment and
levy of the tax carries with it a presumption of liability, or whether
we say that the admission of the defendant that it is engaged in
banking business carries with it the presumption that it is liable to
pay the taxes which the law imposes on all persons engaged in that
business which the defendant must overcome. chanroblesvi rtua lawlib rary cha nro bles vi rtua l law lib ra ry

The argument of counsel for appellant based on the fact that certain
savings banks in the United States have enormous reserve or
accrued profits and that it would be a practical impossibility to
distribute those profits among the depositors, we regard as without
merit. The essential point is that, in those cases, the ownership of
the depositors of the reserve funds or accrued profits is admitted;
and their right to share in the distribution thereof is undisputed.
Here the ownership of the fund is claimed by the defendant and the
right of the depositors to participate therein is denied.
chanroblesv irt ualawli bra ry chan robles v irt ual law l ibra ry

The question whether the P549,912.52 is capital and taxable as

such is one which presents some difficulties. The word "capital"
seems to have been used and understood by the Legislature of the
Philippine Islands in a nontechnical sense. It is not "capital stock,"
or any other stated or fixed sum. It is, rather, the amount of money
which the bank uses in its business; and this seems to be the sense
in which the word is used in the Internal Revenue Law imposing a
tax on the capital employed by a banking institution. The tax is
levied by that Act "upon the capital employed by any bank . . .
engaged in the business of banking." It is worthy of note that the
proviso immediately following the phrase imposing the tax speaks of
what is not capital, and provides that money borrowed and received
from time to time in the usual course of business from any person
not a partner of or interested in the bank shall not be considered as
capital employed. This proviso may be viewed in two aspects. In the
first place, giving a definition of what is not capital, it might,
perhaps, be legitimate to assume that everything else used by the
bank in the usual course of business was capital. n the second
place, the phraseology would indicate that the Legislature, in
speaking of capital, did not refer to a fixed sum which should be
paid by the incorporators or stockholders in cash to the bank before
or after it began business. If it were not for that proviso it would
seem that in the word "capital" would be included "money borrowed
or received from time to time in the usual course of business from
any person not a partner of or interested in said bank." In other
words, by the exclusion of money so borrowed the Legislature
indicated that the capital upon which the tax was imposed was
broad enough to cover whatever money, from whatever source
except deposits, the bank used in the usual course of business. chanroble svirtualawl ibra ry chan roble s virtual law lib rary

The third proviso is also not without significance in determining

what the Legislature had in mind when it used the word "capital." It
deals with what shall be considered capital for the purpose of
taxation of banks which are branches of banks incorporated and
located in foreign countries and in the United States. In the case of
such branches the Legislature, by virtue of this proviso, gives no
importance or significance to the actual capital of the branch bank
at any given moment in levying tax upon the capital employed in
the Philippine Islands; and it provides that the "capital employed"
by any branch bank shall be determined by a comparison between
the total amount of the earnings of the parent bank during a given
period and also the total amount of the earnings of the branch bank
on its business conducted in the Philippine Islands during the same
period, and such a part of the total capital of the bank shall be
deemed to have been employed in the Philippine Islands as the
earnings in the Philippine Islands bear to the total earnings of the
parent bank. Under this proviso a branch bank having an actual
capital or a capital stock of one million pesos would not pay a tax on
the one million. It might pay a tax on one-half million or it might
pay a tax on two millions, the precise amount depending on the
relation which the business of the branch bank in the Philippine
Islands bore to the total business of the parent bank. If the capital
of the parent bank was twenty millions and the branch bank did a
business in the Philippine Islands of 50 per cent of the total business
of the parent bank, the branch bank would pay a tax on capital of
ten million. This would seem to indicate that the word "capital" has
not so strict and definite a meaning as is given to the words "capital
stock," actual capital, or fixed capital. It seems to have the wider
signification of the word which, popularly speaking, means the
amount of money which one uses in his business. chanroblesv irtualawli bra ry chan rob les virtual law l ibra ry

Upon the whole we are satisfied that the P549,912.52 involved in

this litigation was money which the defendant institution used in its
banking business, although it may have been held for the time
being, or for a considerable length of time, for the payment of
depositors in times of extraordinary withdrawals from the bank or to
meet unusual demands upon its loan department. The mere fact
that it is for the time being inactive is not conclusive in the
determination of its nature.. chanroblesvi rtua lawlib rary cha nro bles vi rtua l law lib ra ry

The judgement appealed from is affirmed, with costs against the

appellant. So ordered. chan roblesv irt ualawli bra ry chan robles v irt ual law l ibra ry

Torres, Carson and Araullo, JJ., concur.

G.R. No. L-25843 July 25, 1974

MELCHORA CABANAS, plaintiff-appellee,

vs.
FRANCISCO PILAPIL, defendant-appellant.

Seno, Mendoza & Associates for plaintiff-appellee.

Emilio Benitez, Jr. for defendant-appellant.

FERNANDO, J.:p

The disputants in this appeal from a question of law from a lower court decision are the mother and the uncle of a minor beneficiary of the
proceeds of an insurance policy issued on the life of her deceased father. The dispute centers as to who of them should be entitled to act as
trustee thereof. The lower court applying the appropriate Civil Code provisions decided in favor of the mother, the plaintiff in this case.
Defendant uncle appealed. As noted, the lower court acted the way it did following the specific mandate of the law. In addition, it must have
taken into account the principle that in cases of this nature the welfare of the child is the paramount consideration. It is not an unreasonable
assumption that between a mother and an uncle, the former is likely to lavish more care on and pay greater attention to her. This is all the
more likely considering that the child is with the mother. There are no circumstances then that did militate against what conforms to the
natural order of things, even if the language of the law were not as clear. It is not to be lost sight of either that the judiciary pursuant to its role
as an agency of the State as parens patriae, with an even greater stress on family unity under the present Constitution, did weigh in the
balance the opposing claims and did come to the conclusion that the welfare of the child called for the mother to be entrusted with such
responsibility. We have to affirm.
The appealed decision made clear: "There is no controversy as to the facts. "1 The insured,
Florentino Pilapil had a child, Millian Pilapil, with a married woman, the plaintiff, Melchora Cabanas.
She was ten years old at the time the complaint was filed on October 10, 1964. The defendant,
Francisco Pilapil, is the brother of the deceased. The deceased insured himself and instituted as
beneficiary, his child, with his brother to act as trustee during her minority. Upon his death, the
proceeds were paid to him. Hence this complaint by the mother, with whom the child is living,
seeking the delivery of such sum. She filed the bond required by the Civil Code. Defendant would
justify his claim to the retention of the amount in question by invoking the terms of the insurance
policy.2

After trial duly had, the lower court in a decision of May 10, 1965, rendered judgment ordering the
defendant to deliver the proceeds of the policy in question to plaintiff. Its main reliance was on
Articles 320 and 321 of the Civil Code. The former provides: "The father, or in his absence the
mother, is the legal administrator of the property pertaining to the child under parental authority. If
the property is worth more than two thousand pesos, the father or mother shall give a bond subject
to the approval of the Court of First Instance."3 The latter states: "The property which the
unemancipated child has acquired or may acquire with his work or industry, or by any lucrative title,
belongs to the child in ownership, and in usufruct to the father or mother under whom he is under
parental authority and whose company he lives; ...4

Conformity to such explicit codal norm is apparent in this portion of the appealed decision: "The
insurance proceeds belong to the beneficiary. The beneficiary is a minor under the custody and
parental authority of the plaintiff, her mother. The said minor lives with plaintiff or lives in the
company of the plaintiff. The said minor acquired this property by lucrative title. Said property,
therefore, belongs to the minor child in ownership, and in usufruct to the plaintiff, her mother. Since
under our law the usufructuary is entitled to possession, the plaintiff is entitled to possession of the
insurance proceeds. The trust, insofar as it is in conflict with the above quoted provision of law,
is pro tanto null and void. In order, however, to protect the rights of the minor, Millian Pilapil, the
plaintiff should file an additional bond in the guardianship proceedings, Sp. Proc. No. 2418-R of this
Court to raise her bond therein to the total amount of P5,000.00."5

It is very clear, therefore, considering the above, that unless the applicability of the two cited Civil
Code provisions can be disputed, the decision must stand. There is no ambiguity in the language
employed. The words are rather clear. Their meaning is unequivocal. Time and time again, this
Court has left no doubt that where codal or statutory norms are cast in categorical language, the task
before it is not one of interpretation but of application.6 So it must be in this case. So it was in the
appealed decision.

1. It would take more than just two paragraphs as found in the brief for the defendant-appellant7 to
blunt the force of legal commands that speak so plainly and so unqualifiedly. Even if it were a
question of policy, the conclusion will remain unaltered. What is paramount, as mentioned at the
outset, is the welfare of the child. It is in consonance with such primordial end that Articles 320 and
321 have been worded. There is recognition in the law of the deep ties that bind parent and child. In
the event that there is less than full measure of concern for the offspring, the protection is supplied
by the bond required. With the added circumstance that the child stays with the mother, not the
uncle, without any evidence of lack of maternal care, the decision arrived at can stand the test of the
strictest scrutiny. It is further fortified by the assumption, both logical and natural, that infidelity to the
trust imposed by the deceased is much less in the case of a mother than in the case of an uncle.
Manresa, commenting on Article 159 of the Civil Code of Spain, the source of Article 320 of the Civil
Code, was of that view: Thus "El derecho y la obligacion de administrar el Patrimonio de los hijos es
una consecuencia natural y lógica de la patria potestad y de la presunción de que nadie cuidará de
los bienes de acquéllos con mas cariño y solicitude que los padres. En nuestro Derecho antiguo
puede decirse que se hallaba reconocida de una manera indirecta aquelia doctrina, y asi se
desprende de la sentencia del Tribunal Supremeo de 30 de diciembre de 1864, que se refiere a la
ley 24, tit. XIII de la Partida 5. De la propia suerte aceptan en general dicho principio los Codigos
extranjeros, con las limitaciones y requisitos de que trataremos mis adelante."8

2. The appealed decision is supported by another cogent consideration. It is buttressed by its

adherence to the concept that the judiciary, as an agency of the State acting as parens patriae, is
called upon whenever a pending suit of litigation affects one who is a minor to accord priority to his
best interest. It may happen, as it did occur here, that family relations may press their respective
claims. It would be more in consonance not only with the natural order of things but the tradition of
the country for a parent to be preferred. it could have been different if the conflict were between
father and mother. Such is not the case at all. It is a mother asserting priority. Certainly the judiciary
as the instrumentality of the State in its role of parens patriae, cannot remain insensible to the
validity of her plea. In a recent case,9 there is this quotation from an opinion of the United States
Supreme Court: "This prerogative of parens patriae is inherent in the supreme power of every State,
whether that power is lodged in a royal person or in the legislature, and has no affinity to those
arbitrary powers which are sometimes exerted by irresponsible monarchs to the great detriment of
the people and the destruction of their liberties." What is more, there is this constitutional provision
vitalizing this concept. It reads: "The State shall strengthen the family as a basic social
institution." 10 If, as the Constitution so wisely dictates, it is the family as a unit that has to be
strengthened, it does not admit of doubt that even if a stronger case were presented for the uncle,
still deference to a constitutional mandate would have led the lower court to decide as it did.

WHEREFORE, the decision of May 10, 1965 is affirmed. Costs against defendant-appellant.

Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur.

Barredo, J., took no part.

G.R. No. 164785 March 15, 2010

ELISEO F. SORIANO, Petitioner,

vs.
MA. CONSOLIZA P. LAGUARDIA, in her capacity as Chairperson of the Movie and Television
Review and Classification Board, MOVIE AND TELEVISION REVIEW AND CLASSIFICATION
BOARD, JESSIE L. GALAPON, ANABEL M. DELA CRUZ, MANUEL M. HERNANDEZ, JOSE L.
LOPEZ, CRISANTO SORIANO, BERNABE S. YARIA, JR., MICHAEL M. SANDOVAL, and
ROLDAN A. GAVINO, Respondents.

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

G.R. No. 165636

ELISEO F. SORIANO, Petitioner,

vs.
MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD, ZOSIMO G. ALEGRE,
JACKIE AQUINO-GAVINO, NOEL R. DEL PRADO, EMMANUEL BORLAZA, JOSE E. ROMERO
IV, and FLORIMONDO C. ROUS, in their capacity as members of the Hearing and Adjudication
Committee of the MTRCB, JESSIE L. GALAPON, ANABEL M. DELA CRUZ, MANUEL M.
HERNANDEZ, JOSE L. LOPEZ, CRISANTO SORIANO, BERNABE S. YARIA, JR., MICHAEL M.
SANDOVAL, and ROLDAN A. GAVINO, in their capacity as complainants before the
MTRCB, Respondents.

RESOLUTION

VELASCO, JR., J.:

Before us is this motion of petitioner Eliseo F. Soriano for reconsideration of the Decision of the
Court dated April 29, 2009, modifying that of the Movie and Television Review and Classification
Board (MTRCB) by imposing the penalty of three-month suspension on the television show Ang
Dating Daan, instead of on petitioner Soriano, as host of that program.

Petitioner seeks reconsideration on the following grounds or issues: (1) the suspension thus meted
out to the program constitutes prior restraint; (2) the Court erred in ruling that his utterances1 did not
constitute exercise of religion; (3) the Court erred in finding the language used as offensive and
obscene; (4) the Court should have applied its policy of non-interference in cases of conflict between
religious groups; and (5) the Court erred in penalizing the television program for the acts of
petitioner.

The motion has no merit.

Petitioner’s threshold posture that the suspension thus imposed constitutes prior restraint and an
abridgement of his exercise of religion and freedom of expression is a mere rehash of the position
he articulated in the underlying petitions for certiorari and expounded in his memorandum.2 So are
the supportive arguments and some of the citations of decisional law, Philippine and American,
holding it together. They have been considered, sufficiently discussed in some detail, and found to
be without merit in our Decision. It would, thus, make little sense to embark on another lengthy
discussion of the same issues and arguments.

Suffice it to reiterate that the sanction imposed on the TV program in question does not, under the
factual milieu of the case, constitute prior restraint, but partakes of the nature of subsequent
punishment for past violation committed by petitioner in the course of the broadcast of the program
on August 10, 2004. To be sure, petitioner has not contested the fact of his having made statements
on the air that were contextually violative of the program’s "G" rating. To merit a "G" rating, the
program must be "suitable for all ages," which, in turn, means that the "material for television [does
not], in the judgment of the [MTRCB], x x x contain anything unsuitable for children and minors, and
may be viewed without adult guidance or supervision."3 As previously discussed by the Court, the
vulgar language petitioner used on prime-time television can in no way be characterized as suitable
for all ages, and is wholly inappropriate for children.

Petitioner next harps on the primacy of his freedoms, referring particularly to the exercise of his
religious beliefs and profession, as presiding minister of his flock, over the right and duty of the state
as parens patriae. Petitioner’s position may be accorded some cogency, but for the fact that it fails to
consider that the medium he used to make his statements was a television broadcast, which is
accessible to children of virtually all ages. As already laid down in the Decision subject of this
recourse, the interest of the government in protecting children who may be subjected to petitioner’s
invectives must take precedence over his desire to air publicly his dirty laundry. The public soapbox
that is television must be guarded by the state, which purpose the MTRCB serves, and has served,
in suspending Ang Dating Daan for petitioner’s statements. As emphasized in Gonzalez v. Kalaw
Katigbak,4 the freedom of broadcast media is, in terms of degree of protection it deserves, lesser in
scope, especially as regards television, which reaches every home where there is a set, and where
children will likely be among the avid viewers of the programs shown. The same case also laid the
basis for the classification system of the MTRCB when it stated, "It cannot be denied though that the
State as parens patriae is called upon to manifest an attitude of caring for the welfare of the young."5

The penalty of suspension imposed on petitioner has driven him to liken the Court to "a blind man
who was asked to describe an elephant, and by his description he stubbornly believed that an
elephant is just the same as a Meralco post after touching one if its legs."6 Petitioner makes this
comparison with the view that the factual backdrop against which his statements were made was
purportedly not considered by the Court. As he presently argues:

The Honorable Court should have rendered its decision in light of the surrounding circumstances
why and what prompted herein petitioner to utter those words. Clearly, he was provoked because of
the malicious and blatant splicing by the INC ministers of his recorded voice. Verily, Petitioner
submits that the choice of words he used has been harsh but strongly maintains that the same was
consistent with his constitutional right of freedom of speech and religion.

Contrary to petitioner’s impression, the Court has, in fact, considered the factual antecedents of and
his motive in making his utterances, and has found those circumstances wanting as defense for
violating the program’s "G" rating. Consider the following excerpts from the Court’s Decision:

There is nothing in petitioner’s statements subject of the complaints expressing any particular
religious belief, nothing furthering his avowed evangelical mission. The fact that he came out with his
statements in a televised bible exposition program does not automatically accord them the character
of a religious discourse. Plain and simple insults directed at another person cannot be elevated to
the status of religious speech. Even petitioner’s attempts to place his words in context show that he
was moved by anger and the need to seek retribution, not by any religious conviction. His claim,
assuming its veracity, that some INC ministers distorted his statements respecting amounts Ang
Dating Daan owed to a TV station does not convert the foul language used in retaliation as religious
speech. We cannot accept that petitioner made his statements in defense of his reputation and
religion, as they constitute no intelligible defense or refutation of the alleged lies being spread by a
rival religious group. They simply illustrate that petitioner had descended to the level of name-calling
and foul-language discourse. Petitioner could have chosen to contradict and disprove his detractors,
but opted for the low road.

And just to set things straight, the penalty imposed is on the program, not on petitioner.
Petitioner would next have the Court adopt a hands-off approach to the conflict between him and the
Iglesia Ni Cristo. In support of his urging, he cites Iglesia ni Cristo v. Court of Appeals.7

Petitioner’s invocation of Iglesia ni Cristo to support his hands-off thesis is erroneous. Obviously, he
fails to appreciate what the Court stated in that particular case when it rejected the argument that a
religious program is beyond MTRCB’s review and regulatory authority. We reproduce what the Court
pertinently wrote in Iglesia ni Cristo:

We thus reject petitioner’s postulate that its religious program is per se beyond review by the
respondent [MTRCB]. Its public broadcast on TV of its religious program brings it out of the bosom of
internal belief. Television is a medium that reaches even the eyes and ears of children. The Court
iterates the rule that the exercise of religious freedom can be regulated by the State when it will
bring about the clear and present danger of some substantive evil which the State is duty bound to
prevent, i.e. serious detriment to the more overriding interest of public health, public morals, or public
welfare. A laissez faire policy on the exercise of religion can be seductive to the liberal mind but
history counsels the Court against its blind adoption as religion is and continues to be a volatile area
of concern in our country today. Across the sea and in our shore, the bloodiest and bitterest wars
fought by men were caused by irreconcilable religious differences. Our country is still not safe from
the recurrence of this stultifying strife considering our warring religious beliefs and the fanaticism
with which some of us cling and claw to these beliefs. x x x For when religion divides and its
exercise destroys, the State should not stand still.8 (Emphasis added.)

Lastly, petitioner claims that there was violation of due process of law, alleging that the registered
producer of the program is not a party to the proceedings. Hence, the program cannot, so petitioner
asserts, be penalized.

We will let the records speak for themselves to refute that argument.

As per petitioner’s admission in his petition for certiorari filed with the Court, he is "the Executive
Producer of Ang Dating Daan, a televised bible exposition program produced by the Philippine-
based religious organization, Church of God International."9 It is unclear, then, which producer the
movant is referring to in claiming that there was no representation before the MTRCB. He was and is
the representative of Ang Dating Daan, and the claim that there was no due process of law is simply
bereft of merit.

Even as the foregoing disquisitions would suffice to write finis to the instant motion, certain relevant
issues have been raised by some members of the Court that ought to be addressed if only to put
things in their proper perspective. We refer to the matter of obscenity.

As stressed at every possible turn in the challenged Court’s Decision, the defining standards to be
employed in judging the harmful effects of the statements petitioner used would be those for the
average child, not those for the average adult. We note that the ratings and regulation of television
broadcasts take into account the protection of the child, and it is from the child’s narrow viewpoint
that the utterances must be considered, if not measured. The ratings "G," "PG" (parental guidance),
"PG-13," and "R" (restricted or for adults only) suggest as much. The concern was then, as now, that
the program petitioner hosted and produced would reach an unintended audience, the average child,
and so it is how this audience would view his words that matters. The average child would not be
concerned with colorful speech, but, instead, focus on the literal, everyday meaning of words used. It
was this literal approach that rendered petitioner’s utterances obscene. 1avv phi 1

The Court has taken stock of Action for Children’s Television v. FCC,10 but finds this U.S. case not to
be of governing application to this jurisdiction under the present state of things. The so-called "safe
harbor" of 10:00 p.m. to 6:00 a.m., adverted to in Action for Children’s Television as the time wherein
broadcast of indecent material may be permitted, is believed inapplicable here. As it were, there is
no legislative enactment or executive issuance setting a similar period in the Philippines wherein
indecent material may be broadcast. Rather than fix a period for allowing indecent programming,
what is used in this jurisdiction is the system of classification of television programs, which the
petitioner violated. His program was rated "G," purported to be suitable for all ages. We cannot lose
sight of the violation of his program’s classification that carried with it the producer’s implied
assurance that the program did not contain anything unsuitable for children and minors. The hour at
which it was broadcasted was of little moment in light of the guarantee that the program was safe for
children’s viewing.
The suspension of the program has not been arrived at lightly. Taking into account all the factors
involved and the arguments pressed on the Court, the suspension of the program is a sufficiently
limited disciplinary action, both to address the violation and to serve as an object lesson for the
future. The likelihood is great that any disciplinary action imposed on petitioner would be met with an
equally energetic defense as has been put up here. The simple but stubborn fact is that there has
been a violation of government regulations that have been put in place with a laudable purpose, and
this violation must accordingly be dealt with. We are not unmindful of the concerns on the restriction
of freedoms that may occur in imposing sanctions upon erring individuals and institutions, but it
cannot be over-emphasized that the freedoms encased in the Bill of Rights are far from absolute.
Each has its own limits, responsibilities, and obligations. Everyone is expected to bear the burden
implicit in the exercise of these freedoms. So it must be here.

WHEREFORE, petitioner’s motion for reconsideration is hereby DENIED.

No further pleadings shall be entertained in this case. Let entry of judgment be made in due course.

SO ORDERED.

DISSENTING OPINION

CARPIO, J.:

Liberty is a right that inheres in every one of us as a member of the human family. When a person is
deprived of his right, all of us are diminished and debased for liberty is total and indivisible.1

Among the cherished liberties in a democracy such as ours is freedom of expression. A democracy
needs a healthy public sphere where the people can exchange ideas, acquire knowledge and
information, confront public issues, or discuss matters of public interest, without fear of
reprisals.2 Free speech must be protected so that the people can engage in the discussion and
deliberation necessary for the successful operation of democratic institutions.3 Thus, no less than our
Constitution mandates full protection to freedom of speech, of expression, and of the press.4 All of
the protections expressed in the Bill of Rights are important, but the courts have accorded to free
speech the status of a preferred freedom. This qualitative significance of freedom of expression
arises from the fact that it is the indispensable condition of nearly every other freedom.5

The freedom of expression clause is precisely a guarantee against both prior restraint and
subsequent punishment. It protects from any undue interference by the government the people's
right to freely speak their minds. The guarantee rests on the principle that freedom of expression is
essential to a functioning democracy and suppression of expression leads to authoritarianism.

Prior restraint has been defined as official governmental restrictions on any form of expression in
advance of actual dissemination. But the mere prohibition of government interference before words
are spoken is not an adequate protection of the freedom of expression if the government could
arbitrarily punish after the words have been spoken. The threat of subsequent punishment itself
would operate as a very effective prior restraint.6

Any form of prior restraint bears a presumption against its constitutional validity. The burden is on
the censor to justify any imposition of prior restraint, not on the censored to put up a defense against
it. In the case of print media, it has been held that just because press freedom may sometimes be
abused does not mean that the press does not deserve immunity from prior restraint. The settled
rule is that any such abuse may be remedied by subsequent punishment.7

This Court, in Eastern Broadcasting Corporation v. Dans, Jr.,8 laid down the following guideline:

All forms of media, whether print or broadcast, are entitled to the broad protection of the freedom of
speech and expression clause. The test for limitations on freedom of expression continues to be the
clear and present danger rule - that words are used in such circumstances and are of such a nature
as to create a clear and present danger that they will bring about the substantive evils that the
lawmaker has a right to prevent.
Chief Justice Fernando expounded on the meaning of the "clear and present danger" test in
Gonzalez v. Chairman Katigbak,9 to wit:

The test, to repeat, to determine whether freedom of expression may be limited is the clear and
present danger of an evil of a substantive character that the State has a right to prevent. Such
danger must not only be clear but must also be present. There should be no doubt that what is
feared may be traced to the expression complained of. The causal connection must be evident. Also,
there must be reasonable apprehension about its imminence. The time element cannot be ignored.
Nor does it suffice if such danger be only probable. There is the requirement of its being well-nigh
inevitable.

Where the medium of a television broadcast is concerned, as in the case at hand, well-entrenched is
the rule that censorship is allowable only under the clearest proof of a clear and present danger of a
substantive evil to public safety, public morals, public health, or any other legitimate public interest.10

One of the established exceptions in freedom of expression is speech characterized as obscene. I

will briefly discuss obscenity as the majority opinion characterized the subject speech in this case as
obscene, thereby taking the speech out of the scope of constitutional protection.

The leading test for determining what material could be considered obscene was the famous Regina
v. Hicklin11case wherein Lord Cockburn enunciated thus:

I think the test of obscenity is this, whether the tendency of the matter charged as obscenity is to
deprave and corrupt those whose minds are open to such immoral influences, and into whose hands
a publication of this sort may fall.

Judge Learned Hand, in United States v. Kennerly,12 opposed the strictness of the Hicklin test even
as he was obliged to follow the rule. He wrote:

I hope it is not improper for me to say that the rule as laid down, however consonant it may be with
mid-Victorian morals, does not seem to me to answer to the understanding and morality of the
present time.

Roth v. United States13 laid down the more reasonable and thus, more acceptable test for obscenity:
"whether to the average person, applying contemporary community standards, the dominant theme
of the material taken as a whole appeals to prurient interest." Such material is defined as that which
has "a tendency to excite lustful thoughts," and "prurient interest" as "a shameful or morbid interest
in nudity, sex, or excretion."

Miller v. California14 merely expanded the Roth test to include two additional criteria: "the work
depicts or describes, in a patently offensive way, sexual conduct specifically defined by the
applicable state law; and the work, taken as whole, lacks serious literary, artistic, political, or
scientific value." The basic test, as applied in our jurisprudence,15extracts the essence of
both Roth and Miller – that is, whether the material appeals to prurient interest.

The present controversy emanated from the alleged splicing of a video recording wherein petitioner
was supposedly made to appear as if he was asking for contributions to raise 37 trillion pesos
instead of the allegedly true amount of 3.6 million pesos. The video was played by ministers of
Iglesia ni Cristo in their television program "Ang Tamang Daan."

In response, petitioner Eliseo Soriano, as host of the television program "Ang Dating Daan," made
the following utterances:16

Bro. Josel Mallari:

Ulit-ulit na iyang talagang kawalanghiyaan na iyan, naku. E, markado nang masyado at saka
branded na itong nga ito anong klase po sila. Wala kayong babalikan diyan Kapatid na
Manny. Iyang klase ng mga ministro na iyan, pasamain lamang si Kapatid na Eli e pati mga
ninakaw na tape, pati mga audio na pinag-edit-edit, lalagyan ng caption para makita nila,
maipakita nilang malinaw 'yung panloloko nila. Kasi Sis. Luz, puwede mo nang hindi lagyan
ng caption e, patunugin mo na lang na ganun ang sinasabi. Pero talagang para mai-
emphasize nila 'yung kanilang kawalanghiyaan, lalagyan pa nila ng caption na hindi naman
talagang sinabi ni Bro. Eli kundi pinagdugtong lang 'yung audio.
Bro. Eli Soriano:

At saka ang malisyoso. Kitang-kita malisyoso e. Paninirang-puri e. Alam mo kung bakit?

Mahilig daw ako talagang manghingi para sa aking pangangailangan. Pangangailangan ko
ba 'yung pambayad sa UNTV e ang mga kontrata diyan ay hindi naman ako kapatid na
Josel.

Bro. Josel Mallari:

Ay, opo.

Bro. Eli Soriano:

Hindi ko kontrata iyang babayaran na iyan. I am not even a signatory to that contract.
Pagkatapos para pagbintangan mo ako na humingi ako para sa pangangailangan ko, gago
ka talaga Michael. Masahol ka pa sa putang babae. O, di ba? Yung putang babae ang
gumagana lang doon yung ibaba, kay Michael ang gumagana ang itaas, o di ba! O, masahol
pa sa putang babae yan. Sabi ng lola ko masahol pa sa putang babae yan. Sobra ang
kasinungalingan ng mga demonyong ito. Sige, sumagot kayo. At habang ginaganyan ninyo
ako, ang mga miyembro ninyo unti-unting maliliwanagan. Makikita n'yo rin, magreresulta ng
maganda iyan.

Bro. Manny Catangay Jusay:

Bro. Eli, ay iyan nga po ang sinasabi ko e, habang gumagawa sila ng ganyan, gaya nung
sinabi nung Kapatid natin kagabi dahil napanood 'yung kasinungalingan ni Pol Guevarra, ay,
lumuluha 'yung Kapatid, inaanyayahan 'yung mag-anak niya. Magsialis na kayo diyan. Lipat
na kayo rito. Kasi kung nag-iisip lang ang isang Iglesia ni Cristo matapos ninyong mapanood
itong episode na ito, iiwanan ninyo e, kung mahal ninyo ang kaluluwa ninyo. Hindi kayo
paaakay sa ganyan, nagpafabricate ng mga kasinungalingan. Sabi ko nga lahat ng paraan
ng pakikipagbaka nagawa na nila e, isa na lang ang hindi 'yung pakikipagdebate at
patunayan na sila ang totoo. Iyon na lang ang hindi nila nagagawa. Pero demanda,
paninirang-puri – nagtataka nga ako e, tayo, kaunting kibot, nakademanda sila e. 'yung
ginagawa nila, ewan ko, idinedemanda n'yo ba Bro. Eli?

The majority opinion ruled that the highlighted portion of the aforequoted speech was obscene and
was, therefore, not entitled to constitutional protection.

Well-settled is the rule that speech, to be considered obscene, must appeal to prurient interest as
defined in Roth and firmly adopted in our jurisdiction.17 The subject speech cannot, by any stretch of
the imagination, be said to appeal to any prurient interest. The highlighted portion of the verbal
exchange between the two feuding religious groups is utterly bereft of any tendency to excite lustful
thoughts as to be deemed obscene. The majority's finding of obscenity is clearly untenable.

In contrast, a radio broadcast of a monologue replete with indecent words such as shit, piss, fuck,
cunt, cocksucker, motherfucker, and tits, has been held protected speech depending on the context
relating to the time of broadcast.18However, in this case before us, the words "putang babae" (female
prostitute), and the descriptive action phrases "ang gumagana lang doon yung ibaba" and "kay
Michael ang gumagana ang itaas" were enough to constitute outright obscenity for the majority. The
majority opinion simply forced these words and phrases into a strained standard formula for
censorship. But such overbroad standard must be struck down for it indiscriminately infringes upon
free speech.

The subject speech in this case may, at most, be considered indecent speech.

Indecent speech conveyed through the medium of broadcast is a case of first impression in our
jurisdiction. However, this issue has been settled in American case law, which has persuasive
influence in our jurisprudence. There, the rule is that indecent speech is protected depending on the
context in which it is spoken. The concept of what is "indecent" is intimately connected with the
exposure of children to language that describes, in terms patently offensive, as measured by
contemporary community standards for the broadcast medium, sexual or excretory activities and
organs, at times of the day when there is a reasonable risk that children may be in the audience.19
FCC v. Pacifica Foundation20 is the landmark U.S. case on the regulation of indecent speech in
broadcast. The case involved a radio broadcast of "Filthy Words," a 12-minute monologue by
American stand-up comedian and social critic, George Carlin. Appended to the decision is the
following verbatim transcript prepared by the Federal Communications Commission:

The original seven words were, shit, piss, fuck, cunt, cocksucker, motherfucker, and tits. Those are
the ones that will curve your spine, grow hair on your hands and maybe, even bring us, God help us,
peace without honor and a bourbon. And now the first thing that we noticed was that word fuck was
really repeated in there because the word motherfucker is a compound word and it's another form of
the word fuck. You want to be a purist, it can't be on the list of basic words. Also, cocksucker is a
compound word and neither half of that is really dirty. The word-the half sucker that's merely
suggestive and the word cock is a half-way dirty word, 50% dirty-dirty half the time, depending on
what you mean by it. Uh, remember when you first heard it, like in 6th grade, you used to giggle. And
the cock crowed three times, the cock-three times. It's in the Bible, cock in the Bible. And the first
time you heard about a cock-fight, remember-What? Huh? It ain't that, are you stupid? It's chickens,
you know, Then you have the four letter words from the old Angle-Saxon fame. Uh, shit and fuck.
The word shit, uh, is an interesting kind of word in that the middle class has never really accepted it
and approved it. They use it like, crazy but it's not really okay. It's still a rude, dirty, old kind of gushy
word. They don't like that, but they say it, like, they say it like, a lady now in a middle-class home,
you'll hear most of the time she says it as an expletive, you know, it's out of her mouth before she
knows. She says, Oh shit oh shit, oh shit. If she drops something, Oh, the shit hurt the broccoli. Shit.
Thank you.

Shit! I won the Grammy, man, for the comedy album. Isn't that groovy? That's true. Thank you.
Thank you man. Yeah. Thank you man. Thank you. Thank you very much, man. Thank, no, for that
and for the Grammy, man, [']cause that's based on people liking it man, that's okay man. Let's let
that go, man. I got my Grammy. I can let my hair hang down now, shit. Ha! So! Now the word shit is
okay for the man. At work you can say it like crazy. Mostly figuratively, Get that shit out of here, will
ya? I don't want to see that shit anymore. I can't cut that shit, buddy. I've had that shit up to here. I
think you're full of shit myself. He don't know shit from Shinola. you know that? Always wondered
how the Shinola people felt about that Hi, I'm the new man from Shinola, Hi, how are ya? Nice to see
ya. How are ya? Boy, I don't know whether to shit or wind my watch. Guess, I'll shit on my watch.
Oh, the shit is going to hit de fan. Built like a brick shit-house. Up, he's up shit's creek. He's had it.
He hit me, I'm sorry. Hot shit, holy shit, tough shit, eat shit. shit-eating grin. Uh, whoever thought of
that was ill. He had a shit-eating grin! He had a what? Shit on a stick. Shit in a handbag. I always like
that. He ain't worth shit in a handbag. Shitty. He acted real shitty. You know what I mean? I got the
money back, but a real shitty attitude. Heh, he had a shit-fit. Wow! Shit-fit. Whew! Glad I wasn't
there. All the animals-Bull shit, horse shit, cow shit, rat shit, bat shit. First time I heard bat shit, I
really came apart. A guy in Oklahoma, Boggs, said it, man. Aw! Bat shit. Vera reminded me of that
last night. Snake shit, slicker than owl shit. Get your shit together. Shit or get off the pot. I got a shit-
load full of them. I got a shit-pot full, all right. Shit-head, shit-heel, shit in your heart, shit for brains,
shit-face. I always try to think how that could have originated; the first guy that said that. Somebody
got drunk and fell in some shit, you know. Hey, I'm shit-face. Shit-face, today. Anyway, enough of
that shit. The big one, the word fuck that's the one that hangs them up the most. [']Cause in a lot of
cases that's the very act that hangs them up the most. So, it's natural that the word would, uh, have
the same effect. It's a great word, fuck, nice word, easy word, cute word, kind of. Easy word to say.
One syllable, short u. Fuck. You know, it's easy. Starts with a nice soft sound fuh ends with a kuh.
Right? A little something for everyone. Fuck Good word. Kind of a proud word, too. Who are you? I
am FUCK, FUCK OF THE MOUNTAIN. Tune in again next week to FUCK OF THE MOUNTAIN. It's
an interesting word too, [']cause it's got a double kind of a life-personality-dual, you know, whatever
the right phrase is. It leads a double life, the word fuck. First of all, it means, sometimes, most of the
time, fuck. What does it mean? It means to make love. Right? We're going to make love, yeh, we're
going to fuck, yeh, we're going to fuck, yeh, we're going to make love. we're really going to fuck, yeh,
we're going to make love. Right? And it also means the beginning of life, it's the act that begins life,
so there's the word hanging around with words like love, and life, and yet on the other hand, it's also
a word that we really use to hurt each other with, man. It's a heavy one that you have toward the end
of the argument. Right? You finally can't make out. Oh, fuck you man. I said, fuck you. Stupid fuck.
Fuck you and everybody that looks like you man. It would be nice to change the movies that we
already have and substitute the word fuck for the word kill, wherever we could, and some of those
movie cliches would change a little bit. Madfuckers still on the loose. Stop me before I fuck again.
Fuck the ump, fuck the ump, fuck the ump, fuck the ump, fuck the ump. Easy on the clutch Bill, you'll
fuck that engine again. The other shit one was, I don't give a shit. Like it's worth something, you
know? I don't give a shit. Hey, well, I don't take no shit, you know what I mean? You know why I
don't take no shit? [']Cause I don't give a shit. If I give a shit, I would have to pack shit. But I don't
pack no shit cause I don't give a shit. You wouldn't shit me, would you? That's a joke when you're a
kid with a worm looking out the bird's ass. You wouldn't shit me, would you? It's an eight-year-old
joke but a good one. The additions to the list. I found three more words that had to be put on the list
of words you could never say on television, and they were fart, turd and twat, those three. Fart, we
talked about, it's harmless. It's like tits, it's a cutie word, no problem. Turd, you can't say but who
wants to, you know? The subject never comes up on the panel so I'm not worried about that one.
Now the word twat is an interesting word. Twat! Yeh, right in the twat. Twat is an interesting word
because it's the only one I know of, the only slang word applying to the, a part of the sexual anatomy
that doesn't have another meaning to it. Like, ah, snatch, box and pussy all have other meanings,
man. Even in a Walt Disney movie, you can say, We're going to snatch that pussy and put him in a
box and bring him on the airplane. Everybody loves it. The twat stands alone, man, as it should. And
two-way words. Ah, ass is okay providing you're riding into town on a religious feast day. You can't
say, up your ass. You can say, stuff it!

Worthy of note, in Pacifica, the FCC did not resort to any subsequent punishment, much less any
prior restraint.21The station was not suspended for the broadcast of the monologue, which the U.S.
Supreme Court merely considered indecent speech based on the context in which it was delivered.
According to the U.S. Supreme Court, the monologue would have been protected were it delivered
in another context. The monologue was broadcast at 2:00 p.m., when children were presumptively in
the audience.

A later case, Action for Children's Television v. FCC,22 establishes the safe harbor period to be from
10:00 in the evening to 6:00 in the morning, when the number of children in the audience is at a
minimum. In effect, between the hours of 10:00 p.m. and 6:00 a.m., the broadcasting of material
considered indecent is permitted. Between the hours of 6:00 a.m. and 10:00 p.m., the broadcast of
any indecent material may be sanctioned.

In this case, the subject speech by petitioner was broadcast starting 10:00 p.m. onwards, clearly
within the safe harbor period as established in Action for Children's Television. Correctly applying
Pacifica's context-based ruling, petitioner's speech, if indeed indecent, enjoys constitutional
protection and may not be sanctioned. The rule on this matter, as laid down by Pacifica in relation to
Action for Children's Television, is crystal-clear. But should the majority still have any doubt in their
minds, such doubt should be resolved in favor of free speech and against any interference by
government. The suspension of "Ang Dating Daan" by the MTRCB was a content-based, not a
content-neutral regulation. Thus, the suspension should have been subjected to strict scrutiny
following the rule in Chavez v. Gonzales.23 The test should be strict because the regulation went into
the very heart of the rationale for the right to free speech – that speech may not be prohibited just
because government officials disapprove of the speaker's views.24

Further, the majority opinion held that even if petitioner's utterances were not obscene but merely
indecent speech, they would still be outside of the constitutional protection because they were
conveyed through a medium easily accessible to children. The majority misapplied the doctrine of
FCC v. Pacifica, the leading jurisprudence on this matter. Pacifica did not hold that indecent speech,
when conveyed through a medium easily accessible to children, would automatically be outside the
constitutional protection. On the contrary, the U.S. Supreme Court emphasized the narrowness of its
ruling in Pacifica. The guideline that Pacifica laid down is that the broadcast of a monologue
containing indecent speech could be considered protected or unprotected depending on the context,
that is, the time of the day or the night when the indecent utterances were delivered.

The majority's ruling in this case sets a dangerous precedent. This decision makes it possible for any
television or radio program, on the slightest suspicion of being a danger to national security or on
other pretexts, to likewise face suspension. The exacting "clear and present danger" test is
dispensed with to give way to the "balancing of interests" test in favor of the government's exercise
of its regulatory power. Granting without conceding that "balancing of interests" is the appropriate
test in setting a limitation to free speech, suspension of a television program is a measure way too
harsh that it would be inappropriate as the most reasonable means for averting a perceived harm to
society. The restriction on freedom need not be greater than is necessary to further the
governmental interest.25

The "balancing of interests" test requires that a determination must first be made whether the
necessary safeguarding of the public interest involved may be achieved by some other measure less
restrictive of the protected freedom.26 The majority immediately resorted to outright suspension
without first exploring other measures less restrictive of freedom of speech. It cites MTRCB v. ABS-
CBN Broadcasting Corporation27 in justifying the government's exercise of regulatory power. But
the ABS-CBN case involved a mere fine as punishment, not a prior restraint in the form of
suspension as in this case. In the cited case, one of the episodes of "The Inside Story," a television
program of ABS-CBN, was aired without prior review and approval by the MTRCB. For this
omission, the MTRCB subsequently fined ABS-CBN in the amount of ₱20,000. However, even as
the television station was fined, the program continued to be aired and was never suspended.

Indeed, prior restraint by suspension is an extreme measure that may only be imposed after
satisfying the "clear and present danger" test, which requires the perceived danger to be both grave
and imminent. Prior restraint is simply uncalled for in this case where what is involved is not even
obscene speech, but mere indecent speech. Note too, that the subject utterances in this case were
broadcast starting 10:00 p.m. onwards, well within the safe harbor period for permissible television
broadcast of speech which may be characterized as indecent.

Suspension of the program stops not only petitioner, but also the other leaders of his congregation
from exercising their constitutional right to free speech through their medium of choice, which is
television. The majority opinion attempts to assuage petitioner's misery by saying that petitioner can
still exercise his right to speak his mind using other venues. But this proposition assumes that
petitioner has access to other venues where he may continue his interrupted exercise of free speech
using his chosen mode, television broadcast.

While we may not agree with petitioner's choice of language in expressing his disgust in this word
war between two feuding religious groups, let us not forget that freedom of speech includes the
expression of thoughts that we do not approve of, not just thoughts that are agreeable.28 To
paraphrase Voltaire: We may disapprove of what petitioner has said, but we must defend to the
death his right to say it.

The three-month suspension cannot be passed off merely as a preventive suspension that does not
partake of a penalty. The actual and real effect of the three-month suspension is a prior restraint on
expression in violation of a fundamental constitutional right. Even Congress cannot validly pass a
law imposing a three-month preventive suspension on freedom of expression for offensive or vulgar
language uttered in the past. Congress may punish such offensive or vulgar language after their
utterance, with damages, fine, or imprisonment; but Congress has no power to suspend or suppress
the people's right to speak freely because of such utterances. In short, Congress may pass a law
punishing defamation or tortious speech but the punishment cannot be the suspension or
suppression of the constitutional right to freedom of expression. Otherwise, such law would be
abridging the freedom of speech, of expression, or of the press. If Congress cannot pass such a law,
neither can respondent MTRCB promulgate a rule or a decision suspending for three months
petitioner's constitutional right to freedom of speech. And of course, neither can this Court give its
stamp of imprimatur to such an unconstitutional MTRCB rule or decision.

I end this dissenting opinion with a reminder from Justice Oliver Wendell Holmes – that the market
place of ideas is still the best alternative to censorship.29 The market place of ideas makes freedom
of speech robust and allows people to be more tolerant of opposing views. It has been said that
freedom of speech is not only to freely express oneself within the context of the law but also to hear
what others say, that all may be enlightened, regardless of how obnoxious or erroneous the
opposing views may be.30

Accordingly, I vote to GRANT the motion for reconsideration.

ANTONIO T. CARPIO
Associate Justice

DISSENTING OPINION

ABAD, J.:

I am submitting this dissent to the ably written ponencia of Justice Presbiterio J. Velasco, Jr. that
seeks to deny the petitioner’s motion for reconsideration of the Court’s decision in the case.

Brief Antecedent

Petitioner Eliseo F. Soriano, a television evangelist, hosted the Ang Dating Daan, a popular
television ministry aired nationwide everyday from 10:00 p.m. to midnight over public television. The
program carried a "general patronage" rating from the Movie and Television Review and
Classification Board (MTRCB).

The Ang Dating Daan’s rivalry with another religious television program, the Iglesia ni Cristo’s Ang
Tamang Daan, is well known. The hosts of the two shows have regularly engaged in verbal sparring
on air, hurling accusations and counter-accusations with respect to their opposing religious beliefs
and practices.

It appears that in his program Ang Tamang Daan, Michael M. Sandoval (Michael) of the Iglesia ni
Cristo attacked petitioner Soriano of the Ang Dating Daan for alleged inconsistencies in his Bible
teachings. Michael compared spliced recordings of Soriano’s statements, matched with subtitles of
his utterances, to demonstrate those inconsistencies. On August 10, 2004, in an apparent reaction
to what he perceived as a malicious attack against him by the rival television program, Soriano
accused Michael of prostituting himself with his fabricated presentations. Thus:

"….gago ka talaga Michael. Masahol ka pa sa putang babae. O di ba? Yung putang babae ang
gumagana lang doon yung ibaba, kay Michael ang gumagana ang itaas, o di ba! O, masahol pa sa
putang babae yan. Sabi ng lola ko masahol pa sa putang babae yan. Sobra ang kasinungalingan ng
demonyong ito…"

Michael and seven other ministers of the Iglesia ni Cristo lodged a complaint against petitioner
Soriano before the MTRCB. Acting swiftly, the latter preventively suspended the airing of Soriano’s
Ang Dating Daan television program for 20 days, pursuant to its powers under Section 3(d) of
Presidential Decree 19861 and its related rules.

Petitioner Soriano challenged the validity of that preventive suspension before this Court in G.R.
164785. Meanwhile, after hearing the main case or on September 27, 2004, the MTRCB found
Soriano guilty as charged and imposed on him a penalty of three months suspension from appearing
on the Ang Dating Daan program. Soriano thus filed a second petition in G.R. 165636 to question
that decision. The Court consolidated the two cases.

On April 29, 2009 the Court rendered a decision, upholding MTRCB’s power to impose preventive
suspension and affirming its decision against petitioner Soriano with the modification of applying the
three-month suspension to the program And Dating Daan, rather than to Soriano.

Issue Presented

This dissenting opinion presents a narrow issue: whether or not the Court is justified in imposing the
penalty of three-month suspension on the television program Ang Dating Daan on the ground of host
petitioner Soriano’s remarks about Iglesia ni Cristo’s Michael prostituting himself when he attacked
Soriano in the Iglesia’s own television program.

The Dissent

The Ang Dating Daan is a nationwide television ministry of a church organization officially known as
"Members of the Church of God International" headed by petitioner Soriano. It is a vast religious
movement not so far from those of Mike Velarde’s El Shadai, Eddie Villanueva’s Jesus is Lord, and
Apollo Quiboloy’s The Kingdom of Jesus Christ. These movements have generated such
tremendous following that they have been able to sustain daily television and radio programs that
reach out to their members and followers all over the country. Some of their programs are broadcast
abroad. Ang Dating Daan is aired in the United States and Canada.

The Catholic Church is of course the largest religious organization in the Philippines. If its members
get their spiritual nourishments from attending masses or novenas in their local churches, those of
petitioner Soriano’s church tune in every night to listen to his televised Bible teachings and how
these teachings apply to their lives. They hardly have places of worship like the Catholic Church or
the mainstream protestant movements.

Thus, suspending the Ang Dating Daan television program is the equivalent of closing down their
churches to its followers. Their inability to tune in on their Bible teaching program in the evening is
for them like going to church on Sunday morning, only to find its doors and windows heavily barred.
Inside, the halls are empty.
Do they deserve this? No.

1. A tiny moment of lost temper.

Petitioner Soriano’s Bible ministry has been on television continuously for 27 years since
1983 with no prior record of use of foul language. For a 15-second outburst of its head at his
bitterest critics, it seems not fair for the Court to close down this Bible ministry to its large
followers altogether for a full quarter of a year. It is like cutting the leg to cure a smelly foot.

2. Not obscene.

Primarily, it is obscenity on television that the constitutional guarantee of freedom of speech

does not protect. As the Court’s decision points out, the test of obscenity is whether the
average person, applying contemporary standards, would find the speech, taken as a whole,
appeals to the prurient interest. A thing is prurient when it arouses lascivious thoughts or
desires2 or tends to arouse sexual desire.3

A quarter-of-a-year suspension would probably be justified when a general patronage

program intentionally sneaks in snippets of lewd, prurient materials to attract an audience to
the program. This has not been the case here.

3. Merely borders on indecent.

Actually, the Court concedes that petitioner Soriano’s short outburst was not in the category
of the obscene. It was just "indecent." But were his words and their meaning utterly
indecent? In a scale of 10, did he use the grossest language? He did not.

First, Soriano actually exercised some restraints in the sense that he did not use the
vernacular word for the female sexual organ when referring to it, which word even
the published opinions of the Court avoided despite its adult readers. He referred to it
as "yung ibaba" or down below. And, instead of using the patently offensive
vernacular equivalent of the word "fuck" that describes the sexual act in which the
prostitute engages herself, he instead used the word "gumagana lang doon yung
ibaba" or what functions is only down below. At most, his utterance merely bordered
on the indecent.

Second, the word "puta" or "prostitute" describes a bad trade but it is not a bad word.
The world needs a word to describe it. "Evil" is bad but the word "evil" is not; the use
of the words "puta" or "evil" helps people understand the values that compete in this
world. A policy that places these ordinary descriptive words beyond the hearing of
children is unrealistic and is based on groundless fear. Surely no member of the
Court will recall that when yet a child his or her hearing the word "puta" for the first
time left him or her wounded for life.

Third, Soriano did not tell his viewers that being a prostitute was good. He did not
praise prostitutes as to make them attractive models to his listeners. Indeed, he
condemned Michael for acting like a prostitute in attacking him on the air. The trouble
is that the Court, like the MTRCB read his few lines in isolation. Actually, from the
larger picture, Soriano appears to have been provoked by Michael’s resort to splicing
his speeches and making it appear that he had taught inconsistent and false
doctrines to his listeners. If Michael’s sin were true, Soriano was simply defending
himself with justified anger.

And fourth, the Court appears to have given a literal meaning to what Soriano said.

"Gago ka talaga x x x, masahol ka pa sa putang babae x x x. Yung putang babae ang

gumagana lang doon yung ibaba, [dito] kay Michael ang gumagana ang itaas, o di ba!"

This was a figure of speech. Michael was a man, so he could not literally be a female
prostitute. Its real meaning is that Michael was acting like a prostitute in mouthing the ideas
of anyone who cared to pay him for such service. It had no indecent meaning. The Bible
itself uses the word "prostitute" as a figure of speech. "By their deeds they prostituted
themselves," said Psalm 106:39 of the Israelites who continued to worship idols after God
had taken them out of Egyptian slavery.4 Soriano’s real message is that Michael prostituted
himself by his calumny against him.

If at all, petitioner Soriano’s breach of the rule of decency is slight, one on a scale of 10. Still,
the Court would deprive the Ang Dating Daan followers of their nightly bible teachings for a
quarter of a year because their head teacher had used figures of speech to make his
message vivid.

4. The average child as listener

The Court claims that, since Ang Dating Daan carried a general patronage rating, Soriano’s
speech no doubt caused harm to the children who watched the show. This statement is
much too sweeping.

The Court relies on the United States case of Federal Communications Commission (FCC)
v. Pacifica Foundation,5 a 1978 landmark case. Here are snatches of the challenged
monologue that was aired on radio:

The original seven words were, shit, piss, fuck, cunt, cocksucker, motherfucker, and tits.
Those are the ones that will curve your spine, grow hair on your hands and maybe, even
bring us, God help us, peace without honor and bourbon…Also cocksucker is a compound
word and neither half of that is really dirty…And the cock crowed three times, the cock—
three times. It’s in the Bible, cock in the Bible…Hot shit, holy shit, tough shit, eat shit, shit-
eating grin…It’s a great word, fuck, nice word, easy word, cute word, kind of. Easy word to
say. One syllable, short u. Fuck…A little something for everyone. Fuck. Good word. x x x

Imagine how the above would sound if translated into any of the Filipino vernaculars. The
U.S. Supreme Court held that the above is not protected speech and that the FCC could
regulate its airing on radio. The U.S. Supreme Court was of course correct.

Here, however, there is no question that Soriano attacked Michael, using figure of speech, at
past 10:00 in the evening, not at 2:00 in the afternoon. The average Filipino child would have
been long in bed by the time Ang Dating Daan appeared on the television screen. What is
more, Bible teaching and interpretation is not the stuff of kids. It is not likely that they would
give up programs of interest to them just to listen to Soriano drawing a distinction between
"faith" and "work or action." The Court has stretched the "child" angle beyond realistic
proportions. The MTRCB probably gave the program a general patronage rating simply
because Ang Dating Daan had never before been involved in any questionable broadcast in
the previous 27 years that it had been on the air.

The monologue in the FCC case that was broadcast at 2 in the afternoon was pure indecent
and gross language, uttered for its own sake with no social value at all. It cannot compare to
Soriano’s speech where the indecent words were slight and spoken as mere figure of speech
to defend himself from what he perceived as malicious criticism.

5. Disproportionate penalty

The Court applied the balancing of interest test in justifying the imposition of the penalty of
suspension against Ang Dating Daan. Under this test, when particular conduct is regulated in
the interest of public order and the regulation results in an indirect, conditional, partial
abridgment of speech, the duty of the courts is to determine which of the two conflicting
interests demands the greater protection under the particular circumstances presented.

An example of this is where an ordinance prohibits the making of loud noises from 9:00 p.m.
to 6:00 a.m. Can this ordinance be applied to prevent vehicles circling the neighborhood at
such hours of night, playing campaign jingles on their loudspeakers to win votes for
candidates in the election? Here, there is a tension between the rights of candidates to
address their constituents and the interest of the people in healthy undisturbed sleep. The
Court would probably uphold the ordinance since public interest demands a quiet night’s rest
for all and since the restraint on the freedom of speech is indirect, conditional, and partial.
The candidate is free to make his broadcast during daytime when people are normally awake
and can appreciate what he is saying.
 But here, the abridgment of speech—three months total suspension of the Ang Dating Daan
television bible teaching program—cannot be regarded as indirect, conditional, or partial. It is
a direct, unconditional, and total abridgment of the freedom of speech, to which a religious
organization is entitled, for a whole quarter of a year.

In the American case of FCC, a parent complained. He was riding with his son in the car at 2:00 in
the afternoon and they heard the grossly indecent monologue on radio. Here, no parent has in fact
come forward with a complaint that his child had heard petitioner Soriano’s speech and was harmed
by it. The Court cannot pretend that this is a case of angry or agitated parents against Ang Dating
Daan. The complaint here came from Iglesia ni Cristo preachers and members who deeply loathed
Soriano and his church. The Court’s decision will not be a victory for the children but for the Iglesia ni
Cristo, finally enabling it to silence an abhorred competing religious belief and its practices.

What is more, since this case is about protecting children, the more appropriate penalty, if Soriano’s
speech during the program mentioned was indecent and had offended them, is to raise his
program’s restriction classification. The MTRCB classify programs to protect vulnerable audiences. It
can change the present G or General Patronage classification of Ang Dating Daan to PG or "with
Parental Guidance only" for three months. This can come with a warning that should the program
commit the same violation, the MTRCB can make the new classification permanent or, if the
violation is recurring, cancel its program’s permit.

This has precedent. In Gonzales v. Katigbak,6 the Court did not ban the motion picture just because
there were suggestive scenes in it that were not fit for children. It simply classified the picture as for
adults only. By doing this, the Court would not be cutting the leg to cure a smelly foot.

I vote to partially grant the motion for reconsideration by modifying the three-month suspension
penalty imposed on the program Ang Dating Daan. In its place, I vote to raise the program’s
restriction classification from G or General Patronage to PG or with Parental Guidance for three
months with warning that should petitioner Soriano commit the same violation, the classification of
his program will be permanently changed or, if the violation is persistent, the program will be
altogether cancelled.

ROBERTO A. ABAD
Associate Justice

G.R. No. 177728 July 31, 2009

JENIE SAN JUAN DELA CRUZ and minor CHRISTIAN DELA CRUZ "AQUINO," represented by
JENIE SAN JUAN DELA CRUZ, Petitioners,
vs.
RONALD PAUL S. GRACIA, in his capacity as City Civil Registrar of Antipolo
City, Respondent.

DECISION

CARPIO MORALES, J.:

For several months in 2005, then 21-year old petitioner Jenie San Juan Dela Cruz (Jenie) and then
19-year old Christian Dominique Sto. Tomas Aquino (Dominique) lived together as husband and wife
without the benefit of marriage. They resided in the house of Dominique’s parents Domingo B.
Aquino and Raquel Sto. Tomas Aquino at Pulang-lupa, Dulumbayan, Teresa, Rizal.

On September 4, 2005, Dominique died.1 After almost two months, or on November 2, 2005, Jenie,
who continued to live with Dominique’s parents, gave birth to her herein co-petitioner minor child
Christian Dela Cruz "Aquino" at the Antipolo Doctors Hospital, Antipolo City.

Jenie applied for registration of the child’s birth, using Dominique’s surname Aquino, with the Office
of the City Civil Registrar, Antipolo City, in support of which she submitted the child’s Certificate of
Live Birth,2 Affidavit to Use the Surname of the Father3 (AUSF) which she had executed and signed,
and Affidavit of Acknowledgment executed by Dominique’s father Domingo Butch Aquino.4 Both
affidavits attested, inter alia, that during the lifetime of Dominique, he had continuously
acknowledged his yet unborn child, and that his paternity had never been questioned. Jenie
attached to the AUSF a document entitled "AUTOBIOGRAPHY" which Dominique, during his
lifetime, wrote in his own handwriting, the pertinent portions of which read:

AQUINO, CHRISTIAN DOMINIQUE S.T.

AUTOBIOGRAPHY

I’M CHRISTIAN DOMINIQUE STO. TOMAS AQUINO, 19 YEARS OF AGE TURNING 20 THIS
COMING OCTOBER 31, 2005.5 I RESIDE AT PULANG-LUPA STREET BRGY. DULUMBAYAN,
TERESA, RIZAL. I AM THE YOUNGEST IN OUR FAMILY. I HAVE ONE BROTHER NAMED
JOSEPH BUTCH STO. TOMAS AQUINO. MY FATHER’S NAME IS DOMINGO BUTCH AQUINO
AND MY MOTHER’S NAME IS RAQUEL STO. TOMAS AQUINO. x x x.

xxxx

AS OF NOW I HAVE MY WIFE NAMED JENIE DELA CRUZ. WE MET EACH OTHER IN OUR
HOMETOWN, TEREZA RIZAL. AT FIRST WE BECAME GOOD FRIENDS, THEN WE FELL IN
LOVE WITH EACH OTHER, THEN WE BECAME GOOD COUPLES. AND AS OF NOW SHE IS
PREGNANT AND FOR THAT WE LIVE TOGETHER IN OUR HOUSE NOW. THAT’S
ALL.6 (Emphasis and underscoring supplied)

By letter dated November 11, 2005,7 the City Civil Registrar of Antipolo City, Ronald Paul S. Gracia
(respondent), denied Jenie’s application for registration of the child’s name in this wise:

7. Rule 7 of Administrative Order No. 1, Series of 2004 (Implementing Rules and Regulations of
Republic Act No. 9255 ["An Act Allowing Illegitimate Children to Use the Surname of their Father,
Amending for the Purpose, Article 176 of Executive Order No. 209, otherwise Known as the ‘Family
Code of the Philippines’"]) provides that:

Rule 7. Requirements for the Child to Use the Surname of the Father

7.1 For Births Not Yet Registered

7.1.1 The illegitimate child shall use the surname of the father if a public document is executed by
the father, either at the back of the Certificate of Live Birth or in a separate document.

7.1.2 If admission of paternity is made through a private handwritten instrument, the child shall use
the surname of the father, provided the registration is supported by the following documents:

a. AUSF8

b. Consent of the child, if 18 years old and over at the time of the filing of the document.

c. Any two of the following documents showing clearly the paternity between the father and
the child:

1. Employment records

2. SSS/GSIS records

3. Insurance

4. Certification of membership in any organization

5. Statement of Assets and Liability

6. Income Tax Return (ITR)

In summary, the child cannot use the surname of his father because he was born out of wedlock and
the father unfortunately died prior to his birth and has no more capacity to acknowledge his paternity
to the child (either through the back of Municipal Form No. 102 – Affidavit of
Acknowledgment/Admission of Paternity – or the Authority to Use the Surname of the Father).
(Underscoring supplied)

Jenie and the child promptly filed a complaint9 for injunction/registration of name against respondent
before the Regional Trial Court of Antipolo City, docketed as SCA Case No. 06-539, which was
raffled to Branch 73 thereof. The complaint alleged that, inter alia, the denial of registration of the
child’s name is a violation of his right to use the surname of his deceased father under Article 176
of the Family Code, as amended by Republic Act (R.A.) No. 9255,10 which provides:

Article 176. Illegitimate children shall use the surname and shall be under the parental authority of
their mother, and shall be entitled to support in conformity with this Code. However, illegitimate
children may use the surname of their father if their filiation has been expressly recognized by the
father through the record of birth appearing in the civil register, or when an admission in a public
document or private handwritten instrument is made by the father. Provided, the father has the right
to institute an action before the regular courts to prove non-filiation during his lifetime. The legitime of
each illegitimate child shall consist of one-half of the legitime of a legitimate child. (Emphasis and
underscoring supplied)

They maintained that the Autobiography executed by Dominique constitutes an admission of

paternity in a "private handwritten instrument" within the contemplation of the above-quoted provision
of law.

For failure to file a responsive pleading or answer despite service of summons, respondent was
declared in default.

Jenie thereupon presented evidence ex-parte. She testified on the circumstances of her common-
law relationship with Dominique and affirmed her declarations in her AUSF that during his lifetime,
he had acknowledged his yet unborn child.11 She offered Dominique’s handwritten Autobiography
(Exhibit "A") as her documentary evidence-in-chief.12 Dominique’s lone brother, Joseph Butch S.T.
Aquino, also testified, corroborating Jenie’s declarations.13

By Decision14 of April 25, 2007, the trial court dismissed the complaint "for lack of cause of action" as
the Autobiography was unsigned, citing paragraph 2.2, Rule 2 (Definition of Terms)
of Administrative Order (A.O.) No. 1, Series of 2004 (the Rules and Regulations Governing the
Implementation of R.A. 9255) which defines "private handwritten document" through which a father
may acknowledge an illegitimate child as follows:

2.2 Private handwritten instrument – an instrument executed in the handwriting of the father and duly
signed by him where he expressly recognizes paternity to the child. (Underscoring supplied)

The trial court held that even if Dominique was the author of the handwritten Autobiography, the
same does not contain any express recognition of paternity. 1avv phi 1

Hence, this direct resort to the Court via Petition for Review on Certiorari raising this purely legal
issue of:

WHETHER OR NOT THE UNSIGNED HANDWRITTEN STATEMENT OF THE DECEASED

FATHER OF MINOR CHRISTIAN DELA CRUZ CAN BE CONSIDERED AS A RECOGNITION OF
PATERNITY IN A "PRIVATE HANDWRITTEN INSTRUMENT" WITHIN THE CONTEMPLATION OF
ARTICLE 176 OF THE FAMILY CODE, AS AMENDED BY R.A. 9255, WHICH ENTITLES THE SAID
MINOR TO USE HIS FATHER’S SURNAME.15(Underscoring supplied)

Petitioners contend that Article 176 of the Family Code, as amended, does not expressly require that
the private handwritten instrument containing the putative father’s admission of paternity must be
signed by him. They add that the deceased’s handwritten Autobiography, though unsigned by him, is
sufficient, for the requirement in the above-quoted paragraph 2.2 of the Administrative Order that the
admission/recognition must be "duly signed" by the father is void as it "unduly expanded" the earlier-
quoted provision of Article 176 of the Family Code.16

Petitioners further contend that the trial court erred in not finding that Dominique’s handwritten
Autobiography contains a "clear and unmistakable" recognition of the child’s paternity.17
In its Comment, the Office of the Solicitor General (OSG) submits that respondent’s position, as
affirmed by the trial court, is in consonance with the law and thus prays for the dismissal of the
petition. It further submits that Dominique’s Autobiography "merely acknowledged Jenie’s pregnancy
but not [his] paternity of the child she was carrying in her womb."18

Article 176 of the Family Code, as amended by R.A. 9255, permits an illegitimate child to use the
surname of his/her father if the latter had expressly recognized him/her as his offspring through the
record of birth appearing in the civil register, or through an admission made in a public or private
handwritten instrument. The recognition made in any of these documents is, in itself, a
consummated act of acknowledgment of the child’s paternity; hence, no separate action for judicial
approval is necessary.19

Article 176 of the Family Code, as amended, does not, indeed, explicitly state that the private
handwritten instrument acknowledging the child’s paternity must be signed by the putative father.
This provision must, however, be read in conjunction with related provisions of the Family Code
which require that recognition by the father must bear his signature, thus:

Art. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the
same evidence as legitimate children.

xxxx

Art. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritten

instrument and signed by the parent concerned.

x x x x (Emphasis and underscoring supplied)

That a father who acknowledges paternity of a child through a written instrument must affix his
signature thereon is clearly implied in Article 176 of the Family Code. Paragraph 2.2, Rule 2 of A.O.
No. 1, Series of 2004, merely articulated such requirement; it did not "unduly expand" the import of
Article 176 as claimed by petitioners.

In the present case, however, special circumstances exist to hold that Dominique’s Autobiography,
though unsigned by him, substantially satisfies the requirement of the law.

First, Dominique died about two months prior to the child’s birth. Second, the relevant matters in the
Autobiography, unquestionably handwritten by Dominique, correspond to the facts culled from the
testimonial evidence Jenie proffered.20 Third, Jenie’s testimony is corroborated by the Affidavit of
Acknowledgment of Dominique’s father Domingo Aquino and testimony of his brother Joseph Butch
Aquino whose hereditary rights could be affected by the registration of the questioned recognition of
the child. These circumstances indicating Dominique’s paternity of the child give life to his
statements in his Autobiography that "JENIE DELA CRUZ" is "MY WIFE" as "WE FELL IN LOVE
WITH EACH OTHER" and "NOW SHE IS PREGNANT AND FOR THAT WE LIVE TOGETHER."

In Herrera v. Alba,21 the Court summarized the laws, rules, and jurisprudence on establishing
filiation, discoursing in relevant part:

Laws, Rules, and Jurisprudence

Establishing Filiation

The relevant provisions of the Family Code provide as follows:

ART. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the
same evidence as legitimate children.

xxxx
ART. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritten

instrument and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws.

The Rules on Evidence include provisions on pedigree. The relevant sections of Rule 130 provide:

SEC. 39. Act or declaration about pedigree. — The act or declaration of a person deceased, or
unable to testify, in respect to the pedigree of another person related to him by birth or marriage,
may be received in evidence where it occurred before the controversy, and the relationship between
the two persons is shown by evidence other than such act or declaration. The word "pedigree"
includes relationship, family genealogy, birth, marriage, death, the dates when and the places where
these facts occurred, and the names of the relatives. It embraces also facts of family history
intimately connected with pedigree.

SEC. 40. Family reputation or tradition regarding pedigree. — The reputation or tradition existing in a
family previous to the controversy, in respect to the pedigree of any one of its members, may be
received in evidence if the witness testifying thereon be also a member of the family, either by
consanguinity or affinity. Entries in family bibles or other family books or charts, engraving on rings,
family portraits and the like, may be received as evidence of pedigree.

This Court's rulings further specify what incriminating acts are acceptable as evidence to establish
filiation. In Pe Lim v. CA, a case petitioner often cites, we stated that the issue of paternity still has to
be resolved by such conventional evidence as the relevant incriminating verbal and written acts by
the putative father. Under Article 278 of the New Civil Code, voluntary recognition by a parent shall
be made in the record of birth, a will, a statement before a court of record, or in any authentic
writing. To be effective, the claim of filiation must be made by the putative father himself and the
writing must be the writing of the putative father. A notarial agreement to support a child whose
filiation is admitted by the putative father was considered acceptable evidence. Letters to the mother
vowing to be a good father to the child and pictures of the putative father cuddling the child on
various occasions, together with the certificate of live birth, proved filiation. However, a student
permanent record, a written consent to a father's operation, or a marriage contract where the
putative father gave consent, cannot be taken as authentic writing. Standing alone, neither a
certificate of baptism nor family pictures are sufficient to establish filiation. (Emphasis and
underscoring supplied.)

In the case at bar, there is no dispute that the earlier quoted statements in Dominique’s
Autobiography have been made and written by him. Taken together with the other relevant facts
extant herein – that Dominique, during his lifetime, and Jenie were living together as common-law
spouses for several months in 2005 at his parents’ house in Pulang-lupa, Dulumbayan, Teresa,
Rizal; she was pregnant when Dominique died on September 4, 2005; and about two months after
his death, Jenie gave birth to the child – they sufficiently establish that the child of Jenie is
Dominique’s.

In view of the pronouncements herein made, the Court sees it fit to adopt the following rules
respecting the requirement of affixing the signature of the acknowledging parent in any private
handwritten instrument wherein an admission of filiation of a legitimate or illegitimate child is made:

1) Where the private handwritten instrument is the lone piece of evidence submitted to prove
filiation, there should be strict compliance with the requirement that the same must be signed
by the acknowledging parent; and

2) Where the private handwritten instrument is accompanied by other relevant and

competent evidence, it suffices that the claim of filiation therein be shown to have been made
 and handwritten by the acknowledging parent as it is merely corroborative of such other
evidence.

Our laws instruct that the welfare of the child shall be the "paramount consideration" in resolving
questions affecting him.22 Article 3(1) of the United Nations Convention on the Rights of a Child of
which the Philippines is a signatory is similarly emphatic:

Article 3

1. In all actions concerning children, whether undertaken by public or private social welfare
institutions, courts of law, administrative authorities or legislative bodies, the best interests of the
child shall be a primary consideration.23(Underscoring supplied)

It is thus "(t)he policy of the Family Code to liberalize the rule on the investigation of the paternity
and filiation of children, especially of illegitimate children x x x."24 Too, "(t)he State as parens patriae
affords special protection to children from abuse, exploitation and other conditions prejudicial to their
development."25

In the eyes of society, a child with an unknown father bears the stigma of dishonor. It is to petitioner
minor child’s best interests to allow him to bear the surname of the now deceased Dominique and
enter it in his birth certificate.

WHEREFORE, the petition is GRANTED. The City Civil Registrar of Antipolo City is DIRECTED to
immediately enter the surname of the late Christian Dominique Sto. Tomas Aquino as the surname
of petitioner minor Christian dela Cruz in his Certificate of Live Birth, and record the same in the
Register of Births.

SO ORDERED.

G.R. No. L-5 September 17, 1945

CO KIM CHAM (alias CO KIM CHAM), petitioner,

vs.
EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON, Judge of First Instance of
Manila, respondents.1

Marcelino Lontok for petitioner.

P. A. Revilla for respondent Valdez Tan Keh.
Respondent Judge Dizon in his own behalf.

FERIA, J.:

This petition for mandamus in which petitioner prays that the respondent judge of the lower court be
ordered to continue the proceedings in civil case No. 3012 of said court, which were initiated under
the regime of the so-called Republic of the Philippines established during the Japanese military
occupation of these Islands.

The respondent judge refused to take cognizance of and continue the proceedings in said case on
the ground that the proclamation issued on October 23, 1944, by General Douglas MacArthur had
the effect of invalidating and nullifying all judicial proceedings and judgements of the court of the
Philippines under the Philippine Executive Commission and the Republic of the Philippines
established during the Japanese military occupation, and that, furthermore, the lower courts have no
jurisdiction to take cognizance of and continue judicial proceedings pending in the courts of the
defunct Republic of the Philippines in the absence of an enabling law granting such authority. And
the same respondent, in his answer and memorandum filed in this Court, contends that the
government established in the Philippines during the Japanese occupation were no de
facto governments.

On January 2, 1942, the Imperial Japanese Forces occupied the City of Manila, and on the next day
their Commander in Chief proclaimed "the Military Administration under law over the districts
occupied by the Army." In said proclamation, it was also provided that "so far as the Military
Administration permits, all the laws now in force in the Commonwealth, as well as executive and
judicial institutions, shall continue to be effective for the time being as in the past," and "all public
officials shall remain in their present posts and carry on faithfully their duties as before."

A civil government or central administration organization under the name of "Philippine Executive
Commission was organized by Order No. 1 issued on January 23, 1942, by the Commander in Chief
of the Japanese Forces in the Philippines, and Jorge B. Vargas, who was appointed Chairman
thereof, was instructed to proceed to the immediate coordination of the existing central
administrative organs and judicial courts, based upon what had existed therefore, with approval of
the said Commander in Chief, who was to exercise jurisdiction over judicial courts.

The Chairman of the Executive Commission, as head of the central administrative organization,
issued Executive Orders Nos. 1 and 4, dated January 30 and February 5, 1942, respectively, in
which the Supreme Court, Court of Appeals, Courts of First Instance, and the justices of the peace
and municipal courts under the Commonwealth were continued with the same jurisdiction, in
conformity with the instructions given to the said Chairman of the Executive Commission by the
Commander in Chief of Japanese Forces in the Philippines in the latter's Order No. 3 of February 20,
1942, concerning basic principles to be observed by the Philippine Executive Commission in
exercising legislative, executive and judicial powers. Section 1 of said Order provided that "activities
of the administration organs and judicial courts in the Philippines shall be based upon the existing
statutes, orders, ordinances and customs. . . ."

On October 14, 1943, the so-called Republic of the Philippines was inaugurated, but no substantial
change was effected thereby in the organization and jurisdiction of the different courts that
functioned during the Philippine Executive Commission, and in the laws they administered and
enforced.

On October 23, 1944, a few days after the historic landing in Leyte, General Douglas MacArthur
issued a proclamation to the People of the Philippines which declared:

1. That the Government of the Commonwealth of the Philippines is, subject to the supreme
authority of the Government of the United States, the sole and only government having legal
and valid jurisdiction over the people in areas of the Philippines free of enemy occupation
and control;

2. That the laws now existing on the statute books of the Commonwealth of the Philippines
and the regulations promulgated pursuant thereto are in full force and effect and legally
binding upon the people in areas of the Philippines free of enemy occupation and control;
and

3. That all laws, regulations and processes of any other government in the Philippines than
that of the said Commonwealth are null and void and without legal effect in areas of the
Philippines free of enemy occupation and control.

On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945, General
MacArthur, on behalf of the Government of the United States, solemnly declared "the full powers and
responsibilities under the Constitution restored to the Commonwealth whose seat is here established
as provided by law."

In the light of these facts and events of contemporary history, the principal questions to be resolved
in the present case may be reduced to the following:(1) Whether the judicial acts and proceedings of
the court existing in the Philippines under the Philippine Executive Commission and the Republic of
the Philippines were good and valid and remained so even after the liberation or reoccupation of the
Philippines by the United States and Filipino forces; (2)Whether the proclamation issued on October
23, 1944, by General Douglas MacArthur, Commander in Chief of the United States Army, in which
he declared "that all laws, regulations and processes of any of the government in the Philippines
than that of the said Commonwealth are null and void and without legal effect in areas of the
Philippines free of enemy occupation and control," has invalidated all judgements and judicial acts
and proceedings of the said courts; and (3) If the said judicial acts and proceedings have not been
invalidated by said proclamation, whether the present courts of the Commonwealth, which were the
same court existing prior to, and continued during, the Japanese military occupation of the
Philippines, may continue those proceedings pending in said courts at the time the Philippines were
reoccupied and liberated by the United States and Filipino forces, and the Commonwealth of the
Philippines were reestablished in the Islands.
We shall now proceed to consider the first question, that is, whether or not under the rules of
international law the judicial acts and proceedings of the courts established in the Philippines under
the Philippine Executive Commission and the Republic of the Philippines were good and valid and
remained good and valid even after the liberation or reoccupation of the Philippines by the United
States and Filipino forces.

1. It is a legal truism in political and international law that all acts and proceedings of the legislative,
executive, and judicial departments of a de facto government are good and valid. The question to be
determined is whether or not the governments established in these Islands under the names of the
Philippine Executive Commission and Republic of the Philippines during the Japanese military
occupation or regime were de facto governments. If they were, the judicial acts and proceedings of
those governments remain good and valid even after the liberation or reoccupation of the Philippines
by the American and Filipino forces.

There are several kinds of de facto governments. The first, or government de facto in a proper legal
sense, is that government that gets possession and control of, or usurps, by force or by the voice of
the majority, the rightful legal governments and maintains itself against the will of the latter, such as
the government of England under the Commonwealth, first by Parliament and later by Cromwell as
Protector. The second is that which is established and maintained by military forces who invade and
occupy a territory of the enemy in the course of war, and which is denominated a government of
paramount force, as the cases of Castine, in Maine, which was reduced to British possession in the
war of 1812, and Tampico, Mexico, occupied during the war with Mexico, by the troops of the United
States. And the third is that established as an independent government by the inhabitants of a
country who rise in insurrection against the parent state of such as the government of the Southern
Confederacy in revolt not concerned in the present case with the first kind, but only with the second
and third kinds of de facto governments.

Speaking of government "de facto" of the second kind, the Supreme Court of the United States, in
the case of Thorington vs. Smith (8 Wall., 1), said: "But there is another description of government,
called also by publicists a government de facto, but which might, perhaps, be more aptly
denominated a government of paramount force. Its distinguishing characteristics are (1), that its
existence is maintained by active military power with the territories, and against the rightful authority
of an established and lawful government; and (2), that while it exists it necessarily be obeyed in civil
matters by private citizens who, by acts of obedience rendered in submission to such force, do not
become responsible, or wrongdoers, for those acts, though not warranted by the laws of the rightful
government. Actual governments of this sort are established over districts differing greatly in extent
and conditions. They are usually administered directly by military authority, but they may be
administered, also, civil authority, supported more or less directly by military force. . . . One example
of this sort of government is found in the case of Castine, in Mine, reduced to British possession in
the war of 1812 . . . U. S. vs. Rice (4 Wheaton, 253). A like example is found in the case of Tampico,
occupied during the war with Mexico, by the troops of the United States . . . Fleming vs. Page (9
Howard, 614). These were cases of temporary possessions of territory by lawfull and regular
governments at war with the country of which the territory so possessed was part."

The powers and duties of de facto governments of this description are regulated in Section III of the
Hague Conventions of 1907, which is a revision of the provisions of the Hague Conventions of 1899
on the same subject of said Section III provides "the authority of the legislative power having actually
passed into the hands of the occupant, the latter shall take steps in his power to reestablish and
insure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the
laws in force in the country."

According to the precepts of the Hague Conventions, as the belligerent occupant has the right and is
burdened with the duty to insure public order and safety during his military occupation, he possesses
all the powers of a de factogovernment, and he can suspended the old laws and promulgate new
ones and make such changes in the old as he may see fit, but he is enjoined to respect, unless
absolutely prevented by the circumstances prevailing in the occupied territory, the municipal laws in
force in the country, that is, those laws which enforce public order and regulate social and
commercial life of the country. On the other hand, laws of a political nature or affecting political
relations, such as, among others, the right of assembly, the right to bear arms, the freedom of the
press, and the right to travel freely in the territory occupied, are considered as suspended or in
abeyance during the military occupation. Although the local and civil administration of justice is
suspended as a matter of course as soon as a country is militarily occupied, it is not usual for the
invader to take the whole administration into his own hands. In practice, the local ordinary tribunals
are authorized to continue administering justice; and judges and other judicial officers are kept in
their posts if they accept the authority of the belligerent occupant or are required to continue in their
positions under the supervision of the military or civil authorities appointed, by the Commander in
Chief of the occupant. These principles and practice have the sanction of all publicists who have
considered the subject, and have been asserted by the Supreme Court and applied by the President
of the United States.

The doctrine upon this subject is thus summed up by Halleck, in his work on International Law (Vol.
2, p. 444): "The right of one belligerent to occupy and govern the territory of the enemy while in its
military possession, is one of the incidents of war, and flows directly from the right to conquer. We,
therefore, do not look to the Constitution or political institutions of the conqueror, for authority to
establish a government for the territory of the enemy in his possession, during its military occupation,
nor for the rules by which the powers of such government are regulated and limited. Such authority
and such rules are derived directly from the laws war, as established by the usage of the of the
world, and confirmed by the writings of publicists and decisions of courts — in fine, from the law of
nations. . . . The municipal laws of a conquered territory, or the laws which regulate private rights,
continue in force during military occupation, excepts so far as they are suspended or changed by the
acts of conqueror. . . . He, nevertheless, has all the powers of a de facto government, and can at his
pleasure either change the existing laws or make new ones."

And applying the principles for the exercise of military authority in an occupied territory, which were
later embodied in the said Hague Conventions, President McKinley, in his executive order to the
Secretary of War of May 19,1898, relating to the occupation of the Philippines by United States
forces, said in part: "Though the powers of the military occupant are absolute and supreme, and
immediately operate upon the political condition of the inhabitants, the municipal laws of the
conquered territory, such as affect private rights of person and property and provide for the
punishment of crime, are considered as continuing in force, so far as they are compatible with the
new order of things, until they are suspended or superseded by the occupying belligerent; and in
practice they are not usually abrogated, but are allowed to remain in force and to be administered by
the ordinary tribunals, substantially as they were before the occupation. This enlightened practice is,
so far as possible, to be adhered to on the present occasion. The judges and the other officials
connected with the administration of justice may, if they accept the authority of the United States,
continue to administer the ordinary law of the land as between man and man under the supervision
of the American Commander in Chief." (Richardson's Messages and Papers of President, X, p. 209.)

As to "de facto" government of the third kind, the Supreme Court of the United States, in the same
case of Thorington vs. Smith, supra, recognized the government set up by the Confederate States
as a de factogovernment. In that case, it was held that "the central government established for the
insurgent States differed from the temporary governments at Castine and Tampico in the
circumstance that its authority did no originate in lawful acts of regular war; but it was not, on the
account, less actual or less supreme. And we think that it must be classed among the governments
of which these are examples. . . .

In the case of William vs. Bruffy (96 U. S. 176, 192), the Supreme Court of the United States,
discussing the validity of the acts of the Confederate States, said: "The same general form of
government, the same general laws for the administration of justice and protection of private rights,
which had existed in the States prior to the rebellion, remained during its continuance and
afterwards. As far as the Acts of the States do not impair or tend to impair the supremacy of the
national authority, or the just rights of citizens under the Constitution, they are, in general, to be
treated as valid and binding. As we said in Horn vs. Lockhart (17 Wall., 570; 21 Law. ed., 657): "The
existence of a state of insurrection and war did not loosen the bonds of society, or do away with civil
government or the regular administration of the laws. Order was to be preserved, police regulations
maintained, crime prosecuted, property protected, contracts enforced, marriages celebrated, estates
settled, and the transfer and descent of property regulated, precisely as in the time of peace. No
one, that we are aware of, seriously questions the validity of judicial or legislative Acts in the
insurrectionary States touching these and kindered subjects, where they were not hostile in their
purpose or mode of enforcement to the authority of the National Government, and did not impair the
rights of citizens under the Constitution'. The same doctrine has been asserted in numerous other
cases."

And the same court, in the case of Baldy vs. Hunter (171 U. S., 388, 400), held: "That what occured
or was done in respect of such matters under the authority of the laws of these local de
facto governments should not be disregarded or held to be invalid merely because those
governments were organized in hostility to the Union established by the national Constitution; this,
because the existence of war between the United States and the Confederate States did not relieve
those who are within the insurrectionary lines from the necessity of civil obedience, nor destroy the
bonds of society nor do away with civil government or the regular administration of the laws, and
because transactions in the ordinary course of civil society as organized within the enemy's territory
although they may have indirectly or remotely promoted the ends of the de facto or unlawful
government organized to effect a dissolution of the Union, were without blame 'except when proved
to have been entered into with actual intent to further invasion or insurrection:'" and "That judicial
and legislative acts in the respective states composing the so-called Confederate States should be
respected by the courts if they were not hostile in their purpose or mode of enforcement to the
authority of the National Government, and did not impair the rights of citizens under the
Constitution."

In view of the foregoing, it is evident that the Philippine Executive Commission, which was organized
by Order No. 1, issued on January 23, 1942, by the Commander of the Japanese forces, was a civil
government established by the military forces of occupation and therefore a de facto government of
the second kind. It was not different from the government established by the British in Castine,
Maine, or by the United States in Tampico, Mexico. As Halleck says, "The government established
over an enemy's territory during the military occupation may exercise all the powers given by the
laws of war to the conqueror over the conquered, and is subject to all restrictions which that code
imposes. It is of little consequence whether such government be called a military or civil government.
Its character is the same and the source of its authority the same. In either case it is a government
imposed by the laws of war, and so far it concerns the inhabitants of such territory or the rest of the
world, those laws alone determine the legality or illegality of its acts." (Vol. 2, p. 466.) The fact that
the Philippine Executive Commission was a civil and not a military government and was run by
Filipinos and not by Japanese nationals, is of no consequence. In 1806, when Napoleon occupied
the greater part of Prussia, he retained the existing administration under the general direction of a
french official (Langfrey History of Napoleon, 1, IV, 25); and, in the same way, the Duke of
Willington, on invading France, authorized the local authorities to continue the exercise of their
functions, apparently without appointing an English superior. (Wellington Despatches, XI, 307.). The
Germans, on the other hand, when they invaded France in 1870, appointed their own officials, at
least in Alsace and Lorraine, in every department of administration and of every rank. (Calvo, pars.
2186-93; Hall, International Law, 7th ed., p. 505, note 2.)

The so-called Republic of the Philippines, apparently established and organized as a sovereign state
independent from any other government by the Filipino people, was, in truth and reality, a
government established by the belligerent occupant or the Japanese forces of occupation. It was of
the same character as the Philippine Executive Commission, and the ultimate source of its authority
was the same — the Japanese military authority and government. As General MacArthur stated in
his proclamation of October 23, 1944, a portion of which has been already quoted, "under enemy
duress, a so-called government styled as the 'Republic of the Philippines' was established on
October 14, 1943, based upon neither the free expression of the people's will nor the sanction of the
Government of the United States." Japan had no legal power to grant independence to the
Philippines or transfer the sovereignty of the United States to, or recognize the latent sovereignty of,
the Filipino people, before its military occupation and possession of the Islands had matured into an
absolute and permanent dominion or sovereignty by a treaty of peace or other means recognized in
the law of nations. For it is a well-established doctrine in International Law, recognized in Article 45
of the Hauge Conventions of 1907 (which prohibits compulsion of the population of the occupied
territory to swear allegiance to the hostile power), the belligerent occupation, being essentially
provisional, does not serve to transfer sovereignty over the territory controlled although the de
jure government is during the period of occupancy deprived of the power to exercise its rights as
such. (Thirty Hogshead of Sugar vs. Boyle, 9 Cranch, 191; United States vs. Rice, 4 Wheat., 246;
Fleming vs. Page, 9 Howard, 603; Downes vs. Bidwell, 182 U. S., 345.) The formation of the
Republic of the Philippines was a scheme contrived by Japan to delude the Filipino people into
believing in the apparent magnanimity of the Japanese gesture of transferring or turning over the
rights of government into the hands of Filipinos. It was established under the mistaken belief that by
doing so, Japan would secure the cooperation or at least the neutrality of the Filipino people in her
war against the United States and other allied nations.

Indeed, even if the Republic of the Philippines had been established by the free will of the Filipino
who, taking advantage of the withdrawal of the American forces from the Islands, and the occupation
thereof by the Japanese forces of invasion, had organized an independent government under the
name with the support and backing of Japan, such government would have been considered as one
established by the Filipinos in insurrection or rebellion against the parent state or the Unite States.
And as such, it would have been a de facto government similar to that organized by the confederate
states during the war of secession and recognized as such by the by the Supreme Court of the
United States in numerous cases, notably those of Thorington vs. Smith, Williams vs. Bruffy, and
Badly vs. Hunter, above quoted; and similar to the short-lived government established by the Filipino
insurgents in the Island of Cebu during the Spanish-American war, recognized as a de
facto government by the Supreme Court of the United States in the case of McCleod vs. United
States (299 U. S., 416). According to the facts in the last-named case, the Spanish forces evacuated
the Island of Cebu on December 25, 1898, having first appointed a provisional government, and
shortly afterwards, the Filipinos, formerly in insurrection against Spain, took possession of the
Islands and established a republic, governing the Islands until possession thereof was surrendered
to the United States on February 22, 1898. And the said Supreme Court held in that case that "such
government was of the class of de facto governments described in I Moore's International Law
Digest, S 20, . . . 'called also by publicists a government de facto, but which might, perhaps, be more
aptly denominated a government of paramount force . . '." That is to say, that the government of a
country in possession of belligerent forces in insurrection or rebellion against the parent state, rests
upon the same principles as that of a territory occupied by the hostile army of an enemy at regular
war with the legitimate power.

The governments by the Philippine Executive Commission and the Republic of the Philippines during
the Japanese military occupation being de facto governments, it necessarily follows that the judicial
acts and proceedings of the courts of justice of those governments, which are not of a political
complexion, were good and valid, and, by virtue of the well-known principle of postliminy
(postliminium) in international law, remained good and valid after the liberation or reoccupation of the
Philippines by the American and Filipino forces under the leadership of General Douglas MacArthur.
According to that well-known principle in international law, the fact that a territory which has been
occupied by an enemy comes again into the power of its legitimate government of sovereignty,
"does not, except in a very few cases, wipe out the effects of acts done by an invader, which for one
reason or another it is within his competence to do. Thus judicial acts done under his control, when
they are not of a political complexion, administrative acts so done, to the extent that they take effect
during the continuance of his control, and the various acts done during the same time by private
persons under the sanction of municipal law, remain good. Were it otherwise, the whole social life of
a community would be paralyzed by an invasion; and as between the state and the individuals the
evil would be scarcely less, — it would be hard for example that payment of taxes made under
duress should be ignored, and it would be contrary to the general interest that the sentences passed
upon criminals should be annulled by the disappearance of the intrusive government ." (Hall,
International Law, 7th ed., p. 518.) And when the occupation and the abandonment have been each
an incident of the same war as in the present case, postliminy applies, even though the occupant
has acted as conqueror and for the time substituted his own sovereignty as the Japanese intended
to do apparently in granting independence to the Philippines and establishing the so-called Republic
of the Philippines. (Taylor, International Law, p. 615.)

That not only judicial but also legislative acts of de facto governments, which are not of a political
complexion, are and remain valid after reoccupation of a territory occupied by a belligerent occupant,
is confirmed by the Proclamation issued by General Douglas MacArthur on October 23, 1944, which
declares null and void all laws, regulations and processes of the governments established in the
Philippines during the Japanese occupation, for it would not have been necessary for said
proclamation to abrogate them if they were invalid ab initio.

2. The second question hinges upon the interpretation of the phrase "processes of any other
government" as used in the above-quoted proclamation of General Douglas MacArthur of October
23, 1944 — that is, whether it was the intention of the Commander in Chief of the American Forces
to annul and void thereby all judgments and judicial proceedings of the courts established in the
Philippines during the Japanese military occupation.

The phrase "processes of any other government" is broad and may refer not only to the judicial
processes, but also to administrative or legislative, as well as constitutional, processes of the
Republic of the Philippines or other governmental agencies established in the Islands during the
Japanese occupation. Taking into consideration the fact that, as above indicated, according to the
well-known principles of international law all judgements and judicial proceedings, which are not of a
political complexion, of the de facto governments during the Japanese military occupation were good
and valid before and remained so after the occupied territory had come again into the power of the
titular sovereign, it should be presumed that it was not, and could not have been, the intention of
General Douglas MacArthur, in using the phrase "processes of any other government" in said
proclamation, to refer to judicial processes, in violation of said principles of international law. The
only reasonable construction of the said phrase is that it refers to governmental processes other
than judicial processes of court proceedings, for according to a well-known rule of statutory
construction, set forth in 25 R. C. L., p. 1028, "a statute ought never to be construed to violate the
law of nations if any other possible construction remains."

It is true that the commanding general of a belligerent army of occupation, as an agent of his
government, may not unlawfully suspend existing laws and promulgate new ones in the occupied
territory, if and when the exigencies of the military occupation demand such action. But even
assuming that, under the law of nations, the legislative power of a commander in chief of military
forces who liberates or reoccupies his own territory which has been occupied by an enemy, during
the military and before the restoration of the civil regime, is as broad as that of the commander in
chief of the military forces of invasion and occupation (although the exigencies of military
reoccupation are evidently less than those of occupation), it is to be presumed that General Douglas
MacArthur, who was acting as an agent or a representative of the Government and the President of
the United States, constitutional commander in chief of the United States Army, did not intend to act
against the principles of the law of nations asserted by the Supreme Court of the United States from
the early period of its existence, applied by the Presidents of the United States, and later embodied
in the Hague Conventions of 1907, as above indicated. It is not to be presumed that General
Douglas MacArthur, who enjoined in the same proclamation of October 23, 1944, "upon the loyal
citizens of the Philippines full respect and obedience to the Constitution of the Commonwealth of the
Philippines," should not only reverse the international policy and practice of his own government, but
also disregard in the same breath the provisions of section 3, Article II, of our Constitution, which
provides that "The Philippines renounces war as an instrument of national policy, and adopts the
generally accepted principles of international law as part of the law of the Nation."

Moreover, from a contrary construction great inconvenience and public hardship would result, and
great public interests would be endangered and sacrificed, for disputes or suits already adjudged
would have to be again settled accrued or vested rights nullified, sentences passed on criminals set
aside, and criminals might easily become immune for evidence against them may have already
disappeared or be no longer available, especially now that almost all court records in the Philippines
have been destroyed by fire as a consequence of the war. And it is another well-established rule of
statutory construction that where great inconvenience will result from a particular construction, or
great public interests would be endangered or sacrificed, or great mischief done, such construction
is to be avoided, or the court ought to presume that such construction was not intended by the
makers of the law, unless required by clear and unequivocal words. (25 R. C. L., pp. 1025, 1027.)

The mere conception or thought of possibility that the titular sovereign or his representatives who
reoccupies a territory occupied by an enemy, may set aside or annul all the judicial acts or
proceedings of the tribunals which the belligerent occupant had the right and duty to establish in
order to insure public order and safety during military occupation, would be sufficient to paralyze the
social life of the country or occupied territory, for it would have to be expected that litigants would not
willingly submit their litigation to courts whose judgements or decisions may afterwards be annulled,
and criminals would not be deterred from committing crimes or offenses in the expectancy that they
may escaped the penalty if judgments rendered against them may be afterwards set aside.

That the proclamation has not invalidated all the judgements and proceedings of the courts of justice
during the Japanese regime, is impliedly confirmed by Executive Order No. 37, which has the force
of law, issued by the President of the Philippines on March 10, 1945, by virtue of the emergency
legislative power vested in him by the Constitution and the laws of the Commonwealth of the
Philippines. Said Executive order abolished the Court of Appeals, and provided "that all case which
have heretofore been duly appealed to the Court of Appeals shall be transmitted to the Supreme
Court final decision." This provision impliedly recognizes that the judgments and proceedings of the
courts during the Japanese military occupation have not been invalidated by the proclamation of
General MacArthur of October 23, because the said Order does not say or refer to cases which have
been duly appealed to said court prior to the Japanese occupation, but to cases which had therefore,
that is, up to March 10, 1945, been duly appealed to the Court of Appeals; and it is to be presumed
that almost all, if not all, appealed cases pending in the Court of Appeals prior to the Japanese
military occupation of Manila on January 2, 1942, had been disposed of by the latter before the
restoration of the Commonwealth Government in 1945; while almost all, if not all, appealed cases
pending on March 10, 1945, in the Court of Appeals were from judgments rendered by the Court of
First Instance during the Japanese regime.

The respondent judge quotes a portion of Wheaton's International Law which say: "Moreover when it
is said that an occupier's acts are valid and under international law should not be abrogated by the
subsequent conqueror, it must be remembered that no crucial instances exist to show that if his acts
should be reversed, any international wrong would be committed. What does happen is that most
matters are allowed to stand by the restored government, but the matter can hardly be put further
than this." (Wheaton, International Law, War, 7th English edition of 1944, p. 245.) And from this
quotion the respondent judge "draws the conclusion that whether the acts of the occupant should be
considered valid or not, is a question that is up to the restored government to decide; that there is no
rule of international law that denies to the restored government to decide; that there is no rule of
international law that denies to the restored government the right of exercise its discretion on the
matter, imposing upon it in its stead the obligation of recognizing and enforcing the acts of the
overthrown government."

There is doubt that the subsequent conqueror has the right to abrogate most of the acts of the
occupier, such as the laws, regulations and processes other than judicial of the government
established by the belligerent occupant. But in view of the fact that the proclamation uses the words
"processes of any other government" and not "judicial processes" prisely, it is not necessary to
determine whether or not General Douglas MacArthur had power to annul and set aside all
judgments and proceedings of the courts during the Japanese occupation. The question to be
determined is whether or not it was his intention, as representative of the President of the United
States, to avoid or nullify them. If the proclamation had, expressly or by necessary implication,
declared null and void the judicial processes of any other government, it would be necessary for this
court to decide in the present case whether or not General Douglas MacArthur had authority to
declare them null and void. But the proclamation did not so provide, undoubtedly because the author
thereof was fully aware of the limitations of his powers as Commander in Chief of Military Forces of
liberation or subsequent conqueror.

Not only the Hague Regulations, but also the principles of international law, as they result from the
usages established between civilized nations, the laws of humanity and the requirements of the
public of conscience, constitute or from the law of nations. (Preamble of the Hague Conventions;
Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of the Hague Regulations or
Conventions which we have already quoted in discussing the first question, imposes upon the
occupant the obligation to establish courts; and Article 23 (h), section II, of the same Conventions,
which prohibits the belligerent occupant "to declare . . . suspended . . . in a Court of Law the rights
and action of the nationals of the hostile party," forbids him to make any declaration preventing the
inhabitants from using their courts to assert or enforce their civil rights. (Decision of the Court of
Appeals of England in the case of Porter vs. Fruedenburg, L.R. [1915], 1 K.B., 857.) If a belligerent
occupant is required to establish courts of justice in the territory occupied, and forbidden to prevent
the nationals thereof from asserting or enforcing therein their civil rights, by necessary implication,
the military commander of the forces of liberation or the restored government is restrained from
nullifying or setting aside the judgments rendered by said courts in their litigation during the period of
occupation. Otherwise, the purpose of these precepts of the Hague Conventions would be thwarted,
for to declare them null and void would be tantamount to suspending in said courts the right and
action of the nationals of the territory during the military occupation thereof by the enemy. It goes
without saying that a law that enjoins a person to do something will not at the same time empower
another to undo the same. Although the question whether the President or commanding officer of
the United States Army has violated restraints imposed by the constitution and laws of his country is
obviously of a domestic nature, yet, in construing and applying limitations imposed on the executive
authority, the Supreme Court of the United States, in the case of Ochoa, vs. Hernandez (230 U.S.,
139), has declared that they "arise from general rules of international law and from fundamental
principles known wherever the American flag flies."

In the case of Raymond vs. Thomas (91 U.S., 712), a special order issued by the officer in command
of the forces of the United States in South Carolina after the end of the Civil War, wholly annulling a
decree rendered by a court of chancery in that state in a case within its jurisdiction, was declared
void, and not warranted by the acts approved respectively March 2, 1867 (14 Stat., 428), and July 19
of the same year (15 id., 14), which defined the powers and duties of military officers in command of
the several states then lately in rebellion. In the course of its decision the court said; "We have
looked carefully through the acts of March 2, 1867 and July 19, 1867. They give very large
governmental powers to the military commanders designated, within the States committed
respectively to their jurisdiction; but we have found nothing to warrant the order here in question. . . .
The clearest language would be necessary to satisfy us that Congress intended that the power given
by these acts should be so exercised. . . . It was an arbitrary stretch of authority, needful to no good
end that can be imagined. Whether Congress could have conferred the power to do such an act is a
question we are not called upon to consider. It is an unbending rule of law that the exercise of
military power, where the rights of the citizen are concerned, shall never be pushed beyond what the
exigency requires. (Mithell vs. Harmony, 13 How., 115; Warden vs. Bailey, 4 Taunt., 67;
Fabrigas vs. Moysten, 1 Cowp., 161; s.c., 1 Smith's L.C., pt. 2, p. 934.) Viewing the subject before
us from the standpoint indicated, we hold that the order was void."
It is, therefore, evident that the proclamation of General MacArthur of October 23, 1944, which
declared that "all laws, regulations and processes of any other government in the Philippines than
that of the said Commonwealth are null and void without legal effect in areas of the Philippines free
of enemy occupation and control," has not invalidated the judicial acts and proceedings, which are
not a political complexion, of the courts of justice in the Philippines that were continued by the
Philippine Executive Commission and the Republic of the Philippines during the Japanese military
occupation, and that said judicial acts and proceedings were good and valid before and now good
and valid after the reoccupation of liberation of the Philippines by the American and Filipino forces.

3. The third and last question is whether or not the courts of the Commonwealth, which are the same
as those existing prior to, and continued during, the Japanese military occupation by the Philippine
Executive Commission and by the so-called Republic of the Philippines, have jurisdiction to continue
now the proceedings in actions pending in said courts at the time the Philippine Islands were
reoccupied or liberated by the American and Filipino forces, and the Commonwealth Government
was restored.

Although in theory the authority the authority of the local civil and judicial administration is
suspended as a matter of course as soon as military occupation takes place, in practice the invader
does not usually take the administration of justice into his own hands, but continues the ordinary
courts or tribunals to administer the laws of the country which he is enjoined, unless absolutely
prevented, to respect. As stated in the above-quoted Executive Order of President McKinley to the
Secretary of War on May 19, 1898, "in practice, they (the municipal laws) are not usually abrogated
but are allowed to remain in force and to be administered by the ordinary tribunals substantially as
they were before the occupation. This enlightened practice is, so far as possible, to be adhered to on
the present occasion." And Taylor in this connection says: "From a theoretical point of view it may be
said that the conqueror is armed with the right to substitute his arbitrary will for all preexisting forms
of government, legislative, executive and judicial. From the stand-point of actual practice such
arbitrary will is restrained by the provision of the law of nations which compels the conqueror to
continue local laws and institution so far as military necessity will permit." (Taylor, International
Public Law, p.596.) Undoubtedly, this practice has been adopted in order that the ordinary pursuits
and business of society may not be unnecessarily deranged, inasmuch as belligerent occupation is
essentially provisional, and the government established by the occupant of transient character.

Following these practice and precepts of the law of nations, Commander in Chief of the Japanese
Forces proclaimed on January 3, 1942, when Manila was occupied, the military administration under
martial law over the territory occupied by the army, and ordered that "all the laws now in force in the
Commonwealth, as well as executive and judicial institutions, shall continue to be affective for the
time being as in the past," and "all public officials shall remain in their present post and carry on
faithfully their duties as before." When the Philippine Executive Commission was organized by Order
No. 1 of the Japanese Commander in Chief, on January 23, 1942, the Chairman of the Executive
Commission, by Executive Orders Nos. 1 and 4 of January 30 and February 5, respectively,
continued the Supreme Court, Court of Appeals, Court of First Instance, and justices of the peace of
courts, with the same jurisdiction in conformity with the instructions given by the Commander in
Chief of the Imperial Japanese Army in Order No. 3 of February 20, 1942. And on October 14, 1943
when the so-called Republic of the Philippines was inaugurated, the same courts were continued
with no substantial change in organization and jurisdiction thereof.

If the proceedings pending in the different courts of the Islands prior to the Japanese military
occupation had been continued during the Japanese military administration, the Philippine Executive
Commission, and the so-called Republic of the Philippines, it stands to reason that the same courts,
which had become reestablished and conceived of as having in continued existence upon the
reoccupation and liberation of the Philippines by virtue of the principle of postliminy (Hall,
International Law, 7th ed., p. 516), may continue the proceedings in cases then pending in said
courts, without necessity of enacting a law conferring jurisdiction upon them to continue said
proceedings. As Taylor graphically points out in speaking of said principles "a state or other
governmental entity, upon the removal of a foreign military force, resumes its old place with its right
and duties substantially unimpaired. . . . Such political resurrection is the result of a law analogous to
that which enables elastic bodies to regain their original shape upon removal of the external force, —
and subject to the same exception in case of absolute crushing of the whole fibre and content."
(Taylor, International Public Law, p. 615.)

The argument advanced by the respondent judge in his resolution in support in his conclusion that
the Court of First Instance of Manila presided over by him "has no authority to take cognizance of,
and continue said proceedings (of this case) to final judgment until and unless the Government of
the Commonwealth of the Philippines . . . shall have provided for the transfer of the jurisdiction of the
courts of the now defunct Republic of the Philippines, and the cases commenced and the left
pending therein," is "that said courts were a government alien to the Commonwealth Government.
The laws they enforced were, true enough, laws of the Commonwealth prior to Japanese
occupation, but they had become the laws — and the courts had become the institutions — of Japan
by adoption (U.S. vs.Reiter. 27 F. Cases, No. 16146), as they became later on the laws and
institutions of the Philippine Executive Commission and the Republic of the Philippines."

The court in the said case of U.S. vs. Reiter did not and could not say that the laws and institutions
of the country occupied if continued by the conqueror or occupant, become the laws and the courts,
by adoption, of the sovereign nation that is militarily occupying the territory. Because, as already
shown, belligerent or military occupation is essentially provisional and does not serve to transfer the
sovereignty over the occupied territory to the occupant. What the court said was that, if such laws
and institutions are continued in use by the occupant, they become his and derive their force from
him, in the sense that he may continue or set them aside. The laws and institution or courts so
continued remain the laws and institutions or courts of the occupied territory. The laws and the
courts of the Philippines, therefore, did not become, by being continued as required by the law of
nations, laws and courts of Japan. The provision of Article 45, section III, of the Hague Conventions
of 1907 which prohibits any compulsion of the population of occupied territory to swear allegiance to
the hostile power, "extends to prohibit everything which would assert or imply a change made by the
invader in the legitimate sovereignty. This duty is neither to innovate in the political life of the
occupied districts, nor needlessly to break the continuity of their legal life. Hence, so far as the courts
of justice are allowed to continue administering the territorial laws, they must be allowed to give their
sentences in the name of the legitimate sovereign " (Westlake, Int. Law, Part II, second ed., p. 102).
According to Wheaton, however, the victor need not allow the use of that of the legitimate
government. When in 1870, the Germans in France attempted to violate that rule by ordering, after
the fall of the Emperor Napoleon, the courts of Nancy to administer justice in the name of the "High
German Powers occupying Alsace and Lorraine," upon the ground that the exercise of their powers
in the name of French people and government was at least an implied recognition of the Republic,
the courts refused to obey and suspended their sitting. Germany originally ordered the use of the
name of "High German Powers occupying Alsace and Lorraine," but later offered to allow use of the
name of the Emperor or a compromise. (Wheaton, International Law, War, 7th English ed. 1944, p.
244.)

Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established
continues until changed by the some competent legislative power. It is not change merely by change
of sovereignty." (Joseph H. Beale, Cases on Conflict of Laws, III, Summary Section 9, citing
Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his Treatise on the Conflict
on Laws (Cambridge, 1916, Section 131): "There can no break or interregnum in law. From the time
the law comes into existence with the first-felt corporateness of a primitive people it must last until
the final disappearance of human society. Once created, it persists until a change take place, and
when changed it continues in such changed condition until the next change, and so forever.
Conquest or colonization is impotent to bring law to an end; in spite of change of constitution, the law
continues unchanged until the new sovereign by legislative acts creates a change."

As courts are creatures of statutes and their existence defends upon that of the laws which create
and confer upon them their jurisdiction, it is evident that such laws, not being a political nature, are
not abrogated by a change of sovereignty, and continue in force "ex proprio vigore" unless and until
repealed by legislative acts. A proclamation that said laws and courts are expressly continued is not
necessary in order that they may continue in force. Such proclamation, if made, is but a declaration
of the intention of respecting and not repealing those laws. Therefore, even assuming that Japan
had legally acquired sovereignty over these Islands, which she had afterwards transferred to the so-
called Republic of the Philippines, and that the laws and the courts of these Islands had become the
courts of Japan, as the said courts of the laws creating and conferring jurisdiction upon them have
continued in force until now, it necessarily follows that the same courts may continue exercising the
same jurisdiction over cases pending therein before the restoration of the Commonwealth
Government, unless and until they are abolished or the laws creating and conferring jurisdiction
upon them are repealed by the said government. As a consequence, enabling laws or acts providing
that proceedings pending in one court be continued by or transferred to another court, are not
required by the mere change of government or sovereignty. They are necessary only in case the
former courts are abolished or their jurisdiction so change that they can no longer continue taking
cognizance of the cases and proceedings commenced therein, in order that the new courts or the
courts having jurisdiction over said cases may continue the proceedings. When the Spanish
sovereignty in the Philippine Islands ceased and the Islands came into the possession of the United
States, the "Audiencia" or Supreme Court was continued and did not cease to exist, and proceeded
to take cognizance of the actions pending therein upon the cessation of the Spanish sovereignty
until the said "Audiencia" or Supreme Court was abolished, and the Supreme Court created in
Chapter II of Act No. 136 was substituted in lieu thereof. And the Courts of First Instance of the
Islands during the Spanish regime continued taking cognizance of cases pending therein upon the
change of sovereignty, until section 65 of the same Act No. 136 abolished them and created in its
Chapter IV the present Courts of First Instance in substitution of the former. Similarly, no enabling
acts were enacted during the Japanese occupation, but a mere proclamation or order that the courts
in the Island were continued.

On the other hand, during the American regime, when section 78 of Act No. 136 was enacted
abolishing the civil jurisdiction of the provost courts created by the military government of occupation
in the Philippines during the Spanish-American War of 1898, the same section 78 provided for the
transfer of all civil actions then pending in the provost courts to the proper tribunals, that is, to the
justices of the peace courts, Court of First Instance, or Supreme Court having jurisdiction over them
according to law. And later on, when the criminal jurisdiction of provost courts in the City of Manila
was abolished by section 3 of Act No. 186, the same section provided that criminal cases pending
therein within the jurisdiction of the municipal court created by Act No. 183 were transferred to the
latter.

That the present courts as the same courts which had been functioning during the Japanese regime
and, therefore, can continue the proceedings in cases pending therein prior to the restoration of the
Commonwealth of the Philippines, is confirmed by Executive Order No. 37 which we have already
quoted in support of our conclusion in connection with the second question. Said Executive Order
provides"(1) that the Court of Appeals created and established under Commonwealth Act No. 3 as
amended, be abolished, as it is hereby abolished," and "(2) that all cases which have heretofore
been duly appealed to the Court of Appeals shall be transmitted to the Supreme Court for final
decision. . . ." In so providing, the said Order considers that the Court of Appeals abolished was the
same that existed prior to, and continued after, the restoration of the Commonwealth Government;
for, as we have stated in discussing the previous question, almost all, if not all, of the cases pending
therein, or which had theretofore (that is, up to March 10, 1945) been duly appealed to said court,
must have been cases coming from the Courts of First Instance during the so-called Republic of the
Philippines. If the Court of Appeals abolished by the said Executive Order was not the same one
which had been functioning during the Republic, but that which had existed up to the time of the
Japanese occupation, it would have provided that all the cases which had, prior to and up to that
occupation on January 2, 1942, been dully appealed to the said Court of Appeals shall be
transmitted to the Supreme Court for final decision.

It is, therefore, obvious that the present courts have jurisdiction to continue, to final judgment, the
proceedings in cases, not of political complexion, pending therein at the time of the restoration of the
Commonwealth Government.

Having arrived at the above conclusions, it follows that the Court of First Instance of Manila has
jurisdiction to continue to final judgment the proceedings in civil case No. 3012, which involves civil
rights of the parties under the laws of the Commonwealth Government, pending in said court at the
time of the restoration of the said Government; and that the respondent judge of the court, having
refused to act and continue him does a duty resulting from his office as presiding judge of that
court, mandamus is the speedy and adequate remedy in the ordinary course of law, especially
taking into consideration the fact that the question of jurisdiction herein involved does affect not only
this particular case, but many other cases now pending in all the courts of these Islands.

In view of all the foregoing it is adjudged and decreed that a writ of mandamus issue, directed to the
respondent judge of the Court of First Instance of Manila, ordering him to take cognizance of and
continue to final judgment the proceedings in civil case No. 3012 of said court. No pronouncement
as to costs. So ordered.

G.R. No. L-17467 April 23, 1963

NATIONAL DEVELOPMENT COMPANY, represented by its Agents,

THE PHILIPPINE NATIONAL BANK, plaintiff-appellant,
vs.
JOSE YULO TOBIAS, defendant-appellee.
Ramon de los Reyes for plaintiff-appellant.
Vicente Hilado for defendant-appellee.

CONCEPCION, J.:

Appeal taken by plaintiff, National Development Company, represented by its agent, The Philippine
National Bank, from an order of the Court of First Instance of Negros Occidental dismissing plaintiff's
complaint upon the ground of prescription of action, without special pronouncement as to costs.

In said complaint, filed on March 22, 1960, plaintiff seeks to recover from defendant, Jose YULO
TOBIAS, the sum of P6,905.81, plus interest and attorney's fees, under a promissory note of said
defendant, dated and issued on May 13, 1946, for the sum of P7,000.00, payable "on demand after
date" to the order of said plaintiff. Upon being summoned, the defendant filed a motion to dismiss
upon the ground that "the action upon which the complaint is based has prescribed long ago," more
than ten (10) years having elapsed since May 13, 1946, when said promissory note was issued and
plaintiff's action accrued. Hence, the aforementioned order of dismissal, which plaintiff assails as
erroneous upon the theory that the statute of limitations does not run against the plaintiff because
the same is an instrumentality of the Government. In support of this view plaintiff cites the case of
the Government of the Philippine Islands vs. Monte de Piedad (35 Phil. 738).

Plaintiffs pretense is clearly devoid of merit. The case cited is not in point, it having been instituted
by the Government of the Philippine Islands. Plaintiff herein is neither the Government of the
Republic nor a branch or subdivision thereof. It is true that plaintiff is an instrumentality of such
Government, but as this Court has held in the case of Association Cooperative de Credito Agricola
de Miagao vs. Monteclaro (74 Phil. 281), "even the Agricultural and Industrial Bank, which is a
government owned and controlled corporation and which has been created to promote agriculture
and industry on a larger scale than agriculture credit cooperative associations, cannot be said to
exercise a sovereign function. It is, like all other corporation capitalized by the Government,
a business corporation," and, as such, its causes of action are subject to the statute of limitations. To
the same effect are the cases of Monteadora vs. Cebu Portland Cement Co. (54 O.G. 4289), Price
Stabilization Corp. vs. CIR (54 O.G. 4472), GSIS vs. Castillo (52 O.G. 4269), and Manila Hotel
Employees Association vs. Manila Hotel Co. (73 Phil. 374).

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and
approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove
their case not covered by this stipulation of facts.
1äwphï1.ñët

That plaintiff herein does not exercise sovereign powers — and, hence, can not invoke the
exemptions thereof — but is an agency for the performance of purely corporate, proprietary or
business functions, is apparent from its Organic Act (Commonwealth Act 182, as amended by
Commonwealth Act 311) pursuant to section 3 of which it "shall be subject to the provisions of the
Corporation Law in so far as they are not inconsistent" with the provisions of said Commonwealth
Act "and shall have the general powers mentioned in said" Corporation Law, and, hence, "may
engage in commercial, industrial, mining, agricultural, and other enterprises which may be necessary
or contributory to the economic development of the country, or important in the public interest," as
well as "acquire, hold, mortgage, and alienate personal and real property in the Philippines or
elsewhere . . .; make contracts of any kind and description" and "perform any and all acts which a
corporation or natural person is authorized to perform under the laws now existing or which may be
enacted hereafter."

In fact, plaintiff was sentenced to pay costs in Batongbacal v. National Development Co. (49 O.G.
229), and National Development Co. vs. CIR, L-13209 (September 30, 1959), despite the fact that
"no costs shall be allowed against the Republic of the Philippines, unless otherwise provided by
Law," pursuant to Rule 131, Section 1, of the Rules of Court.

WHEREFORE, the order appealed from is hereby affirmed, with the costs of this instance against
plaintiff-appellant.

G.R. No. 1051 May 19, 1903

THE UNITED STATES, complainant-appellee,
vs.
FRED L. DORR, ET AL., defendants-appellants.

F. G. Waite for appellants.

Solicitor-General Araneta for appellee.

LADD, J.:

The defendants have been convicted upon a complaint charging them with the offense of writing,
publishing, and circulating a scurrilous libel against the Government of the United States and the
Insular Government of the Philippine Islands. The complaint is based upon section 8 of Act No. 292
of the Commission, which is as follows:

Every person who shall utter seditious words or speeches, write, publish, or circulate
scurrilous libels against the Government of the United States or the Insular Government of
the Philippine Islands, or which tend to disturb or obstruct any lawful officer in executing his
office, or which tend to instigate others to cabal or meet together for unlawful purposes, or
which suggest or incite rebellious conspiracies or riots, or which tend to stir up the people
against the lawful authorities, or to disturb the peace of the community, the safety and order
of the Government, or who shall knowingly conceal such evil practices, shall be punished by
a fine not exceeding two thousand dollars or by imprisonment not exceeding two years, or
both, in the discretion of the court.

The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902,
under the caption of "A few hard facts."

The Attorney-General in his brief indicates the following passages of the article as those upon which
he relies to sustain the conviction:

Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of
the Civil Commission in appointing rascally natives to important Government positions:

"It is a strong thing to say, but nevertheless true, that the Civil Commission, through
its ex-insurgent office holders, and by its continual disregard for the records of
natives obtained during the military rule of the Islands, has, in its distribution of
offices, constituted a protectorate over a set of men who should be in jail or deported.
. . . [Reference is then made to the appointment of one Tecson as justice of the
peace.] This is the kind of foolish work that the Commission is doing all over the
Islands, reinstating insurgents and rogues and turning down the men who have
during the struggle, at the risk of their lives, aided the Americans."

xxx xxx xxx

There is no doubt but that the Filipino office holders of the Islands are in a good many
instances rascals.

xxx xxx xxx

The commission has exalted to the highest positions in the Islands Filipinos who are alleged
to be notoriously corrupt and rascally, and men of no personal character.

xxx xxx xxx

Editor Valdez, of "Miau," made serious charges against two of the native Commissioners — charges
against Trinidad H. Pardo de Tavera, which, if true, would brand the man as a coward and a rascal,
and with what result? . . . [Reference is then made to the prosecution and conviction of Valdez for
libel "under a law which specifies that the greater the truth the greater the libel."] Is it the desire of
the people of the United States that the natives against whom these charges have been made
(which, if true, absolutely vilify their personal characters) be permitted to retain their seats on the
Civil Commission, the executive body of the Philippine Government, without an investigation?

xxx xxx xxx

 It is a notorious fact that many branches of the Government organized by the Civil
Commission are rotten and corrupt. The fiscal system, upon which life, liberty, and justice
depends, is admitted by the Attorney-General himself to be most unsatisfactory. It is a fact
that the Philippine judiciary is far from being what it should. Neither fiscals nor judges can be
persuaded to convict insurgents when they wish to protect them.

xxx xxx xxx

Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and
especially the northern end of it; it is said that it is impossible to secure the conviction of
lawbreakers and outlaws by the native justices, or a prosecution by the native fiscals.

xxx xxx xxx

The long and short of it is that Americans will not stand for an arbitrary government,
especially when evidences of carpetbagging and rumors of graft are too thick to be pleasant.

We do not understand that it is claimed that the defendants succeeded in establishing at the trial the
truth of any of the foregoing statements. The only question which we have considered is whether
their publication constitutes an offense under section 8 of Act No. 292, above cited.

Several allied offenses or modes of committing the same offense are defined in that section, viz: (1)
The uttering of seditious words or speeches; (2) the writing, publishing, or circulating of scurrilous
libels against the Government of the United States or the Insular Government of the Philippine
Islands; (3) the writing, publishing, or circulating of libels which tend to disturb or obstruct any lawful
officer in executing his office; (4) or which tend to instigate others to cabal or meet together for
unlawful purposes; (5) or which suggest or incite rebellious conspiracies or riots; (6) or which tend to
stir up the people against the lawful authorities or to disturb the peace of the community, the safety
and order of the Government; (7) knowingly concealing such evil practices.

The complaint appears to be framed upon the theory that a writing, in order to be punishable as a
libel under this section, must be of a scurrilous nature and directed against the Government of the
United States or the Insular Government of the Philippine Islands, and must, in addition, tend to
some one of the results enumerated in the section. The article in question is described in the
complaint as "a scurrilous libel against the Government of the United States and the Insular
Government of the Philippine Islands, which tends to obstruct the lawful officers of the United States
and the Insular Government of the Philippine Islands in the execution of their offices, and which
tends to instigate others to cabal and meet together for unlawful purposes, and which suggests and
incites rebellious conspiracies, and which tends to stir up the people against the lawful authorities,
and which disturbs the safety and order of the Government of the United States and the Insular
Government of the Philippine Islands." But it is "a well-settled rule in considering indictments that
where an offense may be committed in any of several different modes, and the offense, in any
particular instance, is alleged to have been committed in two or more modes specified, it is sufficient
to prove the offense committed in any one of them, provided that it be such as to constitute the
substantive offense" (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants may,
therefore, be convicted if any one of the substantive charges into which the complaint may be
separated has been made out.

We are all, however, agreed upon the proposition that the article in question has no appreciable
tendency to "disturb or obstruct any lawful officer in executing his office," or to "instigate" any person
or class of persons "to cabal or meet together for unlawful purposes," or to "suggest or incite
rebellious conspiracies or riots," or to "stir up the people against the lawful authorities or to disturb
the peace of the community, the safety and order of the Government." All these various tendencies,
which are described in section 8 of Act No. 292, each one of which is made an element of a certain
form of libel, may be characterized in general terms as seditious tendencies. This is recognized in
the description of the offenses punished by this section, which is found in the title of the act, where
they are defined as the crimes of the "seditious utterances, whether written or spoken."

Excluding from consideration the offense of publishing "scurrilous libels against the Government of
the United States or the Insular Government of the Philippine Islands," which may conceivably stand
on a somewhat different footing, the offenses punished by this section all consist in inciting, orally or
in writing, to acts of disloyalty or disobedience to the lawfully constituted authorities in these Islands.
And while the article in question, which is, in the main, a virulent attack against the policy of the Civil
Commission in appointing natives to office, may have had the effect of exciting among certain
classes dissatisfaction with the Commission and its measures, we are unable to discover anything in
it which can be regarded as having a tendency to produce anything like what may be called
disaffection, or, in other words, a state of feeling incompatible with a disposition to remain loyal to
the Government and obedient to the laws. There can be no conviction, therefore, for any of the
offenses described in the section on which the complaint is based, unless it is for the offense of
publishing a scurrilous libel against the Government of the of the United States or the Insular
Government of the Philippine Islands.

Can the article be regarded as embraced within the description of "scurrilous libels against the
Government of the United States or the Insular Government of the Philippine Islands?" In the
determination of this question we have encountered great difficulty, by reason of the almost entire
lack of American precedents which might serve as a guide in the construction of the law. There are,
indeed, numerous English decisions, most of them of the eighteenth century, on the subject of
libelous attacks upon the "Government, the constitution, or the law generally," attacks upon the
Houses of Parliament, the Cabinet, the Established Church, and other governmental organisms, but
these decisions are not now accessible to us, and, if they were, they were made under such different
conditions from those which prevail at the present day, and are founded upon theories of
government so foreign to those which have inspired the legislation of which the enactment in
question forms a part, that they would probably afford but little light in the present inquiry. In
England, in the latter part of the eighteenth century, any "written censure upon public men for their
conduct as such," as well as any written censure "upon the laws or upon the institutions of the
country," would probably have been regarded as a libel upon the Government. (2 Stephen, History of
the Criminal Law of England, 348.) This has ceased to be the law in England, and it is doubtful
whether it was ever the common law of any American State. "It is true that there are ancient dicta to
the effect that any publication tending to "possess the people with an ill opinion of the Government"
is a seditious libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in
R. vs. Cobbett, 1804, 29 How. St. Tr., 49), but no one would accept that doctrine now. Unless the
words used directly tend to foment riot or rebellion or otherwise to disturb the peace and tranquility of
the Kingdom, the utmost latitude is allowed in the discussion of all public affairs." (11 Enc. of the
Laws of England, 450.) Judge Cooley says (Const. Lim., 528): "The English common law rule which
made libels on the constitution or the government indictable, as it was administered by the courts,
seems to us unsuited to the condition and circumstances of the people of America, and therefore
never to have been adopted in the several States."

We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the
only existing American statute of a similar character to that in question, and from which much of the
phraseology of then latter appears to have been taken, though with some essential modifications.

The important question is to determine what is meant in section 8 of Act No. 292 by the expression
"the Insular Government of the Philippine Islands." Does it mean in a general and abstract sense the
existing laws and institutions of the Islands, or does it mean the aggregate of the individuals by
whom the government of the Islands is, for the time being, administered? Either sense would
doubtless be admissible.

We understand, in modern political science, . . . by the term government, that institution or aggregate
of institutions by which an independent society makes and carries out those rules of action which are
unnecessary to enable men to live in a social state, or which are imposed upon the people forming
that society by those who possess the power or authority of prescribing them. Government is the
aggregate of authorities which rule a society. By "dministration, again, we understand in modern
times, and especially in more or less free countries, the aggregate of those persons in whose hands
the reins of government are for the time being (the chief ministers or heads of departments)."
(Bouvier, Law Dictionary, 891.) But the writer adds that the terms "government" and "administration"
are not always used in their strictness, and that "government" is often used for "administration."

In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense
to "write, print, utter, or published," or to "knowingly and willingly assist or aid in writing, printing,
uttering, or publishing any false, scandalous, and malicious writing or writings against the
Government of the United States, or either House of the Congress of the United States, or the
President of the United States, with intent to defame the said Government, or either House of the
said Congress, or the said President, or to bring them, or either of them, into contempt or disrepute,
or to excite against them or either or any of them the hatred of the good people of the United States,"
etc. The term "government" would appear to be used here in the abstract sense of the existing
political system, as distinguished from the concrete organisms of the Government — the Houses of
Congress and the Executive — which are also specially mentioned.
Upon the whole, we are of the opinion that this is the sense in which the term is used in the
enactment under consideration.

It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an
abstraction like the Government in the sense of the laws and institutions of a country, but we think
an answer to this suggestion is that the expression "scurrilous libel" is not used in section 8 of Act
No. 292 in the sense in which it is used in the general libel law (Act No. 277) — that is, in the sense
of written defamation of individuals — but in the wider sense, in which it is applied in the common
law to blasphemous, obscene, or seditious publications in which there may be no element of
defamation whatever. "The word 'libel' as popularly used, seems to mean only defamatory words;
but words written, if obscene, blasphemous, or seditious, are technically called libels, and the
publication of them is, by the law of England, an indictable offense." (Bradlaugh vs. The Queen, 3 Q.
B. D., 607, 627, per Bramwell L. J. See Com. vs. Kneeland, 20 Pick., 206, 211.)

While libels upon forms of government, unconnected with defamation of individuals, must in the
nature of things be of uncommon occurrence, the offense is by no means an imaginary one. An
instance of a prosecution for an offense essentially of this nature is Republica vs. Dennie, 4 Yeates
(Pa.), 267, where the defendant was indicted "as a factious and seditious person of a wicked mind
and unquiet and turbulent disposition and conversation, seditiously, maliciously, and willfully
intending, as much as in him lay, to bring into contempt and hatred the independence of the United
States, the constitution of this Commonwealth and of the United States, to excite popular discontent
and dissatisfaction against the scheme of polity instituted, and upon trial in the said United States
and in the said Commonwealth, to molest, disturb, and destroy the peace and tranquility of the said
United States and of the said Commonwealth, to condemn the principles of the Revolution, and
revile, depreciate, and scandalize the characters of the Revolutionary patriots and statesmen, to
endanger, subvert, and totally destroy the republican constitutions and free governments of the said
United States and this Commonwealth, to involve the said United States and this Commonwealth in
civil war, desolation, and anarchy, and to procure by art and force a radical change and alteration in
the principles and forms of the said constitutions and governments, without the free will, wish, and
concurrence of the people of the said United States and this Commonwealth, respectively," the
charge being that "to fulfill, perfect, and bring to effect his wicked, seditious, and detestable
intentions aforesaid he . . . falsely, maliciously, factiously, and seditiously did make, compose, write,
and publish the following libel, to wit; 'A democracy is scarcely tolerable at any period of national
history. Its omens are always sinister and its powers are unpropitious. With all the lights or
experience blazing before our eyes, it is impossible not to discover the futility of this form of
government. It was weak and wicked at Athens, it was bad in Sparta, and worse in Rome. It has
been tried in France and terminated in despotism. it was tried in England and rejected with the
utmost loathing and abhorrence. It is on its trial here and its issue will be civil war, desolation, and
anarchy. No wise man but discerns its imperfections; no good man but shudders at its miseries; no
honest man but proclaims its fraud, and no brave man but draws his sword against its force. The
institution of a scheme of polity so radically contemptible and vicious is a memorable example of
what the villainy of some men can devise, the folly of others receive, and both establish, in despite of
reason, reflection, and sensation.'"

An attack upon the lawfully established system of civil government in the Philippine Islands, like that
which Dennie was accused of making upon the republican form of government lawfully established
in the United States and in the State of Pennsylvania would, we think, if couched in scandalous
language, constitute the precise offense described in section 8 of Act No. 292 as a scurrilous libel
against the Insular Government of the Philippine Islands.

Defamation of individuals, whether holding official positions or not, and whether directed to their
public conduct or to their private life, may always be adequately punished under the general libel
law. Defamation of the Civil Commission as an aggregation, it being "a body of persons definite and
small enough for its individual members to be recognized as such" (Stephen, Digest of the Criminal
Law, art. 277), as well as defamation of any of the individual members of the Commission or of the
Civil Governor, either in his public capacity or as a private individual, may be so punished. The
general libel law enacted by the Commission was in force when Act No. 292, was passed. There
was no occasion for any further legislation on the subject of libels against the individuals by whom
the Insular Government is administered — against the Insular Government in the sense of the
aggregate of such individuals. There was occasion for stringent legislation against seditious words or
libels, and that is the main if not the sole purpose of the section under consideration. It is not
unreasonable to suppose that the Commission, in enacting this section, may have conceived of
attacks of a malignant or scurrilous nature upon the existing political system of the United States, or
the political system established in these Islands by the authority of the United States, as necessarily
of a seditious tendency, but it is not so reasonable to suppose that they conceived of attacks upon
the personnel of the government as necessarily tending to sedition. Had this been their view it
seems probable that they would, like the framers of the Sedition Act of 1798, have expressly and
specifically mentioned the various public officials and collegiate governmental bodies defamation of
which they meant to punish as sedition.

The article in question contains no attack upon the governmental system of the United States, and it
is quite apparent that, though grossly abusive as respects both the Commission as a body and some
of its individual members, it contains no attack upon the governmental system by which the authority
of the United States is enforced in these Islands. The form of government by a Civil Commission and
a Civil Governor is not assailed. It is the character of the men who are intrusted with the
administration of the government that the writer is seeking to bring into disrepute by impugning the
purity of their motives, their public integrity, and their private morals, and the wisdom of their policy.
The publication of the article, therefore, no seditious tendency being apparent, constitutes no offense
under Act No. 292, section 8.

The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.

G.R. No. L-409 January 30, 1947

ANASTACIO LAUREL, petitioner,

vs.
ERIBERTO MISA, respondent.

Claro M. Recto and Querube C. Makalintal for petitioner.

First Assistant Solicitor General Reyes and Solicitor Hernandez, Jr., for respondent.

RESOLUTION

In G.R. No. L-409, Anastacio Laurel vs. Eriberto Misa, etc., the Court, acting on the petition
for habeas corpusfiled by Anastacio Laurel and based on a theory that a Filipino citizen who
adhered to the enemy giving the latter aid and comfort during the Japanese occupation
cannot be prosecuted for the crime of treason defined and penalized by article 114 of the
Revised Penal Code, for the reason (1) that the sovereignty of the legitimate government in
the Philippines and, consequently, the correlative allegiance of Filipino citizens thereto was
then suspended; and (2) that there was a change of sovereignty over these Islands upon the
proclamation of the Philippine Republic:

(1) Considering that a citizen or subject owes, not a qualified and temporary, but an absolute
and permanent allegiance, which consists in the obligation of fidelity and obedience to his
government or sovereign; and that this absolute and permanent allegiance should not be
confused with the qualified and temporary allegiance which a foreigner owes to the
government or sovereign of the territory wherein he resides, so long as he remains there, in
return for the protection he receives, and which consists in the obedience to the laws of the
government or sovereign. (Carlisle vs. Unite States, 21 Law. ed., 429; Secretary of State
Webster Report to the President of the United States in the case of Thraser, 6 Web. Works,
526);

Considering that the absolute and permanent allegiance of the inhabitants of a territory
occupied by the enemy of their legitimate government or sovereign is not abrogated or
severed by the enemy occupation, because the sovereignty of the government or
sovereign de jure is not transferred thereby to the occupier, as we have held in the cases
of Co Kim Cham vs. Valdez Tan Keh and Dizon (75 Phil., 113) and of Peralta vs. Director of
Prisons (75 Phil., 285), and if it is not transferred to the occupant it must necessarily remain
vested in the legitimate government; that the sovereignty vested in the titular government
(which is the supreme power which governs a body politic or society which constitute the
state) must be distinguished from the exercise of the rights inherent thereto, and may be
destroyed, or severed and transferred to another, but it cannot be suspended because the
existence of sovereignty cannot be suspended without putting it out of existence or divesting
the possessor thereof at least during the so-called period of suspension; that what may be
suspended is the exercise of the rights of sovereignty with the control and government of the
territory occupied by the enemy passes temporarily to the occupant; that the subsistence of
the sovereignty of the legitimate government in a territory occupied by the military forces of
the enemy during the war, "although the former is in fact prevented from exercising the
supremacy over them" is one of the "rules of international law of our times"; (II Oppenheim,
6th Lauterpacht ed., 1944, p. 482), recognized, by necessary implication, in articles 23, 44,
45, and 52 of Hague Regulation; and that, as a corollary of the conclusion that the
sovereignty itself is not suspended and subsists during the enemy occupation, the allegiance
of the inhabitants to their legitimate government or sovereign subsists, and therefore there is
no such thing as suspended allegiance, the basic theory on which the whole fabric of the
petitioner's contention rests;

Considering that the conclusion that the sovereignty of the United State was suspended in
Castine, set forth in the decision in the case of United States vs. Rice, 4 Wheaton, 246, 253,
decided in 1819, and quoted in our decision in the cases of Co Kim Cham vs. Valdez Tan
Keh and Dizon and Peralta vs. Director of Prisons, supra, in connection with the question,
not of sovereignty, but of the existence of a government de factotherein and its power to
promulgate rules and laws in the occupied territory, must have been based, either on the
theory adopted subsequently in the Hague Convention of 1907, that the military occupation
of an enemy territory does not transfer the sovereignty to the occupant; that, in the first case,
the word "sovereignty" used therein should be construed to mean the exercise of the rights
of sovereignty, because as this remains vested in the legitimate government and is not
transferred to the occupier, it cannot be suspended without putting it out of existence or
divesting said government thereof; and that in the second case, that is, if the said conclusion
or doctrine refers to the suspension of the sovereignty itself, it has become obsolete after the
adoption of the Hague Regulations in 1907, and therefore it can not be applied to the present
case;

Considering that even adopting the words "temporarily allegiance," repudiated by

Oppenheim and other publicists, as descriptive of the relations borne by the inhabitants of
the territory occupied by the enemy toward the military government established over them,
such allegiance may, at most, be considered similar to the temporary allegiance which a
foreigner owes to the government or sovereign of the territory wherein he resides in return
for the protection he receives as above described, and does not do away with the absolute
and permanent allegiance which the citizen residing in a foreign country owes to his own
government or sovereign; that just as a citizen or subject of a government or sovereign may
be prosecuted for and convicted of treason committed in a foreign country, in the same way
an inhabitant of a territory occupied by the military forces of the enemy may commit treason
against his own legitimate government or sovereign if he adheres to the enemies of the latter
by giving them aid and comfort; and that if the allegiance of a citizen or subject to his
government or sovereign is nothing more than obedience to its laws in return for the
protection he receives, it would necessarily follow that a citizen who resides in a foreign
country or state would, on one hand, ipso factoacquire the citizenship thereof since he has
enforce public order and regulate the social and commercial life, in return for the protection
he receives, and would, on the other hand, lose his original citizenship, because he would
not be bound to obey most of the laws of his own government or sovereign, and would not
receive, while in a foreign country, the protection he is entitled to in his own;

Considering that, as a corollary of the suspension of the exercise of the rights of sovereignty
by the legitimate government in the territory occupied by the enemy military forces, because
the authority of the legitimate power to govern has passed into the hands of the occupant
(Article 43, Hague Regulations), the political laws which prescribe the reciprocal rights,
duties and obligation of government and citizens, are suspended or in abeyance during
military occupation (Co Kim cham vs. Valdez Tan Keh and dizon, supra), for the only reason
that as they exclusively bear relation to the ousted legitimate government, they are
inoperative or not applicable to the government established by the occupant; that the crimes
against national security, such as treason and espionage; inciting to war, correspondence
with hostile country, flight to enemy's country, as well as those against public order, such as
rebellion, sedition, and disloyalty, illegal possession of firearms, which are of political
complexion because they bear relation to, and are penalized by our Revised Penal Code as
crimes against the legitimate government, are also suspended or become inapplicable as
against the occupant, because they can not be committed against the latter
(Peralta vs. Director of Prisons, supra); and that, while the offenses against public order to
be preserved by the legitimate government were inapplicable as offenses against the invader
for the reason above stated, unless adopted by him, were also inoperative as against the
ousted government for the latter was not responsible for the preservation of the public order
in the occupied territory, yet article 114 of the said Revised Penal Code, was applicable to
treason committed against the national security of the legitimate government, because the
inhabitants of the occupied territory were still bound by their allegiance to the latter during the
enemy occupation;

Considering that, although the military occupant is enjoined to respect or continue in force,
unless absolutely prevented by the circumstances, those laws that enforce public order and
regulate the social and commercial life of the country, he has, nevertheless, all the powers
of de facto government and may, at his pleasure, either change the existing laws or make
new ones when the exigencies of the military service demand such action, that is, when it is
necessary for the occupier to do so for the control of the country and the protection of his
army, subject to the restrictions or limitations imposed by the Hague Regulations, the usages
established by civilized nations, the laws of humanity and the requirements of public
conscience (Peralta vs.Director of Prisons, supra; 1940 United States Rules of Land Warfare
76, 77); and that, consequently, all acts of the military occupant dictated within these
limitations are obligatory upon the inhabitants of the territory, who are bound to obey them,
and the laws of the legitimate government which have not been adopted, as well and those
which, though continued in force, are in conflict with such laws and orders of the occupier,
shall be considered as suspended or not in force and binding upon said inhabitants;

Considering that, since the preservation of the allegiance or the obligation of fidelity and
obedience of a citizen or subject to his government or sovereign does not demand from him
a positive action, but only passive attitude or forbearance from adhering to the enemy by
giving the latter aid and comfort, the occupant has no power, as a corollary of the preceding
consideration, to repeal or suspend the operation of the law of treason, essential for the
preservation of the allegiance owed by the inhabitants to their legitimate government, or
compel them to adhere and give aid and comfort to him; because it is evident that such
action is not demanded by the exigencies of the military service or not necessary for the
control of the inhabitants and the safety and protection of his army, and because it is
tantamount to practically transfer temporarily to the occupant their allegiance to the titular
government or sovereign; and that, therefore, if an inhabitant of the occupied territory were
compelled illegally by the military occupant, through force, threat or intimidation, to give him
aid and comfort, the former may lawfully resist and die if necessary as a hero, or submit
thereto without becoming a traitor;

Considering that adoption of the petitioner's theory of suspended allegiance would lead to
disastrous consequences for small and weak nations or states, and would be repugnant to
the laws of humanity and requirements of public conscience, for it would allow invaders to
legally recruit or enlist the Quisling inhabitants of the occupied territory to fight against their
own government without the latter incurring the risk of being prosecuted for treason, and
even compel those who are not aid them in their military operation against the resisting
enemy forces in order to completely subdue and conquer the whole nation, and thus deprive
them all of their own independence or sovereignty — such theory would sanction the action
of invaders in forcing the people of a free and sovereign country to be a party in the
nefarious task of depriving themselves of their own freedom and independence and
repressing the exercise by them of their own sovereignty; in other words, to commit a
political suicide;

(2) Considering that the crime of treason against the government of the Philippines defined
and penalized in article 114 of the Penal Code, though originally intended to be a crime
against said government as then organized by authority of the sovereign people of the
United States, exercised through their authorized representative, the Congress and the
President of the United States, was made, upon the establishment of the Commonwealth
Government in 1935, a crime against the Government of the Philippines established by
authority of the people of the Philippines, in whom the sovereignty resides according to
section 1, Article II, of the Constitution of the Philippines, by virtue of the provision of section
2, Article XVI thereof, which provides that "All laws of the Philippine Islands . . . shall remain
operative, unless inconsistent with this Constitution . . . 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;

Considering that the Commonwealth of the Philippines was a sovereign government, though
not absolute but subject to certain limitations imposed in the Independence Act and
incorporated as Ordinance appended to our Constitution, was recognized not only by the
Legislative Department or Congress of the United States in approving the Independence Law
 above quoted and the Constitution of the Philippines, which contains the declaration that
"Sovereignty resides in the people and all government authority emanates from them"
(section 1, Article II), but also by the Executive Department of the United States; that the late
President Roosevelt in one of his messages to Congress said, among others, "As I stated on
August 12, 1943, the United States in practice regards the Philippines as having now the
status as a government of other independent nations — in fact all the attributes of complete
and respected nationhood" (Congressional Record, Vol. 29, part 6, page 8173); and that it is
a principle upheld by the Supreme Court of the United States in many cases, among them in
the case of Jones vs. United States (137 U.S., 202; 34 Law. ed., 691, 696) that the question
of sovereignty is "a purely political question, the determination of which by the legislative and
executive departments of any government conclusively binds the judges, as well as all other
officers, citizens and subjects of the country.

Considering that section I (1) of the Ordinance appended to the Constitution which provides
that pending the final and complete withdrawal of the sovereignty of the United States "All
citizens of the Philippines shall owe allegiance to the United States", was one of the few
limitations of the sovereignty of the Filipino people retained by the United States, but these
limitations do not away or are not inconsistent with said sovereignty, in the same way that
the people of each State of the Union preserves its own sovereignty although limited by that
of the United States conferred upon the latter by the States; that just as to reason may be
committed against the Federal as well as against the State Government, in the same way
treason may have been committed during the Japanese occupation against the sovereignty
of the United States as well as against the sovereignty of the Philippine Commonwealth; and
that the change of our form of government from Commonwealth to Republic does not affect
the prosecution of those charged with the crime of treason committed during the
Commonwealth, because it is an offense against the same government and the same
sovereign people, for Article XVIII of our Constitution provides that "The government
established by this constitution shall be known as the Commonwealth of the Philippines.
Upon the final and complete withdrawal of the sovereignty of the United States and the
proclamation of Philippine independence, the Commonwealth of the Philippines shall
thenceforth be known as the Republic of the Philippines";

This Court resolves, without prejudice to write later on a more extended opinion, to deny the
petitioner's petition, as it is hereby denied, for the reasons above set forth and for others to
be stated in the said opinion, without prejudice to concurring opinion therein, if any. Messrs.
Justices Paras and Hontiveros dissent in a separate opinion. Mr. justice Perfecto concurs in
a separate opinion.

G.R. No. L-49 November 12, 1945

WILLIAM F. PERALTA, petitioner,

vs.
THE DIRECTOR OF PRISONS, respondent.

William F. Peralta in his own behalf.

Office of the Solicitor General Tañada for respondent.
City Fiscal Mabanag as amicus curiae.

FERIA, J.:

Petitioner-defendant, a member of the Metropolitan Constabulary of Manila charged with the

supervision and control of the production, procurement and distribution of goods and other
necessaries as defined in section 1 of Act No. 9 of the National Assembly of the so-called Republic
of the Philippines, was prosecuted for the crime of robbery as defined and penalized by section 2 (a)
of Act No. 65 of the same Assembly. He was found guilty and sentenced to life imprisonment, which
he commenced to serve on August 21, 1944, by the Court of Special and Exclusive Criminal
Jurisdiction, created in section 1 of Ordinance No. 7 promulgated by the President of the so-called
Republic of the Philippines, pursuant to the authority conferred upon him by the Constitution and
laws of the said Republic. And the procedure followed in the trial was the summary one established
in Chapter II of Executive Order No. 157 of the Chairman of the Executive Commission, made
applicable to the trial violations of said Act No. 65 by section 9 thereof and section 5 of said
Ordinance No. 7.
The petition for habeas corpus is based on the ground that the Court of Special and Executive
Criminal Jurisdiction created by Ordinance No. 7 "was a political instrumentality of the military forces
of the Japanese Imperial Army, the aims and purposes of which are repugnant to those aims and
political purposes of the Commonwealth of the Philippines, as well as those of the United States of
America, and therefore, null and void ab initio," that the provisions of said Ordinance No. 7 are
violative of the fundamental laws of the Commonwealth of the Philippines and "the petitioner has
been deprived of his constitutional rights"; that the petitioner herein is being punished by a law
created to serve the political purpose of the Japanese Imperial Army in the Philippines, and "that the
penalties provided for are much (more) severe than the penalties provided for in the Revised Penal
Code."

The Solicitor General, in his answer in behalf of the respondent, states that, in his own opinion, for
the reasons expressed in his brief in the case of People of the Philippines, plaintiff-appellant, vs.
Benedicto Jose y Santos, defendant-appellee, G. R. No. L-22 (p. 612, post), the acts and
proceedings taken and had before the said Court of Special and Exclusive Criminal Jurisdiction
which resulted in the conviction and imprisonment of the herein petitioner, should now be denied
force and efficacy, and therefore the petition for habeas corpus should be granted. The reasons
advanced by the Solicitor General in said brief and in his reply memorandum in support of his
contention are, that the Court of Special and Exclusive Criminal Jurisdiction created, and the
summary procedure prescribed therefor, by said Ordinance No. 7 in connection with Executive Order
No. 157 of the Chairman of the Executive Commission are tinged with political complexion; that the
procedure prescribed in Ordinance No. 7 does not afford a fair trial, violates the Constitution of the
Commonwealth, and impairs the Constitutional rights of accused persons under their legitimate
Constitution. And he cites, in support of this last proposition, the decisions of the Supreme Court of
the United States in the cases of Texas vs. White (7 Wall., 700, 743); Horn vs. Lockart (17 Wall.,
570, 581); United States vs. Home Insurance Co. (22 Wall., 99, 104); Sprott vs. United States (20
Wall., 459).

The City Fiscal of Manila appeared before this Court as amicus curiae. In his memorandum he
submits that the petition for habeas corpus be denied on the following grounds: That the Court of
Special and Exclusive Criminal Jurisdiction and the Acts, Ordinances and Executive Orders, creating
it are not of a political complexion, for said Court was created, and the crimes and offenses placed
under its jurisdiction were penalized heavily, in response to an urgent necessity, according to the
preamble of Ordinance No. 7; that the right to appeal in a criminal case is not a constitutional right;
and that the summary procedure established in said Ordinance No. 7 is not violative of the provision
of Article III, section 1 (18) of the Constitution of the Commonwealth, to the effect that no person
shall be compelled to be a witness against himself, nor of the provision of section 1 (1) of the same
Article that no person shall be deprived of life, liberty, or property without due process of law.

The features of the summary procedure adopted by Ordinance No. 7, assailed by the petitioner and
the Solicitor General as impairing the constitutional rights of an accused are: that court may
interrogate the accused and witnesses before trial in order to clarify the points in dispute; that the
refusal of the accused to answer the questions may be considered unfavorable to him; that if from
the facts admitted at the preliminary interrogatory it appears that the defendant is guilty, he may be
immediately convicted; and that the sentence of the sentence of the court is not appealable, except
in case of death penalty which cannot be executed unless and until reviewed and affirmed by a
special division of the Supreme Court composed of three Justices.

Before proceeding further, and in order to determine the law applicable to the questions involved in
the present case, it is necessary to bear in mind the nature and status of the government established
in these Islands by the Japanese forces of occupation under the designation of Republic of the
Philippines.

In the case of Co Kim Cham vs. Valdez Tan Keh and Dizon (G. R. No. L-5, pp. 113, 127, ante),
recently decided, this Court, speaking through the Justice who pens this decision, held:

In view of the foregoing, it is evident that the Philippines Executive Commission, which was
organized by Order No. 1, issued on January 23, 1942, by the Commander of the Japanese
forces, was a civil government established by the military forces of occupation and therefore
a de facto government of the second kind. It was not different from the government
established by the British in Castine, Maine, or by the United States in Tanpico, Mexico. As
Halleck says, "the government established over an enemy's territory during the military
occupation may exercise all the powers given by the laws of war to the conqueror over the
conquered, and is subject to all restrictions which that code imposes. It is of little
 consequence whether such government be called a military or civil government. Its character
is the same and the source of its authority the same. In either case it is a government
imposed by the laws of war and so far as it concerns the inhabitants of such territory or the
rest of the world those laws alone determine the legality or illegality of its acts." (vol. 2 p.
466.) The fact that the Philippine Executive Commission was a civil and not a military
government and was run by Filipinos and not by Japanese nationals is of no consequence.

And speaking of the so-called Republic of the Philippines in the same decision, this Court said:

The so-called Republic of the Philippines, apparently established and organized as a

sovereign state independent from any other government by the Filipino people, was, in truth
and reality, a government established by the belligerent occupant or the Japanese forces of
occupation. It was of the same character as the Philippine Executive Commission, and the
ultimate source of its authority was the same — the Japanese military authority and
government. As General MacArthur stated in his proclamation of October 23, 1944, a portion
of which has been already quoted, "under enemy duress, a so-called government styled as
the 'Republic of the Philippines' was established on October 14, 1943, based upon neither
the free expression of the peoples" will nor the sanction of the Government of the United
States.' Japan had no legal power to grant independence to the Philippines or transfer the
sovereignty of the United States to, or recognize the latent sovereignty of the Filipino people,
before its military occupation and possession of the Islands had matured into an absolute
and permanent dominion or sovereignty by a treaty of peace or other means recognized in
the law of nations.

As the so-called Republic of the Philippines was a de facto government of the second kind (of
paramount force), as the government established in Castine, Maine, during its occupation by the
British forces and as that of Tampico, Mexico, occupied during the war with that the country by the
United State Army, the question involved in the present case cannot be decided in the light of the
Constitution of the Commonwealth Government; because the belligerent occupant was totally
independent of the constitution of the occupied territory in carrying out the administration over said
territory; and the doctrine laid down by the Supreme Court of the United States in the cases involving
the validity of judicial and legislative acts of the Confederate States, considered as de
facto governments of the third kind, does not apply to the acts of the so-called Republic of the
Philippines which is a de facto government of paramount force. The Constitution of the so-called
Republic of the Philippines can neither be applied, since the validity of an act of a belligerent
occupant cannot be tested in the light of another act of the same occupant, whose criminal
jurisdiction is drawn entirely from the law martial as defined in the usages of nations.

In the case of United States vs. Rice (4 Wheaton, 246), the Supreme Court of the United States held
that, by the military occupation of Castine, Maine, the sovereignty of the United States in the territory
was, of course, suspended, and the laws of the United States could no longer be rightfully enforced
there or be obligatory upon the inhabitants who remained and submitted to the belligerent occupant.
By the surrender the inhabitants passed under a temporary allegiance to the British government, and
were bound by such laws, and such only, as it chose to recognize and impose. And Oppenheim, in
his Treatise on International Law, says that, in carrying out the administration over the occupied
territory and its inhabitants, "the (belligerent) occupant is totally independent of the constitution and
the laws of the territory, since occupation is an aim of warfare, and the maintenance and safety of
his forces, and the purpose of war, stand in the foreground of his interest and must be promoted
under all circumstances or conditions. (Vol. II, Sixth Edition, Revised, 1944, p. 342.)

The doctrine laid down in the decisions of the Supreme Court of the United States (in the cases of
Texas vs. White, 7 Wall., 700; Horn vs. Lockart, 17 Wall., 570; Williams vs. Bruffy, 96 U. S., 176
United States vs. Home Insurance Co., 20 Wall., 249; Sprott vs. United States, 20 Wall., 459, and
others) that the judicial and legislative acts of the Confederate States which impaired the rights of
the citizens under the Constitution of the United States or of the States, or were in conflict with those
constitutions, were null and void, is not applicable to the present case. Because that doctrine rests
on the propositions that "the concession (of belligerency) made to the Confederate Government . . .
sanctioned no hostile legislation . . . and it impaired in no respect the rights of loyal and citizens as
they existed at the commencement of hostilities" (Williams vs. Bruffy, supra);that the Union is
perpetual and indissoluble, and the obligation of allegiance to the to the estate and obedience to her
laws and the estate constitution, subject to the Constitution of the United States, remained
unimpaired during the War of Secession (Texas vs. White, supra) and that the Confederate States
"in most, if not in all instances, merely transferred the existing state organizations to the support of a
new and different national head. the same constitution, the same laws for the protection of the
property and personal rights remained and were administered by the same officers."
(Sprott vs. United States, supra). In fine, because in the case of the Confederate States, the
constitution of each state and that of the United States or the Union continued in force in those
states during the War of Secession; while the Constitution of the Commonwealth Government was
suspended during the occupation of the Philippines by the Japanese forces of the belligerent
occupant at regular war with the United States.

The question which we have to resolve in the present case in the light of the law of nations are, first,
the validity of the creation of the Court of Special and Exclusive Criminal Jurisdiction, and of the
summary procedure adopted for that court; secondly, the validity of the sentence which
imprisonment during the Japanese military occupation; and thirdly, if they were then valid, the effect
on said punitive sentence of the reoccupation of the Philippines and the restoration therein of the
Commonwealth Government.

(1) As to the validity of the creation of the Court of Special and Exclusive Criminal Jurisdiction by
Ordinance No. 7, the only factor to be considered is the authority of the legislative power which
promulgated said law or ordinance. It is well established in International Law that "The criminal
jurisdiction established by the invader in the occupied territory finds its source neither in the laws of
the conquering or conquered state, — it is drawn entirely form the law martial as defined in the
usages of nations. The authority thus derived can be asserted either through special tribunals,
whose authority and procedure is defined in the military code of the conquering state, or through the
ordinary courts and authorities of the occupied district." (Taylor, International Public Law, p. 598.)
The so-called Republic of the Philippines, being a governmental instrumentality of the belligerent
occupant, had therefore the power or was competent to create the Court of Special and Exclusive
Criminal Jurisdiction. No question may arise as to whether or not a court is of political complexion,
for it is mere a governmental agency charged with the duty of applying the law to cases falling within
its jurisdiction. Its judgments and sentences may be of political complexion, or not depending upon
the nature or character of the law so applied. There is no room for doubt, therefore, as to the validity
of the creation of the court in question.

With respect to the Summary procedure adopted by Ordinance No. 7, and followed in the trial of the
case which resulted in the conviction of the herein petitioner, there is also no question as to the
power or competence of the belligerent occupant to promulgate the law providing for such
procedure. For "the invader deals freely with the relations of the inhabitants of the occupied territory
towards himself . . . for his security also, he declares certain acts, not forbidden by the ordinary laws
of the country, to be punishable; and he so far suspends the laws which guard personal liberty as is
required for the summary punishment of any one doing such acts." (Hall's International Law, seventh
ed., p. 5000). A belligerent "occupant may where necessary, set up military courts instead of the
ordinary courts; and in case, and in so far as, he admits the administration of justice by the ordinary
courts, he may nevertheless, so far as is necessary for military purposes, or for the maintenance of
public order and safety temporarily alter the laws, especially the Criminal Law, on the basis of which
justice is administered as well as the laws regarding procedure." (Oppenheim's International Law,
Vol. II, sixth edition, 1944, p.349.)

No objection can be set up to the legality of its provisions in the light of the precepts of our
Commonwealth Constitution relating to the rights of accused under that Constitution, because the
latter was not in force during the period of the Japanese military occupation, as we have already
stated. Nor may said Constitution be applied upon its revival at the time of the re-occupation of the
Philippines by virtue of the principle of postliminium because "a constitution should operate
prospectively only, unless the words employed show a clear intention that it should have a
retrospective effect" (Cooley's Constitutional Limitations, seventh edition, page 97, and cases quoted
and cited in the footnote), especially as regards laws of procedure applied to cases already
terminated completely.

The only restrictions or limitations imposed upon the power of a belligerent occupant to alter the laws
or promulgate new ones, especially the criminal law as well as the laws regarding procedure, so far
as it is necessary for military purposes, that is, for his control of the territory and the safety and
protection of his army, are those imposed by the Hague Regulations, the usages established by
civilized nations, the laws of humanity and the requirements of public conscience. It is obvious that
the summary procedure under consideration does not violate those precepts. It cannot be
considered as violating the laws of humanity and public conscience, for it is less objectionable, even
from the point of view of those who are used to the accusatory system of criminal procedure than the
procedural laws based on the semi-inquisitorial or mixed system prevailing in France and other
countries in continental Europe.
(2) The validity of the sentence rendered by the Court of Special and Exclusive Criminal Jurisdiction
which imposes life imprisonment upon the herein petitioner, depends upon the competence or power
of the belligerent occupant to promulgate Act No. 65 which punishes the crime of which said
petitioner was convicted.

Westlake says that Article XLIII, Section III, of the Hague Conventions of 1907 "indicates that the
laws to be enforced by the occupant consist of, first, the territorial law in general, as that which
stands to the public order and social and commercial life of the district in a relation of mutual
adaptation, so that any needless displacement of it would defeat the object which the invader is
enjoined to have in view, and secondly, such variations of the territorial law as may be required by
real necessity and are not expressly prohibited by any of the rules which will come before us. Such
variations will naturally be greatest in what concerns the relation of the communities and individuals
within the district to the invading army and its followers, it being necessary for the protection of the
latter, and for the unhindered prosecution of the war by them, that acts committed to their detriment
shall not only lose what justification the territorial law might give them as committed against
enemies, but shall be repressed more severely than the territorial law would repress acts committed
against fellow subjects. Indeed the entire relation between the invaders and the invaded, so far as it
may fall within the criminal department whether by the intrinsic nature of the acts done or in
consequence of the regulations made by the invaders, may be considered as taken out of the
territorial law and referred to what is called martial law." (Westlake, International Law, Part II, War, p.
96.)

According to Hyde (International Law, Vol. II, p. 386), the term "martial law," in so far as it is used to
describe any fact in relation to belligerent occupation, does not refer to a particular code or system of
law, or to a special agency entrusted with its administration. The term merely signifies that the body
of law actually applied, having the sanction of military authority, is essentially martial. All law, by
whomsoever administered, in an occupied district martial law; and it is none the less so when
applied by civil courts in matters devoid of special interest to the occupant. The words "martial law"
are doubtless suggestive of the power of the occupant to share the law as he sees fit; that is, to
determine what shall be deemed lawful or unlawful acts, to establish tests for ascertaining the guilt of
offenders, to fix penalties, and generally to administer justice through such agencies as the found
expedient.

And the United States Rules of Land Warfare provide that the belligerent occupant may promulgate
such new laws and regulations as military necessity demands, and in this class will be included
those laws which come into being as a result of military rule; that is, those which establish new
crimes and offenses incident to a state of war and are necessary for the control of the country and
the protection of the army, for the principal object of the occupant is to provide for the security of the
invading army and to contribute to its support and efficiency and the success of its operations. (Pub.
1940, pp. 76, 77.)

From the above it appears clear that it was within the power and competence of the belligerent
occupant to promulgate, through the National Assembly of the so-called Republic of the Philippines,
Act No. 65 of the said Assembly, which penalizes the crimes of robbery and other offenses by
imprisonment ranging from the maximum period of the imprisonment prescribed by the laws and
ordinances promulgated by the President of the so-called Republic as minimum, to life imprisonment
or death as maximum. Although these crimes are defined in the Revised Penal Code, they were
altered and penalized by said Act No. 65 with different and heavier penalties, as new crimes and
offenses demanded by military necessity, incident to a state of war, and necessary for the control of
the country by the belligerent occupant, the protection and safety of the army of occupation, its
support and efficiency, and the success of its operations.

They are not the same ordinary offenses penalized by the Revised Penal Code. — The criminal acts
penalized by said Act No. 65 are those committed by persons charged or connected with the
supervision and control of the production, procurement and distribution of foods and other
necessaries; and the penalties imposed upon the violators are different from and much heavier than
those provided by the Revised Penal Code for the same ordinary crimes. The acts penalized by said
Act were taken out of the territorial law or Revised Penal Code, and referred to what is called martial
law by international jurists, defined above by Hyde, in order, not only to prevent food and other
necessaries from reaching the "guerrillas" which were harassing the belligerent occupant from every
nook and corner of the country, but also to preserve the food supply and other necessaries in order
that, in case of necessity, the Imperial Japanese forces could easily requisition them, as they did,
and as they had the right to do in accordance with the law of nations for their maintenance and
subsistence (Art. LII, Sec. III, Hague Conventions of 1907). Especially taking into consideration the
fact, of which this court may take judicial notice, that the Imperial Japanese Army had depended
mostly for their supply upon the produce of this country.

The crimes penalized by Act No. 65 — as well as the crimes against national security and the law of
nations, to wit: treason, espionage, inciting war, violation of neutrality, correspondence with hostile
country, flight to enemy's country, piracy; and the crimes against public order, such as rebellion,
sedition and disloyalty, illegal possession of firearms and other, penalized by Ordinance No. 7 and
placed under jurisdiction of the Court of Special and Exclusive Criminal Jurisdiction — are all of a
political complexion, because the acts constituting those offenses were punished, as are all political
offenses, for public rather than private reasons, and were acts in aid or favor of the enemy and
against the welfare, safety and security of the belligerent occupant. While it is true that these
offenses, when committed against the Commonwealth or United States Government, are defined
and also penalized by the territorial law Revised Penal Code, they became inapplicable as crimes
against the occupier upon the occupation of the Islands by the Japanese forces. And they had to be
taken out of the territorial law and made punishable by said Ordinance No. 7, for they were not
penalized before under the Revised Penal Code when committed against the belligerent occupant or
the government established by him in these Island. They are also considered by some writers as war
crimes in a broad sense. In this connection Wheaton observes the following:

"Of 'war crimes' the number is naturally indefinite, depending as they do on the acts from time to
time ordered to be done or forbidden to be done in the martial law proclamation or regulations of the
invading or occupying commander. Thus, in the Anglo-Boer war, the British military authorities
proclaimed the following to be offenses against their martial law; — Being in possession of arms,
ammunition, etc.; traveling without a permit; sending prohibited goods; holding meetings other than
those allowed; using seditious language; spreading alarmist reports; overcharging for goods;
wearing uniforms without due authority; going out of doors between certain hours; injuring military
animals or stores; being in possession, without a permit, of horses, vehicles, cycles, etc.; hindering
those in execution of military orders; trespassing on defense works. Such offenses, together with
several others, were specified in the Japanese regulations made in the Russo-Japanese war."
(Wheaton's International Law, War, seventh edition, 1944, p. 242.)

It is, therefore, evident that the sentence rendered by the Court of Special and Exclusive Criminal
Jurisdiction against the petitioner, imposing upon him the penalty of life imprisonment, was good and
valid, since it was within the admitted power or competence of the belligerent occupant to
promulgate the law penalizing the crime of which petitioner was convicted.

(3) The last question is the legal effect of the reoccupation of the Philippines and restoration of the
Commonwealth Government; that is whether or not, by the principle of postliminy, the punitive
sentence which petitioner is now serving fell through or ceased to be valid from that time.

In order to resolve this last question, it is not necessary to enter into an elaborate discussion on the
matter. It is sufficient to quote the opinion on the subject of several international jurists and our
recent decision in the case of Co Kim Cham vs. Valdez Tan Keh and Dizon, supra.

Hall, commenting on the effect of the principle of postliminy upon sentences of the tribunals
continued or created by the belligerent occupant, opines "that judicial acts done under this control,
when they are not of a political complexion, administrative acts so done, to the extent that they take
effect during the continuance of his control, and the various acts done during the same time by
private persons under the sanction of municipal law, remain good. . . . Political acts on the other
hand fall through as of course, whether they introduce any positive change into the organization of
the country, or whether they only suspend the working of that already in existence. The execution
also of punitive sentences ceases as of course when they have had reference to acts not criminal by
the municipal law of the state, such for example as acts directed against the security or control of the
invader." (Hall's International Law, seventh edition, p. 518.)

Westlake, speaking of the duration of the validity of punitive sentences for offenses such as the one
in question, which is within the admitted power or competence of the belligerent occupant to punish,
says that: "To the extent to which the legal power of the occupant is admitted he can make law for
the duration of his occupation. Like any other legislator he is morally subject to the duty of giving
sufficient notice of his enactments or regulations, not indeed so as to be debarred from carrying out
his will without notice, when required by military necessity and so far as practically carrying out his
will can be distinguished from punishment, but always remembering that to punish for breach of a
regulation a person who was justifiably ignorant of it would be outrageous. But the law made by the
occupant within his admitted power, whether morally justifiable or not, will bind any member of the
occupied population as against any other member of it, and will bind as between them all and their
national government, so far as it produces an effect during the occupation. When the occupation
comes to an end the authority of the national government is restored, either by the progress of
operations during the war or by the conclusion of a peace, no redress can be had for what has been
actually carried out but nothing further can follow from the occupant's legislation. A prisoner detained
under it must be released, and no civil right conferred by it can be further enforced. The enemy's law
depends on him for enforcement as well as for enactment. The invaded state is not subject to the
indignity of being obliged to execute his commands. (Westlake, International Law, Part II, War, pp.
97, 98.)

And Wheaton, who, as above stated, considers as war crimes such offenses as those penalized in
Ordinance No. 7 and Act No. 65, says: "In general, the cast of the occupant possess legal validity,
and under international law should not be abrogated by the subsequent government. But this rule
does not necessarily apply to acts that exceed the occupant's power (e.g., alienation of the domains
of the State or the sovereign), to sentences for 'war treason' and 'war crimes,' to acts of a political
character, and to those that beyond the period of occupation. When occupation ceases, no
reparation is legally due for what has already been carried out." (Wheaton's International Law, supra,
p. 245.)

We have already held in our recent decision in the case of Co Kim Cham vs. Valdez Tan Keh and
Dizon, supra, that all judgments of political complexion of the courts during the Japanese regime,
ceased to be valid upon the reoccupation of the islands by virtue of the principle or right of
postliminium. Applying that doctrine to the present case, the sentence which convicted the petitioner
of a crime of a political complexion must be considered as having ceased to be valid ipso facto
upon the reoccupation or liberation of the Philippines by General Douglas MacArthur.

It may not be amiss to say in this connection that it is not necessary and proper to invoke the
proclamation of General Douglas MacArthur declaring null and void all laws, among them Act No.
65, of the so-called Republic of the Philippines under which petitioner was convicted, in order to give
retroactive effect to the nullification of said penal act and invalidate sentence rendered against
petitioner under said law, a sentence which, before the proclamation, had already become null and
of no effect.

We therefore hold that the punitive sentence under consideration, although good and valid during
the military occupation of the Philippines by the Japanese forces, ceased to be good and valid ipso
facto upon the reoccupation of these Island and the restoration therein of the Commonwealth
Government.

In view of all the foregoing, the writ of habeas corpus prayed for is hereby granted and it is ordered
that the petitioner be released forthwith, without pronouncement as to costs. So ordered.

G.R. No. L-6 November 29, 1945

ANICETO ALCANTARA, petitioner,

vs.
DIRECTOR OF PRISONS, respondent.

Buenaventura B. Martinez for petitioner.

Office of the Solicitor General Tañada for respondent.

FERIA, J.:

This is a petition for the issuance of a writ of habeas corpus and for the release of the petitioner on
the ground that the latter is unlawfully imprisoned and restrained of his liberty by the respondent
Director of Prison in the provincial jail at Vigan, Ilocos Sur.

Petitioner was convicted by the Court First Instance of Ilocos Sur (Criminal case No. 23) of the crime
of illegal discharge of firearms with less serious physical injuries. Upon appeal, the Court of Appeals
of Northern Luzon at Baguio modified said sentence (CA- G.R. No. 790)and sentence the petitioner
to an indeterminate penalty of from four months four months and twenty-one days of arresto
mayor to three years, nine months and three days of prison correccional. The sentence as modified
became final on September 12, 1944, and June 23, 1945, petitioner commenced serving his
sentence.

Petitioner now questions the validity of the decision of the Court of Appeals of Northern Luzon, on
the sole ground that said court was only a creation of the so-called Republic of the Philippines during
the Japanese military occupation of the Islands; that the Court of Appeals was not authorized by
Commonwealth Act No. 3 to hold sessions in Baguio, and that only the two Justices constituted the
majority which promulgated the decision in question. The petitioner does not question the validity of
said decision on the strength of the Proclamation of General Douglas McArthur of October 23, 1944,
which according to our decision in the case of Co Kim Cham vs. Valdez Tan Keh and Dizon, G.R.
No. L-5 (p. 113, ante), does not refer to judicial processes.

In the said case of Co Kim Cham vs. Valdez Tan Keh and Dizon, this Court ruled that the so-called
Republic of the Philippines and the Philippine Executive Commission established in the Philippines
during the Japanese regime were governments de facto organized by the belligerent occupant by
the judicial acts thereof were good and valid and remained good and valid after the restoration of the
Commonwealth Government, except those a political complexion. In that the same case this Court
held that the Court of Appeals which was continued throughout the Japanese occupation, was the
same Court of Appeals existed prior to the Japanese occupation and was lately abolished by
Executive Order No. 37. The division of the Court of Appeals into several District Court of Appeals,
and the reduction of the number of Justices sitting in each division, the regime of the so-called
Republic effected no substantial change in its nature and jurisdiction.

Even assuming that the Court of Appeals of Northern Luzon was a new court created by the
belligerent occupant or the de facto governments established by him, the judgments of such court,
like those of the court which were continued during the Japanese occupation, were good and valid
and remain good and valid, and therefore enforceable now after the liberation or occupation of the
Philippines, provided that such judgments do not have a political complexion, as this court held in its
decision in the abovementioned case of Co Kim Cham vs. Valdez Tan Keh and Dizon supra, in
accordance with the authorities therein cited.

Obviously, the sentence which petitioner is now serving has no political complexion. He was charged
with and convicted of an offense punishable under the municipal law of the Commonwealth, the
Revised Penal Code. Therefore, the sentence of the Court of First Instance of Ilocos Sur, as
modified by the Court of Appeals of Northern Luzon, is valid and enforceable.

A punitive or penal sentence is said to of a political complexion when it penalizes either a new act
not defined in the municipal laws, or acts already penalized by the latter as a crime against the
legitimate government, but taken out of the territorial law and penalized as a new offenses
committed against belligerent occupant, incident to a state of a war and necessary for the control of
the occupied territory and the protection of the army of the occupier. They are acts penalized for
public rather than private reasons, acts which tend, directly or indirectly, to aid or favor the enemy
and are directed against the welfare, safety and security, of the belligerent occupant. As example,
the crimes against national security , such as treason, espionage, etc., and against public order,
such as rebellion, sedition, etc., were crimes against the Commonwealth or United States
Government under the Revised Penal Code, which were made crimes against the belligerent
occupant.

In view of the foregoing, the petitioner for the writ of habeas corpus is denied.

Moran, C.J., Ozaeta, Paras, Jaranilla, Pablo and Bengzon, JJ., concur.

Separate Opinions

DE JOYA, J., concurring:

The principal question involved in this habeas corpus case is the validity of the judicial proceedings
held, during the Japanese occupation, in the Court First Instance of Ilocos Sur, in which herein
petitioner was accused of frustrated murder, and in the Court of Appeals of Northern Luzon, in
which, on appeal, said petitioner was found guilty of illegal discharge of firearms with less serious
physical injuries, and sentenced to a term of imprisonment ranging from four moths and twenty-one
days of arresto mayor to three years, and nine months and three days of prison correccional; and
the effect on said proceedings of the proclamation of General Douglas McArthur, dated October 24
1944. The decision of this questions requires the application of principles of International Law, in
connection with the municipal law of this country.

Under the Constitution Commonwealth of the Philippines, International Law is part of the
Fundamental law of the land (Article II, sec. 3). As International Law is an integral part of our law, it
must be ascertained and administered by this Court, whenever question of right depending upon it
are presented for our determination (Kansas vs. Colorado, 185 U.S. 146; 22 Sup. Ct., 552; 46 Law.
ed., 838).

Since International Law is a body of rules accepted by nations as regulating their mutual relations,
the proof of their existence is to be found in the consent of the nations to abide by them; and this
consent is evidenced chiefly by the usages and customs of nation, as found in the writings of
publicist and in the decisions of the highest courts of the different countries of the world (The
Habana, 175 U. S., 677; 20 Sup. Ct., 290; 44 Law. ed., 320.).

But while usages and customs are the older original source of International Law, great international
treaties are a latter source of increasing importance, such as The Hogue Conventions of 1899 and
1907.

The Hague Conventions of 1899, respecting laws and customs of war on land, expressly declare
that:

ARTICLE XLII. Territory is considered occupied when it is actually placed under the authority
of the hostile army.

The occupation applies only to the territory where such authority is established, and in a
position to assert itself.

ART. XLII. The authority of the legitimate power having actually passed into the hands of the
occupant, the latter shall take all steps in his power to reestablish and insure, as far as
possible, public order and safety, while respecting, unless absolutely prevented, the laws in
force in the country. (32 Stat., II, 1821.).

The above provisions of the Hague Conventions have been adopted by the nations giving
adherence to them, among which is the United States of America (32 Stat., II, 1821).

The commander in chief of the invading forces or military occupant may exercise governmental
authority, but only when in actual possession of the enemy's territory, and this authority will be
exercised upon principles of International Law (New Orleans vs. Steamship Co. [1874], 20 Wall.,
387; Kelly vs. Sanders [1878], 99 U.S., 441; MacLeod vs. United States 229 U.S. 416; 33 Sup Ct.,
955; 57 Law. ed., 1260; II Oppenheim on International Law, sec. 167).

It will thus be readily seen that the civil laws of the invaded state continue in force, in so far as they
do not affect the hostile occupant unfavorably. The regular judicial tribunals of the occupied territory
continue to act in cases not affecting the military occupation, and is not usual for the invader to take
the whole administration into his own hands, because it is easier to preserve order through the
agency of the native officials, and also because the latter are more competent to administer the laws
of the territory; and the military occupant generally keeps in their posts such of the judicial and
administrative officers as are willing to serve under him, subjecting them only to supervision by the
military authorities, or by superior civil authorities appointed by him (Young vs. United States, 97
U.S. 39; 24 Law. ed 992; Coleman vs. Tennessee, 97 U.S. 509; 24 Law ed., 1118;
MacLeod vs. United States, 229 U.S. 416; 33 Sup Ct., 955; 57 Law. ed., 1260 Taylor, International
Law, secs. 576, 578; Wilson, International Law, pp. 331-337; Hall, International Law, 6th ed. [1909],
pp. 464, 465, 475, 476; Lawrence, International Law, 7th ed., 412, 413; Davis, Elements of
International Law, 3d ed., pp. 330-332, 335; Holland, International Law, pp. 356, 357, 359; Westlake,
International Law, Part II, 2d ed., pp. 121-123).

In 1811, during the occupation of Catalonia, Spain, by the French army, a Frenchman, accused of
the murder of a Catalan in that province, was tried and convicted by the assize Court of the
Department of the Pyrenees Orientales, France. Upon appeal to the French Court of Cassation, the
conviction was quashed, on the ground that the courts of the territory within which the crime had
been committed had exclusive jurisdiction to try the case and that "the occupation of Catalonia by
French troops and its government by the French authorities had not communicated to its inhabitants
the character of French citizens, nor to their territory the character of French territory, and that such
character could only be acquired by a solemn act of incorporation which had not been gone
through." (Hall, International Law, 6th ed., p. 461.)

It is, therefore, evident that the establishment of the government under the name of the Philippine
Executive Commission, or the so-called Philippine Republic, afterwards, during Japanese
occupation, respecting the laws in force in the country, and permitting our courts to function and
administer said laws, as proclaim in the City of Manila, by the commander in chief of the Japanese
Imperial Forces, on January 3, 1942, was in accordance with the rules and principles of International
Law.

If the military occupant is thus in duty bound to establish in the territory under military occupation
governmental agencies for the preservation of peace and order and for the proper administration of
justice, in accordance with the local laws, it must necessarily follow that the judicial proceeding
conducted before the courts established by the military occupant must be considered legal and valid,
even after said government established by the military occupant had been displaced by the
legitimate government of the territory.

Thus the judgments rendered by the Confederate Courts, during the American Civil War, merely
setting the rights of private parties actually within their jurisdiction, not only tending to defeat the
legal rights of citizens of the United States, nor in furtherance of laws passed in aid of the rebellion,
had been declared valid and binding (Cook vs.Oliver, 1 Woods, 437; Fed. Cas., No. 3, 164;
Coleman vs. Tennessee, 97 U.S., 509;24 Law. ed., 1118; Williams vs.Bruffy, 96 U.S. 176;
Horn vs. Lockhart, 17 Wall., 570; Sprott vs. United States, 20 Wall., 459; Texas vs. White, 7 Wall.,
700; Ketchum vs. Buckley [1878], 99 U.S., 188); and the judgment of a court of Georgia rendered in
November, 1861, for the purchase money slaves was held valid judgment when entered, and
enforceable in 1871 (French vs. Tumllin, 10 Am. Law. Reg. [N.S.], 641; Fed. Case, No. 5104).

The judgments by the courts of the states constituting the Confederate States of the America were
considered legal and valid and enforceable, even after the termination of the American Civil War,
because they had been rendered by the courts of a de facto government. The Confederate States
were a de facto government, in the sense that its citizens were bound to render the government
obedience in civil matters, and did not become responsible, as wrong-doers, for such act of
obedience (Thorington vs. Smith, 8 Wall. [U.S.] 9; 19 Law ed., 361).

In the more recent case of Ketchum vs. Buckley ([1878], 99 U.S., 188), the Supreme Court of the
United States held-- "It is now settled law in this court that during the late civil war the same general
law for the administration of justice and the protection of private rights, which had existed in the
States prior to the rebellion, remained during its continuance and afterwards. As far as the acts of
the States did not impair or tend to impair the supremacy of the national authority, or the just rights
of the citizens, under the Constitution, they are in general to be treated as valid and binding."
(Williams vs. Bruffy, 96 U.S., 176; Horn vs. Lockhart, 17 Wall., 570; Sprott vs. United States, 20
Wall., 459; Texas vs. White 7 Wall., 700.)

The government established in the Philippines, during Japanese occupation, would seem to fall
under the following definition of de facto government given by the Supreme Court of the United
States:

But there is another description of government de facto, called also by publicists a

government de facto, but which might, perhaps, he more aptly denominated a government of
paramount force. Its distinguishing characteristics (1) that its existence is maintained by
active military power within the territories, and against the rightful authority of an established
and lawful government; and (2) that while it exists it must necessarily be obeyed in civil
matters by private citizens who by acts of obedience rendered in submission to such force,
do not become responsible, as wrongdoers, for those acts though not warranted by the laws
of the rightful government. Actual governments of this sort are established over districts
differing greatly in extent and conditions. They are usually administered directly by military
authority, but they may be administered, also, by civil authority, supported more or less
directly by military force. (MacLeod vs. United States [1913], 229 U.S., 416.)
The government established in the Philippines, under the Philippine Executive Commission or under
the so-called Philippine Republic, during Japanese occupation, was and should, therefor, be
considered as a de factogovernment; and that the judicial proceedings conducted before the courts
has been established in this country, during said Japanese occupation, and are should be
considered as legal and valid enforceable, even after the liberation of this country by the American
forces, as a long a said judicial proceedings had been conducted, in accordance with the law of the
Commonwealth of the Philippines.

The judicial proceedings involved in the case under consideration merely refer to the prosecution of
the petitioner in this case, for the crime of frustrated murder, which was reduced to illegal discharge
of firearms with less serious physical injuries, under the provisions of the Revised Penal Code, in
force in this country under the Commonwealth government, before and during Japanese occupation.

Now, petitioner contends that the judicial proceedings in question are null and void, and that the
accused should be immediately released from the custody, under the provisions of the proclamation
issued by General Douglas McArthur dated October 23, 1944; as said proclamation nullifies all the
laws, regulations and processes of any other government in the Philippines than that of the
Commonwealth of the Philippines.

In other words petition demands a literal interpretation of said proclamation issued by the General
Douglas McArthur, a contention which, in our opinion, is untenable, as it would inevitably produce
judicial chaos and uncertainties. When an act is susceptible of two or more constructions, one of
which will maintain and the others destroy it, the Courts will always adopt the former (United
States vs. Coombs [1838]], 12 Pet., 72; 9 Law. ed., 1004; Board of Supervisors of Grenada
County vs. Brown [1884], 112 U.S., 261; 28 Law. ed., 704; 5 Sup. Ct. Rep., 125; In re Guariña
[1913], 24 Phil., 37; Fuentes vs. Director of Prisons [1924], 46 Phil., 22; Yu Cong Eng vs. Trinidad
[1925], 47 Phil., 385). The judiciary, always alive to the dictates of national welfare, can properly
incline the scales of its decisions in favor of that solution which will most effectively promote the
public policy (Smith, Bell & Co., Ltd. vs.Natividad [1919], 40 Phil., 136). All laws should receive a
sensible construction as not to lead it injustice, oppression or an absurd consequence. It will always,
therefore, be presumed that the legislature intended exception to its language, which would avoid
results of this character. The reason of the law in such cases should prevail over its letter (United
States vs. Kirby, 7 Wall [U.S.], 482; 19 Law. ed, 278; Church of Holy Trinity vs. United States, 143
U.S., 461; 12 Sup. Ct., 511; 36 Law. ed., 226; Jacobson vs. Massachussetts, 197 U.S., 39; 25 Sup.
Ct., 358; 49 Law. ed., 643; 3 Ann. Cas., 765; In re Allen, 2 Phil., 630). The duty of the court in
construing a statute, which is reasonably susceptible of two constructions to adopt that which saves
its constitutionality, includes the duty of a avoiding a construction which raises grave and doubtful
constitutional questions, if it can be avoided (United States vs. Delaware & Hudson Co., 213 U.S.,
366; 29 Sup. Ct. 527; 53 Law. ed., 836).

According to the rules and principles of International Law, and the legal doctrines cited above, the
judicial proceedings conducted before the court of the justice, established here during Japanese
military occupation, merely applying the provisions of the municipal law of the territory, as the
provisions of the Revised Penal Code in the instant case which have no political or military
significance, are and should be considered legal, valid and binding. It is to be presumed that General
Douglas McArthur knows said rules and principles of International Law, as International Law is an
integral part of the fundamental law of the land, in accordance with the provisions of the Constitution
of the United States. And it is also to be presumed that General Douglas McArthur has acted, in
accordance with said principles of International Law, which have been sanction by the Supreme
Court of the United States, as the nullification of all judicial proceedings conducted before our courts,
during the Japanese occupation would be highly detrimental to public interests.

For the forgoing reasons, I concur in the majority opinion, and the petition for habeas corpus filed in
this case should, therefore, be denied.

PERFECTO, J., dissenting:

Following our opinions in this cases of Co Kim Cham vs. Valdez Tan Keh and Dizon (p. 153, ante),
and Peralta vs. Director of Prisons (p. 334, ante), G.R. No. L-5 and G.R. No. L-49 respectively, the
proceedings attacked by petitioner belong to the judicial processes declared null and void in the
proclamation issued by General McArthur on October 23, 1944, and therefore, we vote the granting
of the writ of habeas corpus prayed for.

HILADO, J., dissenting:

Upon the grounds stated my main dissenting opinion, in G.R. No. L-5 Co Kim Cham vs. Valdez Tan
Keh and Dizon (p. 199, ante), and in my concurring opinion in G.R. No. L-49, Peralta vs. Director of
Prisons (p. 355, ante), I dissent from the opinion of the majority herein. The writ of habeas
corpus sought by petitioner should be granted because the nullity of the judgment and proceedings
under which he has been imprisoned and restrained of his liberty. As stated in the majority opinion,
the sentence against him became final on September 122, 1944, and had been pronounced by the
Japanese-sponsored Court of Appeals of Northern Luzon upon appeal from a judgment of conviction
by the Japanese sponsored Court of First Instance of Ilocos Sur.

G.R. No. L-533 August 20, 1946

RAMON RUFFY, ET AL., petitioners,

vs.
THE CHIEF OF STAFF, PHILIPPINE ARMY, ET AL., respondents.

Placido C. Ramos for petitioners.

Lt. Col. Fred Ruiz Castro and Capt. Ramon V. Diaz, JAGS, PA., for respondents.

TUASON, J.:

This was a petition for prohibition, praying that the respondents, the Chief of Staff and the General
Court Martial of the Philippine Army, be commanded to desist from further proceedings in the trial of
petitioners before that body. Preliminary injunction having been denied by us and the General Court
Martial having gone ahead with the trial, which eventually resulted in the acquittal of one of the
defendants, Ramon Ruffy, the dismissal of the case as to another, Victoriano Dinglasan, and the
conviction of Jose L. Garcia, Prudente M. Francisco, Dominador Adeva and Andres Fortus, the last-
named four petitioners now seek in their memorandum to convert the petition into one for certiorari,
with the prayer that the records of the proceedings before the General Court Martial be ordered
certified to this court for review.

The ground of the petition was that the petitioners were not subject to military law at the time the
offense for which they had been placed on trial was committed. In their memorandum they have
raised an additional question of law — that the 93d Article of War is unconstitutional.

An outline of the petitioner's previous connection with the Philippine Army, the Philippine
Constabulary, and/or with guerrilla organizations will presently be made. This outline is based on
allegations in the petition and the answer, and on exhibits attached thereto and to the parties'
memoranda, exhibits which were offered in the course of the oral argument and admitted without
objection. The said exhibits are public documents certified by the officials who had them in custody
in their official capacity. They are presumed to be authentic, as we have no doubt they are.

It appears that at the outbreak of war on December 8, 1941, Ramon Ruffy was the Provincial
Commander, Prudente M. Francisco, a junior officer, and Andres Fortus, a corporal, all of the
Philippine Constabulary garrison stationed in Mindoro. When, on February 27, 1942, the Japanese
forces landed in Mindoro, Major Ruffy retreated to the mountains instead of surrendering to the
enemy, disbanded his company, and organized and led a guerrilla outfit known as Bolo Combat
team of Bolo Area. Lieutenant Francisco, Corporal Fortus and Jose L. Garcia, the last then a civilian
joined Major Ruffy's organization towards the latter part of 1942, while Dominador Adeva and
Victoriano Dinglasan, then likewise civilians, became its members some time in 1943..

Meanwhile, Brigadier General Macario Peralta, Jr., then a lieutenant colonel of the Philippine Army,
also took to the hills of Panay and led the operation of the 6th Military District, one of the districts into
which the Philippine Army had been divided before the war. About November, 1942, Colonel Peralta
succeeded in contacting the General Headquarters of General MacArthur in Australia as the result of
which on February 13, 1943, the 6th Military District was recognized by the Headquarters of the
Southwest Pacific Area as a military unit and part of its command.

Even before General MacArthur's recognition of the 6th Military District Colonel Peralta had
extended its sphere of operation to comprise Mindoro and Marinduque, and had, on January 2,
1943, named Major Ruffy as Acting Commander for those two provinces and Commanding Officer of
the 3rd Battalion, 66 Infantry 61st Division, Philippine Corps. After the recognition, 2d Lieut.
Prudente M. Francisco, by virtue of Special Orders No. 99, dated November 2, 1943, and signed by
Enrique L. Jurado, Major, OSE, Commanding, was assigned as S-3 in the Bolo Area. Major, later
Lieut. Col., Jurado, it should be noted, had been dispatched by the 6th Military District to Mindoro to
assume operational control supervision over the Bolo Area unit and to make and direct the
necessary report to the Headquarters, 6th Military District, in Panay. On April 26, 1944, by General
Orders No. 40 of the 6th Military District, 2d Lieutenant Francisco was promoted to the rank of 1st
Lieutenant (Brevet), effective April 15, 1944, subject to approval by the President of the Philippines,
and was re-assigned to the Bolo Area. As to Andres Fortus he was assigned to the same Bolo Area
as probationary 3d lieutenant for two-month probationary training, by the Headquarters of the 6th
Military District, as per Special Orders No. 70, dated May 15, 1944.

According to a memorandum of the Chief of Staff, 6th Military District, dated January 1943, and
signed by L.R. Relunia, Lieut. Col., CE, Chief of Staff, Jose L. Garcia and Dominador Adeva were
appointed 3d lieutenants, infantry as of December 31, 1942. Garcia later was promoted to the rank
of captain, effective March 15, 1943, as per Special Orders No. 82, issued in the field, 6th Military
District, and dated August 28, 1943. On May 24, 1943, Jose L. Garcia took his oath before Captain
Esteban P. Beloncio, then Acting Commanding Officer, 3d Battalion, 66th Infantry Regiment, 61st
Division, 6th Military District.

As has been said, the 6th Military District sent Lieut. Col. Enrique L. Jurado to be Commanding
Officer of the Bolo Combat Team in Mindoro and to undertake other missions of Military character.
Pursuant to instructions, Colonel Jurado on November 2, 1943, assigned Major Ruffy as
Commanding Officer of the Bolo Area with 3d Lieut. Dominador Adeva and 2d Lieut. Prudente M.
Francisco as members of his staff and Victoriano Dinglasan as Finance Officer, as per Special
Orders No. 99 dated November 2, 1943. In a memorandum of Colonel Jurado for Major Ruffy
bearing date 25 June, 1944, it was stated that Captain Garcia had been given P5,000 for palay and
Lieut. Francisco P9,000, P5,000 for palay and P4,000 for salary of the personnel B. Company.

A change in the command of the Bolo Area was effected by Colonel Jurado on June 8, 1944: Major
Ruffy was relieved of his assignment as Commanding Officer, Bolo Battalion, and Capt. Esteban P.
Beloncio was put in Ruffy's place. On October 19, 1944, Lieut. Col. Jurado was slain allegedly by the
petitioners. After the commission of this crime, the petitioners, it is alleged, seceded from the 6th
Military District. It was this murder which gave rise to petitioner's trial, the legality of which is now
being contested.

On July 26, 1941, the President of the Untied States issued a military order the pertinent paragraph
of which stated: ". . . as Commander in Chief of the Army and Navy of the United States, I hereby
call and order into the service of the armed forces of the United States Army, for the period of the
existing emergency, and place under the command of the general officer, United States Army, to be
designated by the Secretary of War, from time to time, all of the organized military forces of the
Government of the Commonwealth." Following the issuance of President Roosevelt's order General
Douglas MacArthur was appointed Commanding General of the United States Armed Forces in the
Far East.

It is contended, in behalf of Captain Francisco and Lieutenant Fortus, that "by the enemy occupation
of the Philippines, the National Defense Act and all laws and regulations creating and governing the
existence of the Philippine Army including the Articles of War, were suspended and in abeyance
during such belligerent occupation."

The paragraph quoted in the petitioner's memorandum from Winthrop's Military Law and Precedents
and the subsequent paragraph which has been omitted furnish a complete answer to petitioner's
contention of the Philippines by Japanese forces, the officers and men of the Philippine Army did not
cease to be fully in the service, though in a measure,' only in a measure, they were not subject to the
military jurisdiction, if they were not active duty. In the latter case, like officers and soldiers on leave
of absence or held as prisoners of war, they could not be held guilty of a breach of the discipline of
the command or of a neglect of duty, or disobedience of orders, or mutiny, or subject to a military
trial therefor; but for an act unbecoming an officer and a gentleman, or an act which constitutes an
offense of the class specified in the 95th Article of War, they may in general be legally held subject
to military jurisdiction and trial. "So a prisoner of war, though not subject, while held by the enemy, to
the discipline of his own army, would, when exchanged of paroled, be not exempt from liability for
such offenses as criminal acts or injuriuos conduct committed during his captivity against other
officers or soldiers in the same status." (Winthrop's Military Law and Precedents, 2d Edition, pp. 91,
92.)

The rule invoked by counsel, namely, that laws of political nature or affecting political relations are
considered superseded or in abeyance during the military occupation, is intended for the governing
of the civil inhabitants of the occupied territory. It is not intended for and does not bind the enemies
in arms. This is self-evident from the very nature of things. The paradox of a contrary ruling should
readily manifest itself. Under the petitioner's theory the forces of resistance operating in an occupied
territory would have to abide by the outlawing of their own existence. They would be stripped of the
very life-blood of an army, the right and the ability to maintain order and discipline within the
organization and to try the men guilty of breach thereof.

The surrender by General Wainright of the Fil-American Forces does not profit the petitioner's who
were former members of the Philippine Constabulary any more than does the rule of war or
international law they cite. The fall of Bataan and Corregidor did not end the war. It did not, legally or
otherwise, keep the United States and the Commonwealth of the Philippines from organizing a new
army, regular or irregular, out of new men and men in the old service who had refused to surrender
or who having surrendered, had decided to carry on the fight through other diverse means and
methods. The fall of Corregidor and Bataan just marked the beginning of the gigantic preparation for
the gigantic drive that was to fight its way to and beyond the Philippines in fulfillment of General
MacArthur's classic promise, "I shall return." The heroic role which the guerrillas played in that
preparation and in the subsequent liberation of the Philippines is now history.

Independently of their previous connection with the Philippine Army and the Philippine Constabulary,
Captain Francisco and Lieutenant Fortus as well as Major Garcia and Lieutenant Adeva were
subject to military jurisdiction.

The 2d Article of War defines and enumerates the persons subject to military law as follows:

Art. 2. Persons Subject to Military Law. — The following persons are subject to these articles
and shall be understood as included in the term "any person subject to military law" or
"persons subject to military law," whenever used in these articles:

(a) All officers, members of the Nurse Corps and soldiers belonging to the Regular Force of
the Philippine Army; all reservists, from the dates of their call to active duty and while on
such active duty; all trainees undergoing military instructions; and all other persons lawfully
called, drafted, or order to obey the same;

(b) Cadets, flying cadets, and probationary third lieutenants;

(c) All retainers to the camp and all persons accompanying or serving with the Army of the
Philippines in the field in time of war or when martial law is declared though not otherwise
subject to these articles;

(d) All persons under sentences adjudged by courts-martial.

It is our opinion that the petitioners come within the general application of the clause in sub-
paragraph (a); "and all other persons lawfully called, drafted, or ordered into, or to duty for training in,
the said service, from the dates they are required by the terms of the call, draft, or order to obey the
same." By their acceptance of appointments as officers in the Bolo Area from the General
Headquarters of the 6th Military District, they became members of the Philippine Army amendable to
the Articles of War. The Bolo Area, as has been seen, was a contigent of the 6th Military District
which, as has also been pointed out, had been recognized by and placed under the operational
control of the United States Army in the Southwest Pacific. The Bolo Area received supplies and
funds for the salaries of its officers and men from the Southwest Pacific Command. As officers in the
Bolo Area and the 6th Military District, the petitioners operated under the orders of duly established
and duly appointed commanders of the United States Army.
The attitude of the enemy toward underground movements did not affect the military status of
guerrillas who had been called into the service of the Philippine Army. If the invaders refused to look
upon guerrillas, without distinctions, as legitimate troops, that did not stop the guerillas who had
been inducted into the service of the Philippine Army from being component parts thereof, bound to
obey military status of guerrillas was to be judged not by the concept of the army of the country for
which they fought.

The constitutionality of the 93d Article of War is assailed. This article ordains "that any person
subject to military law who commits murder in time of was shall suffer death or imprisonment for life,
as the court martial may direct." It is argued that since "no review is provided by that law to be made
by the Supreme Court, irrespective of whether the punishment is for life imprisonment or death", it
violates Article VIII, section 2, paragraph 4, of the Constitution of the Philippines which provides that
"the National Assembly may not deprive the Supreme Court of its original jurisdiction over all criminal
cases in which the penalty imposed is death or life imprisonment."

We think the petitioners are in error. This error arose from failure to perceive the nature of courts
martial and the sources of the authority for their creation.

Courts martial are agencies of executive character, and one of the authorities "for the ordering of
courts martial has been held to be attached to the constitutional functions of the President as
Commander in Chief, independently of legislation." (Winthrop's Military Law and Precedents, 2d
Edition, p. 49.) Unlike courts of law, they are not a portion of the judiciary. "The Supreme Court of
the United States referring to the provisions of the Constitution authorizing Congress to provide for
the government of the army, excepting military offenses from the civil jurisdiction, and making the
President Commander in Chief, observes as follows: "These provisions show that Congress has the
power to provide for the trial and punishment of military and naval offenses in the manner then and
now practiced by civilized nations, and that the power to do so is given without any connection
between it and the 3d Article of the United States; indeed that the two powers are entirely
independent of each other."

"Not belonging to the judicial branch of the government, it follows that courts-martial must pertain to
the executive department; and they are in fact simply instrumentalities of the executive power,
provided by Congress for the President as Commander in Chief, to aid him in properly commanding
the army and navy and enforcing discipline therein, and utilized under his orders or those of his
authorized military representatives." (Winthrop's Military Law and Precedents, 2d Edition, p. 49.) Of
equal interest Clode, 2 M. F., 361, says of these courts in the British law: "It must never be lost sight
of that the only legitimate object of military tribunals is to aid the Crown to maintain the discipline and
government of the Army." (Footnote No. 24, p. 49, Winthrop's Military Law and Precedents, 2d
Edition.)

Our conclusion, therefore, is that the petition has no merit and that it should be dismissed with costs.
It is so ordered.

Moran, C.J., Paras, Feria, Pablo, Hilado, Bengzon, Briones and Padilla, JJ., concur.

Separate Opinions

PERFECTO, J., dissenting:

We agree with the rule that laws of political nature or affecting political relations are considered in
abeyance during enemy military occupation, although we maintain that the rule must be restricted to
laws which are exclusively political in nature. We agree with the theory that the rule is not intended
for and does not bind the enemies in arms, but we do not agree with the theory that the rule is
intended for the civil inhabitants of the occupied territory without exception. We are of opinion that
the rule does not apply to civil government of the occupied territory. Enemy occupation does not
relieve them from their sworn official duties. Government officers wield powers and enjoy privileges
denied to private citizens. The wielding of powers and enjoyment of privileges impose corresponding
responsibilities, and even dangers that must be faced during emergency.
The petitioners assailed the constitutionally of the 93rd Article of War, providing that "any person
subject to military law who commits murder in time of war shall suffer death or imprisonment for life,
as the court-martial may direct," because no review is provided by said law to be made by the
Supreme Court, irrespective of whether the punishment is for life imprisonment or death, such
omission being a violation of section 2 (4) , Article VIII, of the Constitution of the Philippines.

Petitioners are mistaken. The silence of the law as to the power of the Supreme Court to review the
decisions and proceedings of courts-martial, especially when the penalty imposed is death or life
imprisonment, should not be understood as negating such power, much more when it is recognized
and guaranteed by specific provisions of the fundamental law. At any rate, any doubt in interpreting
the silence of the law must be resolved in favor of a construction that will make the law
constitutional.

Furthermore, it may not be amiss to recall the fact that the National Assembly, in approving the
Articles of War (Commonwealth Act No. 408), had never intended to deny or diminish the power of
the Supreme Court to review, revise, reverse or modify final judgments and decrees of courts martial
created and organized under the Articles of War. On the contrary, it was clearly understood that the
decrees and the decisions of said courts-martial are subject to review by the Supreme Court. The
last Committee report on the Articles of War was rendered to the National Assembly by its
Committee on Third Reading, commonly known as the "Little Senate," which submitted the bill
printed in final form. As chairman of the committee and in behalf of the same, we submitted the
report recommending the approval of the bill on third reading with the express statement and
understanding that it would not deprive the Supreme Court of its constitutional revisionary power on
final judgments and decrees of courts-martial proposed to be created, which were and are to be
considered as part of the judicial system, being included in the denomination of inferior courts
mentioned in section 1, Article VIII, of the constitution. With the said statement and understanding,
the National Assembly, without any dissenting vote, approved the Articles of War as recommended
by the Committee on third Reading.

Consequently, petitioners' contention is untenable, the premise upon which they assailed the
constitutionality of the 93rd Article of War being groundless in view of the actuation of the national
Assembly.

The majority appear to concur in petitioners' premise that, by the silence of the Articles of War, the
Supreme Court is deprived of its constitutional power to review final decisions of courts-martial. The
majority even go as far as to justify the constitutionality of such deprivation on the theory that courts
martial belong, not to the judicial branch of the government, but to the executive department, citing
as authority therefor Winthrop's Military Law and Precedents. The majority are in error.

In our opinion in Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) and in Homma vs. Styer (L-244), we
have shown that this Supreme Court enjoys the power to revise the actuations and decisions of
military commissions, especially if they act without jurisdiction or violate the law, military
commissions being included within the denomination of inferior courts under the provisions of our
Constitution. Courts-martial are, likely military commissions, inferior courts. The fact that they are
military tribunals does not change their essence as veritable tribunals or courts of justice, as
agencies of the government in the administration of justice. Their functions are essentially judicial.
Except in cases where judicial functions are specifically entrusted by the Constitution to other
agencies — such as impeachment to Congress, legislative electoral contests to the Electoral
Tribunals — all judicial functions are vested in the Supreme Court and in such inferior courts as may
be established by law. Courts-martial are inferior courts established by law.

The majority's theory is based on an authority which has no bearing or application under the
Constitution of the Philippines. Winthrop's Military Law and Precedents has in mind the Constitution
of the United States of America, the provisions of which regarding the judicial department are
essentially different from those contained in our own Constitution.

Article III of the Constitution of the United States of America is as follows:

SECTION 1. The Judicial Power of the United States, shall be vested in one Supreme Court,
and in such inferior courts as the Congress may from time to time ordain and establish. The
Judges, both of the Supreme Court and Inferior Courts, shall hold their offices during good
behavior, and shall at stated times, received for their services, a compensation, which shall
not be diminished during their continuance in office.
 SEC. 2. The Judicial Power shall extend to all cases, in Law and Equity, arising under this
Constitution, the Laws of the United States, and Treaties made, or which shall be made,
under their authority; — to all cases affecting Ambassadors, other public Ministers and
Consuls; — to all cases of admirality and maritime jurisdiction; — to controversies to which
the United States shall be a party; — to controversies between two or more States; —
between a States and citizens of another State; — between citizens of another State; —
between citizens of different States, — between citizens of the same State claiming lands
under grants of different States, and between a State, or the citizens thereof, and foreign
States, citizens or subjects.

In all cases affecting Ambassadors, other public Ministers and Consuls, and those in which a
State shall be a party, the Supreme Court shall have original jurisdiction. In all the other
cases before mentioned, the Supreme Court shall have appellate jurisdiction, both as to law
and fact, with such exceptions, and under such regulations as the Congress shall make.

The trial of all crimes, except in cases of impeachment, shall be jury; and such trial shall be
held in the State where the said crimes shall have been committed; but when not committed
within any State, the trial shall be at such place or places as the Congress may by law have
directed.

SEC. 3. Treason against the United States, shall consist only in levying war against them, or
in adhering to their enemies, giving them aid and comfort. No person shall be convicted of
treason unless on the testimony of two witnesses to the same overt act, or on confession in
open court.

The Congress shall have power to declare the punishment of treason, but no attainder of
treason shall work corruption of blood, or forfeiture except during the life of the person
attached.

A comparison of the above provision with that of the Constitution of the Philippines will readily show
that the former does not have the negative provision contained in the latter to the effect that our
Supreme Court may not be deprived of certain specific judicial functions.

Section 2 of Articles VIII of our Constitution is as follows:

SEC. 2. The Congress shall have the power to define, prescribe, and apportion the
jurisdiction of the various courts, but may not deprive the Supreme Court of its original
jurisdiction over cases affecting ambassadors, other public ministers, and consuls, nor of its
jurisdiction to review, revise, reverse, modify of affirm on appeal, certiorari, or writ of error, as
the law or the rules of court may provide, final judgments and decrees of inferior courts in —

(1) All cases in which the constitutionality or validity of any treaty, law, ordinance, or
executive order or regulations is in question.

(2) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty
imposed in relation thereto.

(3) All cases in which the jurisdiction of any trial courts is in issue.

(4) All criminal cases in which the penalty imposed is death or life imprisonment.

(5) All cases in which an error or question of law is involved.

It is our considered opinion that the theory maintained in Winthrop's Military Law and Precedents
and in the decisions of the Supreme Court of the United States cited therein to the effect that the trial
and punishment of military and naval offenses by courts-martial are executive functions because the
only legitimate object of military tribunals "is to aid the Crown to maintain the discipline and
government of the Army," as applied in the Philippine, is basically wrong, being rooted in the English
monarchial ideology.

Military tribunals are tribunals whose functions are judicial in character and in nature. No amount of
logodaedaly may change the nature of such functions. The trial and punishment of offenses, whether
civil or military naval or aerial, since time immemorial, have always been considered as judicial
functions. The fact that such trial and punishment are entrusted to "tribunals or courts-martial" shows
the nuclear idea of the nature of the function. Tribunals and courts are the agencies employed by
government to administer justice.

The very fact that in this case the Supreme Court has given due course to the petition, required
respondents to answer, set the case for hearing and, in fact, heard it, instead of ordering the outright
dismissal of the petition as soon as it was filed, thus following the same procedure in
Reyes vs. Crisologo, (L-54, 41 Off. Gaz., 1096) and in Yamashita vs. Styer (supra), is a conclusive
evidence of the fact of that this Supreme Court has the jurisdiction and power to review the
proceedings and decision of military tribunals, such as courts-martials, military commissions, and
other similar bodies exercising judicial functions limited to military personnel.

It appearing that petitioners impugning the jurisdiction of the court-martial which has tried and
convicted them, we are of opinion that the petition must be granted in the sense that the records of
the court-martial in question should, be elevated to the Supreme Court for revision, so that we may
decide the question on the court-martial's jurisdiction and give petitioners the justice they are
claiming for.

A.M. No. 133-J May 31, 1982

BERNARDITA R. MACARIOLA, complainant,

vs.
HONORABLE ELIAS B. ASUNCION, Judge of the Court of First Instance of Leyte, respondent.

MAKASIAR, J:

In a verified complaint dated August 6, 1968 Bernardita R. Macariola charged respondent Judge
Elias B. Asuncion of the Court of First Instance of Leyte, now Associate Justice of the Court of
Appeals, with "acts unbecoming a judge."

The factual setting of the case is stated in the report dated May 27, 1971 of then Associate Justice
Cecilia Muñoz Palma of the Court of Appeals now retired Associate Justice of the Supreme Court, to
whom this case was referred on October 28, 1968 for investigation, thus:

Civil Case No. 3010 of the Court of First Instance of Leyte was a complaint for
partition filed by Sinforosa R. Bales, Luz R. Bakunawa, Anacorita Reyes, Ruperto
Reyes, Adela Reyes, and Priscilla Reyes, plaintiffs, against Bernardita R. Macariola,
defendant, concerning the properties left by the deceased Francisco Reyes, the
common father of the plaintiff and defendant.

In her defenses to the complaint for partition, Mrs. Macariola alleged among other
things that; a) plaintiff Sinforosa R. Bales was not a daughter of the deceased
Francisco Reyes; b) the only legal heirs of the deceased were defendant Macariola,
she being the only offspring of the first marriage of Francisco Reyes with Felisa
Espiras, and the remaining plaintiffs who were the children of the deceased by his
second marriage with Irene Ondez; c) the properties left by the deceased were all the
conjugal properties of the latter and his first wife, Felisa Espiras, and no properties
were acquired by the deceased during his second marriage; d) if there was any
partition to be made, those conjugal properties should first be partitioned into two
parts, and one part is to be adjudicated solely to defendant it being the share of the
latter's deceased mother, Felisa Espiras, and the other half which is the share of the
deceased Francisco Reyes was to be divided equally among his children by his two
marriages.

On June 8, 1963, a decision was rendered by respondent Judge Asuncion in Civil

Case 3010, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court,

upon a preponderance of evidence, finds and so holds, and hereby
renders judgment (1) Declaring the plaintiffs Luz R. Bakunawa,
Anacorita Reyes, Ruperto Reyes, Adela Reyes and Priscilla Reyes
 as the only children legitimated by the subsequent marriage of
Francisco Reyes Diaz to Irene Ondez; (2) Declaring the plaintiff
Sinforosa R. Bales to have been an illegitimate child of Francisco
Reyes Diaz; (3) Declaring Lots Nos. 4474, 4475, 4892, 5265, 4803,
4581, 4506 and 1/4 of Lot 1145 as belonging to the conjugal
partnership of the spouses Francisco Reyes Diaz and Felisa Espiras;
(4) Declaring Lot No. 2304 and 1/4 of Lot No. 3416 as belonging to
the spouses Francisco Reyes Diaz and Irene Ondez in common
partnership; (5) Declaring that 1/2 of Lot No. 1184 as belonging
exclusively to the deceased Francisco Reyes Diaz; (6) Declaring the
defendant Bernardita R. Macariola, being the only legal and forced
heir of her mother Felisa Espiras, as the exclusive owner of one-half
of each of Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506; and
the remaining one-half (1/2) of each of said Lots Nos. 4474, 4475,
4892, 5265, 4803, 4581, 4506 and one-half (1/2) of one-fourth (1/4)
of Lot No. 1154 as belonging to the estate of Francisco Reyes Diaz;
(7) Declaring Irene Ondez to be the exclusive owner of one-half (1/2)
of Lot No. 2304 and one-half (1/2) of one-fourth (1/4) of Lot No. 3416;
the remaining one-half (1/2) of Lot 2304 and the remaining one-half
(1/2) of one-fourth (1/4) of Lot No. 3416 as belonging to the estate of
Francisco Reyes Diaz; (8) Directing the division or partition of the
estate of Francisco Reyes Diaz in such a manner as to give or grant
to Irene Ondez, as surviving widow of Francisco Reyes Diaz, a
hereditary share of. one-twelfth (1/12) of the whole estate of
Francisco Reyes Diaz (Art. 996 in relation to Art. 892, par 2, New
Civil Code), and the remaining portion of the estate to be divided
among the plaintiffs Sinforosa R. Bales, Luz R. Bakunawa, Anacorita
Reyes, Ruperto Reyes, Adela Reyes, Priscilla Reyes and defendant
Bernardita R. Macariola, in such a way that the extent of the total
share of plaintiff Sinforosa R. Bales in the hereditary estate shall not
exceed the equivalent of two-fifth (2/5) of the total share of any or
each of the other plaintiffs and the defendant (Art. 983, New Civil
Code), each of the latter to receive equal shares from the hereditary
estate, (Ramirez vs. Bautista, 14 Phil. 528; Diancin vs. Bishop of
Jaro, O.G. [3rd Ed.] p. 33); (9) Directing the parties, within thirty days
after this judgment shall have become final to submit to this court, for
approval a project of partition of the hereditary estate in the
proportion above indicated, and in such manner as the parties may,
by agreement, deemed convenient and equitable to them taking into
consideration the location, kind, quality, nature and value of the
properties involved; (10) Directing the plaintiff Sinforosa R. Bales and
defendant Bernardita R. Macariola to pay the costs of this suit, in the
proportion of one-third (1/3) by the first named and two-thirds (2/3) by
the second named; and (I 1) Dismissing all other claims of the parties
[pp 27-29 of Exh. C].

The decision in civil case 3010 became final for lack of an appeal, and on October
16, 1963, a project of partition was submitted to Judge Asuncion which is marked
Exh. A. Notwithstanding the fact that the project of partition was not signed by the
parties themselves but only by the respective counsel of plaintiffs and defendant,
Judge Asuncion approved it in his Order dated October 23, 1963, which for
convenience is quoted hereunder in full:

The parties, through their respective counsels, presented to this

Court for approval the following project of partition:

COMES NOW, the plaintiffs and the defendant in the above-entitled

case, to this Honorable Court respectfully submit the following Project
of Partition:

l. The whole of Lots Nos. 1154, 2304 and 4506 shall belong
exclusively to Bernardita Reyes Macariola;
 2. A portion of Lot No. 3416 consisting of 2,373.49 square meters
along the eastern part of the lot shall be awarded likewise to
Bernardita R. Macariola;

3. Lots Nos. 4803, 4892 and 5265 shall be awarded to Sinforosa

Reyes Bales;

4. A portion of Lot No. 3416 consisting of 1,834.55 square meters

along the western part of the lot shall likewise be awarded to
Sinforosa Reyes-Bales;

5. Lots Nos. 4474 and 4475 shall be divided equally among Luz
Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes
and Priscilla Reyes in equal shares;

6. Lot No. 1184 and the remaining portion of Lot No. 3416 after taking
the portions awarded under item (2) and (4) above shall be awarded
to Luz Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela
Reyes and Priscilla Reyes in equal shares, provided, however that
the remaining portion of Lot No. 3416 shall belong exclusively to
Priscilla Reyes.

WHEREFORE, it is respectfully prayed that the Project of Partition

indicated above which is made in accordance with the decision of the
Honorable Court be approved.

Tacloban City, October 16, 1963.

(SGD) BONIFACIO RAMO Atty. for the Defendant Tacloban City

(SGD) ZOTICO A. TOLETE Atty. for the Plaintiff Tacloban City

While the Court thought it more desirable for all the parties to have
signed this Project of Partition, nevertheless, upon assurance of both
counsels of the respective parties to this Court that the Project of
Partition, as above- quoted, had been made after a conference and
agreement of the plaintiffs and the defendant approving the above
Project of Partition, and that both lawyers had represented to the
Court that they are given full authority to sign by themselves the
Project of Partition, the Court, therefore, finding the above-quoted
Project of Partition to be in accordance with law, hereby approves the
same. The parties, therefore, are directed to execute such papers,
documents or instrument sufficient in form and substance for the
vesting of the rights, interests and participations which were
adjudicated to the respective parties, as outlined in the Project of
Partition and the delivery of the respective properties adjudicated to
each one in view of said Project of Partition, and to perform such
other acts as are legal and necessary to effectuate the said Project of
Partition.

SO ORDERED.

Given in Tacloban City, this 23rd day of October, 1963.

(SGD) ELIAS B. ASUNCION Judge

EXH. B.

The above Order of October 23, 1963, was amended on November 11, 1963, only
for the purpose of giving authority to the Register of Deeds of the Province of Leyte
to issue the corresponding transfer certificates of title to the respective adjudicatees
in conformity with the project of partition (see Exh. U).
 One of the properties mentioned in the project of partition was Lot 1184 or rather
one-half thereof with an area of 15,162.5 sq. meters. This lot, which according to the
decision was the exclusive property of the deceased Francisco Reyes, was
adjudicated in said project of partition to the plaintiffs Luz, Anacorita Ruperto, Adela,
and Priscilla all surnamed Reyes in equal shares, and when the project of partition
was approved by the trial court the adjudicatees caused Lot 1184 to be subdivided
into five lots denominated as Lot 1184-A to 1184-E inclusive (Exh. V).

Lot 1184-D was conveyed to Enriqueta D. Anota, a stenographer in Judge

Asuncion's court (Exhs. F, F-1 and V-1), while Lot 1184-E which had an area of
2,172.5556 sq. meters was sold on July 31, 1964 to Dr. Arcadio Galapon (Exh. 2)
who was issued transfer certificate of title No. 2338 of the Register of Deeds of the
city of Tacloban (Exh. 12).

On March 6, 1965, Dr. Arcadio Galapon and his wife Sold a portion of Lot 1184-E
with an area of around 1,306 sq. meters to Judge Asuncion and his wife, Victoria S.
Asuncion (Exh. 11), which particular portion was declared by the latter for taxation
purposes (Exh. F).

On August 31, 1966, spouses Asuncion and spouses Galapon conveyed their
respective shares and interest in Lot 1184-E to "The Traders Manufacturing and
Fishing Industries Inc." (Exit 15 & 16). At the time of said sale the stockholders of the
corporation were Dominador Arigpa Tan, Humilia Jalandoni Tan, Jaime Arigpa Tan,
Judge Asuncion, and the latter's wife, Victoria S. Asuncion, with Judge Asuncion as
the President and Mrs. Asuncion as the secretary (Exhs. E-4 to E-7). The Articles of
Incorporation of "The Traders Manufacturing and Fishing Industries, Inc." which we
shall henceforth refer to as "TRADERS" were registered with the Securities and
Exchange Commission only on January 9, 1967 (Exh. E) [pp. 378-385, rec.].

Complainant Bernardita R. Macariola filed on August 9, 1968 the instant complaint dated August 6,
1968 alleging four causes of action, to wit: [1] that respondent Judge Asuncion violated Article 1491,
paragraph 5, of the New Civil Code in acquiring by purchase a portion of Lot No. 1184-E which was
one of those properties involved in Civil Case No. 3010 decided by him; [2] that he likewise violated
Article 14, paragraphs I and 5 of the Code of Commerce, Section 3, paragraph H, of R.A. 3019,
otherwise known as the Anti-Graft and Corrupt Practices Act, Section 12, Rule XVIII of the Civil
Service Rules, and Canon 25 of the Canons of Judicial Ethics, by associating himself with the
Traders Manufacturing and Fishing Industries, Inc., as a stockholder and a ranking officer while he
was a judge of the Court of First Instance of Leyte; [3] that respondent was guilty of coddling an
impostor and acted in disregard of judicial decorum by closely fraternizing with a certain Dominador
Arigpa Tan who openly and publicly advertised himself as a practising attorney when in truth and in
fact his name does not appear in the Rolls of Attorneys and is not a member of the Philippine Bar;
and [4] that there was a culpable defiance of the law and utter disregard for ethics by respondent
Judge (pp. 1-7, rec.).

Respondent Judge Asuncion filed on September 24, 1968 his answer to which a reply was filed on
October 16, 1968 by herein complainant. In Our resolution of October 28, 1968, We referred this
case to then Justice Cecilia Muñoz Palma of the Court of Appeals, for investigation, report and
recommendation. After hearing, the said Investigating Justice submitted her report dated May 27,
1971 recommending that respondent Judge should be reprimanded or warned in connection with the
first cause of action alleged in the complaint, and for the second cause of action, respondent should
be warned in case of a finding that he is prohibited under the law to engage in business. On the third
and fourth causes of action, Justice Palma recommended that respondent Judge be exonerated.

The records also reveal that on or about November 9 or 11, 1968 (pp. 481, 477, rec.), complainant
herein instituted an action before the Court of First Instance of Leyte, entitled "Bernardita R.
Macariola, plaintiff, versus Sinforosa R. Bales, et al., defendants," which was docketed as Civil Case
No. 4235, seeking the annulment of the project of partition made pursuant to the decision in Civil
Case No. 3010 and the two orders issued by respondent Judge approving the same, as well as the
partition of the estate and the subsequent conveyances with damages. It appears, however, that
some defendants were dropped from the civil case. For one, the case against Dr. Arcadio Galapon
was dismissed because he was no longer a real party in interest when Civil Case No. 4234 was
filed, having already conveyed on March 6, 1965 a portion of lot 1184-E to respondent Judge and on
August 31, 1966 the remainder was sold to the Traders Manufacturing and Fishing Industries, Inc.
Similarly, the case against defendant Victoria Asuncion was dismissed on the ground that she was
no longer a real party in interest at the time the aforesaid Civil Case No. 4234 was filed as the
portion of Lot 1184 acquired by her and respondent Judge from Dr. Arcadio Galapon was already
sold on August 31, 1966 to the Traders Manufacturing and Fishing industries, Inc. Likewise, the
cases against defendants Serafin P. Ramento, Catalina Cabus, Ben Barraza Go, Jesus Perez,
Traders Manufacturing and Fishing Industries, Inc., Alfredo R. Celestial and Pilar P. Celestial,
Leopoldo Petilla and Remedios Petilla, Salvador Anota and Enriqueta Anota and Atty. Zotico A.
Tolete were dismissed with the conformity of complainant herein, plaintiff therein, and her counsel.

On November 2, 1970, Judge Jose D. Nepomuceno of the Court of First Instance of Leyte, who was
directed and authorized on June 2, 1969 by the then Secretary (now Minister) of Justice and now
Minister of National Defense Juan Ponce Enrile to hear and decide Civil Case No. 4234, rendered a
decision, the dispositive portion of which reads as follows:

A. IN THE CASE AGAINST JUDGE ELIAS B. ASUNCION

(1) declaring that only Branch IV of the Court of First Instance of Leyte has
jurisdiction to take cognizance of the issue of the legality and validity of the Project of
Partition [Exhibit "B"] and the two Orders [Exhibits "C" and "C- 3"] approving the
partition;

(2) dismissing the complaint against Judge Elias B. Asuncion;

(3) adjudging the plaintiff, Mrs. Bernardita R. Macariola to pay defendant Judge Elias
B. Asuncion,

(a) the sum of FOUR HUNDRED THOUSAND PESOS [P400,000.00]

for moral damages;

(b) the sum of TWO HUNDRED THOUSAND PESOS [P200,000.001

for exemplary damages;

(c) the sum of FIFTY THOUSAND PESOS [P50,000.00] for nominal

damages; and

(d) he sum of TEN THOUSAND PESOS [PI0,000.00] for Attorney's

Fees.

B. IN THE CASE AGAINST THE DEFENDANT MARIQUITA

VILLASIN, FOR HERSELF AND FOR THE HEIRS OF THE
DECEASED GERARDO VILLASIN —

(1) Dismissing the complaint against the defendants Mariquita Villasin and the heirs
of the deceased Gerardo Villasin;

(2) Directing the plaintiff to pay the defendants Mariquita Villasin and the heirs of
Gerardo Villasin the cost of the suit.

C. IN THE CASE AGAINST THE DEFENDANT SINFOROSA R.

BALES, ET AL., WHO WERE PLAINTIFFS IN CIVIL CASE NO. 3010
—

(1) Dismissing the complaint against defendants Sinforosa R. Bales, Adela R. Herrer,
Priscilla R. Solis, Luz R. Bakunawa, Anacorita R. Eng and Ruperto O. Reyes.

D. IN THE CASE AGAINST DEFENDANT BONIFACIO RAMO —

(1) Dismissing the complaint against Bonifacio Ramo;

(2) Directing the plaintiff to pay the defendant Bonifacio Ramo the cost of the suit.

SO ORDERED [pp. 531-533, rec.]

It is further disclosed by the record that the aforesaid decision was elevated to the Court of Appeals
upon perfection of the appeal on February 22, 1971.

WE find that there is no merit in the contention of complainant Bernardita R. Macariola, under her
first cause of action, that respondent Judge Elias B. Asuncion violated Article 1491, paragraph 5, of
the New Civil Code in acquiring by purchase a portion of Lot No. 1184-E which was one of those
properties involved in Civil Case No. 3010. 'That Article provides:

Article 1491. The following persons cannot acquire by purchase, even at a public or
judicial action, either in person or through the mediation of another:

xxx xxx xxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other officers and employees connected with the administration of justice, the
property and rights in litigation or levied upon an execution before the court within
whose jurisdiction or territory they exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall apply to lawyers, with respect
to the property and rights which may be the object of any litigation in which they may
take part by virtue of their profession [emphasis supplied].

The prohibition in the aforesaid Article applies only to the sale or assignment of the property which is
the subject of litigation to the persons disqualified therein. WE have already ruled that "... for the
prohibition to operate, the sale or assignment of the property must take place during the pendency of
the litigation involving the property" (The Director of Lands vs. Ababa et al., 88 SCRA 513, 519
[1979], Rosario vda. de Laig vs. Court of Appeals, 86 SCRA 641, 646 [1978]).

In the case at bar, when the respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E,
the decision in Civil Case No. 3010 which he rendered on June 8, 1963 was already final because
none of the parties therein filed an appeal within the reglementary period; hence, the lot in question
was no longer subject of the litigation. Moreover, at the time of the sale on March 6, 1965,
respondent's order dated October 23, 1963 and the amended order dated November 11,
1963 approving the October 16, 1963 project of partition made pursuant to the June 8, 1963
decision, had long become final for there was no appeal from said orders.

Furthermore, respondent Judge did not buy the lot in question on March 6, 1965 directly from the
plaintiffs in Civil Case No. 3010 but from Dr. Arcadio Galapon who earlier purchased on July 31,
1964 Lot 1184-E from three of the plaintiffs, namely, Priscilla Reyes, Adela Reyes, and Luz R.
Bakunawa after the finality of the decision in Civil Case No. 3010. It may be recalled that Lot 1184 or
more specifically one-half thereof was adjudicated in equal shares to Priscilla Reyes, Adela Reyes,
Luz Bakunawa, Ruperto Reyes and Anacorita Reyes in the project of partition, and the same was
subdivided into five lots denominated as Lot 1184-A to 1184-E. As aforestated, Lot 1184-E was sold
on July 31, 1964 to Dr. Galapon for which he was issued TCT No. 2338 by the Register of Deeds of
Tacloban City, and on March 6, 1965 he sold a portion of said lot to respondent Judge and his wife
who declared the same for taxation purposes only. The subsequent sale on August 31, 1966 by
spouses Asuncion and spouses Galapon of their respective shares and interest in said Lot 1184-E to
the Traders Manufacturing and Fishing Industries, Inc., in which respondent was the president and
his wife was the secretary, took place long after the finality of the decision in Civil Case No. 3010
and of the subsequent two aforesaid orders therein approving the project of partition.

While it appears that complainant herein filed on or about November 9 or 11, 1968 an action before
the Court of First Instance of Leyte docketed as Civil Case No. 4234, seeking to annul the project of
partition and the two orders approving the same, as well as the partition of the estate and the
subsequent conveyances, the same, however, is of no moment.

The fact remains that respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E from
Dr. Arcadio Galapon; hence, after the finality of the decision which he rendered on June 8, 1963 in
Civil Case No. 3010 and his two questioned orders dated October 23, 1963 and November 11, 1963.
Therefore, the property was no longer subject of litigation.
The subsequent filing on November 9, or 11, 1968 of Civil Case No. 4234 can no longer alter,
change or affect the aforesaid facts — that the questioned sale to respondent Judge, now Court of
Appeals Justice, was effected and consummated long after the finality of the aforesaid decision or
orders.

Consequently, the sale of a portion of Lot 1184-E to respondent Judge having taken place over one
year after the finality of the decision in Civil Case No. 3010 as well as the two orders approving the
project of partition, and not during the pendency of the litigation, there was no violation of paragraph
5, Article 1491 of the New Civil Code.

It is also argued by complainant herein that the sale on July 31, 1964 of Lot 1184-E to Dr. Arcadio
Galapon by Priscilla Reyes, Adela Reyes and Luz R. Bakunawa was only a mere scheme to conceal
the illegal and unethical transfer of said lot to respondent Judge as a consideration for the approval
of the project of partition. In this connection, We agree with the findings of the Investigating Justice
thus:

And so we are now confronted with this all-important question whether or not the
acquisition by respondent of a portion of Lot 1184-E and the subsequent transfer of
the whole lot to "TRADERS" of which respondent was the President and his wife the
Secretary, was intimately related to the Order of respondent approving the project of
partition, Exh. A.

Respondent vehemently denies any interest or participation in the transactions

between the Reyeses and the Galapons concerning Lot 1184-E, and he insists that
there is no evidence whatsoever to show that Dr. Galapon had acted, in the
purchase of Lot 1184-E, in mediation for him and his wife. (See p. 14 of
Respondent's Memorandum).

xxx xxx xxx

On this point, I agree with respondent that there is no evidence in the record showing
that Dr. Arcadio Galapon acted as a mere "dummy" of respondent in acquiring Lot
1184-E from the Reyeses. Dr. Galapon appeared to this investigator as a
respectable citizen, credible and sincere, and I believe him when he testified that he
bought Lot 1184-E in good faith and for valuable consideration from the Reyeses
without any intervention of, or previous understanding with Judge Asuncion (pp. 391-
394, rec.).

On the contention of complainant herein that respondent Judge acted illegally in approving the
project of partition although it was not signed by the parties, We quote with approval the findings of
the Investigating Justice, as follows:

1. I agree with complainant that respondent should have required the signature of the
parties more particularly that of Mrs. Macariola on the project of partition submitted to
him for approval; however, whatever error was committed by respondent in that
respect was done in good faith as according to Judge Asuncion he was assured by
Atty. Bonifacio Ramo, the counsel of record of Mrs. Macariola, That he was
authorized by his client to submit said project of partition, (See Exh. B and tsn p. 24,
January 20, 1969). While it is true that such written authority if there was any, was
not presented by respondent in evidence, nor did Atty. Ramo appear to corroborate
the statement of respondent, his affidavit being the only one that was presented as
respondent's Exh. 10, certain actuations of Mrs. Macariola lead this investigator to
believe that she knew the contents of the project of partition, Exh. A, and that she
gave her conformity thereto. I refer to the following documents:

1) Exh. 9 — Certified true copy of OCT No. 19520 covering Lot 1154 of the Tacloban
Cadastral Survey in which the deceased Francisco Reyes holds a "1/4 share" (Exh.
9-a). On tills certificate of title the Order dated November 11, 1963, (Exh. U)
approving the project of partition was duly entered and registered on November 26,
1963 (Exh. 9-D);

2) Exh. 7 — Certified copy of a deed of absolute sale executed by Bernardita Reyes

Macariola on October 22, 1963, conveying to Dr. Hector Decena the one-fourth
share of the late Francisco Reyes-Diaz in Lot 1154. In this deed of sale the vendee
 stated that she was the absolute owner of said one-fourth share, the same having
been adjudicated to her as her share in the estate of her father Francisco Reyes Diaz
as per decision of the Court of First Instance of Leyte under case No. 3010 (Exh. 7-
A). The deed of sale was duly registered and annotated at the back of OCT 19520 on
December 3, 1963 (see Exh. 9-e).

In connection with the abovementioned documents it is to be noted that in the project

of partition dated October 16, 1963, which was approved by respondent on October
23, 1963, followed by an amending Order on November 11, 1963, Lot 1154 or rather
1/4 thereof was adjudicated to Mrs. Macariola. It is this 1/4 share in Lot 1154 which
complainant sold to Dr. Decena on October 22, 1963, several days after the
preparation of the project of partition.

Counsel for complainant stresses the view, however, that the latter sold her one-
fourth share in Lot 1154 by virtue of the decision in Civil Case 3010 and not because
of the project of partition, Exh. A. Such contention is absurd because from the
decision, Exh. C, it is clear that one-half of one- fourth of Lot 1154 belonged to the
estate of Francisco Reyes Diaz while the other half of said one-fourth was the share
of complainant's mother, Felisa Espiras; in other words, the decision did not
adjudicate the whole of the one-fourth of Lot 1154 to the herein complainant (see
Exhs. C-3 & C-4). Complainant became the owner of the entire one-fourth of Lot
1154 only by means of the project of partition, Exh. A. Therefore, if Mrs. Macariola
sold Lot 1154 on October 22, 1963, it was for no other reason than that she was wen
aware of the distribution of the properties of her deceased father as per Exhs. A and
B. It is also significant at this point to state that Mrs. Macariola admitted during the
cross-examination that she went to Tacloban City in connection with the sale of Lot
1154 to Dr. Decena (tsn p. 92, November 28, 1968) from which we can deduce that
she could not have been kept ignorant of the proceedings in civil case 3010 relative
to the project of partition.

Complainant also assails the project of partition because according to her the
properties adjudicated to her were insignificant lots and the least valuable.
Complainant, however, did not present any direct and positive evidence to prove the
alleged gross inequalities in the choice and distribution of the real properties when
she could have easily done so by presenting evidence on the area, location, kind, the
assessed and market value of said properties. Without such evidence there is
nothing in the record to show that there were inequalities in the distribution of the
properties of complainant's father (pp. 386389, rec.).

Finally, while it is. true that respondent Judge did not violate paragraph 5, Article 1491 of the New
Civil Code in acquiring by purchase a portion of Lot 1184-E which was in litigation in his court, it was,
however, improper for him to have acquired the same. He should be reminded of Canon 3 of the
Canons of Judicial Ethics which requires that: "A judge's official conduct should be free from the
appearance of impropriety, and his personal behavior, not only upon the bench and in the
performance of judicial duties, but also in his everyday life, should be beyond reproach." And as
aptly observed by the Investigating Justice: "... it was unwise and indiscreet on the part of
respondent to have purchased or acquired a portion of a piece of property that was or had been in
litigation in his court and caused it to be transferred to a corporation of which he and his wife were
ranking officers at the time of such transfer. One who occupies an exalted position in the judiciary
has the duty and responsibility of maintaining the faith and trust of the citizenry in the courts of
justice, so that not only must he be truly honest and just, but his actuations must be such as not give
cause for doubt and mistrust in the uprightness of his administration of justice. In this particular case
of respondent, he cannot deny that the transactions over Lot 1184-E are damaging and render his
actuations open to suspicion and distrust. Even if respondent honestly believed that Lot 1184-E was
no longer in litigation in his court and that he was purchasing it from a third person and not from the
parties to the litigation, he should nonetheless have refrained from buying it for himself and
transferring it to a corporation in which he and his wife were financially involved, to avoid possible
suspicion that his acquisition was related in one way or another to his official actuations in civil case
3010. The conduct of respondent gave cause for the litigants in civil case 3010, the lawyers
practising in his court, and the public in general to doubt the honesty and fairness of his actuations
and the integrity of our courts of justice" (pp. 395396, rec.).

II
With respect to the second cause of action, the complainant alleged that respondent Judge violated
paragraphs 1 and 5, Article 14 of the Code of Commerce when he associated himself with the
Traders Manufacturing and Fishing Industries, Inc. as a stockholder and a ranking officer, said
corporation having been organized to engage in business. Said Article provides that:

Article 14 — The following cannot engage in commerce, either in person or by proxy,

nor can they hold any office or have any direct, administrative, or financial
intervention in commercial or industrial companies within the limits of the districts,
provinces, or towns in which they discharge their duties:

1. Justices of the Supreme Court, judges and officials of the department of public
prosecution in active service. This provision shall not be applicable to mayors,
municipal judges, and municipal prosecuting attorneys nor to those who by chance
are temporarily discharging the functions of judge or prosecuting attorney.

xxx xxx xxx

5. Those who by virtue of laws or special provisions may not engage in commerce in
a determinate territory.

It is Our considered view that although the aforestated provision is incorporated in the Code of
Commerce which is part of the commercial laws of the Philippines, it, however, partakes of the
nature of a political law as it regulates the relationship between the government and certain public
officers and employees, like justices and judges.

Political Law has been defined as that branch of public law which deals with the organization and
operation of the governmental organs of the State and define the relations of the state with the
inhabitants of its territory (People vs. Perfecto, 43 Phil. 887, 897 [1922]). It may be recalled that
political law embraces constitutional law, law of public corporations, administrative law including the
law on public officers and elections. Specifically, Article 14 of the Code of Commerce partakes more
of the nature of an administrative law because it regulates the conduct of certain public officers and
employees with respect to engaging in business: hence, political in essence.

It is significant to note that the present Code of Commerce is the Spanish Code of Commerce of
1885, with some modifications made by the "Commission de Codificacion de las Provincias de
Ultramar," which was extended to the Philippines by the Royal Decree of August 6, 1888, and took
effect as law in this jurisdiction on December 1, 1888.

Upon the transfer of sovereignty from Spain to the United States and later on from the United States
to the Republic of the Philippines, Article 14 of this Code of Commerce must be deemed to have
been abrogated because where there is change of sovereignty, the political laws of the former
sovereign, whether compatible or not with those of the new sovereign, are automatically abrogated,
unless they are expressly re-enacted by affirmative act of the new sovereign.

Thus, We held in Roa vs. Collector of Customs (23 Phil. 315, 330, 311 [1912]) that:

By well-settled public law, upon the cession of territory by one nation to another,
either following a conquest or otherwise, ... those laws which are political in their
nature and pertain to the prerogatives of the former government immediately cease
upon the transfer of sovereignty. (Opinion, Atty. Gen., July 10, 1899).

While municipal laws of the newly acquired territory not in conflict with the, laws of
the new sovereign continue in force without the express assent or affirmative act of
the conqueror, the political laws do not. (Halleck's Int. Law, chap. 34, par. 14).
However, such political laws of the prior sovereignty as are not in conflict with the
constitution or institutions of the new sovereign, may be continued in force if the
conqueror shall so declare by affirmative act of the commander-in-chief during the
war, or by Congress in time of peace. (Ely's Administrator vs. United States, 171 U.S.
220, 43 L. Ed. 142). In the case of American and Ocean Ins. Cos. vs. 356 Bales of
Cotton (1 Pet. [26 U.S.] 511, 542, 7 L. Ed. 242), Chief Justice Marshall said:

On such transfer (by cession) of territory, it has never been held that
the relations of the inhabitants with each other undergo any change.
 Their relations with their former sovereign are dissolved, and new
relations are created between them and the government which has
acquired their territory. The same act which transfers their country,
transfers the allegiance of those who remain in it; and the law which
may be denominated political, is necessarily changed, although that
which regulates the intercourse and general conduct of individuals,
remains in force, until altered by the newly- created power of the
State.

Likewise, in People vs. Perfecto (43 Phil. 887, 897 [1922]), this Court stated that: "It is a general
principle of the public law that on acquisition of territory the previous political relations of the ceded
region are totally abrogated. "

There appears no enabling or affirmative act that continued the effectivity of the aforestated
provision of the Code of Commerce after the change of sovereignty from Spain to the United States
and then to the Republic of the Philippines. Consequently, Article 14 of the Code of Commerce has
no legal and binding effect and cannot apply to the respondent, then Judge of the Court of First
Instance, now Associate Justice of the Court of Appeals.

It is also argued by complainant herein that respondent Judge violated paragraph H, Section 3 of
Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, which provides
that:

Sec. 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:

xxx xxx xxx

(h) Directly or indirectly having financial 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 Iaw from having any interest.

Respondent Judge cannot be held liable under the aforestated paragraph because there is no
showing that respondent participated or intervened in his official capacity in the business or
transactions of the Traders Manufacturing and Fishing Industries, Inc. In the case at bar, the
business of the corporation in which respondent participated has obviously no relation or connection
with his judicial office. The business of said corporation is not that kind where respondent intervenes
or takes part in his capacity as Judge of the Court of First Instance. As was held in one case
involving the application of Article 216 of the Revised Penal Code which has a similar prohibition on
public officers against directly or indirectly becoming interested in any contract or business in which
it is his official duty to intervene, "(I)t is not enough to be a public official to be subject to this crime; it
is necessary that by reason of his office, he has to intervene in said contracts or transactions; and,
hence, the official who intervenes in contracts or transactions which have no relation to his office
cannot commit this crime.' (People vs. Meneses, C.A. 40 O.G. 11th Supp. 134, cited by Justice
Ramon C. Aquino; Revised Penal Code, p. 1174, Vol. 11 [1976]).

It does not appear also from the records that the aforesaid corporation gained any undue advantage
in its business operations by reason of respondent's financial involvement in it, or that the
corporation benefited in one way or another in any case filed by or against it in court. It is undisputed
that there was no case filed in the different branches of the Court of First Instance of Leyte in which
the corporation was either party plaintiff or defendant except Civil Case No. 4234 entitled "Bernardita
R. Macariola, plaintiff, versus Sinforosa O. Bales, et al.," wherein the complainant herein sought to
recover Lot 1184-E from the aforesaid corporation. It must be noted, however, that Civil Case No.
4234 was filed only on November 9 or 11, 1968 and decided on November 2, 1970 by CFI Judge
Jose D. Nepomuceno when respondent Judge was no longer connected with the corporation, having
disposed of his interest therein on January 31, 1967.

Furthermore, respondent is not liable under the same paragraph because there is no provision in
both the 1935 and 1973 Constitutions of the Philippines, nor is there an existing law expressly
prohibiting members of the Judiciary from engaging or having interest in any lawful business.
It may be pointed out that Republic Act No. 296, as amended, also known as the Judiciary Act of
1948, does not contain any prohibition to that effect. As a matter of fact, under Section 77 of said
law, municipal judges may engage in teaching or other vocation not involving the practice of law
after office hours but with the permission of the district judge concerned.

Likewise, Article 14 of the Code of Commerce which prohibits judges from engaging in commerce is,
as heretofore stated, deemed abrogated automatically upon the transfer of sovereignty from Spain to
America, because it is political in nature.

Moreover, the prohibition in paragraph 5, Article 1491 of the New Civil Code against the purchase by
judges of a property in litigation before the court within whose jurisdiction they perform their duties,
cannot apply to respondent Judge because the sale of the lot in question to him took place after the
finality of his decision in Civil Case No. 3010 as well as his two orders approving the project of
partition; hence, the property was no longer subject of litigation.

In addition, although Section 12, Rule XVIII of the Civil Service Rules made pursuant to the Civil
Service Act of 1959 prohibits an officer or employee in the civil service from engaging in any private
business, vocation, or profession or be connected with any commercial, credit, agricultural or
industrial undertaking without a written permission from the head of department, the same, however,
may not fall within the purview of paragraph h, Section 3 of the Anti-Graft and Corrupt Practices Act
because the last portion of said paragraph speaks of a prohibition by the Constitution or law on any
public officer from having any interest in any business and not by a mere administrative rule or
regulation. Thus, a violation of the aforesaid rule by any officer or employee in the civil service, that
is, engaging in private business without a written permission from the Department Head may not
constitute graft and corrupt practice as defined by law.

On the contention of complainant that respondent Judge violated Section 12, Rule XVIII of the Civil
Service Rules, We hold that the Civil Service Act of 1959 (R.A. No. 2260) and the Civil Service
Rules promulgated thereunder, particularly Section 12 of Rule XVIII, do not apply to the members of
the Judiciary. Under said Section 12: "No officer or employee shall engage directly in any private
business, vocation, or profession or be connected with any commercial, credit, agricultural or
industrial undertaking without a written permission from the Head of Department ..."

It must be emphasized at the outset that respondent, being a member of the Judiciary, is covered by
Republic Act No. 296, as amended, otherwise known as the Judiciary Act of 1948 and by Section 7,
Article X, 1973 Constitution.

Under Section 67 of said law, the power to remove or dismiss judges was then vested in the
President of the Philippines, not in the Commissioner of Civil Service, and only on two grounds,
namely, serious misconduct and inefficiency, and upon the recommendation of the Supreme Court,
which alone is authorized, upon its own motion, or upon information of the Secretary (now Minister)
of Justice to conduct the corresponding investigation. Clearly, the aforesaid section defines the
grounds and prescribes the special procedure for the discipline of judges.

And under Sections 5, 6 and 7, Article X of the 1973 Constitution, only the Supreme Court can
discipline judges of inferior courts as well as other personnel of the Judiciary.

It is true that under Section 33 of the Civil Service Act of 1959: "The Commissioner may, for ...
violation of the existing Civil Service Law and rules or of reasonable office regulations, or in the
interest of the service, remove any subordinate officer or employee from the service, demote him in
rank, suspend him for not more than one year without pay or fine him in an amount not exceeding
six months' salary." Thus, a violation of Section 12 of Rule XVIII is a ground for disciplinary action
against civil service officers and employees.

However, judges cannot be considered as subordinate civil service officers or employees subject to
the disciplinary authority of the Commissioner of Civil Service; for, certainly, the Commissioner is not
the head of the Judicial Department to which they belong. The Revised Administrative Code (Section
89) and the Civil Service Law itself state that the Chief Justice is the department head of the
Supreme Court (Sec. 20, R.A. No. 2260) [1959]); and under the 1973 Constitution, the Judiciary is
the only other or second branch of the government (Sec. 1, Art. X, 1973 Constitution). Besides, a
violation of Section 12, Rule XVIII cannot be considered as a ground for disciplinary action against
judges because to recognize the same as applicable to them, would be adding another ground for
the discipline of judges and, as aforestated, Section 67 of the Judiciary Act recognizes only two
grounds for their removal, namely, serious misconduct and inefficiency.
Moreover, under Section 16(i) of the Civil Service Act of 1959, it is the Commissioner of Civil Service
who has original and exclusive jurisdiction "(T)o decide, within one hundred twenty days, after
submission to it, all administrative cases against permanent officers and employees in the
competitive service, and, except as provided by law, to have final authority to pass upon their
removal, separation, and suspension and upon all matters relating to the conduct, discipline, and
efficiency of such officers and employees; and prescribe standards, guidelines and regulations
governing the administration of discipline" (emphasis supplied). There is no question that a judge
belong to the non-competitive or unclassified service of the government as a Presidential appointee
and is therefore not covered by the aforesaid provision. WE have already ruled that "... in interpreting
Section 16(i) of Republic Act No. 2260, we emphasized that only permanent officers and employees
who belong to the classified service come under the exclusive jurisdiction of the Commissioner of
Civil Service" (Villaluz vs. Zaldivar, 15 SCRA 710,713 [1965], Ang-Angco vs. Castillo, 9 SCRA 619
[1963]).

Although the actuation of respondent Judge in engaging in private business by joining the Traders
Manufacturing and Fishing Industries, Inc. as a stockholder and a ranking officer, is not violative of
the provissions of Article 14 of the Code of Commerce and Section 3(h) of the Anti-Graft and Corrupt
Practices Act as well as Section 12, Rule XVIII of the Civil Service Rules promulgated pursuant to
the Civil Service Act of 1959, the impropriety of the same is clearly unquestionable because Canon
25 of the Canons of Judicial Ethics expressly declares that:

A judge should abstain from making personal investments in enterprises which are
apt to be involved in litigation in his court; and, after his accession to the bench, he
should not retain such investments previously made, longer than a period sufficient
to enable him to dispose of them without serious loss. It is desirable that he should,
so far as reasonably possible, refrain from all relations which would normally tend to
arouse the suspicion that such relations warp or bias his judgment, or prevent his
impartial attitude of mind in the administration of his judicial duties. ...

WE are not, however, unmindful of the fact that respondent Judge and his wife had withdrawn on
January 31, 1967 from the aforesaid corporation and sold their respective shares to third parties,
and it appears also that the aforesaid corporation did not in anyway benefit in any case filed by or
against it in court as there was no case filed in the different branches of the Court of First Instance of
Leyte from the time of the drafting of the Articles of Incorporation of the corporation on March 12,
1966, up to its incorporation on January 9, 1967, and the eventual withdrawal of respondent on
January 31, 1967 from said corporation. Such disposal or sale by respondent and his wife of their
shares in the corporation only 22 days after the incorporation of the corporation, indicates that
respondent realized that early that their interest in the corporation contravenes the aforesaid Canon
25. Respondent Judge and his wife therefore deserve the commendation for their immediate
withdrawal from the firm after its incorporation and before it became involved in any court litigation

III

With respect to the third and fourth causes of action, complainant alleged that respondent was guilty
of coddling an impostor and acted in disregard of judicial decorum, and that there was culpable
defiance of the law and utter disregard for ethics. WE agree, however, with the recommendation of
the Investigating Justice that respondent Judge be exonerated because the aforesaid causes of
action are groundless, and WE quote the pertinent portion of her report which reads as follows:

The basis for complainant's third cause of action is the claim that respondent
associated and closely fraternized with Dominador Arigpa Tan who openly and
publicly advertised himself as a practising attorney (see Exhs. I, I-1 and J) when in
truth and in fact said Dominador Arigpa Tan does not appear in the Roll of Attorneys
and is not a member of the Philippine Bar as certified to in Exh. K.

The "respondent denies knowing that Dominador Arigpa Tan was an "impostor" and
claims that all the time he believed that the latter was a bona fide member of the bar.
I see no reason for disbelieving this assertion of respondent. It has been shown by
complainant that Dominador Arigpa Tan represented himself publicly as an attorney-
at-law to the extent of putting up a signboard with his name and the words "Attorney-
at Law" (Exh. I and 1- 1) to indicate his office, and it was but natural for respondent
and any person for that matter to have accepted that statement on its face value.
"Now with respect to the allegation of complainant that respondent is guilty of
fraternizing with Dominador Arigpa Tan to the extent of permitting his wife to be a
 godmother of Mr. Tan's child at baptism (Exh. M & M-1), that fact even if true did not
render respondent guilty of violating any canon of judicial ethics as long as his
friendly relations with Dominador A. Tan and family did not influence his official
actuations as a judge where said persons were concerned. There is no tangible
convincing proof that herein respondent gave any undue privileges in his court to
Dominador Arigpa Tan or that the latter benefitted in his practice of law from his
personal relations with respondent, or that he used his influence, if he had any, on
the Judges of the other branches of the Court to favor said Dominador Tan.

Of course it is highly desirable for a member of the judiciary to refrain as much as

possible from maintaining close friendly relations with practising attorneys and
litigants in his court so as to avoid suspicion 'that his social or business relations or
friendship constitute an element in determining his judicial course" (par. 30, Canons
of Judicial Ethics), but if a Judge does have social relations, that in itself would not
constitute a ground for disciplinary action unless it be clearly shown that his social
relations be clouded his official actuations with bias and partiality in favor of his
friends (pp. 403-405, rec.).

In conclusion, while respondent Judge Asuncion, now Associate Justice of the Court of Appeals, did
not violate any law in acquiring by purchase a parcel of land which was in litigation in his court and in
engaging in business by joining a private corporation during his incumbency as judge of the Court of
First Instance of Leyte, he should be reminded to be more discreet in his private and business
activities, because his conduct as a member of the Judiciary must not only be characterized with
propriety but must always be above suspicion.

WHEREFORE, THE RESPONDENT ASSOCIATE JUSTICE OF THE COURT OF APPEALS IS

HEREBY REMINDED TO BE MORE DISCREET IN HIS PRIVATE AND BUSINESS ACTIVITIES.

SO ORDERED.

United States Supreme Court

KAWANANAKOA v. POLYBLANK(1907)

No. 273

Argued: Decided: April 8, 1907

Mr. Sidney M. Ballou for appellants.

[205 U.S. 349, 351] Messrs. Aldis B. Browne, Alexander Britton, and E. A. Douthitt for
appellees. [205 U.S. 349, 352]

Mr. Justice Holmes delivered the opinion of the court:

This is an appeal from a decree affirming a decree of foreclosure and sale under a
mortgage executed by the appellants to the appellee, Sister Albertina. 17 Haw. 82. The
defendants (appellants) pleaded to the jurisdiction that after the execution of the
mortgage a part of the mortgaged land had been conveyed by them to one Damon, and
by Damon to the territory of Hawaii, and was now part of a public street. The bill
originally made the territory a party, but the territory demurred and the plaintiffs
dismissed their bill as to it before the above plea was argued. Then the plea was
overruled, and after answer and hearing the decree of foreclosure was made, the
appellants having saved their rights. The decree excepted from the sale the land
conveyed to the territory, and directed a judgment for the sum remaining due in case
the proceeds of the sale were insufficient to pay the debt. Eq. Rule 92.

The appellants contend that the owners of the equity of redemption in all parts of the
mortgage land must be joined, and that no deficiency judgment should be entered until
all the mortgaged premises have been sold. In aid of their contention they argue that the
territory of Hawaii is liable to suit like a municipal corporation, irrespective of the
permission given by its statutes, which does not extend to this case. They liken the
territory to the District of Columbia (Metr- [205 U.S. 349, 353] opolitan R. Co. v. District of
Columbia, 132 U.S. 1 , 33 L. ed. 231, 10 Sup. Ct. Rep. 19), and point out that it has
been a party to suits that have been before this court (Damson v. Hawaii, 194 U.S. 154 ,
48 L. ed. 916, 24 Sup. Ct. Rep. 617; Carter v. Hawaii, 200 U.S. 255 , 50 L. ed. 470, 26
Sup. Ct. Rep. 248).

The territory, of course, could waive its exemption (Smith v. Reeves, 178 U.S. 436 , 44
L. ed. 1140, 20 Sup. Ct. Rep. 919), and it took no objection to the proceedings in the
cases cited if it could have done so. See act of April 30, 1900, chap. 339, 96. 31 Stat. at
L. 141, 160. But in the case at bar it did object, and the question raised is whether the
plaintiffs were bound to yield. Some doubts have been expressed as to the source of
the immunity of a sovereign power from suit without its own permission, but the answer
has been public property since before the days of Hobbes. Leviathan, chap. 26, 2. A
sovereign is exempt from suit, not because of any formal conception or obsolete theory,
but on the logical and practical ground that there can be no legal right as against the
authority that makes the law on which the right depends. 'Car on peut bien recevoir loy
d'autruy, mais il est impossible par nature de se donner loy.' Bodin, Republique, 1,
chap. 8, ed. 1629, p. 132; Sir John Eliot, De Jure Maiestatis, chap. 3. Nemo suo statuto
ligatur necessitative. Baldus, De Leg. et Const. Digna Vox, 2. ed. 1496, fol. 51b, ed.
1539, fol. 61.

As the ground is thus logical and practical, the doctrine is not confined to powers that
are sovereign in the full sense of juridical theory, but naturally is extended to those that,
in actual administration, originate and change at their will the law of contract and
property, from which persons within the jurisdiction derive their rights. A suit
presupposes that the defendants are subject to the law invoked. Of course it cannot be
maintained unless they are so. But that is not the case with a territory of the United
States, because the territory itself is the fountain from which rights ordinarily flow. It is
true that Congress might intervene, just as, in the case of a state, the Constitution does,
and the power that can alter the Constitution might. But the rights that exist are not
created by [205 U.S. 349, 354] Congress or the Constitution, except to the extent of
certain limitations of power. The District of Columbia is different, because there the body
of private rights is created and controlled by Congress, and not by a legislature of the
District. But for the territory of Hawaii it is enough to refer to the organic act. Act of April
30, 1900, chap. 339, 6, 55. 31 Stat. at L. 141, 142, 150. Coffield v. Territory, 13 Haw.
478. See, further, Territory v. Doty, 1 Pinney (Wis.) 396, 405; Langford v. King, 1 Mont.
33; Fisk v. Cuthbert, 2 Mont. 593, 598.

However it might be in a different case, when the inability to join all parties and to sell all
the land is due to a conveyance by the mortgagor directly or indirectly to the territory,
the court is not thereby deprived of ability to proceed.

Decree affirmed.

G.R. No. L-1648 August 17, 1949

PEDRO SYQUIA, GONZALO SYQUIA, and LEOPOLDO SYQUIA, petitioners,
vs.
NATIVIDAD ALMEDA LOPEZ, Judge of Municipal Court of Manila, CONRADO V. SANCHEZ,
Judge of Court of First Instance of Manila, GEORGE F. MOORE, ET AL., respondents.

Gibbs, Gibbs, Chuidian and Quasha for petitioner.

J. A. Wolfson for respondent.

MONTEMAYOR, J.:

For the purposes of this decision, the following facts gathered from and based on the pleadings, may
be stated. The plaintiffs named Pedro, Gonzalo, and Leopoldo, all surnamed Syquia, are the
undivided joint owners of three apartment buildings situated in the City of Manila known as the North
Syquia Apartments, South Syquia Apartments and Michel Apartments located at 1131 M. H. del
Pilar, 1151 M. H. del Pilar and 1188 A. Mabini Streets, respectively.

About the middle of the year 1945, said plaintiffs executed three lease contracts, one for each of the
three apartments, in favor of the United States of America at a monthly rental of P1,775 for the North
Syquia Apartments, P1,890 for the South Syquia Apartment, and P3,335 for the Michel Apartments.
The term or period for the three leases was to be "for the duration of the war and six months
thereafter, unless sooner terminated by the United States of America." The apartment buildings were
used for billeting and quartering officers of the U. S. armed forces stationed in the Manila area.

In March 1947, when these court proceedings were commenced, George F. Moore was the
Commanding General, United States Army, Philippine Ryukus Command, Manila, and as
Commanding General of the U. S. Army in the Manila Theatre, was said to control the occupancy of
the said apartment houses and had authority in the name of the United States Government to assign
officers of the U. S. Army to said apartments or to order said officers to vacate the same. Erland A.
Tillman was the Chief, Real Estate Division, Office of the District Engineers, U. S. Army, Manila,
who, under the command of defendant Moore was in direct charge and control of the lease and
occupancy of said three apartment buildings. Defendant Moore and Tillman themselves did not
occupy any part of the premises in question.

Under the theory that said leases terminated six months after September 2, 1945, when Japan
surrendered, plaintiffs sometime in March, 1946, approached the predecessors in office of
defendants Moore and Tillman and requested the return of the apartment buildings to them, but were
advised that the U. S. Army wanted to continue occupying the premises. On May 11, 1946, said
plaintiffs requested the predecessors in office of Moore and Tillman to renegotiate said leases,
execute lease contract for a period of three years and to pay a reasonable rental higher than those
payable under the old contracts. The predecessors in office of Moore in a letter dated June 6, 1946,
refused to execute new leases but advised that "it is contemplated that the United States Army will
vacate subject properties prior to 1 February 1947." Not being in conformity with the continuance of
the old leases because of the alleged comparatively low rentals being paid thereunder, plaintiffs
formally requested Tillman to cancel said three leases and to release the apartment buildings on
June 28, 1946. Tillman refused to comply with the request. Because of the alleged representation
and assurance that the U.S. Government would vacate the premises before February 1, 1947, the
plaintiffs took no further steps to secure possession of the buildings and accepted the monthly
rentals tendered by the predecessors in office of Moore and Tillman on the basis of a month to
month lease subject to cancellation upon thirty days notice. Because of the failure to comply with the
alleged representation and assurance that the three apartment buildings will be vacated prior to
February 1, 1947, plaintiffs on February 17, 1947, served formal notice upon defendants Moore and
Tillman and 64 other army officers or members of the United States Armed Forces who were then
occupying apartments in said three buildings, demanding (a) cancellation of said leases; (b) increase
in rentals to P300 per month per apartment effective thirty days from notice; (c) execution of new
leases for the three or any one or two of the said apartment buildings for a definite term, otherwise,
(d) release of said apartment buildings within thirty days of said notice in the event of the failure to
comply with the foregoing demands. The thirty-day period having expired without any of the
defendants having complied with plaintiffs' demands, the plaintiffs commenced the present action in
the Municipal Court of Manila in the form of an action for unlawful detainer (desahucio) against
Moore and Tillman and the 64 persons occupying apartments in the three buildings for the purpose
of having them vacate the apartments, each occupants to pay P300 a month for his particular
apartment from January 1, 1947 until each of said particular defendant had vacated said apartment;
to permit plaintiffs access to said apartment buildings for the purpose of appraising the damages
sustained as the result of the occupancy by defendants; that defendants be ordered to pay plaintiffs
whatever damages may have been actually caused on said property; and that in the event said
occupants are unable to pay said P300 a month and/or the damages sustained by said property, the
defendants Moore and Tillman jointly and severally be made to pay said monthly rentals of P300 per
month per apartment from January 1, 1947 to March 19, 1947, inclusive, and/or the damages
sustained by said apartments, and that defendants Moore and Tillman be permanently enjoined
against ordering any additional parties in the future from entering and occupying said premises.

Acting upon a motion to dismiss filed through the Special Assistant of the Judge Advocate,
Philippine Ryukus Command on the ground that the court had no jurisdiction over the defendants
and over the subject matter of the action, because the real party in interest was the U.S.
Government and not the individual defendants named in the complaint, and that the complaint did
not state a cause of action, the municipal court of Manila in an order dated April 29, 1947, found that
the war between the United States of America and her allies on one side and Germany and Japan
on the other, had not yet terminated and, consequently, the period or term of the three leases had
not yet expired; that under the well settled rule of International Law, a foreign government like the
United States Government cannot be sued in the courts of another state without its consent; that it
was clear from the allegations of the complaint that although the United States of America has not
been named therein as defendant, it is nevertheless the real defendant in this case, as the parties
named as defendants are officers of the United States Army and were occupying the buildings in
question as such and pursuant to orders received from that Government. The municipal court
dismissed the action with costs against the plaintiffs with the suggestion or opinion that a citizen of
the Philippines, who feels aggrieved by the acts of the Government of a foreign country has the right
to demand that the Philippine Government study his claim and if found meritorious, take such
diplomatic steps as may be necessary for the vindication of rights of that citizen, and that the matter
included or involved in the action should be a proper subject matter of representations between the
Government of the Government of the United States of America and the Philippines. Not being
satisfied with the order, plaintiffs appealed to the Court of Manila, where the motion to dismiss was
renewed.

The Court of First Instance of Manila in an order dated July 12, 1947, affirmed the order of the
municipal court dismissing plaintiffs' complaint. It conceded that under the doctrine laid down in the
case of U. S. vs. Lee, 106 U. S., 196 and affirmed in the case of Tindal vs. Wesley, 167 U. S., 204
ordinarily, courts have jurisdiction over cases where private parties sue to recover possession of
property being held by officers or agents acting in the name of the U. S. Government even though no
suit can be brought against the Government itself, but inasmuch as the plaintiffs in the present case
are bringing this action against officers and agents of the U. S. Government not only to recover the
possession of the three apartment houses supposedly being held illegally by them in the name of
their government, but also to collect back rents, not only at the rate agreed upon in the lease
contracts entered into by the United States of America but in excess of said rate, to say nothing of
the damages claimed, as a result of which, a judgment in these proceedings may become a charge
against the U. S. Treasury, then under the rule laid down in the case of Land vs. Dollar, 91 Law. ed.,
1209, the present suit must be regarded as one against the United States Government itself, which
cannot be sued without its consent, specially by citizens of another country.

The plaintiffs as petitioners have brought this case before us on a petition for a writ of mandamus
seeking to order the Municipal Court of Manila to take jurisdiction over the case. On October 30,
1947, counsel for respondents Almeda Lopez, Sanchez, Moore and Tillman filed a motion to dismiss
on several grounds. The case was orally argued on November 26, 1947. On March 4, 1948,
petitioners filed a petition which, among other things, informed this Court that the North Syquia
Apartments, the South Syquia Apartments and Michel Apartments would be vacated by their
occupants on February 29, March 31, and May 31, 1948, respectively. As a matter of fact, said
apartments were actually vacated on the dates already mentioned and were received by the plaintiff-
owners.

On the basis of this petition and because of the return of the three apartment houses to the owners,
counsel for respondents Almeda Lopez, Sanchez, Moore and Tillman filed a petition to dismiss the
present case on the ground that it is moot. Counsel for the petitioners answering the motion, claimed
that the plaintiffs and petitioners possession of the three apartment houses, reserving all of their
rights against respondents including the right to collect rents and damages; that they have not been
paid rents since January 1, 1947; that respondents admitted that there is a total of P109,895 in
rentals due and owing to petitioners; that should this case be now dismissed, the petitioners will be
unable to enforce collection; that the question of law involved in this case may again come up before
the courts when conflicts arise between Filipino civilian property owners and the U.S. Army
authorities concerning contracts entered into in the Philippines between said Filipinos and the U.S.
Government. Consequently, this Court, according to the petitioners, far from dismissing the case,
should decide it, particularly the question of jurisdiction.

On June 18, 1949, through a "petition to amend complaint" counsel for the petitioners informed this
court that petitioners had already received the U. S. Army Forces in the Western Pacific the sum of
P109,895 as rentals for the three apartments, but with the reservation that said acceptance should
not be construed as jeopardizing the rights of the petitioners in the case now pending in the courts of
the Philippines or their rights against the U. S. Government with respect to the three apartment
houses. In view of this last petition, counsel for respondents alleging that both respondent Moore
and Tillman had long left the Islands for other Army assignments, and now that both the possession
of the three apartments in question as well as the rentals for their occupation have already been
received by the petitioners renew their motion for dismissal on the ground that this case has now
become moot.

The main purpose of the original action in the municipal court was to recover the possession of the
three apartment houses in question. The recovery of rentals as submitted by the very counsel for the
petitioner was merely incidental to the main action. Because the prime purpose of the action had
been achieved, namely, the recovery of the possession of the premises, apart from the fact that the
rentals amounting to P109,895 had been paid to the petitioners and accepted by them though under
reservations, this Court may now well dismiss the present proceedings on the ground that the
questions involved therein have become academic and moot. Counsel for the petitioners however,
insists that a decision be rendered on the merits, particularly on the question of jurisdiction of the
municipal court over the original action, not only for the satisfaction of the parties involved but also to
serve as a guide in future cases involving cases of similar nature such as contracts of lease entered
into between the Government of the United States of America on one side and Filipino citizens on
the other regarding properties of the latter. We accept the suggestion of petitioners and shall
proceed to discuss the facts and law involved and rule upon them.

We shall concede as correctly did the Court of First Instance, that following the doctrine laid down in
the cases of U. S. vs. Lee and U. S. vs. Tindal, supra, a private citizen claiming title and right of
possession of a certain property may, to recover possession of said property, sue as individuals,
officers and agents of the Government who are said to be illegally witholding the same from him,
though in doing so, said officers and agents claim that they are acting for the Government, and the
court may entertain such a suit altho the Government itself is not included as a party-defendant. Of
course, the Government is not bound or concluded by the decision. The philosophy of this ruling is
that unless the courts are permitted to take cognizance and to assume jurisdiction over such a case,
a private citizen would be helpless and without redress and protection of his rights which may have
been invaded by the officers of the government professing to act in its name. In such a case the
officials or agents asserting rightful possession must prove and justify their claim before the courts,
when it is made to appear in the suit against them that the title and right of possession is in the
private citizen. However, and this is important, where the judgment in such a case would result not
only in the recovery of possession of the property in favor of said citizen but also in a charge against
or financial liability to the Government, then the suit should be regarded as one against the
government itself, and, consequently, it cannot prosper or be validly entertained by the courts except
with the consent of said Government. (See case of Land vs. Dollar, 91 Law. ed., 1209.)

From a careful study of this case, considering the facts involved therein as well as those of public
knowledge of which we take judicial cognizance, we are convinced that the real party in interest as
defendant in the original case is the United States of America. The lessee in each of the three lease
agreements was the United States of America and the lease agreement themselves were executed
in her name by her officials acting as her agents. The considerations or rentals was always paid by
the U. S. Government. The original action in the municipal court was brought on the basis of these
three lease contracts and it is obvious in the opinion of this court that any back rentals or increased
rentals will have to be paid by the U. S. Government not only because, as already stated, the
contracts of lease were entered into by such Government but also because the premises were used
by officers of her armed forces during the war and immediately after the terminations of hostilities.

We cannot see how the defendants and respondents Moore and Tillman could be held individually
responsible for the payments of rentals or damages in relation to the occupancy of the apartment
houses in question. Both of these army officials had no intervention whatsoever in the execution of
the lease agreements nor in the initial occupancy of the premises both of which were effected thru
the intervention of and at the instance of their predecessors in office. The original request made by
the petitioners for the return of the apartment buildings after the supposed termination of the leases,
was made to, and denied not by Moore and Tillman but by their predecessors in office. The notice
and decision that the U. S. Army wanted and in fact continued to occupy the premises was made not
by Moore and Tillman but by predecessors in office. The refusal to renegotiate the leases as
requested by the petitioners was made not by Moore but by his predecessors in office according to
the very complaint filed in the municipal court. The assurance that the U. S. Army will vacate the
premises prior to February 29, 1947, was also made by the predecessors in office of Moore.

As to the defendant Tillman, according to the complaint he was Chief, Real State Division, Office of
the District Engineer, U. S. Army, and was in direct charge and control of the leases and occupancy
of the apartment buildings, but he was under the command of defendant Moore, his superior officer.
We cannot see how said defendant Tillman in assigning new officers to occupy apartments in the
three buildings, in obedience to order or direction from his superior, defendant Moore, could be held
personally liable for the payment of rentals or increase thereof, or damages said to have been
suffered by the plaintiffs.

With respect to defendant General Moore, when he assumed his command in Manila, these lease
agreement had already been negotiated and executed and were in actual operation. The three
apartment buildings were occupied by army officers assigned thereto by his predecessors in office.
All that he must have done was to assign or billet incoming army officers to apartments as they were
vacated by outgoing officers due to changes in station. He found these apartment buildings occupied
by his government and devoted to the use and occupancy of army officers stationed in Manila under
his command, and he had reasons to believe that he could continue holding and using the premises
theretofore assigned for that purpose and under contracts previously entered into by his
government, as long as and until orders to the contrary were received by him. It is even to be
presumed that when demand was made by the plaintiffs for the payment of increased rentals or for
vacating the three apartment buildings, defendant Moore, not a lawyer by profession but a soldier,
must have consulted and sought the advise of his legal department, and that his action in declining
to pay the increased rentals or to eject all his army officers from the three buildings must have been
in pursuance to the advice and counsel of his legal division. At least, he was not in a position to pay
increased rentals above those set and stipulated in the lease agreements, without the approval of
his government, unless he personally assumed financial responsibility therefor. Under these
circumstances, neither do we believe nor find that defendant Moore can be held personally liable for
the payment of back or increased rentals and alleged damages.

As to the army officers who actually occupied the apartments involved, there is less reason for
holding them personally liable for rentals and supposed damages as sought by the plaintiffs. It must
be remembered that these army officers when coming to their station in Manila were not given the
choice of their dwellings. They were merely assigned quarters in the apartment buildings in question.
Said assignments or billets may well be regarded as orders, and all that those officers did was to
obey them, and, accordingly, occupied the rooms assigned to them. Under such circumstances, can
it be supposed or conceived that such army officers would first inquire whether the rental being paid
by the government for the rooms or apartments assigned to them by order of their superior officer
was fair and reasonable or not, and whether the period of lease between their government and the
owners of the premises had expired, and whether their occupancy of their rooms or apartments was
legal or illegal? And if they dismissed these seemingly idle speculations, assuming that they ever
entered their minds, and continued to live in their apartments unless and until orders to the contrary
were received by them, could they later be held personally liable for any back rentals which their
government may have failed to pay to the owners of the building, or for any damages to the
premises incident to all leases of property, specially in the absence of proof that such damages to
property had been caused by them and not by the previous occupants, also army officers who are
not now parties defendant to this suit? Incidentally it may be stated that both defendants Moore and
Tillman have long left these Islands to assume other commands or assignments and in all probability
none of their 64 co-defendants is still within this jurisdiction.

On the basis of the foregoing considerations we are of the belief and we hold that the real party
defendant in interest is the Government of the United States of America; that any judgment for back
or increased rentals or damages will have to be paid not by defendants Moore and Tillman and their
64 co-defendants but by the said U. S. Government. On the basis of the ruling in the case of Land
vs. Dollar already cited, and on what we have already stated, the present action must be considered
as one against the U. S. Government. It is clear that the courts of the Philippines including the
Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. The
question of lack of jurisdiction was raised and interposed at the very beginning of the action. The U.
S. Government has not given its consent to the filing of this suit which is essentially against her,
though not in name. Moreover, this is not only a case of a citizen filing a suit against his own
Government without the latter's consent but it is of citizen filing an action against a foreign
government without said government's consent, which renders more obvious the lack of jurisdiction
of the courts of his country. The principles of the law behind this rule are so elementary and of such
general acceptance that we deem it unnecessary to cite authorities in support thereof.

In conclusion we find that the Municipal Court of Manila committed no error in dismissing the case
for lack of jurisdiction and that the Court of First Instance acted correctly in affirming the municipal
court's order of dismissal. Case dismissed, without pronouncement as to costs.

Moran, C.J., Paras, Feria, Bengzon, Tuason and Reyes, JJ., concur.

Separate Opinions

PERFECTO, J., dissenting:

The petition must be granted. This is the conclusion we have arrived at long ago, soon after this
case had been submitted for our decision. We regret that, to avoid further delay in the promulgation
of the decision in this case, we are constrained to limit ourselves to a synthesis of the reasons for
our stand. So that this opinion may be released immediately, we are making it as short as possible.
To said effect we have to waive the opportunity of elaborating on our arguments.

We are of the opinion that both the municipal court and the Court of First Instance of Manila erred in
dismissing petitioners' complaint and the majority of the Supreme Court have given their exequatur
to such grievous error.

There is no question that the Municipal Court of Manila had and has completed jurisdiction to take
cognizance of and decide the case initiated by petitioners. That jurisdiction is the same whether the
true defendants are those specifically mentioned in the complaint or the Government of the United
States.

The contention that the Government of the United States of America is the real party defendant does
not appear to be supported either by the pleadings or by the text of the contract of lease in question.
If said government is the real property defendant and had intended to impugn the jurisdiction of the
Municipal Court of Manila, it must have done so through its diplomatic representative in the
Philippines, i. e., the American Ambassador. It does not appear that the American Ambassador had
intervened in the case in any way and we believe no one appearing in the case has the legal
personality to represent said government.

In the hypothesis that the Government of the United States of America is the lessee in the contract in
question and, therefore, should be considered as the real party defendant in the ejectment case, that
simple fact does not deprive our courts of justice of their jurisdiction to try any legal litigation relating
to said contract of lease. The very fact that the government of the United States of America had
entered into a private contract with private citizens of the Philippines and the deed executed in our
country concerns real property located in Manila, place said government, for purposes of the
jurisdiction of our courts, on the same legal level of the lessors.

Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice,
such rule is inapplicable to cases in which the foreign government enters into private contracts with
the citizens of the court's jurisdiction. A contrary view would simply run against all principles of
decency and violative of all tenets of morals.

Moral principles and principles of justice are as valid and applicable as well with regard to private
individuals as with regard to governments either domestic or foreign. Once a foreign government
enters into a private contract with the private citizens of another country, such foreign government
cannot shield its non-performance or contravention of the terms of the contract under the cloak of
non-jurisdiction. To place such foreign government beyond the jurisdiction of the domestic courts is
to give approval to the execution of unilateral contracts, graphically described in Spanish as
"contratos leoninos," because one party gets the lion's share to the detriment of the other. To give
validity to such contract is to sanctify bad faith, deceit, fraud. We prepare to adhere to the thesis that
all parties in a private contract, including governments and the most powerful of them, are amenable
to law, and that such contracts are enforceable through the help of the courts of justice with
jurisdiction to take cognizance of any violation of such contracts if he same had been entered into
only by private individuals.

To advance the proposition that the Government of the United States of America, soon after
liberating the Philippines from the invading Japanese forces, had entered with the petitioners in to
the lease contract in question with the knowledge that petitioners could not bring an action in our
courts of justice to enforce the terms of said contract is to hurl against said government the blackest
indictment. Under such situation, all the vociferous avowals of adherence to the principles of justice,
liberty, democracy, of said Government would appear as sham. We cannot believe that the
Government of the United States of America can in honest conscience support the stand of
respondents in this case. We cannot believe that said government is so callous as not to understand
the meaning of the shame entailed in the legal stand of non-jurisdiction intended to place said
government beyond the reach of our courts of justice.

G.R. No. 108813 December 15, 1994

JUSMAG PHILIPPINES, petitioner,

vs.
THE NATIONAL LABOR RELATIONS COMMISSION (Second Division) and FLORENCIO
SACRAMENTO, Union President, JPFCEA, respondents.

Juan, Luces, Luna and Associates for petitioner.

Galutera & Aguilar Law Offices for private respondent.

PUNO, J.:

The immunity from suit of the Joint United States Military Assistance Group to the Republic of the
Philippines (JUSMAG-Philippines) is the pivotal issue in the case at bench.

JUSMAG assails the January 29, 1993 Resolution of the NATIONAL LABOR RELATIONS
COMMISSION (public respondent), in NLRC NCR CASE NO. 00-03-02092-92, reversing the July
30, 1991 Order of the Labor Arbiter, and ordering the latter to assume jurisdiction over the complaint
for illegal dismissal filed by FLORENCIO SACRAMENTO (private respondent) against petitioner.

First, the undisputed facts.

Private respondent was one of the seventy-four (74) security assistance support personnel (SASP)
working at JUSMAG-Philippines. 1 He had been with JUSMAG from December 18, 1969, until his
dismissal on April 27, 1992. When dismissed, he held the position of Illustrator 2 and was the
incumbent President of JUSMAG PHILIPPINES-FILIPINO CIVILIAN EMPLOYEES ASSOCIATION
(JPFCEA), a labor organization duly registered with the Department of Labor and Employment. His
services were terminated allegedly due to the abolition of his position.2He was also advised that he
was under administrative leave until April 27, 1992, although the same was not charged against his
leave.

On March 31, 1992, private respondent filed a complaint with the Department of Labor and
Employment on the ground that he was illegally suspended and dismissed from service by
JUSMAG. 3 He asked for his reinstatement.

JUSMAG then filed a Motion to Dismiss invoking its immunity from suit as an agency of the United
States. It further alleged lack of employer-employee relationship and that it has no juridical
personality to sue and be sued.4

In an Order dated July 30, 1991, Labor Arbiter Daniel C. Cueto dismissed the subject complaint " for
want of jurisdiction."5 Private respondent appealed6 to the National Labor Relations Commission
(public respondent), assailing the ruling that petitioner is immune from suit for alleged violation of our
labor laws. JUSMAG filed its Opposition, 7 reiterating its immunity from suit for its non-contractual,
governmental and/or public acts.

In a Resolution, dated January 29, 1993, the NLRC8 reversed the ruling of the Labor Arbiter as it
held that petitioner had lost its right not to be sued. The resolution was predicated on two grounds:
(1) the principle of estoppel — that JUSMAG failed to refute the existence of employer-employee
relationship under the "control test"; and (2) JUSMAG has waived its right to immunity from suit
when it hired the services of private respondent on December 18, 1969.

The NLRC relied on the case of Harry Lyons vs. United States of America,9 where the "United States
Government (was considered to have) waived its immunity from suit by entering into (a) contract of
stevedoring services, and thus, it submitted itself to the jurisdiction of the local courts."

Accordingly, the case was remanded to the labor arbiter for reception of evidence as to the issue on
illegal dismissal.

Hence, this petition, JUSMAG contends:

THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION —

A. IN REVERSING THE DECISION OF THE LABOR ARBITER AND

IN NOT AFFIRMING THE DISMISSAL OF THE COMPLAINT IT
BEING A SUIT AGAINST THE UNITED STATES OF AMERICA
WHICH HAD NOT GIVEN ITS CONSENT TO BE SUED; AND

B. IN FINDING WAIVER BY JUSMAG OF IMMUNITY FROM SUIT;

II

THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION —

A. WHEN IT FOUND AN EMPLOYER-EMPLOYEE RELATIONSHIP

BETWEEN JUSMAG AND PRIVATE RESPONDENT; AND

B. WHEN IT CONSIDERED JUSMAG ESTOPPED FROM DENYING

THAT PRIVATE RESPONDENT IS ITS EMPLOYEE FOR FAILURE
TO PRESENT PROOF TO THE CONTRARY.

We find the petition impressed with merit.

It is meet to discuss the historical background of the JUSMAG to determine its immunity from suit.

JUSMAG was created pursuant to the Military Assistance Agreement 10 dated March 21, 1947,
between the Government of the Republic of the Philippines and the Government of the United States
of America. As agreed upon, JUSMAG shall consist of Air, Naval and Army group, and its primary
task was to advise and assist the Philippines, on air force, army and naval matters. 11

Article 14 of the 1947 Agreement provides, inter alia, that "the cost of all services required by the
Group, including compensation of locally employed interpreters, clerks, laborers, and other
personnel, except personal servants, shall be borne by the Republic of the Philippines."

This set-up was to change in 1991. In Note No 22, addressed to the Department of Foreign Affairs
(DFA) of the Philippines, dated January 23, 1991, the United States Government, thru its Embassy,
manifested its preparedness "to provide funds to cover the salaries of security assistance support
personnel" and security guards, the rent of JUSMAG occupied buildings and housing, and the cost
of utilities. 12 This offer was accepted by our Government, thru the DFA, in Note No. 911725, dated
April 18, 1991.13
Consequently, a Memorandum of Agreement 14 was forged between the Armed Forces of the
Philippines and JUSMAG-Philippines, thru General Lisandro C. Abadia and U.S. Brigadier General
Robert G. Sausser. The Agreement delineated the terms of the assistance-in-kind of JUSMAG for
1991, the relevant parts of which read:

a. The term salaries as used in this agreement include those for the security guards
currently contracted between JUSMAG and A' Prime Security Services Inc., and
the Security Assistance Support Personnel (SASP). . . . .

b. The term Security Assistance Support Personnel (SASP) does not include active
duty uniformed members of the Armed Forces of the Philippines performing duty at
JUSMAG.

c. It is understood that SASP are employees of the Armed Forces of the

Philippines (AFP). Therefore, the AFP agrees to appoint, for service with JUSMAG,
no more than 74 personnel to designated positions with JUSMAG.

d. SASP are under the total operational control of the Chief, JUSMAG-Philippines.
The term "Operational Control" includes, but is not limited to, all personnel
administrative actions, such as: hiring recommendations; firing recommendations;
position classification; discipline; nomination and approval of incentive awards; and
payroll computation. Personnel administration will be guided by Annex E of
JUSMAG-Philippines Memo 10-2. For the period of time that there is an exceptional
funding agreement between the government of the Philippines and the United States
Government (USG), JUSMAG will pay the total payroll costs for the SASP
employees. Payroll costs include only regular salary; approved overtime, costs of
living allowance; medical insurance; regular contributions to the Philippine Social
Security System, PAG-IBIG Fund and Personnel Economic Relief Allowance
(PERA); and the thirteenth-month bonus. Payroll costs do not include gifts or other
bonus payments in addition to those previously defined above. Entitlements not
considered payroll costs under this agreement will be funded and paid by the AFP.

e. All SASP employed as of July 1, 1990 will continue their service with JUSMAG at
their current rate of pay and benefits up to 30 June 1991, with an annual renewal of
employment thereafter subject to renewal of their appointment with the AFP
(employees and rates of pay are indicated at Enclosure 3). No promotion or transfer
internal to JUSMAG of the listed personnel will result in the reduction of their pay and
benefits.

f. All SASP will, after proper classification, be paid salaries and benefits at
established AFP civilian rates. Rules for computation of pay and allowances will be
made available to the Comptroller, JUSMAG, by the Comptroller, GHQ, AFP.
Additionally, any legally mandated changes in salary levels or methods of
computation shall be transmitted within 48 hours of receipt by Comptroller, GHQ to
Comptroller, JUSMAG.

g. The AFP agrees not to terminate SASP without 60 days prior written notice to
Chief, JUSMAG-Philippines. Any termination of these personnel thought to be
necessary because of budgetary restrictions or manpower ceiling will be subject to
consultations between AFP and JUSMAG to ensure that JUSMAG's mission of
dedicated support to the AFP will not be degraded or harmed in any way.

h. The AFP agrees to assume the severance pay/retirement pay liability for all
appointed SASP. (Enclosure 3 lists the severance pay liability date for current
SASP). Any termination of services, other than voluntary resignations or termination
for cause, will result in immediate payments of AFP of all termination pay to the
entitled employee. Vouchers for severance/retirement pay and accrued bonuses and
annual leave will be presented to the Comptroller, GHQ, AFP, not later than 14
calendar days prior to required date of payment.

i. All SASP listed in Enclosure 3 will continue to participate in the Philippine Social
Security System.
A year later, or in 1992, the United States Embassy sent another note of similar import to the
Department of Foreign Affairs (No. 227, dated April 8, 1992), extending the funding agreement for
the salaries of SASP and security guards until December 31, 1992.

From the foregoing, it is apparent that when JUSMAG took the services of private respondent, it was
performing a governmental function on behalf of the United States pursuant to the Military
Assistance Agreement dated March 21, 1947. Hence, we agree with petitioner that the suit is, in
effect, one against the United States Government, albeit it was not impleaded in the complaint.
Considering that the United States has not waived or consented to the suit, the complaint against
JUSMAG cannot not prosper.

In this jurisdiction, we recognize and adopt the generally accepted principles of international law as
part of the law of the land. 15 Immunity of State from suit is one of these universally recognized
principles. In international law, "immunity" is commonly understood as an exemption of the state and
its organs from the judicial jurisdiction of another state. 16 This is anchored on the principle of the
sovereign equality of states under which one state cannot assert jurisdiction over another in violation
of the maxim par in parem non habet imperium (an equal has no power over an equal).17

Under the traditional rule of State immunity, a state cannot be sued in the courts of another State,
without its consent or waiver. However, in Santos, et al., vs. Santos, et al., 18 we recognized an
exception to the doctrine of immunity from suit by a state, thus:

. . . . Nevertheless, if, where and when the state or its government enters into a
contract, through its officers or agents, in furtherance of a legitimate aim and purpose
and pursuant to constitutional legislative authority, whereby mutual or reciprocal
benefits accrue and rights and obligations arise therefrom, and if the law granting the
authority to enter into such contract does not provide for or name the officer against
whom action may be brought in the event of a breach thereof, the state itself may be
sued, even without its consent, because by entering into a contract, the sovereign
state has descended to the level of the citizen and its consent to be sued is implied
from the very act of entering into such contract. . . . . (emphasis ours)

It was in this light that the state immunity issue in Harry Lyons, Inc., vs. United States of
America 19 was decided.

In the case of Harry Lyons, Inc., the petitioner entered into a contract with the United States
Government for stevedoring services at the U.S. Naval Base, Subic Bay, Philippines. It then sought
to collect from the US government sums of money arising from the contract. One of the issues posed
in the case was whether or not the defunct Court of First Instance had jurisdiction over the defendant
United States, a sovereign state which cannot be sued without its consent. This Court upheld the
contention of Harry Lyons, Inc., that "when a sovereign state enters into a contract with a private
person, the state can be sued upon the theory that it has descended to the level of an individual from
which it can be implied that it has given its consent to be sued under the contract."

The doctrine of state immunity from suit has undergone further metamorphosis. The view evolved
that the existence of a contract does not, per se, mean that sovereign states may, at all times, be
sued in local courts. The complexity of relationships between sovereign states, brought about by
their increasing commercial activities, mothered a more restrictive application of the doctrine. 20 Thus,
in United States of America vs. Ruiz, 21 we clarified that our pronouncement in Harry Lyons, supra,
with respect to the waiver of State immunity, was obiter and "has no value as an imperative
authority."

As it stands now, the application of the doctrine of immunity from suit has
been restricted to sovereign or governmental activities ( jure imperii). 22 The mantle of state
immunity cannot be extended to commercial, private and proprietary acts ( jure gestionis). As aptly
stated by this Court (En banc) in US vs. Ruiz, supra:

The restrictive application of State immunity is proper when the proceedings arise out
of commercial transactions of the foreign sovereign, its commercial activities or
economic affairs. Stated differently, a State may be said to have descended to the
level of an individual and thus can be deemed to have tacitly given its consent to be
used only when it enters into business contracts. It does not apply where the contract
relates to the exercise of its sovereign functions. (emphasis ours)
We held further, that the application of the doctrine of state immunity depends on the legal nature of
the act. Ergo, since a governmental function was involved — the transaction dealt with the
improvement of the wharves in the naval installation at Subic Bay — it was held that the United
States was not deemed to have waived its immunity from suit.

Then came the case of United States vs. Hon. Rodrigo, et al. 23 In said case, Genove was employed
as a cook in the Main Club located at U.S. Air Force Recreation Center, John Hay Air Station. He
was dismissed from service after he was found to have polluted the stock of soup with urine. Genove
countered with a complaint for damages. Apparently, the restaurant services offered at the John Hay
Air Station partake of the nature of a business enterprise undertaken by the United States
government in its proprietary capacity. The Court then noted that the restaurant is well known and
available to the general public, thus, the services are operated for profit, as a commercial and not a
governmental activity. Speaking through Associate Justice Isagani Cruz, the Court (En Banc) said:

The consequence of this finding is that the petitioners cannot invoke the doctrine of
state immunity to justify the dismissal of the damage suit against them by Genove.
Such defense will not prosper even if it be established that they were acting as
agents of the United States when they investigated and later dismissed Genove. For
the matter, not even the United States government itself can claim such immunity.
The reason is that by entering into the employment contract with Genove in the
discharge of its proprietary functions, it impliedly divested itself of its sovereign
immunity from suit. (emphasis ours)

Conversely, if the contract was entered into in the discharge of its governmental functions, the
sovereign state cannot be deemed to have waived its immunity from suit. 24 Such is the case at
bench. Prescinding from this premise, we need not determine whether JUSMAG controls the
employment conditions of the private respondent.

We also hold that there appears to be no basis for public respondent to rule that JUSMAG is
stopped from denying the existence of employer-employee relationship with private respondent. On
the contrary, in its Opposition before the public respondent, JUSMAG consistently contended that
the (74) SASP, including private respondent, working in JUSMAG, are employees of the Armed
Forces of the Philippines. This can be gleaned from: (1) the Military Assistance Agreement, supra,
(2) the exchange of notes between our Government, thru Department of Foreign Affairs, and the
United States, thru the US Embassy to the Philippines, and (3) the Agreement on May 21,
1991, supra between the Armed Forces of the Philippines and JUSMAG.

We symphatize with the plight of private respondent who had served JUSMAG for more than twenty
(20) years. Considering his length of service with JUSMAG, he deserves a more compassionate
treatment. Unfortunately, JUSMAG is beyond the jurisdiction of this Court. Nonetheless, the
Executive branch, through the Department of Foreign Affairs and the Armed Forces of the
Philippines, can take the cudgel for private respondent and the other SASP working for JUSMAG,
pursuant to the aforestated Military Assistance Agreement.

IN VIEW OF THE FOREGOING, the petition for certiorari is GRANTED. Accordingly, the impugned
Resolution dated January 29, 1993 of the National Labor Relations Commission is REVERSED and
SET ASIDE. No costs.

SO ORDERED.

Narvasa, C.J., Regalado and Mendoza, JJ., concur.

G.R. No. 101949 December 1, 1994

THE HOLY SEE, petitioner,

vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court of
Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC., respondents.

Padilla Law Office for petitioner.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

QUIASON, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside
the Orders dated June 20, 1991 and September 19, 1991 of the Regional Trial Court, Branch 61,
Makati, Metro Manila in Civil Case No. 90-183.

The Order dated June 20, 1991 denied the motion of petitioner to dismiss the complaint in Civil Case
No. 90-183, while the Order dated September 19, 1991 denied the motion for reconsideration of the
June 20,1991 Order.

Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is
represented in the Philippines by the Papal Nuncio.

Private respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged in the real
estate business.

This petition arose from a controversy over a parcel of land consisting of 6,000 square meters (Lot 5-
A, Transfer Certificate of Title No. 390440) located in the Municipality of Parañaque, Metro Manila
and registered in the name of petitioner.

Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title
Nos. 271108 and 265388 respectively and registered in the name of the Philippine Realty
Corporation (PRC).

The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to
the sellers. Later, Licup assigned his rights to the sale to private respondent.

In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose
as to who of the parties has the responsibility of evicting and clearing the land of squatters.
Complicating the relations of the parties was the sale by petitioner of Lot 5-A to Tropicana Properties
and Development Corporation (Tropicana).

On January 23, 1990, private respondent filed a complaint with the Regional Trial Court, Branch 61,
Makati, Metro Manila for annulment of the sale of the three parcels of land, and specific performance
and damages against petitioner, represented by the Papal Nuncio, and three other defendants:
namely, Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana (Civil Case No.
90-183).

The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner and the
PRC, agreed to sell to Ramon Licup Lots 5-A, 5-B and 5-D at the price of P1,240.00 per square
meters; (2) the agreement to sell was made on the condition that earnest money of P100,000.00 be
paid by Licup to the sellers, and that the sellers clear the said lots of squatters who were then
occupying the same; (3) Licup paid the earnest money to Msgr. Cirilos; (4) in the same month, Licup
assigned his rights over the property to private respondent and informed the sellers of the said
assignment; (5) thereafter, private respondent demanded from Msgr. Cirilos that the sellers fulfill
their undertaking and clear the property of squatters; however, Msgr. Cirilos informed private
respondent of the squatters' refusal to vacate the lots, proposing instead either that private
respondent undertake the eviction or that the earnest money be returned to the latter; (6) private
respondent counterproposed that if it would undertake the eviction of the squatters, the purchase
price of the lots should be reduced from P1,240.00 to P1,150.00 per square meter; (7) Msgr. Cirilos
returned the earnest money of P100,000.00 and wrote private respondent giving it seven days from
receipt of the letter to pay the original purchase price in cash; (8) private respondent sent the earnest
money back to the sellers, but later discovered that on March 30, 1989, petitioner and the PRC,
without notice to private respondent, sold the lots to Tropicana, as evidenced by two separate Deeds
of Sale, one over Lot 5-A, and another over Lots 5-B and 5-D; and that the sellers' transfer certificate
of title over the lots were cancelled, transferred and registered in the name of Tropicana; (9)
Tropicana induced petitioner and the PRC to sell the lots to it and thus enriched itself at the expense
of private respondent; (10) private respondent demanded the rescission of the sale to Tropicana and
the reconveyance of the lots, to no avail; and (11) private respondent is willing and able to comply
with the terms of the contract to sell and has actually made plans to develop the lots into a
townhouse project, but in view of the sellers' breach, it lost profits of not less than P30,000.000.00.

Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner and
the PRC on the one hand, and Tropicana on the other; (2) the reconveyance of the lots in question;
(3) specific performance of the agreement to sell between it and the owners of the lots; and (4)
damages.

On June 8, 1990, petitioner and Msgr. Cirilos separately moved to dismiss the complaint —
petitioner for lack of jurisdiction based on sovereign immunity from suit, and Msgr. Cirilos for being
an improper party. An opposition to the motion was filed by private respondent.

On June 20, 1991, the trial court issued an order denying, among others, petitioner's motion to
dismiss after finding that petitioner "shed off [its] sovereign immunity by entering into the business
contract in question" (Rollo, pp. 20-21).

On July 12, 1991, petitioner moved for reconsideration of the order. On August 30, 1991, petitioner
filed a "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation for claim of
Immunity as a Jurisdictional Defense." So as to facilitate the determination of its defense of
sovereign immunity, petitioner prayed that a hearing be conducted to allow it to establish certain
facts upon which the said defense is based. Private respondent opposed this motion as well as the
motion for reconsideration.

On October 1, 1991, the trial court issued an order deferring the resolution on the motion for
reconsideration until after trial on the merits and directing petitioner to file its answer (Rollo, p. 22).

Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of
sovereign immunity only on its own behalf and on behalf of its official representative, the Papal
Nuncio.

On December 9, 1991, a Motion for Intervention was filed before us by the Department of Foreign
Affairs, claiming that it has a legal interest in the outcome of the case as regards the diplomatic
immunity of petitioner, and that it "adopts by reference, the allegations contained in the petition of the
Holy See insofar as they refer to arguments relative to its claim of sovereign immunity from suit"
(Rollo, p. 87).

Private respondent opposed the intervention of the Department of Foreign Affairs. In compliance
with the resolution of this Court, both parties and the Department of Foreign Affairs submitted their
respective memoranda.

II

A preliminary matter to be threshed out is the procedural issue of whether the petition
for certiorari under Rule 65 of the Revised Rules of Court can be availed of to question the order
denying petitioner's motion to dismiss. The general rule is that an order denying a motion to dismiss
is not reviewable by the appellate courts, the remedy of the movant being to file his answer and to
proceed with the hearing before the trial court. But the general rule admits of exceptions, and one of
these is when it is very clear in the records that the trial court has no alternative but to dismiss the
complaint (Philippine National Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service
Commission, 216 SCRA 114 [1992]. In such a case, it would be a sheer waste of time and energy to
require the parties to undergo the rigors of a trial.

The other procedural question raised by private respondent is the personality or legal interest of the
Department of Foreign Affairs to intervene in the case in behalf of the Holy See (Rollo, pp. 186-190).

In Public International Law, when a state or international agency wishes to plead sovereign or
diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is sued to
convey to the court that said defendant is entitled to immunity.

In the United States, the procedure followed is the process of "suggestion," where the foreign state
or the international organization sued in an American court requests the Secretary of State to make
a determination as to whether it is entitled to immunity. If the Secretary of State finds that the
defendant is immune from suit, he, in turn, asks the Attorney General to submit to the court a
"suggestion" that the defendant is entitled to immunity. In England, a similar procedure is followed,
only the Foreign Office issues a certification to that effect instead of submitting a "suggestion"
(O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign
Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).

In the Philippines, the practice is for the foreign government or the international organization to first
secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how the
Philippine Foreign Office conveys its endorsement to the courts varies. In International Catholic
Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a
letter directly to the Secretary of Labor and Employment, informing the latter that the respondent-
employer could not be sued because it enjoyed diplomatic immunity. In World Health Organization v.
Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that
effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs
to request the Solicitor General to make, in behalf of the Commander of the United States Naval
Base at Olongapo City, Zambales, a "suggestion" to respondent Judge. The Solicitor General
embodied the "suggestion" in a Manifestation and Memorandum as amicus curiae.

In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved
with this Court to be allowed to intervene on the side of petitioner. The Court allowed the said
Department to file its memorandum in support of petitioner's claim of sovereign immunity.

In some cases, the defense of sovereign immunity was submitted directly to the local courts by the
respondents through their private counsels (Raquiza v. Bradford, 75 Phil. 50 [1945]; Miquiabas v.
Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America v. Guinto, 182 SCRA
644 [1990] and companion cases). In cases where the foreign states bypass the Foreign Office, the
courts can inquire into the facts and make their own determination as to the nature of the acts and
transactions involved.

III

The burden of the petition is that respondent trial court has no jurisdiction over petitioner, being a
foreign state enjoying sovereign immunity. On the other hand, private respondent insists that the
doctrine of non-suability is not anymore absolute and that petitioner has divested itself of such a
cloak when, of its own free will, it entered into a commercial transaction for the sale of a parcel of
land located in the Philippines.

A. The Holy See

Before we determine the issue of petitioner's non-suability, a brief look into its status as a sovereign
state is in order.

Before the annexation of the Papal States by Italy in 1870, the Pope was the monarch and he, as
the Holy See, was considered a subject of International Law. With the loss of the Papal States and
the limitation of the territory under the Holy See to an area of 108.7 acres, the position of the Holy
See in International Law became controversial (Salonga and Yap, Public International Law 36-37
[1992]).

In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy recognized the exclusive
dominion and sovereign jurisdiction of the Holy See over the Vatican City. It also recognized the right
of the Holy See to receive foreign diplomats, to send its own diplomats to foreign countries, and to
enter into treaties according to International Law (Garcia, Questions and Problems In International
Law, Public and Private 81 [1948]).

The Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to the
Holy See absolute and visible independence and of guaranteeing to it indisputable sovereignty also
in the field of international relations" (O'Connell, I International Law 311 [1965]).

In view of the wordings of the Lateran Treaty, it is difficult to determine whether the statehood is
vested in the Holy See or in the Vatican City. Some writers even suggested that the treaty created
two international persons — the Holy See and Vatican City (Salonga and Yap, supra, 37).
The Vatican City fits into none of the established categories of states, and the attribution to it of
"sovereignty" must be made in a sense different from that in which it is applied to other states
(Fenwick, International Law 124-125 [1948]; Cruz, International Law 37 [1991]). In a community of
national states, the Vatican City represents an entity organized not for political but for ecclesiastical
purposes and international objects. Despite its size and object, the Vatican City has an independent
government of its own, with the Pope, who is also head of the Roman Catholic Church, as the Holy
See or Head of State, in conformity with its traditions, and the demands of its mission in the world.
Indeed, the world-wide interests and activities of the Vatican City are such as to make it in a sense
an "international state" (Fenwick, supra., 125; Kelsen, Principles of International Law 160 [1956]).

One authority wrote that the recognition of the Vatican City as a state has significant implication —
that it is possible for any entity pursuing objects essentially different from those pursued by states to
be invested with international personality (Kunz, The Status of the Holy See in International Law, 46
The American Journal of International Law 308 [1952]).

Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the Holy
See and not in the name of the Vatican City, one can conclude that in the Pope's own view, it is the
Holy See that is the international person.

The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The
Holy See, through its Ambassador, the Papal Nuncio, has had diplomatic representations with the
Philippine government since 1957 (Rollo, p. 87). This appears to be the universal practice in
international relations.

B. Sovereign Immunity

As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally
accepted principles of International Law. Even without this affirmation, such principles of
International Law are deemed incorporated as part of the law of the land as a condition and
consequence of our admission in the society of nations (United States of America v. Guinto, 182
SCRA 644 [1990]).

There are two conflicting concepts of sovereign immunity, each widely held and firmly established.
According to the classical or absolute theory, a sovereign cannot, without its consent, be made a
respondent in the courts of another sovereign. According to the newer or restrictive theory, the
immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state,
but not with regard to private acts or acts jure gestionis
(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public
International Law 194 [1984]).

Some states passed legislation to serve as guidelines for the executive or judicial determination
when an act may be considered as jure gestionis. The United States passed the Foreign Sovereign
Immunities Act of 1976, which defines a commercial activity as "either a regular course of
commercial conduct or a particular commercial transaction or act." Furthermore, the law declared
that the "commercial character of the activity shall be determined by reference to the nature of the
course of conduct or particular transaction or act, rather than by reference to its purpose." The
Canadian Parliament enacted in 1982 an Act to Provide For State Immunity in Canadian Courts. The
Act defines a "commercial activity" as any particular transaction, act or conduct or any regular course
of conduct that by reason of its nature, is of a "commercial character."

The restrictive theory, which is intended to be a solution to the host of problems involving the issue
of sovereign immunity, has created problems of its own. Legal treatises and the decisions in
countries which follow the restrictive theory have difficulty in characterizing whether a contract of a
sovereign state with a private party is an act jure gestionis or an act jure imperii.

The restrictive theory came about because of the entry of sovereign states into purely commercial
activities remotely connected with the discharge of governmental functions. This is particularly true
with respect to the Communist states which took control of nationalized business activities and
international trading.

This Court has considered the following transactions by a foreign state with private parties as
acts jure imperii: (1) the lease by a foreign government of apartment buildings for use of its military
officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of public bidding for the repair of a
wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and (3) the change
of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]).

On the other hand, this Court has considered the following transactions by a foreign state with
private parties as acts jure gestionis: (1) the hiring of a cook in the recreation center, consisting of
three restaurants, a cafeteria, a bakery, a store, and a coffee and pastry shop at the John Hay Air
Station in Baguio City, to cater to American servicemen and the general public (United States of
America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for the operation of barber shops in
Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA 644 [1990]). The
operation of the restaurants and other facilities open to the general public is undoubtedly for profit as
a commercial and not a governmental activity. By entering into the employment contract with the
cook in the discharge of its proprietary function, the United States government impliedly divested
itself of its sovereign immunity from suit.

In the absence of legislation defining what activities and transactions shall be considered
"commercial" and as constituting acts jure gestionis, we have to come out with our own guidelines,
tentative they may be.

Certainly, the mere entering into a contract by a foreign state with a private party cannot be the
ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the
foreign state is engaged in the activity in the regular course of business. If the foreign state is not
engaged regularly in a business or trade, the particular act or transaction must then be tested by its
nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure
imperii, especially when it is not undertaken for gain or profit.

As held in United States of America v. Guinto, (supra):

There is no question that the United States of America, like any other state, will be
deemed to have impliedly waived its non-suability if it has entered into a contract in
its proprietary or private capacity. It is only when the contract involves its sovereign
or governmental capacity that no such waiver may be implied.

In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate
business, surely the said transaction can be categorized as an act jure gestionis. However, petitioner
has denied that the acquisition and subsequent disposal of Lot 5-A were made for profit but claimed
that it acquired said property for the site of its mission or the Apostolic Nunciature in the Philippines.
Private respondent failed to dispute said claim.

Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was
made not for commercial purpose, but for the use of petitioner to construct thereon the official place
of residence of the Papal Nuncio. The right of a foreign sovereign to acquire property, real or
personal, in a receiving state, necessary for the creation and maintenance of its diplomatic mission,
is recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts. 20-22). This treaty was
concurred in by the Philippine Senate and entered into force in the Philippines on November 15,
1965.

In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and
administrative jurisdiction of the receiving state over any real action relating to private immovable
property situated in the territory of the receiving state which the envoy holds on behalf of the sending
state for the purposes of the mission. If this immunity is provided for a diplomatic envoy, with all the
more reason should immunity be recognized as regards the sovereign itself, which in this case is the
Holy See.

The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a
governmental character. Petitioner did not sell Lot
5-A for profit or gain. It merely wanted to dispose off the same because the squatters living thereon
made it almost impossible for petitioner to use it for the purpose of the donation. The fact that
squatters have occupied and are still occupying the lot, and that they stubbornly refuse to leave the
premises, has been admitted by private respondent in its complaint (Rollo, pp. 26, 27).

The issue of petitioner's non-suability can be determined by the trial court without going to trial in the
light of the pleadings, particularly the admission of private respondent. Besides, the privilege of
sovereign immunity in this case was sufficiently established by the Memorandum and Certification of
the Department of Foreign Affairs. As the department tasked with the conduct of the Philippines'
foreign relations (Administrative Code of 1987, Book IV, Title I, Sec. 3), the Department of Foreign
Affairs has formally intervened in this case and officially certified that the Embassy of the Holy See is
a duly accredited diplomatic mission to the Republic of the Philippines exempt from local jurisdiction
and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this
country (Rollo, pp. 156-157). The determination of the executive arm of government that a state or
instrumentality is entitled to sovereign or diplomatic immunity is a political question that is conclusive
upon the courts (International Catholic Migration Commission v. Calleja, 190 SCRA 130 [1990]).
Where the plea of immunity is recognized and affirmed by the executive branch, it is the duty of the
courts to accept this claim so as not to embarrass the executive arm of the government in
conducting the country's foreign relations (World Health Organization v. Aquino, 48 SCRA 242
[1972]). As in International Catholic Migration Commission and in World Health Organization, we
abide by the certification of the Department of Foreign Affairs.

Ordinarily, the procedure would be to remand the case and order the trial court to conduct a hearing
to establish the facts alleged by petitioner in its motion. In view of said certification, such procedure
would however be pointless and unduly circuitous (Ortigas & Co. Ltd. Partnership v. Judge Tirso
Velasco, G.R. No. 109645, July 25, 1994).

IV

Private respondent is not left without any legal remedy for the redress of its grievances. Under both
Public International Law and Transnational Law, a person who feels aggrieved by the acts of a
foreign sovereign can ask his own government to espouse his cause through diplomatic channels.

Private respondent can ask the Philippine government, through the Foreign Office, to espouse its
claims against the Holy See. Its first task is to persuade the Philippine government to take up with
the Holy See the validity of its claims. Of course, the Foreign Office shall first make a determination
of the impact of its espousal on the relations between the Philippine government and the Holy See
(Young, Remedies of Private Claimants Against Foreign States, Selected Readings on Protection by
Law of Private Foreign Investments 905, 919 [1964]). Once the Philippine government decides to
espouse the claim, the latter ceases to be a private cause.

According to the Permanent Court of International Justice, the forerunner of the International Court
of Justice:

By taking up the case of one of its subjects and by reporting to diplomatic action or
international judicial proceedings on his behalf, a State is in reality asserting its own
rights — its right to ensure, in the person of its subjects, respect for the rules of
international law (The Mavrommatis Palestine Concessions, 1 Hudson, World Court
Reports 293, 302 [1924]).

WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183
against petitioner is DISMISSED.

SO ORDERED.

Narvasa, C.J., Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan and
Mendoza, JJ., concur.

G.R. Nos. L-71998-99 June 2, 1993

EMILIANO R. DE LOS SANTOS, SPOUSES NORMA A. PADILLA and ISIDORO L. PADILLA and
the HEIRS OF FRANCISCO DAYRIT, petitioners,
vs.
THE HON. INTERMEDIATE APPELLATE COURT, HON. JUDGE CICERRO C. JURADO and
EDILBERTO CADIENTE, respondents.

Isidoro L. Padilla for petitioners.

Joaquin G. Mendoza for E. Cadiente.

ROMERO, J.:

Questioned in the instant petition for review on certiorari is the Decision of the then Intermediate
Appellate Court1affirming the December 1, 1982 order of the then Court of First Instance of Rizal,
Branch XXII at Pasig2 in civil Cases Nos. 46800 which states in toto:

It appearing that the construction of the road and creek in question was a project
undertaken under the authority of the Minister of Public Works, the funding of which
was the responsibility of the National Government and that the defendants impleaded
herein are Edilberto Cadiente and Nestor Agustin and not the Republic of the
Philippines which cannot be sued without its consent, this court hereby resolves to
dismiss these two (2) cases without pronouncement as to costs.

SO ORDERED.

Civil Cases Nos. 46800 and 46801 were both filed on July 13, 1982 by petitioners who are co-
owners under TCT No. 329945 of a parcel of land located in Barrio Wawa, Binangonan, Rizal with
an area of nineteen thousand sixty-one (19,061) square meters. In Civil Case No. 46800, petitioners
alleged in the petition for prohibition that in October 1981, without their knowledge or consent,
Lorenzo Cadiente, a private contractor and the Provincial Engineer of Rizal constructed a road nine
(9) meters wide and one hundred twenty-eight meters and seventy centimeters (128.70) long
occupying a total area of one thousand one hundred sixty-five (1,165) square meters of their land.

Petitioners added that aside from the road, the said respondents also constructed, without their
knowledge and consent, an artificial creek twenty three meters and twenty centimeters (23.20) wide
and one hundred twenty-eight meters and sixty-nine centimeters long (128.69) occupying an area of
two thousand nine hundred six (2,906) square meters of their property. Constructed in a zig-zag
manner, the creek meandered through their property.

Alleging that it completed, the road and the creek would "serve no public profitable and practicable
purpose but for respondents' personal profit, to the great damage and prejudice of the taxpayers and
the petitioners," the same petitioners invoked their rights under Art. IV Secs. 1 and 2, of the Bill of
Rights of the 1973 Constitution and prayed for the issuance of restraining order or a writ of
preliminary injunction to stop the construction. They also prayed that after hearing on the merits,
judgment be rendered: (1) declaring illegal the construction of the road and artificial creek which was
made without their knowledge and consent, "without due process and without just compensation and
in violation of the provision of statute law and of the Philippine Constitution;" (2) issuing a permanent
prohibition; (3) ordering respondents to pay petitioners "jointly and collectively" P15,00.00 as
attorney's fees and P600.00 for each appearance, and (4) ordering the respondents to pay the costs
of the suit.3

An action for damages, Civil Case No. 46801 on the other hand, was founded on Art. 32, paragraphs
6 and 7 of the Civil Code and the constitutional provisions on the right against deprivation of property
without due process of law and without just compensation.

Thereafter, the two cases were consolidated. On November 11, 1982, the Solicitor General filed a
motion to dismiss both cases on the following grounds: (a) with respect to Civil Case No. 46800, the
pendency of Civil Case No. 46801 which involved the same parties and cause of action; (b) both
cases were in reality suits against the state which could not be maintained without the State's
consent; and (c) lack of cause of action.

Consequently, the lower court issued the aforequoted Order of December 1, 1982. Their motion for
the reconsideration of said Order having been denied, petitioners elevated (to) the cases to this
Court through an "appeal by certiorari" which was docketed as G. R. No. 63610. The Second
Division of this Court, however, referred the cases to the then Intermediate Appellate Court pursuant
to Sec. 16 of the Interim Rules.4 In due course, the Appellate court rendered a Decision on May 22,
1985 which disposed of the cases thus:

Accordingly, the two actions cannot be maintained. They are in reality suits against
the state which has not given its consent to be sued (Minister [sic] vs. CFI, 40 SCRA
 464; Isberto vs. Raquiza, 67 SCRA 116; Begosa v. Chairman, PVA, 32 SCRA 466).
Appellants' remedy lies elsewhere.

Appellants assert that the taking of their property in the manner alleged in these two
cases was without due process of law. This is not correct. The appealed order has
not closed the door to appellants right, if any, to just compensation for the alleged
area of their land which was expropriated. The court below dismissed the cases for
lack of consent on the part of the state to be sued herein. We repeat appellants'
remedy for just compensation lies elsewhere.

WHEREFORE, the order appealed from is in full accord with the evidence and the
law and is hereby therefore affirmed in all its parts. Costs against appellants.

SO ORDERED.5

Consequently, petitioners elevated the cases to this Court through a petition for review on certiorari.
The petition is anchored on the ruling of the Court in Amigable v. Cuenca6 which states: ". . . . where
the government takes away property from a private landowner for public use without going through
the legal process of expropriation or negotiated sale," a suit may properly be maintained against the
government.

We hold for the petitioners.

That the principle of state immunity from suit cannot be invoked to defeat petitioners' claim has long
been settled. In Ministerio v. Court of First Instance of Cebu,7 the Court held:

. . . . The doctrine of governmental immunity from suit cannot serve as an instrument

for perpetrating an injustice on a citizen. Had the government followed the procedure
indicated by the governing law at the time, a complaint would have been filed by it,
and only upon payment of the compensation fixed by the judgment, or after tender to
the party entitled to such payment of the amount fixed, may it "have the right to enter
in and upon the land so condemned" to appropriate the same to the public use
defined in the judgment. If there were an observance of procedural regularity,
petitioners would not be in the said plaint they are now. It is unthinkable then that
precisely because there was a failure to abide by what the law requires, the
government would stand to benefit. It just as important, if not more so, that there be
fidelity to legal norms on the part of the officialdom if the rule of law were to be
maintained. It is not too much to say that when the government takes any property
for public use, which is conditioned upon the payment of just compensation, to be
judicially ascertained, it makes manifest that it submits to the jurisdiction of a court.
There is no thought then that the doctrine of immunity from suit could still be
appropriately invoked.

We find the facts of the Ministerio case on all fours with the instant cases insofar as the fact that the
respondent government officials executed a shortcut in appropriating petitioners' property for public
use is concerned. As in the Amigable case, no expropriation proceedings were initiated before
construction of the projects began. In like manner, nowhere in his pleadings in the cases at bar does
the Solicitor General mention that the fact that expropriation proceedings had in fact been
undertaken before the road and artificial creek were constructed. Thus, quoting the answer of the
defendants in Civil Case No. 46801, the Solicitor General summarized the facts which defendants
considered as constituting justification for the construction as follows:

10. The construction of the road and creek in question on the property which at the
time was said to be public property, was initiated, and construction effected, through
the usual and ordinary course, as shown by the following:

a. November 5, 1979 — Engr. Data who was the incumbent District

Engineer submitted (thru channels) plans, program of works and
detailed estimates for approval of higher authorities, thru the initiation
of Mayor Ynares and Assemblyman Gilberto Duavit;
 b. February 18, 1980 — Regional Director Eduardo L. Lagunilla,
MPW Region IV, EDSA, Quezon City endorsed said request to the
Minister of Public Works;.

c. February 13, 1981 — Assemblyman Gilberto Duavit sent a hand-

written follow-up note regarding the project;

d. June 17, 1981 — The undersigned defendant Nestor Agustin was

designated Chief Civil Engineer of the Rizal Engineer District, Vice
Engr. Cresencio Data who reached his compulsory retirement age;

e. September 23, 1981 — Funds in the amount of P588,000.00 was

released for partial implementation of the project. The total amount
requested was P1,200,000. 00;

f. October 19, 1981 — The undersigned submitted a request to the

MPWH Central Office seeking authority to effect implementation of
the project;

g. October 29, 1981 — The Regional Director approved the plans and
program of works for the project in the amount of P588,000.00;

h. November 11, 1981 — The Honorable Minister Jesus S. Hipolito

granted the request to undertake the implementation of the project;

i. November 25, 1981 — Project implementation was started;

j. March 3, 1982 — Construction of rock bulkhead was completed;

k. November 23, 1982 — P249,000.00 was released for improvement

(deepening and diverting of flow) of Binangonan River which was a
complimentary structure of Binangonan port system;

l. April 9, 1982 — Implementation was started. Contract for this

project was approved by the Regional Director in favor of
EDILBERTO CADIENTE CONSTRUCTION;

m. May 21, 1982 — Deepening slightly of the adjacent portion of the

rock bulkhead was completed.

11. The construction of the structures was done in good faith;

The construction of the roadway and deepening of the creek was designated to
generate for the municipality of Binangonan, Rizal more benefits in the form of
substantial revenue from fishing industry, parking area, market rentals, development
site, and road system improvements. The area covered by said public improvements
is part of the Laguna Lake area which is submerged in water even during dry season.
The municipal mayor of Binangonan, Rizal stated that said area is public property.8

Public respondents' belief that the property involved is public, even if buttressed by statements of
other public officials, is no reason for the unjust taking of petitioners' property. As TCT No. 329945
shows, the property was registered under the Torrens system in the names of "Emiliano R. de los
Santos, married to Corazon Dayrit; and Norma Alabastro, married to Isidro L. Padilla" as early as
March 29, 1971. Had the public respondents, including the other officials involved in the
construction, performed their functions by exercising even the ordinary diligence expected of them
as public officials, they would not have failed to note that the property is a private one. A public
infrastructure losses its laudability if, in the process of undertaking it, private rights are disregarded.
In this connection, the Court said in Republic v. Sandiganbayan:9

It can hardly be doubted that in exercising the right of eminent domain, the State
exercises its jus imperii, as distinguished from its proprietary rights of jus gestionis.
Yet, even in that area, it has been held that where private property has been taken in
 expropriation without just compensation being paid, the defense of immunity from
suit cannot be set up by the State against an action for payment by the owner.

Public respondents' assertion that the project had been completed on May 21, 1982 meets strong
opposition from the petitioners who insist that the project "until now is not yet finished."10 This factual
issue needs determination which only the trial court can undertake. Thus, the need for a full blown
trial on the merits. We do not subscribe to the appellate court's suggestion that the remedy of the
petitioners "lies elsewhere."

The filing of another case to determine just compensation is superfluous. The issue may be threshed
out below for practical reasons in the event that it is shown later that it is no longer possible to
prohibit the public respondents from continuing with the public work. As held in the Amigable case,
damages may be awarded the petitioners in the form of legal interest on the price of the land to be
reckoned from the time of the unlawful taking.

WHEREFORE, the petition is hereby GRANTED and Civil Cases Nos. 46800 and 46801 shall be
REMANDED to the lower court for trial on the merits after the Republic of the Philippines shall have
been impleaded as defendant in both cases.

Feliciano, Davide, Jr., Romero, and Melo, JJ. concur.

Bidin, J. took no part.

G.R. No. L-20213 January 31, 1966

MARIANO E. GARCIA, plaintiff-appellant,

vs.
THE CHIEF OF STAFF and THE ADJUTANT GENERAL, ARMED FORCES OF THE
PHILIPPINES and/or THE CHAIRMAN, PHILIPPINE VETERANS BOARD and/or THE AUDITOR
GENERAL OF THE PHILIPPINES,defendants-appellees.

Tiangco and Millosa for the plaintiff-appellant.

Office of the Solicitor General for the defendants-appellees.

REGALA, J.:

This is an appeal from an order of dismissal.

It appears that on December 1, 1961, the plaintiff-appellant, Mariano E. Garcia, filed with the Court
of First Instance of Pangasinan an action to collect a sum of money against the Chief of Staff and
the Adjutant General of the Armed Forces of the Philippines, the Chairman of the Philippine
Veterans Board and /or the Auditor General. The complaint alleged: that sometime in July, 1948, the
plaintiff suffered injuries while undergoing the 10-month military training at Camp Floridablanca,
Pampanga; that sometime thereafter he filed his claim under Commonwealth Act 400 and in April,
1957, he submitted some papers in support of his claim to the Adjutant General's Office upon the
latter's request; that on May 2, 1957, he received a letter from the said Adjutant General's Office
disallowing his claim for disability benefits; that on November 24, 1958, after further demands of the
plaintiff, the Adjutant General's Office denied the said claim, alleging that Commonwealth Act 400
had already been repealed by Republic Act 610 which took effect on January 1, 1950; that by reason
of the injuries suffered by plaintiff he was deprived of his sight or vision rendering him permanently
disabled; and that by reason of the unjustified refusal by defendants of plaintiff's claim, the latter was
deprived of his disability pension from July, 1948 totalling no less than P4,000 at the rate of P20 a
month and suffered thereby moral damages and attorney's fees the amount of P2,000.00.

The Philippine Veterans Administration and the Chief of Staff of the Armed Forces filed separate
motions to dismiss the complaint on the grounds that the court has no jurisdiction over the subject
matter of the complaint; that the plaintiff failed to exhaust all administrative remedies before coming
to court; that the complaint states no cause of action; and that the cause of action is barred by the
statute of limitations.
1äw phï1.ñët
Acting on the said motion, the court, on March 2, 1962, rendered an order dismissing the complaint
on the ground that the action has prescribed.

Motion for reconsideration of the said order having been denied, the plaintiff has interposed this
appeal.

Without need of discussing the various questions raised, We have to uphold the order of dismissal,
not necessarily on the same ground as found by the lower court; but for the simple reason that the
Court of First Instance has no jurisdiction over the subject matter, it being a money claim against the
government.

This Court has already held (New Manila Lumber Co. Inc. vs. Republic, G.R. No. L-14248, April 28,
1960) that a claim for the recovery of money against the government should be filed with the Auditor
General, in line with the principle that the State cannot be sued without its consent. Commonwealth
Act 327 provides:

SECTION 1. In all cases involving the settlement of accounts or claims, other than those of
accountable officers, the Auditor General shall act and decide the same within sixty days,
exclusive of Sundays and holidays, after their presentation. . . .

SEC. 2. The party aggrieved by the final decision of the Auditor General in the settlement of
an account or claim may, within thirty days from receipt of the decision, take an appeal in
writing:

xxx xxx x x x.

(c) To the Supreme Court of the Philippines, if the appellant is a private person or entity.

The well established rule that no recourse to court can be had until all administrative remedies had
been exhausted and that actions against administrative officers should not be entertained if superior
administrative officers could grant relief is squarely applicable to the present case.

In view therefor, the order dismissing the complaint is hereby affirmed, without pronouncement as to
costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes J.B.L., Barrera, Dizon, Bengzon, J.P., and
Zaldivar, JJ., concur.
Makalintal, J., took no part.

G.R. No. L-46930 June 10, 1988

DALE SANDERS, AND A.S. MOREAU, JR, petitioners,

vs.
HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First Instance of
Zambales, Olongapo City, ANTHONY M. ROSSI and RALPH L. WYERS, respondents.

CRUZ, J.:

The basic issue to be resolved in this case is whether or not the petitioners were performing their official duties when they did the acts for
which they have been sued for damages by the private respondents. Once this question is decided, the other answers will fall into place and
this petition need not detain us any longer than it already has.

Petitioner Sanders was, at the time the incident in question occurred, the special services director of
the U.S. Naval Station (NAVSTA) in Olongapo City. 1 Petitioner Moreau was the commanding officer
of the Subic Naval Base, which includes the said station. 2 Private respondent Rossi is an American
citizen with permanent residence in the Philippines,3 as so was private respondent Wyer, who died
two years ago. 4 They were both employed as gameroom attendants in the special services
department of the NAVSTA, the former having been hired in 1971 and the latter in 1969. 5
On October 3, 1975, the private respondents were advised that their employment had been
converted from permanent full-time to permanent part-time, effective October 18, 1975. 6 Their
reaction was to protest this conversion and to institute grievance proceedings conformably to the
pertinent rules and regulations of the U.S. Department of Defense. The result was a
recommendation from the hearing officer who conducted the proceedings for the reinstatement of
the private respondents to permanent full-time status plus backwages. The report on the hearing
contained the observation that "Special Services management practices an autocratic form of
supervision." 7

In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the complaint), Sanders
disagreed with the hearing officer's report and asked for the rejection of the abovestated
recommendation. The letter contained the statements that: a ) "Mr. Rossi tends to alienate most co-
workers and supervisors;" b) "Messrs. Rossi and Wyers have proven, according to their immediate
supervisors, to be difficult employees to supervise;" and c) "even though the grievants were under
oath not to discuss the case with anyone, (they) placed the records in public places where others not
involved in the case could hear."

On November 7, 1975, before the start of the grievance hearings, a-letter (Annex "B" of the
complaint) purportedly corning from petitioner Moreau as the commanding general of the U.S. Naval
Station in Subic Bay was sent to the Chief of Naval Personnel explaining the change of the private
respondent's employment status and requesting concurrence therewith. The letter did not carry his
signature but was signed by W.B. Moore, Jr. "by direction," presumably of Moreau.

On the basis of these antecedent facts, the private respondent filed in the Court of First Instance of
Olongapo City a for damages against the herein petitioners on November 8, 1976.8 The plaintiffs
claimed that the letters contained libelous imputations that had exposed them to ridicule and caused
them mental anguish and that the prejudgment of the grievance proceedings was an invasion of their
personal and proprietary rights.

The private respondents made it clear that the petitioners were being sued in their private or
personal capacity. However, in a motion to dismiss filed under a special appearance, the petitioners
argued that the acts complained of were performed by them in the discharge of their official duties
and that, consequently, the court had no jurisdiction over them under the doctrine of state immunity.

After extensive written arguments between the parties, the motion was denied in an order dated
March 8, 1977, 9 on the main ground that the petitioners had not presented any evidence that their
acts were official in nature and not personal torts, moreover, the allegation in the complaint was that
the defendants had acted maliciously and in bad faith. The same order issued a writ of preliminary
attachment, conditioned upon the filing of a P10,000.00 bond by the plaintiffs, against the properties
of petitioner Moreau, who allegedly was then about to leave the Philippines. Subsequently, to make
matters worse for the defendants, petitioner Moreau was declared in a default by the trial court in its
order dated August 9, 1977. The motion to lift the default order on the ground that Moreau's failure to
appear at the pre-trial conference was the result of some misunderstanding, and the motion for
reconsideration of the denial of the motion to dismiss, which was filed by the petitioner's new
lawyers, were denied by the respondent court on September 7, 1977.

This petition for certiorari, prohibition and preliminary injunction was thereafter filed before this Court,
on the contention that the above-narrated acts of the respondent court are tainted with grave abuse
of discretion amounting to lack of jurisdiction.

We return now to the basic question of whether the petitioners were acting officially or only in their
private capacities when they did the acts for which the private respondents have sued them for
damages.

It is stressed at the outset that the mere allegation that a government functionary is being sued in his
personal capacity will not automatically remove him from the protection of the law of public officers
and, if appropriate, the doctrine of state immunity. By the same token, the mere invocation of official
character will not suffice to insulate him from suability and liability for an act imputed to him as a
personal tort committed without or in excess of his authority. These well-settled principles are
applicable not only to the officers of the local state but also where the person sued in its courts
pertains to the government of a foreign state, as in the present case.

The respondent judge, apparently finding that the complained acts were prima facie personal and
tortious, decided to proceed to trial to determine inter alia their precise character on the strength of
the evidence to be submitted by the parties. The petitioners have objected, arguing that no such
evidence was needed to substantiate their claim of jurisdictional immunity. Pending resolution of this
question, we issued a temporary restraining order on September 26, 1977, that has since then
suspended the proceedings in this case in the court a quo.

In past cases, this Court has held that where the character of the act complained of can be
determined from the pleadings exchanged between the parties before the trial, it is not necessary for
the court to require them to belabor the point at a trial still to be conducted. Such a proceeding would
be superfluous, not to say unfair to the defendant who is subjected to unnecessary and avoidable
inconvenience.

Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint against the commanding
general of the Olongapo Naval Base should not have been denied because it had been sufficiently
shown that the act for which he was being sued was done in his official capacity on behalf of the
American government. The United States had not given its consent to be sued. It was the reverse
situation in Syquia v. Almeda Lopez," where we sustained the order of the lower court granting a
where we motion to dismiss a complaint against certain officers of the U.S. armed forces also shown
to be acting officially in the name of the American government. The United States had also not
waived its immunity from suit. Only three years ago, in United States of America v. Ruiz, 12 we set
aside the denial by the lower court of a motion to dismiss a complaint for damages filed against the
United States and several of its officials, it appearing that the act complained of was governmental
rather than proprietary, and certainly not personal. In these and several other cases 13 the Court
found it redundant to prolong the other case proceedings after it had become clear that the suit could
not prosper because the acts complained of were covered by the doctrine of state immunity.

It is abundantly clear in the present case that the acts for which the petitioners are being called to
account were performed by them in the discharge of their official duties. Sanders, as director of the
special services department of NAVSTA, undoubtedly had supervision over its personnel, including
the private respondents, and had a hand in their employment, work assignments, discipline,
dismissal and other related matters. It is not disputed that the letter he had written was in fact a reply
to a request from his superior, the other petitioner, for more information regarding the case of the
private respondents.14 Moreover, even in the absence of such request, he still was within his rights in
reacting to the hearing officer's criticism—in effect a direct attack against him—-that Special
Services was practicing "an autocratic form of supervision."

As for Moreau,what he is claimed to have done was write the Chief of Naval Personnel for
concurrence with the conversion of the private respondents' type of employment even before the
grievance proceedings had even commenced. Disregarding for the nonce the question of its
timeliness, this act is clearly official in nature, performed by Moreau as the immediate superior of
Sanders and directly answerable to Naval Personnel in matters involving the special services
department of NAVSTA In fact, the letter dealt with the financial and budgetary problems of the
department and contained recommendations for their solution, including the re-designation of the
private respondents. There was nothing personal or private about it.

Given the official character of the above-described letters, we have to conclude that the petitioners
were, legally speaking, being sued as officers of the United States government. As they have acted
on behalf of that government, and within the scope of their authority, it is that government, and not
the petitioners personally, that is responsible for their acts. Assuming that the trial can proceed and it
is proved that the claimants have a right to the payment of damages, such award will have to be
satisfied not by the petitioners in their personal capacities but by the United States government as
their principal. This will require that government to perform an affirmative act to satisfy the
judgment, viz, the appropriation of the necessary amount to cover the damages awarded, thus
making the action a suit against that government without its consent.

There should be no question by now that such complaint cannot prosper unless the government
sought to be held ultimately liable has given its consent to' be sued. So we have ruled not only in
Baer but in many other decisions where we upheld the doctrine of state immunity as applicable not
only to our own government but also to foreign states sought to be subjected to the jurisdiction of our
courts. 15

The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right against
the authority which makes the law on which the right depends.16 In the case of foreign states, the rule
is derived from the principle of the sovereign equality of states which wisely admonishes that par in
parem non habet imperium and that a contrary attitude would "unduly vex the peace of
nations." 17 Our adherence to this precept is formally expressed in Article II, Section 2, of our
Constitution, where we reiterate from our previous charters that the Philippines "adopts the generally
accepted principles of international law as part of the law of the land.

All this is not to say that in no case may a public officer be sued as such without the previous
consent of the state. To be sure, there are a number of well-recognized exceptions. It is clear that a
public officer may be sued as such to compel him to do an act required by law, as where, say, a
register of deeds refuses to record a deed of sale; 18 or to restrain a Cabinet member, for example,
from enforcing a law claimed to be unconstitutional; 19 or to compel the national treasurer to pay
damages from an already appropriated assurance fund; 20 or the commissioner of internal revenue to
refund tax over-payments from a fund already available for the purpose; 21 or, in general, to secure a
judgment that the officer impleaded may satisfy by himself without the government itself having to do
a positive act to assist him. We have also held that where the government itself has violated its own
laws, the aggrieved party may directly implead the government even without first filing his claim with
the Commission on Audit as normally required, as the doctrine of state immunity "cannot be used as
an instrument for perpetrating an injustice." 22

This case must also be distinguished from such decisions as Festejo v. Fernando, 23 where the Court
held that a bureau director could be sued for damages on a personal tort committed by him when he
acted without or in excess of authority in forcibly taking private property without paying just
compensation therefor although he did convert it into a public irrigation canal. It was not necessary
to secure the previous consent of the state, nor could it be validly impleaded as a party defendant,
as it was not responsible for the defendant's unauthorized act.

The case at bar, to repeat, comes under the rule and not under any of the recognized exceptions.
The government of the United States has not given its consent to be sued for the official acts of the
petitioners, who cannot satisfy any judgment that may be rendered against them. As it is the
American government itself that will have to perform the affirmative act of appropriating the amount
that may be adjudged for the private respondents, the complaint must be dismissed for lack of
jurisdiction.

The Court finds that, even under the law of public officers, the acts of the petitioners are protected by
the presumption of good faith, which has not been overturned by the private respondents. Even
mistakes concededly committed by such public officers are not actionable as long as it is not shown
that they were motivated by malice or gross negligence amounting to bad faith.24 This, to, is well
settled .25 Furthermore, applying now our own penal laws, the letters come under the concept of
privileged communications and are not punishable, 26 let alone the fact that the resented remarks are
not defamatory by our standards. It seems the private respondents have overstated their case.

A final consideration is that since the questioned acts were done in the Olongapo Naval Base by the
petitioners in the performance of their official duties and the private respondents are themselves
American citizens, it would seem only proper for the courts of this country to refrain from taking
cognizance of this matter and to treat it as coming under the internal administration of the said base.

The petitioners' counsel have submitted a memorandum replete with citations of American cases, as
if they were arguing before a court of the United States. The Court is bemused by such attitude.
While these decisions do have persuasive effect upon us, they can at best be invoked only to
support our own jurisprudence, which we have developed and enriched on the basis of our own
persuasions as a people, particularly since we became independent in 1946.

We appreciate the assistance foreign decisions offer us, and not only from the United States but also
from Spain and other countries from which we have derived some if not most of our own laws. But
we should not place undue and fawning reliance upon them and regard them as indispensable
mental crutches without which we cannot come to our own decisions through the employment of our
own endowments We live in a different ambience and must decide our own problems in the light of
our own interests and needs, and of our qualities and even idiosyncrasies as a people, and always
with our own concept of law and justice.

The private respondents must, if they are still sominded, pursue their claim against the petitioners in
accordance with the laws of the United States, of which they are all citizens and under whose
jurisdiction the alleged offenses were committed. Even assuming that our own laws are applicable,
the United States government has not decided to give its consent to be sued in our courts, which
therefore has not acquired the competence to act on the said claim,.
WHEREFORE, the petition is GRANTED. The challenged orders dated March 8,1977, August
9,1977, and September 7, 1977, are SET ASIDE. The respondent court is directed to DISMISS Civil
Case No. 2077-O. Our Temporary restraining order of September 26,1977, is made PERMANENT.
No costs.

SO ORDERED.

Narvasa, Gancayco, Grino-Aquiño and Medialdea, JJ., Concur.

G.R. No. 171182 August 23, 2012

UNIVERSITY OF THE PHILIPPINES, JOSE V. ABUEVA, RAUL P. DE GUZMAN, RUBEN P.

ASPIRAS, EMMANUEL P. BELLO, WILFREDO P. DAVID, CASIANO S. ABRIGO, and JOSEFINA
R. LICUANAN,Petitioners,
vs.
HON. AGUSTIN S. DIZON, his capacity as Presiding Judge of the Regional Trial Court of
Quezon City, Branch 80, STERN BUILDERS, INC., and SERVILLANO DELA
CRUZ, Respondents.

DECISION

BERSAMIN, J.:

Trial judges should not immediately issue writs of execution or garnishment against the Government
or any of its subdivisions, agencies and instrumentalities to enforce money judgments.1 They should
bear in mind that the primary jurisdiction to examine, audit and settle all claims of any sort due from
the Government or any of its subdivisions, agencies and instrumentalities pertains to the
Commission on Audit (COA) pursuant to Presidential Decree No. 1445 (Government Auditing Code
of the Philippines).

The Case

On appeal by the University of the Philippines and its then incumbent officials (collectively, the UP) is
the decision promulgated on September 16, 2005,2 whereby the Court of Appeals (CA) upheld the
order of the Regional Trial Court (RTC), Branch 80, in Quezon City that directed the garnishment of
public funds amounting to ₱ 16,370,191.74 belonging to the UP to satisfy the writ of execution
issued to enforce the already final and executory judgment against the UP.

Antecedents

On August 30, 1990, the UP, through its then President Jose V. Abueva, entered into a General
Construction Agreement with respondent Stern Builders Corporation (Stern Builders), represented
by its President and General Manager Servillano dela Cruz, for the construction of the extension
building and the renovation of the College of Arts and Sciences Building in the campus of the
University of the Philippines in Los Baños (UPLB).3

In the course of the implementation of the contract, Stern Builders submitted three progress billings
corresponding to the work accomplished, but the UP paid only two of the billings. The third billing
worth ₱ 273,729.47 was not paid due to its disallowance by the Commission on Audit (COA).
Despite the lifting of the disallowance, the UP failed to pay the billing, prompting Stern Builders and
dela Cruz to sue the UP and its co-respondent officials to collect the unpaid billing and to recover
various damages. The suit, entitled Stern Builders Corporation and Servillano R. Dela Cruz v.
University of the Philippines Systems, Jose V. Abueva, Raul P. de Guzman, Ruben P. Aspiras,
Emmanuel P. Bello, Wilfredo P. David, Casiano S. Abrigo, and Josefina R. Licuanan, was docketed
as Civil Case No. Q-93-14971 of the Regional Trial Court in Quezon City (RTC).4

After trial, on November 28, 2001, the RTC rendered its decision in favor of the plaintiffs,5 viz:

Wherefore, in the light of the foregoing, judgment is hereby rendered in favor of the plaintiff and
against the defendants ordering the latter to pay plaintiff, jointly and severally, the following, to wit:

1. ₱ 503,462.74 amount of the third billing, additional accomplished work and retention
money
 2. ₱ 5,716,729.00 in actual damages

3. ₱ 10,000,000.00 in moral damages

4. ₱ 150,000.00 and ₱ 1,500.00 per appearance as attorney’s fees; and

5. Costs of suit.

SO ORDERED.

Following the RTC’s denial of its motion for reconsideration on May 7, 2002,6 the UP filed a notice of
appeal on June 3, 2002.7 Stern Builders and dela Cruz opposed the notice of appeal on the ground of
its filing being belated, and moved for the execution of the decision. The UP countered that the
notice of appeal was filed within the reglementary period because the UP’s Office of Legal Affairs
(OLS) in Diliman, Quezon City received the order of denial only on May 31, 2002. On September 26,
2002, the RTC denied due course to the notice of appeal for having been filed out of time and
granted the private respondents’ motion for execution.8

The RTC issued the writ of execution on October 4, 2002,9 and the sheriff of the RTC served the writ
of execution and notice of demand upon the UP, through its counsel, on October 9, 2002.10 The UP
filed an urgent motion to reconsider the order dated September 26, 2002, to quash the writ of
execution dated October 4, 2002, and to restrain the proceedings.11 However, the RTC denied the
urgent motion on April 1, 2003.12

On June 24, 2003, the UP assailed the denial of due course to its appeal through a petition
for certiorari in the Court of Appeals (CA), docketed as CA-G.R. No. 77395.13

On February 24, 2004, the CA dismissed the petition for certiorari upon finding that the UP’s notice
of appeal had been filed late,14 stating:

Records clearly show that petitioners received a copy of the Decision dated November 28, 2001 and
January 7, 2002, thus, they had until January 22, 2002 within which to file their appeal. On January
16, 2002 or after the lapse of nine (9) days, petitioners through their counsel Atty. Nolasco filed a
Motion for Reconsideration of the aforesaid decision, hence, pursuant to the rules, petitioners still
had six (6) remaining days to file their appeal. As admitted by the petitioners in their petition (Rollo,
p. 25), Atty. Nolasco received a copy of the Order denying their motion for reconsideration on May
17, 2002, thus, petitioners still has until May 23, 2002 (the remaining six (6) days) within which to file
their appeal. Obviously, petitioners were not able to file their Notice of Appeal on May 23, 2002 as it
was only filed on June 3, 2002.

In view of the said circumstances, We are of the belief and so holds that the Notice of Appeal filed by
the petitioners was really filed out of time, the same having been filed seventeen (17) days late of
the reglementary period. By reason of which, the decision dated November 28, 2001 had already
become final and executory. "Settled is the rule that the perfection of an appeal in the manner and
within the period permitted by law is not only mandatory but jurisdictional, and failure to perfect that
appeal renders the challenged judgment final and executory. This is not an empty procedural rule
but is grounded on fundamental considerations of public policy and sound practice." (Ram’s Studio
and Photographic Equipment, Inc. vs. Court of Appeals, 346 SCRA 691, 696). Indeed, Atty. Nolasco
received the order of denial of the Motion for Reconsideration on May 17, 2002 but filed a Notice of
Appeal only on June 3, 3003. As such, the decision of the lower court ipso facto became final when
no appeal was perfected after the lapse of the reglementary period. This procedural caveat cannot
be trifled with, not even by the High Court.15

The UP sought a reconsideration, but the CA denied the UP’s motion for reconsideration on April 19,
2004.16

On May 11, 2004, the UP appealed to the Court by petition for review on certiorari (G.R. No.
163501).

On June 23, 2004, the Court denied the petition for review.17 The UP moved for the reconsideration of
the denial of its petition for review on August 29, 2004,18 but the Court denied the motion on October
6, 2004.19 The denial became final and executory on November 12, 2004.20
In the meanwhile that the UP was exhausting the available remedies to overturn the denial of due
course to the appeal and the issuance of the writ of execution, Stern Builders and dela Cruz filed in
the RTC their motions for execution despite their previous motion having already been granted and
despite the writ of execution having already issued. On June 11, 2003, the RTC granted another
motion for execution filed on May 9, 2003 (although the RTC had already issued the writ of
execution on October 4, 2002).21

On June 23, 2003 and July 25, 2003, respectively, the sheriff served notices of garnishment on the
UP’s depository banks, namely: Land Bank of the Philippines (Buendia Branch) and the
Development Bank of the Philippines (DBP), Commonwealth Branch.22 The UP assailed the
garnishment through an urgent motion to quash the notices of garnishment;23 and a motion to quash
the writ of execution dated May 9, 2003.24

On their part, Stern Builders and dela Cruz filed their ex parte motion for issuance of a release
order.25

On October 14, 2003, the RTC denied the UP’s urgent motion to quash, and granted Stern Builders
and dela Cruz’s ex parte motion for issuance of a release order.26

The UP moved for the reconsideration of the order of October 14, 2003, but the RTC denied the
motion on November 7, 2003.27

On January 12, 2004, Stern Builders and dela Cruz again sought the release of the garnished
funds.28 Despite the UP’s opposition,29 the RTC granted the motion to release the garnished funds on
March 16, 2004.30 On April 20, 2004, however, the RTC held in abeyance the enforcement of the
writs of execution issued on October 4, 2002 and June 3, 2003 and all the ensuing notices of
garnishment, citing Section 4, Rule 52, Rules of Court, which provided that the pendency of a timely
motion for reconsideration stayed the execution of the judgment.31

On December 21, 2004, the RTC, through respondent Judge Agustin S. Dizon, authorized the
release of the garnished funds of the UP,32 to wit:

WHEREFORE, premises considered, there being no more legal impediment for the release of the
garnished amount in satisfaction of the judgment award in the instant case, let the amount garnished
be immediately released by the Development Bank of the Philippines, Commonwealth Branch,
Quezon City in favor of the plaintiff.

SO ORDERED.

The UP was served on January 3, 2005 with the order of December 21, 2004 directing DBP to
release the garnished funds.33

On January 6, 2005, Stern Builders and dela Cruz moved to cite DBP in direct contempt of court for
its non-compliance with the order of release.34

Thereupon, on January 10, 2005, the UP brought a petition for certiorari in the CA to challenge the
jurisdiction of the RTC in issuing the order of December 21, 2004 (CA-G.R. CV No. 88125).35 Aside
from raising the denial of due process, the UP averred that the RTC committed grave abuse of
discretion amounting to lack or excess of jurisdiction in ruling that there was no longer any legal
impediment to the release of the garnished funds. The UP argued that government funds and
properties could not be seized by virtue of writs of execution or garnishment, as held in Department
of Agriculture v. National Labor Relations Commission,36 and citing Section 84 of Presidential Decree
No. 1445 to the effect that "revenue funds shall not be paid out of any public treasury or depository
except in pursuance of an appropriation law or other specific statutory authority;" and that the order
of garnishment clashed with the ruling in University of the Philippines Board of Regents v. Ligot-
Telan37 to the effect that the funds belonging to the UP were public funds.

On January 19, 2005, the CA issued a temporary restraining order (TRO) upon application by the
UP.38

On March 22, 2005, Stern Builders and dela Cruz filed in the RTC their amended motion for sheriff’s
assistance to implement the release order dated December 21, 2004, stating that the 60-day period
of the TRO of the CA had already lapsed.39 The UP opposed the amended motion and countered that
the implementation of the release order be suspended.40

On May 3, 2005, the RTC granted the amended motion for sheriff’s assistance and directed the
sheriff to proceed to the DBP to receive the check in satisfaction of the judgment.41

The UP sought the reconsideration of the order of May 3, 2005.42

On May 16, 2005, DBP filed a motion to consign the check representing the judgment award and to
dismiss the motion to cite its officials in contempt of court.43

On May 23, 2005, the UP presented a motion to withhold the release of the payment of the judgment
award.44

On July 8, 2005, the RTC resolved all the pending matters,45 noting that the DBP had already
delivered to the sheriff Manager’s Check No. 811941 for ₱ 16,370,191.74 representing the
garnished funds payable to the order of Stern Builders and dela Cruz as its compliance with the
RTC’s order dated December 21, 2004.46 However, the RTC directed in the same order that Stern
Builders and dela Cruz should not encash the check or withdraw its amount pending the final
resolution of the UP’s petition for certiorari, to wit:47

To enable the money represented in the check in question (No. 00008119411) to earn interest
during the pendency of the defendant University of the Philippines application for a writ of injunction
with the Court of Appeals the same may now be deposited by the plaintiff at the garnishee Bank
(Development Bank of the Philippines), the disposition of the amount represented therein being
subject to the final outcome of the case of the University of the Philippines et al., vs. Hon. Agustin S.
Dizon et al., (CA G.R. 88125) before the Court of Appeals.

Let it be stated herein that the plaintiff is not authorized to encash and withdraw the amount
represented in the check in question and enjoy the same in the fashion of an owner during the
pendency of the case between the parties before the Court of Appeals which may or may not be
resolved in plaintiff’s favor.

With the end in view of seeing to it that the check in question is deposited by the plaintiff at the
Development Bank of the Philippines (garnishee bank), Branch Sheriff Herlan Velasco is directed to
accompany and/or escort the plaintiff in making the deposit of the check in question.

SO ORDERED.

On September 16, 2005, the CA promulgated its assailed decision dismissing the UP’s petition for
certiorari, ruling that the UP had been given ample opportunity to contest the motion to direct the
DBP to deposit the check in the name of Stern Builders and dela Cruz; and that the garnished funds
could be the proper subject of garnishment because they had been already earmarked for the
project, with the UP holding the funds only in a fiduciary capacity,48 viz:

Petitioners next argue that the UP funds may not be seized for execution or garnishment to satisfy
the judgment award. Citing Department of Agriculture vs. NLRC, University of the Philippines Board
of Regents vs. Hon. Ligot-Telan, petitioners contend that UP deposits at Land Bank and the
Development Bank of the Philippines, being government funds, may not be released absent an
appropriations bill from Congress.

The argument is specious. UP entered into a contract with private respondents for the expansion
and renovation of the Arts and Sciences Building of its campus in Los Baños, Laguna. Decidedly,
there was already an appropriations earmarked for the said project. The said funds are retained by
UP, in a fiduciary capacity, pending completion of the construction project.

We agree with the trial Court [sic] observation on this score:

"4. Executive Order No. 109 (Directing all National Government Agencies to Revert Certain
Accounts Payable to the Cumulative Result of Operations of the National Government and
for Other Purposes) Section 9. Reversion of Accounts Payable, provides that, all 1995 and
prior years documented accounts payable and all undocumented accounts regardless of the
year they were incurred shall be reverted to the Cumulative Result of Operations of the
 National Government (CROU). This shall apply to accounts payable of all funds, except
fiduciary funds, as long as the purpose for which the funds were created have not been
accomplished and accounts payable under foreign assisted projects for the duration of the
said project. In this regard, the Department of Budget and Management issued Joint-Circular
No. 99-6 4.0 (4.3) Procedural Guidelines which provides that all accounts payable that
reverted to the CROU may be considered for payment upon determination thru
administrative process, of the existence, validity and legality of the claim. Thus, the allegation
of the defendants that considering no appropriation for the payment of any amount awarded
to plaintiffs appellee the funds of defendant-appellants may not be seized pursuant to a writ
of execution issued by the regular court is misplaced. Surely when the defendants and the
plaintiff entered into the General Construction of Agreement there is an amount already
allocated by the latter for the said project which is no longer subject of future appropriation."49

After the CA denied their motion for reconsideration on December 23, 2005, the petitioners appealed
by petition for review.

Matters Arising During the Pendency of the Petition

On January 30, 2006, Judge Dizon of the RTC (Branch 80) denied Stern Builders and dela Cruz’s
motion to withdraw the deposit, in consideration of the UP’s intention to appeal to the CA,50 stating:

Since it appears that the defendants are intending to file a petition for review of the Court of Appeals
resolution in CA-G.R. No. 88125 within the reglementary period of fifteen (15) days from receipt of
resolution, the Court agrees with the defendants stand that the granting of plaintiffs’ subject motion is
premature.

Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that
the "disposition of the amount represented therein being subject to the final outcome of the case of
the University of the Philippines, et. al., vs. Hon. Agustin S. Dizon et al., (CA G.R. No. 88125 before
the Court of Appeals) is that the judgment or resolution of said court has to be final and executory,
for if the same will still be elevated to the Supreme Court, it will not attain finality yet until the highest
court has rendered its own final judgment or resolution.51

However, on January 22, 2007, the UP filed an Urgent Application for A Temporary Restraining
Order and/or A Writ of Preliminary Injunction,52 averring that on January 3, 2007, Judge Maria
Theresa dela Torre-Yadao (who had meanwhile replaced Judge Dizon upon the latter’s appointment
to the CA) had issued another order allowing Stern Builders and dela Cruz to withdraw the
deposit,53 to wit:

It bears stressing that defendants’ liability for the payment of the judgment obligation has become
indubitable due to the final and executory nature of the Decision dated November 28, 2001. Insofar
as the payment of the [sic] judgment obligation is concerned, the Court believes that there is nothing
more the defendant can do to escape liability. It is observed that there is nothing more the defendant
can do to escape liability. It is observed that defendant U.P. System had already exhausted all its
legal remedies to overturn, set aside or modify the decision (dated November 28, 2001( rendered
against it. The way the Court sees it, defendant U.P. System’s petition before the Supreme Court
concerns only with the manner by which said judgment award should be satisfied. It has nothing to
do with the legality or propriety thereof, although it prays for the deletion of [sic] reduction of the
award of moral damages.

It must be emphasized that this Court’s finding, i.e., that there was sufficient appropriation
earmarked for the project, was upheld by the Court of Appeals in its decision dated September 16,
2005. Being a finding of fact, the Supreme Court will, ordinarily, not disturb the same was said Court
is not a trier of fact. Such being the case, defendants’ arguments that there was no sufficient
appropriation for the payment of the judgment obligation must fail.

While it is true that the former Presiding Judge of this Court in its Order dated January 30, 2006 had
stated that:

Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that
the "disposition of the amount represented therein being subject to the final outcome of the case of
the University of the Philippines, et. al., vs. Hon. Agustin S. Dizon et al., (CA G.R. No. 88125 before
the Court of Appeals) is that the judgment or resolution of said court has to be final and executory,
for if the same will still be elevated to the Supreme Court, it will not attain finality yet until the highest
court has rendered its own final judgment or resolution.

it should be noted that neither the Court of Appeals nor the Supreme Court issued a preliminary
injunction enjoining the release or withdrawal of the garnished amount. In fact, in its present petition
for review before the Supreme Court, U.P. System has not prayed for the issuance of a writ of
preliminary injunction. Thus, the Court doubts whether such writ is forthcoming.

The Court honestly believes that if defendants’ petition assailing the Order of this Court dated
December 31, 2004 granting the motion for the release of the garnished amount was meritorious,
the Court of Appeals would have issued a writ of injunction enjoining the same. Instead, said
appellate court not only refused to issue a wit of preliminary injunction prayed for by U.P. System but
denied the petition, as well.54

The UP contended that Judge Yadao thereby effectively reversed the January 30, 2006 order of
Judge Dizon disallowing the withdrawal of the garnished amount until after the decision in the case
would have become final and executory.

Although the Court issued a TRO on January 24, 2007 to enjoin Judge Yadao and all persons acting
pursuant to her authority from enforcing her order of January 3, 2007,55 it appears that on January 16,
2007, or prior to the issuance of the TRO, she had already directed the DBP to forthwith release the
garnished amount to Stern Builders and dela Cruz; 56 and that DBP had forthwith complied with the
order on January 17, 2007 upon the sheriff’s service of the order of Judge Yadao.57

These intervening developments impelled the UP to file in this Court a supplemental petition on
January 26, 2007,58alleging that the RTC (Judge Yadao) gravely erred in ordering the immediate
release of the garnished amount despite the pendency of the petition for review in this Court.

The UP filed a second supplemental petition59 after the RTC (Judge Yadao) denied the UP’s motion
for the redeposit of the withdrawn amount on April 10, 2007,60 to wit:

This resolves defendant U.P. System’s Urgent Motion to Redeposit Judgment Award praying that
plaintiffs be directed to redeposit the judgment award to DBP pursuant to the Temporary Restraining
Order issued by the Supreme Court. Plaintiffs opposed the motion and countered that the
Temporary Restraining Order issued by the Supreme Court has become moot and academic
considering that the act sought to be restrained by it has already been performed. They also alleged
that the redeposit of the judgment award was no longer feasible as they have already spent the
same.

It bears stressing, if only to set the record straight, that this Court did not – in its Order dated January
3, 2007 (the implementation of which was restrained by the Supreme Court in its Resolution dated
January 24, 2002) – direct that that garnished amount "be deposited with the garnishee bank
(Development Bank of the Philippines)". In the first place, there was no need to order DBP to make
such deposit, as the garnished amount was already deposited in the account of plaintiffs with the
DBP as early as May 13, 2005. What the Court granted in its Order dated January 3, 2007 was
plaintiff’s motion to allow the release of said deposit. It must be recalled that the Court found
plaintiff’s motion meritorious and, at that time, there was no restraining order or preliminary injunction
from either the Court of Appeals or the Supreme Court which could have enjoined the release of
plaintiffs’ deposit. The Court also took into account the following factors:

a) the Decision in this case had long been final and executory after it was rendered on
November 28, 2001;

b) the propriety of the dismissal of U.P. System’s appeal was upheld by the Supreme Court;

c) a writ of execution had been issued;

d) defendant U.P. System’s deposit with DBP was garnished pursuant to a lawful writ of
execution issued by the Court; and

e) the garnished amount had already been turned over to the plaintiffs and deposited in their
account with DBP.
The garnished amount, as discussed in the Order dated January 16, 2007, was already owned by
the plaintiffs, having been delivered to them by the Deputy Sheriff of this Court pursuant to par. (c),
Section 9, Rule 39 of the 1997 Rules of Civil Procedure. Moreover, the judgment obligation has
already been fully satisfied as per Report of the Deputy Sheriff.

Anent the Temporary Restraining Order issued by the Supreme Court, the same has become
functus oficio, having been issued after the garnished amount had been released to the plaintiffs.
The judgment debt was released to the plaintiffs on January 17, 2007, while the Temporary
Restraining Order issued by the Supreme Court was received by this Court on February 2, 2007. At
the time of the issuance of the Restraining Order, the act sought to be restrained had already been
done, thereby rendering the said Order ineffectual.

After a careful and thorough study of the arguments advanced by the parties, the Court is of the
considered opinion that there is no legal basis to grant defendant U.P. System’s motion to redeposit
the judgment amount. Granting said motion is not only contrary to law, but it will also render this
Court’s final executory judgment nugatory. Litigation must end and terminate sometime and
somewhere, and it is essential to an effective administration of justice that once a judgment has
become final the issue or cause involved therein should be laid to rest. This doctrine of finality of
judgment is grounded on fundamental considerations of public policy and sound practice. In fact,
nothing is more settled in law than that once a judgment attains finality it thereby becomes
immutable and unalterable. It may no longer be modified in any respect, even if the modification is
meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the court rendering it or by the highest court of
the land.

WHEREFORE, premises considered, finding defendant U.P. System’s Urgent Motion to Redeposit
Judgment Award devoid of merit, the same is hereby DENIED.

SO ORDERED.

Issues

The UP now submits that:

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISMISSING THE PETITION,

ALLOWING IN EFFECT THE GARNISHMENT OF UP FUNDS, WHEN IT RULED THAT FUNDS
HAVE ALREADY BEEN EARMARKED FOR THE CONSTRUCTION PROJECT; AND THUS,
THERE IS NO NEED FOR FURTHER APPROPRIATIONS.

II

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN ALLOWING GARNISHMENT OF A

STATE UNIVERSITY’S FUNDS IN VIOLATION OF ARTICLE XIV, SECTION 5(5) OF THE
CONSTITUTION.

III

IN THE ALTERNATIVE, THE UNIVERSITY INVOKES EQUITY AND THE REVIEW POWERS OF
THIS HONORABLE COURT TO MODIFY, IF NOT TOTALLY DELETE THE AWARD OF ₱ 10
MILLION AS MORAL DAMAGES TO RESPONDENTS.

IV

THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE

OF THE JUDGMENT AWARD IN ITS ORDER DATED 3 JANUARY 2007 ON THE GROUND OF
EQUITY AND JUDICIAL COURTESY.

THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE

OF THE JUDGMENT AWARD IN ITS ORDER DATED 16 JANUARY 2007 ON THE GROUND
THAT PETITIONER UNIVERSITY STILL HAS A PENDING MOTION FOR RECONSIDERATION OF
THE ORDER DATED 3 JANUARY 2007.

VI

THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN NOT ORDERING THE REDEPOSIT OF

THE GARNISHED AMOUNT TO THE DBP IN VIOLATION OF THE CLEAR LANGUAGE OF THE
SUPREME COURT RESOLUTION DATED 24 JANUARY 2007.

The UP argues that the amount earmarked for the construction project had been purposely set aside
only for the aborted project and did not include incidental matters like the awards of actual damages,
moral damages and attorney’s fees. In support of its argument, the UP cited Article 12.2 of the
General Construction Agreement, which stipulated that no deductions would be allowed for the
payment of claims, damages, losses and expenses, including attorney’s fees, in case of any
litigation arising out of the performance of the work. The UP insists that the CA decision was
inconsistent with the rulings in Commissioner of Public Highways v. San Diego61 and Department of
Agriculture v. NLRC62 to the effect that government funds and properties could not be seized under
writs of execution or garnishment to satisfy judgment awards.

Furthermore, the UP contends that the CA contravened Section 5, Article XIV of the Constitution by
allowing the garnishment of UP funds, because the garnishment resulted in a substantial reduction
of the UP’s limited budget allocated for the remuneration, job satisfaction and fulfillment of the best
available teachers; that Judge Yadao should have exhibited judicial courtesy towards the Court due
to the pendency of the UP’s petition for review; and that she should have also desisted from
declaring that the TRO issued by this Court had become functus officio.

Lastly, the UP states that the awards of actual damages of ₱ 5,716,729.00 and moral damages of ₱
10 million should be reduced, if not entirely deleted, due to its being unconscionable, inequitable and
detrimental to public service.

In contrast, Stern Builders and dela Cruz aver that the petition for review was fatally defective for its
failure to mention the other cases upon the same issues pending between the parties (i.e., CA-G.R.
No. 77395 and G.R No. 163501); that the UP was evidently resorting to forum shopping, and to
delaying the satisfaction of the final judgment by the filing of its petition for review; that the ruling in
Commissioner of Public Works v. San Diego had no application because there was an appropriation
for the project; that the UP retained the funds allotted for the project only in a fiduciary capacity; that
the contract price had been meanwhile adjusted to ₱ 22,338,553.25, an amount already more than
sufficient to cover the judgment award; that the UP’s prayer to reduce or delete the award of
damages had no factual basis, because they had been gravely wronged, had been deprived of their
source of income, and had suffered untold miseries, discomfort, humiliation and sleepless years; that
dela Cruz had even been constrained to sell his house, his equipment and the implements of his
trade, and together with his family had been forced to live miserably because of the wrongful
actuations of the UP; and that the RTC correctly declared the Court’s TRO to be already functus
officio by reason of the withdrawal of the garnished amount from the DBP.

The decisive issues to be considered and passed upon are, therefore:

(a) whether the funds of the UP were the proper subject of garnishment in order to satisfy the
judgment award; and (b) whether the UP’s prayer for the deletion of the awards of actual damages
of ₱ 5,716,729.00, moral damages of ₱ 10,000,000.00 and attorney’s fees of ₱ 150,000.00 plus ₱
1,500.00 per appearance could be granted despite the finality of the judgment of the RTC.

Ruling

The petition for review is meritorious.

I.
UP’s funds, being government funds,
are not subject to garnishment

The UP was founded on June 18, 1908 through Act 1870 to provide advanced instruction in
literature, philosophy, the sciences, and arts, and to give professional and technical training to
deserving students.63 Despite its establishment as a body corporate,64 the UP remains to be a
"chartered institution"65 performing a legitimate government function. It is an institution of higher
learning, not a corporation established for profit and declaring any dividends.66 In enacting Republic
Act No. 9500 (The University of the Philippines Charter of 2008), Congress has declared the UP as
the national university67 "dedicated to the search for truth and knowledge as well as the development
of future leaders."68

Irrefragably, the UP is a government instrumentality,69 performing the State’s constitutional mandate

of promoting quality and accessible education.70 As a government instrumentality, the UP administers
special funds sourced from the fees and income enumerated under Act No. 1870 and Section 1 of
Executive Order No. 714,71 and from the yearly appropriations, to achieve the purposes laid down by
Section 2 of Act 1870, as expanded in Republic Act No. 9500.72 All the funds going into the
possession of the UP, including any interest accruing from the deposit of such funds in any banking
institution, constitute a "special trust fund," the disbursement of which should always be aligned with
the UP’s mission and purpose,73 and should always be subject to auditing by the COA.74

Presidential Decree No. 1445 defines a "trust fund" as a fund that officially comes in the possession
of an agency of the government or of a public officer as trustee, agent or administrator, or that is
received for the fulfillment of some obligation.75 A trust fund may be utilized only for the "specific
purpose for which the trust was created or the funds received."76

The funds of the UP are government funds that are public in character. They include the income
accruing from the use of real property ceded to the UP that may be spent only for the attainment of
its institutional objectives.77 Hence, the funds subject of this action could not be validly made the
subject of the RTC’s writ of execution or garnishment. The adverse judgment rendered against the
UP in a suit to which it had impliedly consented was not immediately enforceable by execution
against the UP,78 because suability of the State did not necessarily mean its liability.79

A marked distinction exists between suability of the State and its liability. As the Court succinctly
stated in Municipality of San Fernando, La Union v. Firme:80

A distinction should first be made between suability and liability. "Suability depends on the consent
of the state to be sued, liability on the applicable law and the established facts. The circumstance
that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be
held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the
state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only
giving the plaintiff the chance to prove, if it can, that the defendant is liable.

Also, in Republic v. Villasor,81 where the issuance of an alias writ of execution directed against the
funds of the Armed Forces of the Philippines to satisfy a final and executory judgment was nullified,
the Court said:

xxx The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant’s action "only up to the completion of proceedings
anterior to the stage of execution" and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the corresponding appropriation as required by
law. The functions and public services rendered by the State cannot be allowed to be paralyzed or
disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated
by law.

The UP correctly submits here that the garnishment of its funds to satisfy the judgment awards of
actual and moral damages (including attorney’s fees) was not validly made if there was no special
appropriation by Congress to cover the liability. It was, therefore, legally unwarranted for the CA to
agree with the RTC’s holding in the order issued on April 1, 2003 that no appropriation by Congress
to allocate and set aside the payment of the judgment awards was necessary because "there (were)
already an appropriations (sic) earmarked for the said project."82 The CA and the RTC thereby
unjustifiably ignored the legal restriction imposed on the trust funds of the Government and its
agencies and instrumentalities to be used exclusively to fulfill the purposes for which the trusts were
created or for which the funds were received except upon express authorization by Congress or by
the head of a government agency in control of the funds, and subject to pertinent budgetary laws,
rules and regulations.83
Indeed, an appropriation by Congress was required before the judgment that rendered the UP liable
for moral and actual damages (including attorney’s fees) would be satisfied considering that such
monetary liabilities were not covered by the "appropriations earmarked for the said project." The
Constitution strictly mandated that "(n)o money shall be paid out of the Treasury except in pursuance
of an appropriation made by law."84

II
COA must adjudicate private respondents’ claim
before execution should proceed

The execution of the monetary judgment against the UP was within the primary jurisdiction of the
COA. This was expressly provided in Section 26 of Presidential Decree No. 1445, to wit:

Section 26. General jurisdiction. - The authority and powers of the Commission shall extend to and
comprehend all matters relating to auditing procedures, systems and controls, the keeping of the
general accounts of the Government, the preservation of vouchers pertaining thereto for a period of
ten years, the examination and inspection of the books, records, and papers relating to those
accounts; and the audit and settlement of the accounts of all persons respecting funds or property
received or held by them in an accountable capacity, as well as the examination, audit, and
settlement of all debts and claims of any sort due from or owing to the Government or any of its
subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government-owned
or controlled corporations, including their subsidiaries, and other self-governing boards,
commissions, or agencies of the Government, and as herein prescribed, including non governmental
entities subsidized by the government, those funded by donations through the government, those
required to pay levies or government share, and those for which the government has put up a
counterpart fund or those partly funded by the government.

It was of no moment that a final and executory decision already validated the claim against the UP.
The settlement of the monetary claim was still subject to the primary jurisdiction of the COA despite
the final decision of the RTC having already validated the claim.85 As such, Stern Builders and dela
Cruz as the claimants had no alternative except to first seek the approval of the COA of their
monetary claim.

On its part, the RTC should have exercised utmost caution, prudence and judiciousness in dealing
with the motions for execution against the UP and the garnishment of the UP’s funds. The RTC had
no authority to direct the immediate withdrawal of any portion of the garnished funds from the
depository banks of the UP. By eschewing utmost caution, prudence and judiciousness in dealing
with the execution and garnishment, and by authorizing the withdrawal of the garnished funds of the
UP, the RTC acted beyond its jurisdiction, and all its orders and issuances thereon were void and of
no legal effect, specifically: (a) the order Judge Yadao issued on January 3, 2007 allowing Stern
Builders and dela Cruz to withdraw the deposited garnished amount; (b) the order Judge Yadao
issued on January 16, 2007 directing DBP to forthwith release the garnish amount to Stern Builders
and dela Cruz; (c) the sheriff’s report of January 17, 2007 manifesting the full satisfaction of the writ
of execution; and (d) the order of April 10, 2007 deying the UP’s motion for the redeposit of the
withdrawn amount. Hence, such orders and issuances should be struck down without exception.

Nothing extenuated Judge Yadao’s successive violations of Presidential Decree No. 1445. She was
aware of Presidential Decree No. 1445, considering that the Court circulated to all judges its
Administrative Circular No. 10-2000,86 issued on October 25, 2000, enjoining them "to observe
utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money
judgments against government agencies and local government units" precisely in order to prevent
the circumvention of Presidential Decree No. 1445, as well as of the rules and procedures of the
COA, to wit:

In order to prevent possible circumvention of the rules and procedures of the Commission on
Audit, judges are hereby enjoined to observe utmost caution, prudence and judiciousness in
the issuance of writs of execution to satisfy money judgments against government agencies
and local government units.

Judges should bear in mind that in Commissioner of Public Highways v. San Diego (31 SCRA 617,
625 1970), this Court explicitly stated:

"The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant’s action ‘only up to the completion of proceedings
anterior to the stage of execution’ and that the power of the Court ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the corresponding appropriation as required by
law. The functions and public services rendered by the State cannot be allowed to be paralyzed or
disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated
by law.

Moreover, it is settled jurisprudence that upon determination of State liability, the

prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the
rules and procedures laid down in P.D. No. 1445, otherwise known as the Government
Auditing Code of the Philippines (Department of Agriculture v. NLRC, 227 SCRA 693, 701-02
1993 citing Republic vs. Villasor, 54 SCRA 84 1973). All money claims against the
Government must first be filed with the Commission on Audit which must act upon it within
sixty days. Rejection of the claim will authorize the claimant to elevate the matter to the
Supreme Court on certiorari and in effect, sue the State thereby (P.D. 1445, Sections 49-50).

However, notwithstanding the rule that government properties are not subject to levy and execution
unless otherwise provided for by statute (Republic v. Palacio, 23 SCRA 899 1968; Commissioner of
Public Highways v. San Diego, supra) or municipal ordinance (Municipality of Makati v. Court of
Appeals, 190 SCRA 206 1990), the Court has, in various instances, distinguished between
government funds and properties for public use and those not held for public use. Thus, in Viuda de
Tan Toco v. Municipal Council of Iloilo (49 Phil 52 1926, the Court ruled that "where property of a
municipal or other public corporation is sought to be subjected to execution to satisfy judgments
recovered against such corporation, the question as to whether such property is leviable or not is to
be determined by the usage and purposes for which it is held." The following can be culled from
Viuda de Tan Toco v. Municipal Council of Iloilo:

1. Properties held for public uses – and generally everything held for governmental purposes
– are not subject to levy and sale under execution against such corporation. The same rule
applies to funds in the hands of a public officer and taxes due to a municipal corporation.

2. Where a municipal corporation owns in its proprietary capacity, as distinguished from its public or
government capacity, property not used or used for a public purpose but for quasi-private purposes,
it is the general rule that such property may be seized and sold under execution against the
corporation.

3. Property held for public purposes is not subject to execution merely because it is temporarily used
for private purposes. If the public use is wholly abandoned, such property becomes subject to
execution.

This Administrative Circular shall take effect immediately and the Court Administrator shall see to it
that it is faithfully implemented.

Although Judge Yadao pointed out that neither the CA nor the Court had issued as of then any writ
of preliminary injunction to enjoin the release or withdrawal of the garnished amount, she did not
need any writ of injunction from a superior court to compel her obedience to the law. The Court is
disturbed that an experienced judge like her should look at public laws like Presidential Decree No.
1445 dismissively instead of loyally following and unquestioningly implementing them. That she did
so turned her court into an oppressive bastion of mindless tyranny instead of having it as a true
haven for the seekers of justice like the UP.

III
Period of appeal did not start without effective
service of decision upon counsel of record;
Fresh-period rule announced in
Neypes v. Court of Appeals
can be given retroactive application

The UP next pleads that the Court gives due course to its petition for review in the name of equity in
order to reverse or modify the adverse judgment against it despite its finality. At stake in the UP’s
plea for equity was the return of the amount of ₱ 16,370,191.74 illegally garnished from its trust
funds. Obstructing the plea is the finality of the judgment based on the supposed tardiness of UP’s
appeal, which the RTC declared on September 26, 2002. The CA upheld the declaration of finality
on February 24, 2004, and the Court itself denied the UP’s petition for review on that issue on May
11, 2004 (G.R. No. 163501). The denial became final on November 12, 2004.

It is true that a decision that has attained finality becomes immutable and unalterable, and cannot be
modified in any respect,87 even if the modification is meant to correct erroneous conclusions of fact
and law, and whether the modification is made by the court that rendered it or by this Court as the
highest court of the land.88 Public policy dictates that once a judgment becomes final, executory and
unappealable, the prevailing party should not be deprived of the fruits of victory by some subterfuge
devised by the losing party. Unjustified delay in the enforcement of such judgment sets at naught the
role and purpose of the courts to resolve justiciable controversies with finality.89Indeed, all litigations
must at some time end, even at the risk of occasional errors.

But the doctrine of immutability of a final judgment has not been absolute, and has admitted several
exceptions, among them: (a) the correction of clerical errors; (b) the so-called nunc pro tunc entries
that cause no prejudice to any party; (c) void judgments; and (d) whenever circumstances transpire
after the finality of the decision that render its execution unjust and inequitable.90 Moreover, in Heirs
of Maura So v. Obliosca,91 we stated that despite the absence of the preceding circumstances, the
Court is not precluded from brushing aside procedural norms if only to serve the higher interests of
justice and equity. Also, in Gumaru v. Quirino State College,92 the Court nullified the proceedings and
the writ of execution issued by the RTC for the reason that respondent state college had not been
represented in the litigation by the Office of the Solicitor General.

We rule that the UP’s plea for equity warrants the Court’s exercise of the exceptional power to
disregard the declaration of finality of the judgment of the RTC for being in clear violation of the UP’s
right to due process.

Both the CA and the RTC found the filing on June 3, 2002 by the UP of the notice of appeal to be
tardy. They based their finding on the fact that only six days remained of the UP’s reglementary 15-
day period within which to file the notice of appeal because the UP had filed a motion for
reconsideration on January 16, 2002 vis-à-vis the RTC’s decision the UP received on January 7,
2002; and that because the denial of the motion for reconsideration had been served upon Atty.
Felimon D. Nolasco of the UPLB Legal Office on May 17, 2002, the UP had only until May 23, 2002
within which to file the notice of appeal.

The UP counters that the service of the denial of the motion for reconsideration upon Atty. Nolasco
was defective considering that its counsel of record was not Atty. Nolasco of the UPLB Legal Office
but the OLS in Diliman, Quezon City; and that the period of appeal should be reckoned from May 31,
2002, the date when the OLS received the order. The UP submits that the filing of the notice of
appeal on June 3, 2002 was well within the reglementary period to appeal.

We agree with the submission of the UP.

Firstly, the service of the denial of the motion for reconsideration upon Atty. Nolasco of the UPLB
Legal Office was invalid and ineffectual because he was admittedly not the counsel of record of the
UP. The rule is that it is on the counsel and not the client that the service should be made.93

That counsel was the OLS in Diliman, Quezon City, which was served with the denial only on May
31, 2002. As such, the running of the remaining period of six days resumed only on June 1,
2002,94 rendering the filing of the UP’s notice of appeal on June 3, 2002 timely and well within the
remaining days of the UP’s period to appeal.

Verily, the service of the denial of the motion for reconsideration could only be validly made upon the
OLS in Diliman, and no other. The fact that Atty. Nolasco was in the employ of the UP at the UPLB
Legal Office did not render the service upon him effective. It is settled that where a party has
appeared by counsel, service must be made upon such counsel.95 Service on the party or the party’s
employee is not effective because such notice is not notice in law.96 This is clear enough from Section
2, second paragraph, of Rule 13, Rules of Court, which explicitly states that: "If any party has
appeared by counsel, service upon him shall be made upon his counsel or one of them, unless
service upon the party himself is ordered by the court. Where one counsel appears for several
parties, he shall only be entitled to one copy of any paper served upon him by the opposite side." As
such, the period to appeal resumed only on June 1, 2002, the date following the service on May 31,
2002 upon the OLS in Diliman of the copy of the decision of the RTC, not from the date when the UP
was notified.97
Accordingly, the declaration of finality of the judgment of the RTC, being devoid of factual and legal
bases, is set aside.

Secondly, even assuming that the service upon Atty. Nolasco was valid and effective, such that the
remaining period for the UP to take a timely appeal would end by May 23, 2002, it would still not be
correct to find that the judgment of the RTC became final and immutable thereafter due to the notice
of appeal being filed too late on June 3, 2002.

In so declaring the judgment of the RTC as final against the UP, the CA and the RTC applied the
rule contained in the second paragraph of Section 3, Rule 41 of the Rules of Court to the effect that
the filing of a motion for reconsideration interrupted the running of the period for filing the appeal;
and that the period resumed upon notice of the denial of the motion for reconsideration. For that
reason, the CA and the RTC might not be taken to task for strictly adhering to the rule then
prevailing.

However, equity calls for the retroactive application in the UP’s favor of the fresh-period rule that the
Court first announced in mid-September of 2005 through its ruling in Neypes v. Court of
Appeals,98 viz:

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to
appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to file
the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a
motion for a new trial or motion for reconsideration.

The retroactive application of the fresh-period rule, a procedural law that aims "to regiment or make
the appeal period uniform, to be counted from receipt of the order denying the motion for new trial,
motion for reconsideration (whether full or partial) or any final order or resolution,"99 is impervious to
any serious challenge. This is because there are no vested rights in rules of procedure.100 A law or
regulation is procedural when it prescribes rules and forms of procedure in order that courts may be
able to administer justice.101 It does not come within the legal conception of a retroactive law, or is not
subject of the general rule prohibiting the retroactive operation of statues, but is given retroactive
effect in actions pending and undetermined at the time of its passage without violating any right of a
person who may feel that he is adversely affected.

We have further said that a procedural rule that is amended for the benefit of litigants in furtherance
of the administration of justice shall be retroactively applied to likewise favor actions then pending,
as equity delights in equality.102 We may even relax stringent procedural rules in order to serve
substantial justice and in the exercise of this Court’s equity jurisdiction.103 Equity jurisdiction aims to
do complete justice in cases where a court of law is unable to adapt its judgments to the special
circumstances of a case because of the inflexibility of its statutory or legal jurisdiction.104

It is cogent to add in this regard that to deny the benefit of the fresh-period rule to the UP would
amount to injustice and absurdity – injustice, because the judgment in question was issued on
November 28, 2001 as compared to the judgment in Neypes that was rendered in 1998; absurdity,
because parties receiving notices of judgment and final orders issued in the year 1998 would enjoy
the benefit of the fresh-period rule but the later rulings of the lower courts like that herein would
not.105

Consequently, even if the reckoning started from May 17, 2002, when Atty. Nolasco received the
denial, the UP’s filing on June 3, 2002 of the notice of appeal was not tardy within the context of the
fresh-period rule. For the UP, the fresh period of 15-days counted from service of the denial of the
motion for reconsideration would end on June 1, 2002, which was a Saturday. Hence, the UP had
until the next working day, or June 3, 2002, a Monday, within which to appeal, conformably with
Section 1 of Rule 22, Rules of Court, which holds that: "If the last day of the period, as thus
computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the
time shall not run until the next working day."

IV
Awards of monetary damages,
being devoid of factual and legal bases,
did not attain finality and should be deleted

Section 14 of Article VIII of the Constitution prescribes that express findings of fact and of law should
be made in the decision rendered by any court, to wit:
Section 14. No decision shall be rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based.

No petition for review or motion for reconsideration of a decision of the court shall be refused due
course or denied without stating the legal basis therefor.

Implementing the constitutional provision in civil actions is Section 1 of Rule 36, Rules of Court, viz:

Section 1. Rendition of judgments and final orders. — A judgment or final order determining the
merits of the case shall be in writing personally and directly prepared by the judge, stating clearly
and distinctly the facts and the law on which it is based, signed by him, and filed with the clerk of the
court. (1a)

The Constitution and the Rules of Court apparently delineate two main essential parts of a judgment,
namely: the body and the decretal portion. Although the latter is the controlling part,106 the importance
of the former is not to be lightly regarded because it is there where the court clearly and distinctly
states its findings of fact and of law on which the decision is based. To state it differently, one
without the other is ineffectual and useless. The omission of either inevitably results in a judgment
that violates the letter and the spirit of the Constitution and the Rules of Court.

The term findings of fact that must be found in the body of the decision refers to statements of fact,
not to conclusions of law.107 Unlike in pleadings where ultimate facts alone need to be stated, the
Constitution and the Rules of Court require not only that a decision should state the ultimate facts
but also that it should specify the supporting evidentiary facts, for they are what are called the
findings of fact.

The importance of the findings of fact and of law cannot be overstated. The reason and purpose of
the Constitution and the Rules of Court in that regard are obviously to inform the parties why they
win or lose, and what their rights and obligations are. Only thereby is the demand of due process
met as to the parties. As Justice Isagani A. Cruz explained in Nicos Industrial Corporation v. Court of
Appeals:108

It is a requirement of due process that the parties to a litigation be informed of how it was decided,
with an explanation of the factual and legal reasons that led to the conclusions of the court. The
court cannot simply say that judgment is rendered in favor of X and against Y and just leave it at that
without any justification whatsoever for its action. The losing party is entitled to know why he lost, so
he may appeal to a higher court, if permitted, should he believe that the decision should be reversed.
A decision that does not clearly and distinctly state the facts and the law on which it is based leaves
the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who
is unable to pinpoint the possible errors of the court for review by a higher tribunal.

Here, the decision of the RTC justified the grant of actual and moral damages, and attorney’s fees in
the following terse manner, viz:

xxx The Court is not unmindful that due to defendants’ unjustified refusal to pay their outstanding
obligation to plaintiff, the same suffered losses and incurred expenses as he was forced to re-
mortgage his house and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to
pay its monetary obligations in the form of interest and penalties incurred in the course of the
construction of the subject project.109

The statement that "due to defendants’ unjustified refusal to pay their outstanding obligation to
plaintiff, the same suffered losses and incurred expenses as he was forced to re-mortgage his house
and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary
obligations in the form of interest and penalties incurred in the course of the construction of the
subject project" was only a conclusion of fact and law that did not comply with the constitutional and
statutory prescription. The statement specified no detailed expenses or losses constituting the ₱
5,716,729.00 actual damages sustained by Stern Builders in relation to the construction project or to
other pecuniary hardships. The omission of such expenses or losses directly indicated that Stern
Builders did not prove them at all, which then contravened Article 2199, Civil Code, the statutory
basis for the award of actual damages, which entitled a person to an adequate compensation only
for such pecuniary loss suffered by him as he has duly proved. As such, the actual damages allowed
by the RTC, being bereft of factual support, were speculative and whimsical. Without the clear and
distinct findings of fact and law, the award amounted only to an ipse dixit on the part of the
RTC,110 and did not attain finality.
There was also no clear and distinct statement of the factual and legal support for the award of
moral damages in the substantial amount of ₱ 10,000,000.00. The award was thus also speculative
and whimsical. Like the actual damages, the moral damages constituted another judicial ipse dixit,
the inevitable consequence of which was to render the award of moral damages incapable of
attaining finality. In addition, the grant of moral damages in that manner contravened the law that
permitted the recovery of moral damages as the means to assuage "physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury."111 The contravention of the law was manifest considering that Stern
Builders, as an artificial person, was incapable of experiencing pain and moral
sufferings.112 Assuming that in granting the substantial amount of ₱ 10,000,000.00 as moral
damages, the RTC might have had in mind that dela Cruz had himself suffered mental anguish and
anxiety. If that was the case, then the RTC obviously disregarded his separate and distinct
personality from that of Stern Builders.113 Moreover, his moral and emotional sufferings as the
President of Stern Builders were not the sufferings of Stern Builders. Lastly, the RTC violated the
basic principle that moral damages were not intended to enrich the plaintiff at the expense of the
defendant, but to restore the plaintiff to his status quo ante as much as possible. Taken together,
therefore, all these considerations exposed the substantial amount of ₱ 10,000,000.00 allowed as
moral damages not only to be factually baseless and legally indefensible, but also to be
unconscionable, inequitable and unreasonable.

Like the actual and moral damages, the ₱ 150,000.00, plus ₱ 1,500.00 per appearance, granted as
attorney’s fees were factually unwarranted and devoid of legal basis. The general rule is that a
successful litigant cannot recover attorney’s fees as part of the damages to be assessed against the
losing party because of the policy that no premium should be placed on the right to litigate.114 Prior to
the effectivity of the present Civil Code, indeed, such fees could be recovered only when there was a
stipulation to that effect. It was only under the present Civil Code that the right to collect attorney’s
fees in the cases mentioned in Article 2208115 of the Civil Code came to be
recognized.116 Nonetheless, with attorney’s fees being allowed in the concept of actual
damages,117 their amounts must be factually and legally justified in the body of the decision and not
stated for the first time in the decretal portion.118 Stating the amounts only in the dispositive portion of
the judgment is not enough;119 a rendition of the factual and legal justifications for them must also be
laid out in the body of the decision.120

That the attorney’s fees granted to the private respondents did not satisfy the foregoing requirement
suffices for the Court to undo them.121 The grant was ineffectual for being contrary to law and public
policy, it being clear that the express findings of fact and law were intended to bring the case within
the exception and thereby justify the award of the attorney’s fees. Devoid of such express findings,
the award was a conclusion without a premise, its basis being improperly left to speculation and
conjecture.122

Nonetheless, the absence of findings of fact and of any statement of the law and jurisprudence on
which the awards of actual and moral damages, as well as of attorney’s fees, were based was a fatal
flaw that invalidated the decision of the RTC only as to such awards. As the Court declared in
Velarde v. Social Justice Society,123 the failure to comply with the constitutional requirement for a
clear and distinct statement of the supporting facts and law "is a grave abuse of discretion
amounting to lack or excess of jurisdiction" and that "(d)ecisions or orders issued in careless
disregard of the constitutional mandate are a patent nullity and must be struck down as void."124 The
other item granted by the RTC (i.e., ₱ 503,462.74) shall stand, subject to the action of the COA as
stated herein.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS
ASIDE the decision of the Court of Appeals under review; ANNULS the orders for the garnishment
of the funds of the University of the Philippines and for the release of the garnished amount to Stern
Builders Corporation and Servillano dela Cruz; and DELETES from the decision of the Regional Trial
Court dated November 28, 2001 for being void only the awards of actual damages of ₱
5,716,729.00, moral damages of ₱ 10,000,000.00, and attorney's fees of ₱ 150,000.00, plus ₱
1,500.00 per appearance, in favor of Stern Builders Corporation and Servillano dela Cruz.

The Court ORDERS Stem Builders Corporation and Servillano dela Cruz to redeposit the amount of
₱ 16,370,191.74 within 10 days from receipt of this decision.

Costs of suit to be paid by the private respondents.

SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice

G.R. No. L-9990 September 30, 1957

ENRIQUE J. L. RUIZ and JOSE V. HERRERA, in their behalf and as minority stockholders of
the Allied Technologists, Inc., plaintiffs-appellants,
vs.
HON. SOTERO B. CABAHUG, Secretary of National Defense, Col. NICOLAS JIMENEZ, Head of
the Engineer Group, Office of the Secretary of National Defense, THE FINANCE OFFICER of
the Department of National Defense, the AUDITOR of the Department of the National Defense,
PABLO D. PANLILIO and ALLIED TECHNOLOGISTS INC., defendants-appellees.

Diokno and Sison for appellants.

L. D. Panlilio for appellee Pablo Panlilio.
Manuel Sales for defendant Allied Technologists, Inc.
Office of the Solicitor General Ambrocio Padilla and Assistant Solicitor Jose G. Bautista for
appellees Hon. Sotero Cabahug and Col. Nicolas Jimenez, et al.

LABRADOR, J.:

Appeal from a judgment of the Court of First Instance of Manila dismissing plaintiffs' amended
complaint.

The facts upon which plaintiffs' first cause of action are based are allowed as follows:

On July 31, 1950 the Secretary of National Defense accepted the bid of the Allied Technologists,
Inc., to furnish the architectural and engineering services in the construction of the Veterans Hospital
at a price of P302,700. The plans, specifications, sketches and detailed drawings and other
architectural requirements submitted by the Allied Technologists through thereof its architects,
Messrs. Enrique J. L. Ruiz, Jose V. Herrera and Pablo D. Panlilio were approved by the United
States Veterans Administration in Washington, D.C. Because of the technical objection to the
capacity of the Allied Technologists, Inc. to practice architecture and upon the advice of the
Secretary of Justice, the contract was signed on the part of the Allied Technologists, Inc. by E.J.L.
Ruiz as President and P.D. Panlilio as Architect. When the defendants-officials paid the Allied
Technologists the contract price for the architectural engineering service, they retained 15 per cent
of the sum due, for the reason that defendant Panlilio has asserted that he is the sole and only
architect of the Veterans Hospital to the exclusion of plaintiffs Ruiz and Herrera, assertion aided and
abetted by defendant Jimenez. Unless defendants are prevented from recognizing defendant
Panlilio as the sole architect of the contract and from paying the 15 per cent retained, plaintiffs will
be deprived of the monetary value of their professional services and their professional prestige and
standing would be seriously impaired.

Under the second cause of action the following facts are alleged: Under Title II of the contract
entered into between plaintiffs and the Secretary of National Defense, at any time prior to six months
after completion and acceptance of the work under Title I, the Government may direct the Allied
Technologists, Inc. to perform the services specified in said Title II. But notwithstanding such
completion or acceptance, the Government has refused to direct the plaintiffs to perform the work,
entrusting such work to a group of inexperienced and unqualified engineers.

The prayer based on the first cause of action is that defendants desist from recognizing Panlilio as
the sole and only architect of the Veterans Hospital and from paying him 15 per cent retained as
above indicated, and that after hearing Ruiz, Herrera and Panlilio be recognized as the architects of
the Veterans Hospital. Under the second cause of action it is prayed that the defendants be directed
to turn over the supervision called for by Title II of the contract.

The court a quo dismissed the complaint on the ground that the suit involved is one against the
Government, which may not sued without its consent. It is held that as the majority of the
stockholders of the Allied Technologists, Inc. have not joined in the action, the minority suit does not
lie. It dismissed the second cause of action on the ground that the optional services under Title II
have already been performed.

On this appeal the plaintiffs assign the following errors:

 I

THE LOWER COURT ERRED IN RULING THAT THE PRESENT SUIT IS ONE AGAINST THE
GOVERNMENT AND THEREFORE CANNOT BE VALIDLY ENTERTAINED BECAUSE THE
GOVERNMENT CANNOT BE SUED WITHOUT ITS CONSENT.

II

THE LOWER COURT ERRED IN HOLDING THAT THE PROVISIONS OF ACT 3038, AS
AMENDED BY COMMONWEALTH ACT 327 ARE APPLICABLE TO THIS CASE; IT ERRED IN
HOLDING THAT PLAINTIFFS' CLAIM SHOULD HAVE BEEN FILED WITH THE AUDITOR
GENERAL.

III

THE LOWER COURT ERRED IN RULING THAT THE MINORITY SUIT IS UNTENABLE.

IV

THE LOWER COURT ERRED IN DISMISSING THE AMENDED COMPLAINT INJUNCTION.

Evidently, the plaintiffs-appellants do not question the dismissal of the second cause of action. So,
the appeal has relation to the first cause of action only.

A careful study of the allegations made in the amended complaint discloses the following facts and
circumstances: The contract price for the architectural engineering services rendered by the Allied
Technologists, Inc. and the plaintiffs is P231,600. All of that sum has been set aside for payment to
the Allied Technologists, Inc. and its architects, except the sum of P34,740, representing 15 per cent
of the total costs, which has been retained by the defendants-officials. Insofar as the Government of
the Philippines is concerned, the full amount of the contract price has been set aside and said full
amount authorized to be paid. The Government does not any longer have any interest in the
amount, which the defendants-officials have retained and have refused to pay to the plaintiffs, or to
the person or entity to which it should be paid. And the plaintiffs do not seek to sue the Government
to require it to pay the amount or involve it in the litigation. The defendant Jimenez is claimed to
have "aided and abetted defendant Panlilio in depriving the Allied Technologists, Inc. and its two
architects (Ruiz and Herrera) of the honor and benefit due to them under the contract Annex `C`
thereof." It is further claimed by plaintiffs that the defendant-officials are about to recognize Panlilio
as the sole architect and are about to pay him the 15 per cent which they had retained, and thus
deprive plaintiffs of their right to share therein and in the honor consequent to the recognition of their
right. The suit, therefore, is properly directed against the officials and against them alone, not against
the Government, which does nor have any interest in the outcome of the controversy between
plaintiffs on the one hand, and Panlilio on the other. The suit is between these alone, to determine
who is entitled to the amount retained by the officials; and if the latter did aid and abet Panlilio in his
pretense, to the exclusion and prejudice of plaintiffs, it is natural that they alone, and not the
Government, should be the subject of the suit. He said officials chosen not to take sides in the
controversy between the architects, and had disclaimed interest in said controversy, the suit would
have been converted into one of interpleader. But they have acted to favor one side, and have
abetted him in his effort to obtain payment to him of the sum remaining unpaid and credit for the
work, to the exclusion of the plaintiffs. Hence, the suit.1âw phïl.nêt

We are not wanting in authority to sustain the view that the State need not be a party in this and
parallel cases.

There is no proposition of law which is better settled than the general rule that a sovereign
state and its political subdivision cannot be sued in the courts except upon the statutory
consent of the state. Numerous decisions of this court to that effect may be cited; but it is
enough to note that this court, in banc in a recent case, State vs. Woodruff (Miss.), 150 So.
760, Hasso held; and therein overruled a previous decision which had adjudicated that such
consent could be worked out of a statute by implication, when express consent was absent
from the terms of that statute.

But the rule applies only when the state or its subdivision is actually made a party upon the
record, or is actually necessary to be made a party in order to furnish the relief demanded by
 the suit. It does not apply when the suit is against an officer or agent of the state, and the
relief demanded by the suit requires no affirmative discharge of any obligation which belongs
to the state in its political capacity, even though the officers or agents who are made
defendants disclaim any personal interest in themselves and claim to hold or to act only by
virtue of a title of the state and as its agents and servants.

Thus it will be found, as illustrative of what has been above said, that nearly all the cases
wherein the rule of immunity from suit against the state or a subdivision thereof, has been
applied and upheld, are those which demanded a money judgment, and wherein the
discharge of the judgment, if obtained, would require the appropriation or an expenditure
therefrom, which being legislative in its character is a province exclusively of the political
departments of the state. And in the less frequent number of cases where no money
judgment is demanded, and the rule of immunity is still upheld, it will be found in them that
the relief demanded would be, nevertheless, to require of the state or its political subdivision
the affirmative performance of some asserted obligation, belong to the state in its political
capacity.

When, therefore, officers or agents of the state, although acting officially and not as
individuals, seize the private property of a citizen, the state having no valid right or title
thereto, or trespass upon that property or damage it, the jurisdiction of the courts to eject the
officers or agents, is as well settled in the jurisprudence of this country as is the general rule
first above mentioned; for in such a suit no relief is demanded which requires any affirmative
action on the part of the state. Such a suit is only to the end that the officers and agents of
the state stay off the property of the citizen and cease to damage that property, the state
having no right or title thereto." (State Mineral Lease Commission vs. Lawrence [1934], 157
So. 897, 898-899.).

We hold that under the facts and circumstances alleged in the amendment complaint, which should
be taken on its face value, the suit is not one against the Government, or a claim against it, but one
against the officials to compel them to act in accordance with the rights to be established by the
contending architects, or to prevent them from making payment and recognition until the contending
architects have established their respective rights and interests in the funds retained and in the
credit for the work done. The order of dismissal is hereby reversed and set aside, and the case is
remanded to the court a quo for further proceedings. With costs against the defendants-appellees. 1âwphïl .nêt

Bengzon, Paras, C.J., Montemayor, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L.,
Endencia and Felix, JJ., concur.

Houston v. Holmes, 262 S.W. 849 (Tex. App. 1924)

Court of Appeals of Texas
Filed: June 4th, 1924
Precedential Status: Precedential
Citations: 262 S.W. 849
Docket Number: No. 1117.
Judges: HIGHTOWER, C.J.

This appeal comes from one of the district courts of Harris county, in which the trial judge, at the conclusion of all
evidence, discharged the jury that had been selected in the case, and thereupon rendered judgment in favor of the
defendant, the appellee herein.
The case has been before this court once before, and the opinion of this court upon the former appeal may be found
reported in 241 S.W. 1039. While there has been some change in the parties plaintiff, occasioned by the death of
Robert J. Houston, there has been no change in the cause of action in any respect, and, as we view the entire record
before us, after careful consideration of it, we find no material difference or change in the facts as adduced upon the
trial from what they were on the former trial. Our former opinion was rather lengthy, because we deemed it necessary
to discuss the evidence at length, since we were of the opinion that the evidence was wholly insufficient to sustain the
verdict of the jury on that trial to the effect that the will of Maud Houston was brought about by the exercise of undue
influence as claimed by the plaintiffs, and it is the custom of this court, when we reverse a judgment for lack of
evidence to support it, to point out at least at reasonable length our reasons for doing so. It would serve no useful
purpose to again discuss the evidence adduced upon the trial from which the present appeal comes, because, as we
have said, it is practically the same on the only material issue, that of undue influence, and we here now refer to our
former opinion *Page 850 reported as above shown for the facts in full as adduced upon the last trial.
After giving the record before us full consideration, we have reached the conclusion that the trial court was not in
error in taking the case from the jury and rendering the judgment for the appellee Holmes. If the state of the evidence
when concluded was such as to leave no issue of fact for the determination of the jury, the court was authorized, of
course, to peremptorily instruct the verdict in favor of the defendant Holmes, and the court's action in discharging the
jury and rendering judgment in favor of the defendant was no more in effect under our practice than to have
peremptorily instructed the verdict. Peterson v. City of Houston (Tex.Civ.App.) 224 S.W. 586; Stark v. George
(Tex.Civ.App.) 237 S.W. 948.
Appellants contend on this appeal that the evidence adduced upon the trial was sufficient to carry the issue of undue
influence to the jury, and was sufficient to warrant a finding by the jury that undue influence was exercised by the
appellee Holmes, and that such undue influence brought about the execution of the will of Maud Houston, and that
therefore the court was in error in taking such issue from the jury. Not only do appellants so contend, but they further
contend that the trial court should have instructed a verdict in their favor. After a careful consideration of the evidence
reflected by the record before us, it is our conclusion that at the most there was nothing more than a suspicion or
surmise that the appellee Harry E. Holmes ever at any time exercised any undue influence over Maud Houston, or
that her will here in contest was the result of any such influence, and, as has been repeatedly held in this state, juries
cannot be permitted to decide cases upon mere suspicion, surmises, or speculation. This salutary principle was
announced by the Supreme Court of this state in Joske v. Irvine,91 Tex. 574, 44 S.W. 1059. It was there said by
the court, speaking through Judge Denman:
"The broad and wise policy of the law, formed in and descending to us through the crucibles of time, does not permit
the citizen to be deprived of his property, his liberty or his life upon mere surmise or suspicion, and places upon a
trained judiciary the grave responsibility of determining, as a question of law, whether the testimony establishes
more."
Joske v. Irvine has been followed and the principle announced reiterated so many times by all of the Courts of Civil
Appeals of this state and by the Supreme Court itself in later cases that it would be a waste of time to undertake to
collate the numerous decisions on the point, but we cite a few: Thresher Co. v. Moss (Tex.Civ.App.)213 S.W. 690;
Kirby Lumber Co. v. Boyett (Tex.Civ.App.) 221 S.W. 669; I. G. N. Ry. Co. v. Edmundson (Tex.Com.App.) 222
S.W. 181; Thomas Co. v. Hawthorne (Tex.Civ.App.) 245 S.W. 966; Joffre v. Mynatt (Tex.Civ.App.) 206 S.W.
951; Hill v. Staats (Tex.Civ.App.)187 S.W. 1039. In the last three cases cited the trial court peremptorily instructed
the verdict, and the contention was made by the losing party that the trial court's action was erroneous in each of
those cases, because the witnesses upon whose testimony the peremptory instruction was based were interested
parties, and that therefore it could not be said as a matter of law that there was not an issue of fact for the jury's
determination. The appellate court in each of the cases held that the peremptory instruction was properly given
notwithstanding the fact that it was based upon the testimony of a party at interest, such testimony being positive and
uncontradicted by other evidence, circumstantial or otherwise, of sufficient probative force to impeach its truth.
In this case no fair or impartial mind could reasonably conclude that the will of Maud Houston, sought to be set aside
by the appellants here, was the result of undue influence practiced upon her by appellee Holmes. The positive and
uncontradicted testimony of Dr. Warren N. Wier, who, as this record reflects, is a reputable physician of the city of
Houston, and that of the attorney who drew the will, negatives and precludes any reasonable conclusion that the will
of Maud Houston was brought about by any undue influence exercised by the appellee on any one else, and both of
these witnesses were disinterested parties, and stand wholly unimpeached by any character of evidence. That of Dr.
Wier shows clearly and positively that when he advised Maud Houston of the seriousness of her condition and asked
her if she did not want her relatives notified of her condition she promptly and emphatically, as shown by this record,
told Dr. Wier that she had no relatives that she cared anything about, and that the only person that she wanted to be
notified was the appellee Harry E. Holmes, and, according to Dr. Wier's testimony, Maud Houston thereupon dictated
the telegram to Holmes, which was in substance that she was seriously sick in the infirmary in Houston, and that he
was needed. All of this will appear more at length in the former opinion to which we have already referred. Dr. Wier
was also a witness to the will executed by Maud Houston only a few days after this telegram was sent to Holmes, and
he testified in substance that he heard the will read over to Maud Houston, and that she promptly expressed her
approval and satisfaction with the will, and stated, in substance, that it was just what she wanted. The testimony of
the attorney who drew the will, Mr. Dupree, was in substance that the will was dictated by Maud Houston, and that he
prepared it *Page 851 exactly as dictated with the exception of legal phraseology, and that not a word in the will was
suggested by anybody while she was dictating it. Upon the evidence of these two witnesses alone the court was
authorized to instruct a verdict in this case, and ought to have done so, and we ought to have reversed and rendered
the case on the former appeal, but out of precaution, and knowing that it might be possible that the plaintiffs might
obtain further evidence in support of their contention, we reversed the judgment and remanded the cause.
It is manifest to us from this record that no error was committed by the trial court in ruling upon evidence tendered by
appellants, though there are two assignments of error In that connection, and such assignments are overruled, and
the judgment of the trial court is in all things affirmed.

G.R. No. L-5156 March 11, 1954

CARMEN FESTEJO, demandante-apelante,

vs.
ISAIAS FERNANDO, Director de Obras Publicas, demandado-apelado.

D. Eloy B. Bello en representacion de la apelante.

El Procurador General Sr. Pompeyo Diaz y el Procurador Sr. Antonio A. Torres en representacion
del apelado.

DIOKNO, J.:
Carmen Festejo, dueña de unos terrenos azucareros, de un total de unas 9 hectareas y media de
superfice, demando a "Isaias Fernando Director, Bureau of public Works, que como tal Director de
Obras Publicas tiene a su cargo los sistemas y proyectos de irrigacion y es el funcionario
responsable de la construccion de los sistemas de irrigacion en el pais," alegando que —

The defendant, as Director of the Bureau of Public Works, without authority obtained first
from the Court of First Instance of Ilocos Sur, without obtaining first a right of way, and
without the consent and knowledge of the plaintiff, and against her express objection
unlawfully took possession of portions of the three parcels of land described above, and
caused an irrigation canal to be constructed on the portion of the three parcels of land on or
about the month of February 1951 the aggregate area being 24,179 square meters to the
damage and prejudice of the plaintiff. ----- R. on A., p. 3.

causando a ella variados daños y perjuicios. Pidio, en su consecuencia, sentencia condenando el

demandado:

. . . to return or cause to be returned the possession of the portions of land unlawfully

occupied and appropriated in the aggregate area of 24,179 square meters and to return the
land to its former condition under the expenses of the defendant. . . .

In the remote event that the portions of land unlawfully occupied and appropriated can not be
returned to the plaintiff, then to order the defendant to pay to the plaintiff the sum of
P19,343.20 as value of the portions totalling an area of 24,179 square meters; ---- R. on A.,
p. 5.

y ademas a pagar P9,756.19 de daños y P5,000 de honorarios de abogado, con las costas R. on A.,
pp. 5-6.

El demandado, por medio del Procurador General, presento mocion de sobreseimiento de la

demanda por el fundamento de que el Juzgado no tiene jurisdiccion para dictar sentencia valida
contra el, toda vez que judicialmente la reclamacion es contra la Republica de Filipinas, y esta no ha
presentado su consentimiento a la demanda. El Juzgado inferior estimo la mocion y sobreseyo la
demanda sin perjuicio y sin costas.

En apelacion, la demandante sostiene que fue un error considerar la demanda como una contra la
Republica y sobreseer en su virtud la demanda.

La mocion contra "Isaias Fernando, Director de Obras Publicas, encargado y responsable de la

construccion de los sistemas de irrigacion en Filipinas" es una dirigida personalmente contra el, por
actos que asumio ejecutar en su concepto oficial. La ley no le exime de responsabilidad por las
extralimitaciones que cometa o haga cometer en el desempeño de sus funciones oficiales. Un caso
semejante es el de Nelson vs. Bobcock (1933) 18 minn. 584, NW 49, 90 ALR 1472. Alli el
Comisionado de Carreteras, al mejorar un trozo de la carretera ocupo o se apropio de terrenos
contiguos al derecho de paso. El Tribunal Supremo del Estado declaro que
es personalmente responsable al dueño de los daños causados. Declaro ademas que la ratificacion
de lo que hicieron sus subordinados era equivalente a una orden a los mismos. He aqui lo dijo el
Tribunal.

We think the evidence and conceded facts permitted the jury in finding that in the trespass
on plaintiff's land defendant committed acts outside the scope of his authority. When he went
outside the boundaries of the right of way upon plaintiff's land and damaged it or destroyed
its former condition an dusefulness, he must be held to have designedly departed from the
duties imposed on him by law. There can be no claim that he thus invaded plaintiff's land
southeasterly of the right of way innocently. Surveys clearly marked the limits of the land
appropriated for the right of way of this trunk highway before construction began. . . .

"Ratification may be equivalent to command, and cooperation may be inferred from

acquiescence where there is power to restrain." It is unnecessary to consider other cases
cited, . . ., for as before suggested, the jury could find or infer that, in so far as there was
actual trespass by appropriation of plaintiff's land as a dumping place for the rock to be
removed from the additional appropriated right of way, defendant planned, approved, and
ratified what was done by his subordinates. — Nelson vs. Bobcock, 90 A.L.R., 1472, 1476,
1477.
La doctrina sobre la responsabilidad civil de los funcionarios en casos parecidos se resume como
sigue:

Ordinarily the officer or employee committing the tort is personally liable therefor, and may
be sued as any other citizen and held answerable for whatever injury or damage results from
his tortious act. — 49 Am. Jur. 289.

. . . If an officer, even while acting under color of his office, exceeds the power conferred on
him by law, he cannot shelter himself under the plea that he is a public agent. — 43 Am. Jur.
86.

It is a general rule that an officer-executive, administrative quasi-judicial, ministerial, or

otherwise who acts outside the scope of his jurisdiction and without authorization of law may
thereby render himself amenable to personal liability in a civil suit. If he exceed the power
conferred on him by law, he cannot shelter himself by the plea that he is a public agent
acting under the color of his office, and not personally. In the eye of the law, his acts then are
wholly without authority. — 43 Am. Jur. 89-90.

El articulo 32 del Codigo Civil dice a su vez:

ART. 32. Any public officer or emplyee, or any private individual, who directly or indirectly
obstructs, defeats, violates or in any manner impedes or impairs any of the following rights
and liberties of another person shall be liable to the latter for damages:

xxx xxx xxx

(6) The right against deprivation of property without due process of law;

xxx xxx xxx

In any of the cases referred to this article, whether or not the defendant's acts or omission
constitutes a criminal offense, the aggrieved party has a right ot commence an entirely
separate and distinct civil action for damages, and for other relief. Such civil action shall
proceed independently of any criminal prosecution (if the latter be instituted), and may be
proved by a preponderance of evidence.

The inmdemnity shall include moral damages Exemplary damages may also be adjudicated.

Veanse tambien Lung vs. Aldanese, 45 Phil., 784; Syquia vs. Almeda, No. L-1648, Agosto
17, 1947; Marquez vs. Nelson, No. L-2412, Septiembre 1950.

Se revoca la orden apelada y se ordena la continuacion de la tramitacion de la demanda conforme

proveen los reglamentos. Sin especial pronunciamiento en cuanto a las costas. Asi se ordena.

Padilla, Reyes, Jugo, Bautista Angelo and Labrador, MM., estan conformes.

Separate Opinions

CONCEPCION, J., dissenting:

To my mind, the allegations of the complaint lead to no other conclusion than that appellee Isaias
Fernando is a party in this case, not in his personal capacity, but as an officer of the Government.
According to said pleading the defendant is "Isaias Fernando, Director, Bureau of Public Works."
Moreover, in paragraphs 4 and 5 of the complaint, it is alleged:

4. That the defendant as Director of the Bureau of Public Works, is in charge of irrigation
projects and systems, and the official responsible for the construction of irrigation system in
the Philippines;
 5. That the defendant, as Director of the Bureau of Public Works, without authority obtained
first from the Court of First Instance of Ilocos Sur, without obtaining first a right of way, and
without the consent and knowledge of the plaintiff, and against her express objection,
unlawfully took possession of portions of the three parcels of land described above, and
caused an irrigation canal to be constructed on the portion of the three parcels of land on or
about the month of February 1951 the aggregate area being 24,179 square meters to the
damage and prejudice of the plaintiff. (Emphasis supplied.)

The emphasis thus placed upon the allegation that the acts complained of were performed by said
defendant "as Director of the Bureau of Public Works," clearly shows that the designation of his
office was included in the title of the case to indicate that he was being sued in his official capacity.
This conclusion is bolstered up by the fact that, among other things, plaintiff prays, in the complaint,
for a judgment

Ordering the defendant to return or caused to be returned the possession of the portions of
land unlawfully occupied and appropriated in the aggregate area of 24,179 square meters
and to return the land to its former condition under the expense of the defendant. (Paragraph
a, of the complaint).

We take judicial notice of the fact that the irrigation projects and system reffered to in the complaint
— of which the defendant, Isaias Fernando, according to the same pleading, is "in charge" and for
which he is "responsible" as Director of the Bureau of Public Works — are established and operated
with public funds, which pursuant to the Constitution, must be appropriated by law. Irrespective of
the manner in which the construction may have been undertaken by the Bureau of Public Works, the
system or canal is, therefore, a property of the Government. Consequently, in praying that
possession of the portions of land occupied by the irrigation canal involved in the present case be
returned to plaintiff therein, and that said land be restored to its former condition, plaintiff seeks to
divest the Government of its possession of said irrigation canal, and, what is worse, to cause said
property of the Government to be removed or destroyed. As held in Syquia vs. Lopez (47 Off. Gaz.,
665), the Government is, accordingly, "the real party in interest as defendant" in the case at bar. In
other words, the same partakes of the nature of a suit against the state and may not be maintained
without its consent.

Hence I am constrained to dissent.

Bengzon, J., concurs.

G.R. No. 76607 February 26, 1990

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE REEVES, petitioners,

vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial Court, Angeles
City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO C. DEL
PILAR, respondents.

G.R. No. 79470 February 26, 1990

UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF, WILFREDO BELSA,

PETER ORASCION AND ROSE CARTALLA, petitioners,
vs.
HON. RODOLFO D. RODRIGO, as Presiding Judge of Branch 7, Regional Trial Court (BAGUIO
CITY), La Trinidad, Benguet and FABIAN GENOVE, respondents.

G.R. No. 80018 February 26, 1990

UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F.

BOSTICK, petitioners,
vs.
HON. JOSEFINA D. CEBALLOS, As Presiding Judge, Regional Trial Court, Branch 66, Capas,
Tarlac, and LUIS BAUTISTA, respondents.
G.R. No. 80258 February 26, 1990

UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC ERNEST E.

RIVENBURGH, AIC ROBIN BLEVINS, SGT. NOEL A. GONZALES, SGT. THOMAS MITCHELL,
SGT. WAYNE L. BENJAMIN, ET AL., petitioners,
vs.
HON. CONCEPCION S. ALARCON VERGARA, as Presiding Judge, Branch 62 REGIONAL
TRIAL COURT, Angeles City, and RICKY SANCHEZ, FREDDIE SANCHEZ AKA FREDDIE
RIVERA, EDWIN MARIANO, AKA JESSIE DOLORES SANGALANG, ET AL., respondents.

Luna, Sison & Manas Law Office for petitioners.

CRUZ, J.:

These cases have been consolidated because they all involve the doctrine of state immunity.
The United States of America was not impleaded in the complaints below but has moved to
dismiss on the ground that they are in effect suits against it to which it has not consented. It
is now contesting the denial of its motions by the respondent judges.

In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force
stationed in Clark Air Base in connection with the bidding conducted by them for contracts
for barber services in the said base.

On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S.
Air Force, solicited bids for such contracts through its contracting officer, James F. Shaw.
Among those who submitted their bids were private respondents Roberto T. Valencia,
Emerenciana C. Tanglao, and Pablo C. del Pilar. Valencia had been a concessionaire inside
Clark for 34 years; del Pilar for 12 years; and Tanglao for 50 years.

The bidding was won by Ramon Dizon, over the objection of the private respondents, who
claimed that he had made a bid for four facilities, including the Civil Engineering Area, which
was not included in the invitation to bid.

The private respondents complained to the Philippine Area Exchange (PHAX). The latter,
through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse explained
that the Civil Engineering concession had not been awarded to Dizon as a result of the
February 24, 1986 solicitation. Dizon was already operating this concession, then known as
the NCO club concession, and the expiration of the contract had been extended from June
30, 1986 to August 31, 1986. They further explained that the solicitation of the CE barbershop
would be available only by the end of June and the private respondents would be notified.

On June 30, 1986, the private respondents filed a complaint in the court below to compel
PHAX and the individual petitioners to cancel the award to defendant Dizon, to conduct a
rebidding for the barbershop concessions and to allow the private respondents by a writ of
preliminary injunction to continue operating the concessions pending litigation. 1

Upon the filing of the complaint, the respondent court issued an ex parte order directing the
individual petitioners to maintain the status quo.

On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for
preliminary injunction on the ground that the action was in effect a suit against the United
States of America, which had not waived its non-suability. The individual defendants, as
official employees of the U.S. Air Force, were also immune from suit.

On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary
injunction.

On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part
as follows:
 From the pleadings thus far presented to this Court by the parties, the Court's
attention is called by the relationship between the plaintiffs as well as the
defendants, including the US Government, in that prior to the bidding or
solicitation in question, there was a binding contract between the plaintiffs as
well as the defendants, including the US Government. By virtue of said
contract of concession it is the Court's understanding that neither the US
Government nor the herein principal defendants would become the employer/s
of the plaintiffs but that the latter are the employers themselves of the barbers,
etc. with the employer, the plaintiffs herein, remitting the stipulated percentage
of commissions to the Philippine Area Exchange. The same circumstance
would become in effect when the Philippine Area Exchange opened for bidding
or solicitation the questioned barber shop concessions. To this extent,
therefore, indeed a commercial transaction has been entered, and for purposes
of the said solicitation, would necessarily be entered between the plaintiffs as
well as the defendants.

The Court, further, is of the view that Article XVIII of the RP-US Bases
Agreement does not cover such kind of services falling under the
concessionaireship, such as a barber shop concession. 2

On December 11, 1986, following the filing of the herein petition for certiorari and prohibition with
preliminary injunction, we issued a temporary restraining order against further proceedings in the
court below. 3

In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony
Lamachia, Wilfredo Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the U.S. Air
Force Recreation Center at the John Hay Air Station in Baguio City. It had been ascertained after
investigation, from the testimony of Belsa Cartalla and Orascion, that Genove had poured urine into
the soup stock used in cooking the vegetables served to the club customers. Lamachia, as club
manager, suspended him and thereafter referred the case to a board of arbitrators conformably to
the collective bargaining agreement between the Center and its employees. The board unanimously
found him guilty and recommended his dismissal. This was effected on March 5, 1986, by Col. David
C. Kimball, Commander of the 3rd Combat Support Group, PACAF Clark Air Force Base. Genove's
reaction was to file Ms complaint in the Regional Trial Court of Baguio City against the individual
petitioners. 4

On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss the
complaint, alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay Air
Station, was immune from suit for the acts done by him in his official capacity. They argued that the
suit was in effect against the United States, which had not given its consent to be sued.

This motion was denied by the respondent judge on June 4, 1987, in an order which read in part:

It is the understanding of the Court, based on the allegations of the complaint —

which have been hypothetically admitted by defendants upon the filing of their motion
to dismiss — that although defendants acted initially in their official capacities, their
going beyond what their functions called for brought them out of the protective
mantle of whatever immunities they may have had in the beginning. Thus, the
allegation that the acts complained of were illegal, done. with extreme bad faith and
with pre-conceived sinister plan to harass and finally dismiss the plaintiff, gains
significance. 5

The petitioners then came to this Court seeking certiorari and prohibition with preliminary injunction.

In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O' Donnell, an
extension of Clark Air Base, was arrested following a buy-bust operation conducted by the individual
petitioners herein, namely, Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S.
Air Force and special agents of the Air Force Office of Special Investigators (AFOSI). On the basis of
the sworn statements made by them, an information for violation of R.A. 6425, otherwise known as
the Dangerous Drugs Act, was filed against Bautista in the Regional Trial Court of Tarlac. The
above-named officers testified against him at his trial. As a result of the filing of the charge, Bautista
was dismissed from his employment. He then filed a complaint for damages against the individual
petitioners herein claiming that it was because of their acts that he was removed. 6
During the period for filing of the answer, Mariano Y. Navarro a special counsel assigned to the
International Law Division, Office of the Staff Judge Advocate of Clark Air Base, entered a special
appearance for the defendants and moved for an extension within which to file an "answer and/or
other pleadings." His reason was that the Attorney General of the United States had not yet
designated counsel to represent the defendants, who were being sued for their official acts. Within
the extended period, the defendants, without the assistance of counsel or authority from the U.S.
Department of Justice, filed their answer. They alleged therein as affirmative defenses that they had
only done their duty in the enforcement of the laws of the Philippines inside the American bases
pursuant to the RP-US Military Bases Agreement.

On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the
defendants, filed with leave of court a motion to withdraw the answer and dismiss the complaint. The
ground invoked was that the defendants were acting in their official capacity when they did the acts
complained of and that the complaint against them was in effect a suit against the United States
without its consent.

The motion was denied by the respondent judge in his order dated September 11, 1987, which held
that the claimed immunity under the Military Bases Agreement covered only criminal and not civil
cases. Moreover, the defendants had come under the jurisdiction of the court when they submitted
their answer.7

Following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we
issued on October 14, 1987, a temporary restraining order. 8

In G.R. No. 80258, a complaint for damages was filed by the private respondents against the herein
petitioners (except the United States of America), for injuries allegedly sustained by the plaintiffs as
a result of the acts of the defendants. 9 There is a conflict of factual allegations here. According to the
plaintiffs, the defendants beat them up, handcuffed them and unleashed dogs on them which bit
them in several parts of their bodies and caused extensive injuries to them. The defendants deny
this and claim the plaintiffs were arrested for theft and were bitten by the dogs because they were
struggling and resisting arrest, The defendants stress that the dogs were called off and the plaintiffs
were immediately taken to the medical center for treatment of their wounds.

In a motion to dismiss the complaint, the United States of America and the individually named
defendants argued that the suit was in effect a suit against the United States, which had not given its
consent to be sued. The defendants were also immune from suit under the RP-US Bases Treaty for
acts done by them in the performance of their official functions.

The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading in
part as follows:

The defendants certainly cannot correctly argue that they are immune from suit. The
allegations, of the complaint which is sought to be dismissed, had to be
hypothetically admitted and whatever ground the defendants may have, had to be
ventilated during the trial of the case on the merits. The complaint alleged criminal
acts against the individually-named defendants and from the nature of said acts it
could not be said that they are Acts of State, for which immunity should be invoked. If
the Filipinos themselves are duty bound to respect, obey and submit themselves to
the laws of the country, with more reason, the members of the United States Armed
Forces who are being treated as guests of this country should respect, obey and
submit themselves to its laws. 10

and so was the motion for reconsideration. The defendants submitted their answer as required but
subsequently filed their petition for certiorari and prohibition with preliminary injunction with this
Court. We issued a temporary restraining order on October 27, 1987. 11

II

The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of
the 1987 Constitution, is one of the generally accepted principles of international law that we have
adopted as part of the law of our land under Article II, Section 2. This latter provision merely
reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and also intended to
manifest our resolve to abide by the rules of the international community.
Even without such affirmation, we would still be bound by the generally accepted principles of
international law under the doctrine of incorporation. Under this doctrine, as accepted by the majority
of states, such principles are deemed incorporated in the law of every civilized state as a condition
and consequence of its membership in the society of nations. Upon its admission to such society,
the state is automatically obligated to comply with these principles in its relations with other states.

As applied to the local state, the doctrine of state immunity is based on the justification given by
Justice Holmes that "there can be no legal right against the authority which makes the law on which
the right depends." 12 There are other practical reasons for the enforcement of the doctrine. In the
case of the foreign state sought to be impleaded in the local jurisdiction, the added inhibition is
expressed in the maxim par in parem, non habet imperium. All states are sovereign equals and
cannot assert jurisdiction over one another. A contrary disposition would, in the language of a
celebrated case, "unduly vex the peace of nations." 13

While the doctrine appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them in the
discharge of their duties. The rule is that if the judgment against such officials will require the state
itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount
needed to pay the damages awarded against them, the suit must be regarded as against the state
itself although it has not been formally impleaded. 14 In such a situation, the state may move to
dismiss the complaint on the ground that it has been filed without its consent.

The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the
privilege it grants the state to defeat any legitimate claim against it by simply invoking its non-
suability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling tyrant
unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does not say the
state may not be sued under any circumstance. On the contrary, the rule says that the state may not
be sued without its consent, which clearly imports that it may be sued if it consents.

The consent of the state to be sued may be manifested expressly or impliedly. Express consent may
be embodied in a general law or a special law. Consent is implied when the state enters into a
contract or it itself commences litigation.

The general law waiving the immunity of the state from suit is found in Act No. 3083, under which the
Philippine government "consents and submits to be sued upon any moneyed claim involving liability
arising from contract, express or implied, which could serve as a basis of civil action between private
parties." In Merritt v. Government of the Philippine Islands, 15 a special law was passed to enable a
person to sue the government for an alleged tort. When the government enters into a contract, it is
deemed to have descended to the level of the other contracting party and divested of its sovereign
immunity from suit with its implied consent. 16 Waiver is also implied when the government files a
complaint, thus opening itself to a counterclaim. 17

The above rules are subject to qualification. Express consent is effected only by the will of the
legislature through the medium of a duly enacted statute. 18 We have held that not all contracts
entered into by the government will operate as a waiver of its non-suability; distinction must be made
between its sovereign and proprietary acts. 19 As for the filing of a complaint by the government,
suability will result only where the government is claiming affirmative relief from the defendant. 20

In the case of the United States of America, the customary rule of international law on state immunity
is expressed with more specificity in the RP-US Bases Treaty. Article III thereof provides as follows:

It is mutually agreed that the United States shall have the rights, power and authority
within the bases which are necessary for the establishment, use, operation and
defense thereof or appropriate for the control thereof and all the rights, power and
authority within the limits of the territorial waters and air space adjacent to, or in the
vicinity of, the bases which are necessary to provide access to them or appropriate
for their control.

The petitioners also rely heavily on Baer v. Tizon, 21 along with several other decisions, to support
their position that they are not suable in the cases below, the United States not having waived its
sovereign immunity from suit. It is emphasized that in Baer, the Court held:

The invocation of the doctrine of immunity from suit of a foreign state without its
consent is appropriate. More specifically, insofar as alien armed forces is concerned,
 the starting point is Raquiza v. Bradford, a 1945 decision. In dismissing a habeas
corpus petition for the release of petitioners confined by American army authorities,
Justice Hilado speaking for the Court, cited Coleman v. Tennessee, where it was
explicitly declared: 'It is well settled that a foreign army, permitted to march through a
friendly country or to be stationed in it, by permission of its government or sovereign,
is exempt from the civil and criminal jurisdiction of the place.' Two years later, in
Tubb and Tedrow v. Griess, this Court relied on the ruling in Raquiza v. Bradford and
cited in support thereof excerpts from the works of the following authoritative writers:
Vattel, Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair and
Lauterpacht. Accuracy demands the clarification that after the conclusion of the
Philippine-American Military Bases Agreement, the treaty provisions should control
on such matter, the assumption being that there was a manifestation of the
submission to jurisdiction on the part of the foreign power whenever appropriate.
More to the point is Syquia v. Almeda Lopez, where plaintiffs as lessors sued the
Commanding General of the United States Army in the Philippines, seeking the
restoration to them of the apartment buildings they owned leased to the United
States armed forces stationed in the Manila area. A motion to dismiss on the ground
of non-suability was filed and upheld by respondent Judge. The matter was taken to
this Court in a mandamus proceeding. It failed. It was the ruling that respondent
Judge acted correctly considering that the 4 action must be considered as one
against the U.S. Government. The opinion of Justice Montemayor continued: 'It is
clear that the courts of the Philippines including the Municipal Court of Manila have
no jurisdiction over the present case for unlawful detainer. The question of lack of
jurisdiction was raised and interposed at the very beginning of the action. The U.S.
Government has not given its consent to the filing of this suit which is essentially
against her, though not in name. Moreover, this is not only a case of a citizen filing a
suit against his own Government without the latter's consent but it is of a citizen firing
an action against a foreign government without said government's consent, which
renders more obvious the lack of jurisdiction of the courts of his country. The
principles of law behind this rule are so elementary and of such general acceptance
that we deem it unnecessary to cite authorities in support thereof then came Marvel
Building Corporation v. Philippine War Damage Commission, where respondent, a
United States Agency established to compensate damages suffered by the
Philippines during World War II was held as falling within the above doctrine as the
suit against it would eventually be a charge against or financial liability of the United
States Government because ... , the Commission has no funds of its own for the
purpose of paying money judgments.' The Syquia ruling was again explicitly relied
upon in Marquez Lim v. Nelson, involving a complaint for the recovery of a motor
launch, plus damages, the special defense interposed being 'that the vessel
belonged to the United States Government, that the defendants merely acted as
agents of said Government, and that the United States Government is therefore the
real party in interest.' So it was in Philippine Alien Property Administration v. Castelo,
where it was held that a suit against Alien Property Custodian and the Attorney
General of the United States involving vested property under the Trading with the
Enemy Act is in substance a suit against the United States. To the same effect
is Parreno v. McGranery, as the following excerpt from the opinion of justice Tuazon
clearly shows: 'It is a widely accepted principle of international law, which is made a
part of the law of the land (Article II, Section 3 of the Constitution), that a foreign state
may not be brought to suit before the courts of another state or its own courts without
its consent.' Finally, there is Johnson v. Turner, an appeal by the defendant, then
Commanding General, Philippine Command (Air Force, with office at Clark Field)
from a decision ordering the return to plaintiff of the confiscated military payment
certificates known as scrip money. In reversing the lower court decision, this
Tribunal, through Justice Montemayor, relied on Syquia v. Almeda Lopez, explaining
why it could not be sustained.

It bears stressing at this point that the above observations do not confer on the United States of
America a blanket immunity for all acts done by it or its agents in the Philippines. Neither may the
other petitioners claim that they are also insulated from suit in this country merely because they have
acted as agents of the United States in the discharge of their official functions.

There is no question that the United States of America, like any other state, will be deemed to have
impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity.
It is only when the contract involves its sovereign or governmental capacity that no such waiver may
be implied. This was our ruling in UnitedStates of America v. Ruiz, 22 where the transaction in
question dealt with the improvement of the wharves in the naval installation at Subic Bay. As this
was a clearly governmental function, we held that the contract did not operate to divest the United
States of its sovereign immunity from suit. In the words of Justice Vicente Abad Santos:

The traditional rule of immunity exempts a State from being sued in the courts of
another State without its consent or waiver. This rule is a necessary consequence of
the principles of independence and equality of States. However, the rules of
International Law are not petrified; they are constantly developing and evolving. And
because the activities of states have multiplied, it has been necessary to distinguish
them — between sovereign and governmental acts (jure imperii) and private,
commercial and proprietary acts (jure gestionis). The result is that State immunity
now extends only to acts jure imperii The restrictive application of State immunity is
now the rule in the United States, the United kingdom and other states in Western
Europe.

xxx xxx xxx

The restrictive application of State immunity is proper only when the proceedings
arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State may be said to have
descended to the level of an individual and can thus be deemed to have tacitly given
its consent to be sued only when it enters into business contracts. It does not apply
where the contract relates to the exercise of its sovereign functions. In this case the
projects are an integral part of the naval base which is devoted to the defense of both
the United States and the Philippines, indisputably a function of the government of
the highest order; they are not utilized for nor dedicated to commercial or business
purposes.

The other petitioners in the cases before us all aver they have acted in the discharge of their official
functions as officers or agents of the United States. However, this is a matter of evidence. The
charges against them may not be summarily dismissed on their mere assertion that their acts are
imputable to the United States of America, which has not given its consent to be sued. In fact, the
defendants are sought to be held answerable for personal torts in which the United States itself is
not involved. If found liable, they and they alone must satisfy the judgment.

In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever, appropriated
private land and converted it into public irrigation ditches. Sued for the value of the lots invalidly
taken by him, he moved to dismiss the complaint on the ground that the suit was in effect against the
Philippine government, which had not given its consent to be sued. This Court sustained the denial
of the motion and held that the doctrine of state immunity was not applicable. The director was being
sued in his private capacity for a personal tort.

With these considerations in mind, we now proceed to resolve the cases at hand.

III

It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners
therein were acting in the exercise of their official functions when they conducted the buy-bust
operation against the complainant and thereafter testified against him at his trial. The said petitioners
were in fact connected with the Air Force Office of Special Investigators and were charged precisely
with the function of preventing the distribution, possession and use of prohibited drugs and
prosecuting those guilty of such acts. It cannot for a moment be imagined that they were acting in
their private or unofficial capacity when they apprehended and later testified against the
complainant. It follows that for discharging their duties as agents of the United States, they cannot
be directly impleaded for acts imputable to their principal, which has not given its consent to be
sued. As we observed in Sanders v. Veridiano: 24

Given the official character of the above-described letters, we have to conclude that
the petitioners were, legally speaking, being sued as officers of the United States
government. As they have acted on behalf of that government, and within the scope
of their authority, it is that government, and not the petitioners personally, that is
responsible for their acts.
The private respondent invokes Article 2180 of the Civil Code which holds the government liable if it
acts through a special agent. The argument, it would seem, is premised on the ground that since the
officers are designated "special agents," the United States government should be liable for their
torts.

There seems to be a failure to distinguish between suability and liability and a misconception that the
two terms are synonymous. Suability depends on the consent of the state to be sued, liability on the
applicable law and the established facts. The circumstance that a state is suable does not
necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first
consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be
sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to
prove, if it can, that the defendant is liable.

The said article establishes a rule of liability, not suability. The government may be held liable under
this rule only if it first allows itself to be sued through any of the accepted forms of consent.

Moreover, the agent performing his regular functions is not a special agent even if he is so
denominated, as in the case at bar. No less important, the said provision appears to regulate only
the relations of the local state with its inhabitants and, hence, applies only to the Philippine
government and not to foreign governments impleaded in our courts.

We reject the conclusion of the trial court that the answer filed by the special counsel of the Office of
the Sheriff Judge Advocate of Clark Air Base was a submission by the United States government to
its jurisdiction. As we noted in Republic v. Purisima, 25 express waiver of immunity cannot be made
by a mere counsel of the government but must be effected through a duly-enacted statute. Neither
does such answer come under the implied forms of consent as earlier discussed.

But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the
discharge of their official functions, we hesitate to make the same conclusion in G.R. No. 80258. The
contradictory factual allegations in this case deserve in our view a closer study of what actually
happened to the plaintiffs. The record is too meager to indicate if the defendants were really
discharging their official duties or had actually exceeded their authority when the incident in question
occurred. Lacking this information, this Court cannot directly decide this case. The needed inquiry
must first be made by the lower court so it may assess and resolve the conflicting claims of the
parties on the basis of the evidence that has yet to be presented at the trial. Only after it shall have
determined in what capacity the petitioners were acting at the time of the incident in question will this
Court determine, if still necessary, if the doctrine of state immunity is applicable.

In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located at
the U.S. Air Force Recreation Center, also known as the Open Mess Complex, at John Hay Air
Station. As manager of this complex, petitioner Lamachia is responsible for eleven diversified
activities generating an annual income of $2 million. Under his executive management are three
service restaurants, a cafeteria, a bakery, a Class VI store, a coffee and pantry shop, a main cashier
cage, an administrative office, and a decentralized warehouse which maintains a stock level of
$200,000.00 per month in resale items. He supervises 167 employees, one of whom was Genove,
with whom the United States government has concluded a collective bargaining agreement.

From these circumstances, the Court can assume that the restaurant services offered at the John
Hay Air Station partake of the nature of a business enterprise undertaken by the United States
government in its proprietary capacity. Such services are not extended to the American servicemen
for free as a perquisite of membership in the Armed Forces of the United States. Neither does it
appear that they are exclusively offered to these servicemen; on the contrary, it is well known that
they are available to the general public as well, including the tourists in Baguio City, many of whom
make it a point to visit John Hay for this reason. All persons availing themselves of this facility pay
for the privilege like all other customers as in ordinary restaurants. Although the prices are
concededly reasonable and relatively low, such services are undoubtedly operated for profit, as a
commercial and not a governmental activity.

The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to
justify the dismissal of the damage suit against them by Genove. Such defense will not prosper even
if it be established that they were acting as agents of the United States when they investigated and
later dismissed Genove. For that matter, not even the United States government itself can claim
such immunity. The reason is that by entering into the employment contract with Genove in the
discharge of its proprietary functions, it impliedly divested itself of its sovereign immunity from suit.
But these considerations notwithstanding, we hold that the complaint against the petitioners in the
court below must still be dismissed. While suable, the petitioners are nevertheless not liable. It is
obvious that the claim for damages cannot be allowed on the strength of the evidence before us,
which we have carefully examined.

The dismissal of the private respondent was decided upon only after a thorough investigation where
it was established beyond doubt that he had polluted the soup stock with urine. The investigation, in
fact, did not stop there. Despite the definitive finding of Genove's guilt, the case was still referred to
the board of arbitrators provided for in the collective bargaining agreement. This board unanimously
affirmed the findings of the investigators and recommended Genove's dismissal. There was nothing
arbitrary about the proceedings. The petitioners acted quite properly in terminating the private
respondent's employment for his unbelievably nauseating act. It is surprising that he should still have
the temerity to file his complaint for damages after committing his utterly disgusting offense.

Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions granted
by the United States government are commercial enterprises operated by private person's. They are
not agencies of the United States Armed Forces nor are their facilities demandable as a matter of
right by the American servicemen. These establishments provide for the grooming needs of their
customers and offer not only the basic haircut and shave (as required in most military organizations)
but such other amenities as shampoo, massage, manicure and other similar indulgences. And all for
a fee. Interestingly, one of the concessionaires, private respondent Valencia, was even sent abroad
to improve his tonsorial business, presumably for the benefit of his customers. No less significantly,
if not more so, all the barbershop concessionaires are under the terms of their contracts, required to
remit to the United States government fixed commissions in consideration of the exclusive
concessions granted to them in their respective areas.

This being the case, the petitioners cannot plead any immunity from the complaint filed by the
private respondents in the court below. The contracts in question being decidedly commercial, the
conclusion reached in the United States of America v. Ruiz case cannot be applied here.

The Court would have directly resolved the claims against the defendants as we have done in G.R.
No. 79470, except for the paucity of the record in the case at hand. The evidence of the alleged
irregularity in the grant of the barbershop concessions is not before us. This means that, as in G.R.
No. 80258, the respondent court will have to receive that evidence first, so it can later determine on
the basis thereof if the plaintiffs are entitled to the relief they seek. Accordingly, this case must also
be remanded to the court below for further proceedings.

IV

There are a number of other cases now pending before us which also involve the question of the
immunity of the United States from the jurisdiction of the Philippines. This is cause for regret, indeed,
as they mar the traditional friendship between two countries long allied in the cause of democracy. It
is hoped that the so-called "irritants" in their relations will be resolved in a spirit of mutual
accommodation and respect, without the inconvenience and asperity of litigation and always with
justice to both parties.

WHEREFORE, after considering all the above premises, the Court hereby renders judgment as
follows:

1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is
directed to proceed with the hearing and decision of Civil Case No. 4772. The
temporary restraining order dated December 11, 1986, is LIFTED.

2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298) is
DISMISSED.

3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is
DISMISSED. The temporary restraining order dated October 14, 1987, is made
permanent.

4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is directed
to proceed with the hearing and decision of Civil Case No. 4996. The temporary
restraining order dated October 27, 1987, is LIFTED.
All without any pronouncement as to costs.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur

G.R. No. 185918 April 18, 2012

LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC., Petitioner,

vs.
UNIVERSITY OF THE PHILIPPINES, Respondent.

DECISION

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assailing the August 20, 2008 Amended Decision1 and December 23, 2008 Resolution2 of
the Court of Appeals (CA) in CA-G.R. SP No. 91281.

The antecedent facts of the case are as follows:

Petitioner Lockheed Detective and Watchman Agency, Inc. (Lockheed) entered into a contract for
security services with respondent University of the Philippines (UP).

In 1998, several security guards assigned to UP filed separate complaints against Lockheed and UP
for payment of underpaid wages, 25% overtime pay, premium pay for rest days and special holidays,
holiday pay, service incentive leave pay, night shift differentials, 13th month pay, refund of cash
bond, refund of deductions for the Mutual Benefits Aids System (MBAS), unpaid wages from
December 16-31, 1998, and attorney’s fees.

On February 16, 2000, the Labor Arbiter rendered a decision as follows:

WHEREFORE, premises considered, respondents Lockheed Detective and Watchman Agency, Inc.
and UP as job contractor and principal, respectively, are hereby declared to be solidarily liable to
complainants for the following claims of the latter which are found meritorious.

Underpaid wages/salaries, premium pay for work on rest day and special holiday, holiday pay, 5
days service incentive leave pay, 13th month pay for 1998, refund of cash bond (deducted at P50.00
per month from January to May 1996, P100.00 per month from June 1996 and P200.00 from
November 1997), refund of deduction for Mutual Benefits Aids System at the rate of P50.00 a month,
and attorney’s fees; in the total amount of P1,184,763.12 broken down as follows per attached
computation of the Computation and [E]xamination Unit of this Commission, which computation
forms part of this Decision:

1. JOSE SABALAS P77,983.62

2. TIRSO DOMASIAN 76,262.70

3. JUAN TAPEL 80,546.03

4. DINDO MURING 80,546.03

5. ALEXANDER ALLORDE 80,471.78

6. WILFREDO ESCOBAR 80,160.63

7. FERDINAND VELASQUEZ 78,595.53

8. ANTHONY GONZALES 76,869.97
 9. SAMUEL ESCARIO 80,509.78
10. PEDRO FAILORINA 80,350.87
11. MATEO TANELA 70,590.58
12. JOB SABALAS 59,362.40

13. ANDRES DACANAYAN 77,403.73

14. EDDIE OLIVAR 77,403.73

P1,077,057.38

plus 10% attorney’s fees 107,705.74

GRAND TOTAL AWARD P1,184,763.12

Third party respondent University of the Philippines is hereby declared to be liable to Third Party
Complainant and cross claimant Lockheed Detective and Watchman Agency for the unpaid
legislated salary increases of the latter’s security guards for the years 1996 to 1998, in the total
amount of P13,066,794.14, out of which amount the amounts due complainants here shall be paid.

The other claims are hereby DISMISSED for lack of merit (night shift differential and 13th month
pay) or for having been paid in the course of this proceedings (salaries for December 15-31, 1997 in
the amount of P40,140.44).

The claims of Erlindo Collado, Rogelio Banjao and Amor Banjao are hereby DISMISSED as
amicably settled for and in consideration of the amounts of P12,315.72, P12,271.77 and P12,819.33,
respectively.

SO ORDERED.3

Both Lockheed and UP appealed the Labor Arbiter’s decision. By Decision4 dated April 12, 2002, the
NLRC modified the Labor Arbiter’s decision. The NLRC held:

WHEREFORE, the decision appealed from is hereby modified as follows:

1. Complainants’ claims for premium pay for work on rest day and special holiday, and 5
days service incentive leave pay, are hereby dismissed for lack of basis.

2. The respondent University of the Philippines is still solidarily liable with Lockheed in the
payment of the rest of the claims covering the period of their service contract.

The Financial Analyst is hereby ordered to recompute the awards of the complainants in accordance
with the foregoing modifications.

SO ORDERED.5

The complaining security guards and UP filed their respective motions for reconsideration. On
August 14, 2002, however, the NLRC denied said motions.

As the parties did not appeal the NLRC decision, the same became final and executory on October
26, 2002.6 A writ of execution was then issued but later quashed by the Labor Arbiter on November
23, 2003 on motion of UP due to disputes regarding the amount of the award. Later, however, said
order quashing the writ was reversed by the NLRC by Resolution7 dated June 8, 2004, disposing as
follows:

WHEREFORE, premises considered, we grant this instant appeal. The Order dated 23 November
2003 is hereby reversed and set aside. The Labor Arbiter is directed to issue a Writ of Execution for
the satisfaction of the judgment award in favor of Third-Party complainants.
SO ORDERED.8

UP moved to reconsider the NLRC resolution. On December 28, 2004, the NLRC upheld its
resolution but with modification that the satisfaction of the judgment award in favor of Lockheed will
be only against the funds of UP which are not identified as public funds.

The NLRC order and resolution having become final, Lockheed filed a motion for the issuance of an
alias writ of execution. The same was granted on May 23, 2005.9

On July 25, 2005, a Notice of Garnishment10 was issued to Philippine National Bank (PNB) UP
Diliman Branch for the satisfaction of the award of ₱12,142,522.69 (inclusive of execution fee).

In a letter11 dated August 9, 2005, PNB informed UP that it has received an order of release dated
August 8, 2005 issued by the Labor Arbiter directing PNB UP Diliman Branch to release to the NLRC
Cashier, through the assigned NLRC Sheriff Max L. Lago, the judgment award/amount of
₱12,142,522.69. PNB likewise reminded UP that the bank only has 10 working days from receipt of
the order to deliver the garnished funds and unless it receives a notice from UP or the NLRC before
the expiry of the 10-day period regarding the issuance of a court order or writ of injunction
discharging or enjoining the implementation and execution of the Notice of Garnishment and Writ of
Execution, the bank shall be constrained to cause the release of the garnished funds in favor of the
NLRC.

On August 16, 2005, UP filed an Urgent Motion to Quash Garnishment.12 UP contended that the
funds being subjected to garnishment at PNB are government/public funds. As certified by the
University Accountant, the subject funds are covered by Savings Account No. 275-529999-8, under
the name of UP System Trust Receipts, earmarked for Student Guaranty Deposit, Scholarship Fund,
Student Fund, Publications, Research Grants, and Miscellaneous Trust Account. UP argued that as
public funds, the subject PNB account cannot be disbursed except pursuant to an appropriation
required by law. The Labor Arbiter, however, dismissed the urgent motion for lack of merit on August
30, 2005.13

On September 2, 2005, the amount of ₱12,062,398.71 was withdrawn by the sheriff from UP’s PNB
account.14

On September 12, 2005, UP filed a petition for certiorari before the CA based on the following
grounds:

I.

The concept of "solidary liability" by an indirect employer notwithstanding, respondent NLRC

gravely abused its discretion in a manner amounting to lack or excess of jurisdiction by
misusing such concept to justify the garnishment by the executing Sheriff of
public/government funds belonging to UP.

II.

Respondents NLRC and Arbiter LORA acted without jurisdiction or gravely abused their
discretion in a manner amounting to lack or excess of jurisdiction when, by means of an Alias
Writ of Execution against petitioner UP, they authorized respondent Sheriff to garnish UP’s
public funds. Similarly, respondent LORA gravely abused her discretion when she resolved
petitioner’s Motion to Quash Notice of Garnishment addressed to, and intended for, the
NLRC, and when she unilaterally and arbitrarily disregarded an official Certification that the
funds garnished are public/government funds, and thereby allowed respondent Sheriff to
withdraw the same from PNB.

III.

Respondents gravely abused their discretion in a manner amounting to lack or excess of

jurisdiction when they, despite prior knowledge, effected the execution that caused
paralyzation and dislocation to petitioner’s governmental functions.15

On March 12, 2008, the CA rendered a decision16 dismissing UP’s petition for certiorari. Citing
Republic v. COCOFED,17 which defines public funds as moneys belonging to the State or to any
political subdivisions of the State, more specifically taxes, customs, duties and moneys raised by
operation of law for the support of the government or the discharge of its obligations, the appellate
court ruled that the funds sought to be garnished do not seem to fall within the stated definition.

On reconsideration, however, the CA issued the assailed Amended Decision. It held that without
departing from its findings that the funds covered in the savings account sought to be garnished do
not fall within the classification of public funds, it reconsiders the dismissal of the petition in light of
the ruling in the case of National Electrification Administration v. Morales18 which mandates that all
money claims against the government must first be filed with the Commission on Audit (COA).

Lockheed moved to reconsider the amended decision but the same was denied in the assailed CA
Resolution dated December 23, 2008. The CA cited Manila International Airport Authority v. Court of
Appeals19 which held that UP ranks with MIAA, a government instrumentality exercising corporate
powers but not organized as a stock or non-stock corporation. While said corporations are
government instrumentalities, they are loosely called government corporate entities but not
government-owned and controlled corporations in the strict sense.

Hence this petition by Lockheed raising the following arguments:

1. RESPONDENT UP IS A GOVERNMENT ENTITY WITH A SEPARATE AND DISTINCT

PERSONALITY FROM THE NATIONAL GOVERNMENT AND HAS ITS OWN CHARTER
GRANTING IT THE RIGHT TO SUE AND BE SUED. IT THEREFORE CANNOT AVAIL OF
THE IMMUNITY FROM SUIT OF THE GOVERNMENT. NOT HAVING IMMUNITY FROM
SUIT, RESPONDENT UP CAN BE HELD LIABLE AND EXECUTION CAN THUS ENSUE.

2. MOREOVER, IF THE COURT LENDS IT ASSENT TO THE INVOCATION OF THE

DOCTRINE OF STATE IMMUNITY, THIS WILL RESULT [IN] GRAVE INJUSTICE.

3. FURTHERMORE, THE PROTESTATIONS OF THE RESPONDENT ARE TOO LATE IN

THE DAY, AS THE EXECUTION PROCEEDINGS HAVE ALREADY BEEN TERMINATED.20

Lockheed contends that UP has its own separate and distinct juridical entity from the national
government and has its own charter. Thus, it can be sued and be held liable. Moreover, Executive
Order No. 714 entitled "Fiscal Control and Management of the Funds of UP" recognizes that "as an
institution of higher learning, UP has always granted full management and control of its affairs
including its financial affairs."21 Therefore, it cannot shield itself from its private contractual liabilities
by simply invoking the public character of its funds. Lockheed also cites several cases wherein it
was ruled that funds of public corporations which can sue and be sued were not exempt from
garnishment.

Lockheed likewise argues that the rulings in the NEA and MIAA cases are inapplicable. It contends
that UP is not similarly situated with NEA because the jurisdiction of COA over the accounts of UP is
only on a post-audit basis. As to the MIAA case, the liability of MIAA pertains to the real estate taxes
imposed by the City of Paranaque while the obligation of UP in this case involves a private
contractual obligation. Lockheed also argues that the declaration in MIAA specifically citing UP was
mere obiter dictum.

Lockheed moreover submits that UP cannot invoke state immunity to justify and perpetrate an
injustice. UP itself admitted its liability and thus it should not be allowed to renege on its contractual
obligations. Lockheed contends that this might create a ruinous precedent that would likely affect the
relationship between the public and private sectors.

Lastly, Lockheed contends that UP cannot anymore seek the quashal of the writ of execution and
notice of garnishment as they are already fait accompli.

For its part, UP contends that it did not invoke the doctrine of state immunity from suit in the
proceedings a quo and in fact, it did not object to being sued before the labor department. It
maintains, however, that suability does not necessarily mean liability. UP argues that the CA
correctly applied the NEA ruling when it held that all money claims must be filed with the COA.

As to alleged injustice that may result for invocation of state immunity from suit, UP reiterates that it
consented to be sued and even participated in the proceedings below. Lockheed cannot now claim
that invocation of state immunity, which UP did not invoke in the first place, can result in injustice.
On the fait accompli argument, UP argues that Lockheed cannot wash its hands from liability for the
consummated garnishment and execution of UP’s trust fund in the amount of ₱12,062,398.71. UP
cites that damage was done to UP and the beneficiaries of the fund when said funds, which were
earmarked for specific educational purposes, were misapplied, for instance, to answer for the
execution fee of ₱120,123.98 unilaterally stipulated by the sheriff. Lockheed, being the party which
procured the illegal garnishment, should be held primarily liable. The mere fact that the CA set aside
the writ of garnishment confirms the liability of Lockheed to reimburse and indemnify in accordance
with law.

The petition has no merit.

We agree with UP that there was no point for Lockheed in discussing the doctrine of state immunity
from suit as this was never an issue in this case. Clearly, UP consented to be sued when it
participated in the proceedings below. What UP questions is the hasty garnishment of its funds in its
PNB account.

This Court finds that the CA correctly applied the NEA case. Like NEA, UP is a juridical personality
separate and distinct from the government and has the capacity to sue and be sued. Thus, also like
NEA, it cannot evade execution, and its funds may be subject to garnishment or levy. However,
before execution may be had, a claim for payment of the judgment award must first be filed with the
COA. Under Commonwealth Act No. 327,22 as amended by Section 26 of P.D. No. 1445,23 it is the
COA which has primary jurisdiction to examine, audit and settle "all debts and claims of any sort"
due from or owing the Government or any of its subdivisions, agencies and instrumentalities,
including government-owned or controlled corporations and their subsidiaries. With respect to
money claims arising from the implementation of Republic Act No. 6758,24 their allowance or
disallowance is for COA to decide, subject only to the remedy of appeal by petition for certiorari to
this Court.251âwphi 1

We cannot subscribe to Lockheed’s argument that NEA is not similarly situated with UP because the
COA’s jurisdiction over the latter is only on post-audit basis. A reading of the pertinent
Commonwealth Act provision clearly shows that it does not make any distinction as to which of the
government subdivisions, agencies and instrumentalities, including government-owned or controlled
corporations and their subsidiaries whose debts should be filed before the COA.

As to the fait accompli argument of Lockheed, contrary to its claim that there is nothing that can be
done since the funds of UP had already been garnished, since the garnishment was erroneously
carried out and did not go through the proper procedure (the filing of a claim with the COA), UP is
entitled to reimbursement of the garnished funds plus interest of 6% per annum, to be computed
from the time of judicial demand to be reckoned from the time UP filed a petition for certiorari before
the CA which occurred right after the withdrawal of the garnished funds from PNB.

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit. Petitioner Lockheed
Detective and Watchman Agency, Inc. is ordered to REIMBURSE respondent University of the
Philippines the amount of ₱12,062,398.71 plus interest of 6% per annum, to be computed from
September 12, 2005 up to the finality of this Decision, and 12% interest on the entire amount from
date of finality of this Decision until fully paid.

No pronouncement as to costs.

SO ORDERED.

G.R. No. L-11154 March 21, 1916

E. MERRITT, plaintiff-appellant,
vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.

Crossfield and O'Brien for plaintiff.

Attorney-General Avanceña for defendant..

TRENT, J.:
This is an appeal by both parties from a judgment of the Court of First Instance of the city of Manila
in favor of the plaintiff for the sum of P14,741, together with the costs of the cause.

Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages which the
plaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and (2) "in limiting the
time when plaintiff was entirely disabled to two months and twenty-one days and fixing the damage
accordingly in the sum of P2,666, instead of P6,000 as claimed by plaintiff in his complaint."

The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding that
the collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due
to the negligence of the chauffeur; (b) in holding that the Government of the Philippine Islands is
liable for the damages sustained by the plaintiff as a result of the collision, even if it be true that the
collision was due to the negligence of the chauffeur; and (c) in rendering judgment against the
defendant for the sum of P14,741.

The trial court's findings of fact, which are fully supported by the record, are as follows:

It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a
motorcycle, was going toward the western part of Calle Padre Faura, passing along the west
side thereof at a speed of ten to twelve miles an hour, upon crossing Taft Avenue and when
he was ten feet from the southwestern intersection of said streets, the General Hospital
ambulance, upon reaching said avenue, instead of turning toward the south, after passing
the center thereof, so that it would be on the left side of said avenue, as is prescribed by the
ordinance and the Motor Vehicle Act, turned suddenly and unexpectedly and long before
reaching the center of the street, into the right side of Taft Avenue, without having sounded
any whistle or horn, by which movement it struck the plaintiff, who was already six feet from
the southwestern point or from the post place there.

By reason of the resulting collision, the plaintiff was so severely injured that, according to Dr.
Saleeby, who examined him on the very same day that he was taken to the General
Hospital, he was suffering from a depression in the left parietal region, a would in the same
place and in the back part of his head, while blood issued from his nose and he was entirely
unconscious.

The marks revealed that he had one or more fractures of the skull and that the grey matter
and brain was had suffered material injury. At ten o'clock of the night in question, which was
the time set for performing the operation, his pulse was so weak and so irregular that, in his
opinion, there was little hope that he would live. His right leg was broken in such a way that
the fracture extended to the outer skin in such manner that it might be regarded as double
and the would be exposed to infection, for which reason it was of the most serious nature.

At another examination six days before the day of the trial, Dr. Saleeby noticed that the
plaintiff's leg showed a contraction of an inch and a half and a curvature that made his leg
very weak and painful at the point of the fracture. Examination of his head revealed a notable
readjustment of the functions of the brain and nerves. The patient apparently was slightly
deaf, had a light weakness in his eyes and in his mental condition. This latter weakness was
always noticed when the plaintiff had to do any difficult mental labor, especially when he
attempted to use his money for mathematical calculations.

According to the various merchants who testified as witnesses, the plaintiff's mental and
physical condition prior to the accident was excellent, and that after having received the
injuries that have been discussed, his physical condition had undergone a noticeable
depreciation, for he had lost the agility, energy, and ability that he had constantly displayed
before the accident as one of the best constructors of wooden buildings and he could not
now earn even a half of the income that he had secured for his work because he had lost 50
per cent of his efficiency. As a contractor, he could no longer, as he had before done, climb
up ladders and scaffoldings to reach the highest parts of the building.

As a consequence of the loss the plaintiff suffered in the efficiency of his work as a
contractor, he had to dissolved the partnership he had formed with the engineer. Wilson,
because he was incapacitated from making mathematical calculations on account of the
condition of his leg and of his mental faculties, and he had to give up a contract he had for
the construction of the Uy Chaco building."
We may say at the outset that we are in full accord with the trial court to the effect that the collision
between the plaintiff's motorcycle and the ambulance of the General Hospital was due solely to the
negligence of the chauffeur.

The two items which constitute a part of the P14,741 and which are drawn in question by the plaintiff
are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666, the amount allowed
for the loss of wages during the time the plaintiff was incapacitated from pursuing his occupation. We
find nothing in the record which would justify us in increasing the amount of the first. As to the
second, the record shows, and the trial court so found, that the plaintiff's services as a contractor
were worth P1,000 per month. The court, however, limited the time to two months and twenty-one
days, which the plaintiff was actually confined in the hospital. In this we think there was error,
because it was clearly established that the plaintiff was wholly incapacitated for a period of six
months. The mere fact that he remained in the hospital only two months and twenty-one days while
the remainder of the six months was spent in his home, would not prevent recovery for the whole
time. We, therefore, find that the amount of damages sustained by the plaintiff, without any fault on
his part, is P18,075.

As the negligence which caused the collision is a tort committed by an agent or employee of the
Government, the inquiry at once arises whether the Government is legally-liable for the damages
resulting therefrom.

Act No. 2457, effective February 3, 1915, reads:

An Act authorizing E. Merritt to bring suit against the Government of the Philippine Islands
and authorizing the Attorney-General of said Islands to appear in said suit.

Whereas a claim has been filed against the Government of the Philippine Islands by Mr. E.
Merritt, of Manila, for damages resulting from a collision between his motorcycle and the
ambulance of the General Hospital on March twenty-fifth, nineteen hundred and thirteen;

Whereas it is not known who is responsible for the accident nor is it possible to determine
the amount of damages, if any, to which the claimant is entitled; and

Whereas the Director of Public Works and the Attorney-General recommended that an Act
be passed by the Legislature authorizing Mr. E. Merritt to bring suit in the courts against the
Government, in order that said questions may be decided: Now, therefore,

By authority of the United States, be it enacted by the Philippine Legislature, that:

SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of the
city of Manila against the Government of the Philippine Islands in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General
Hospital, and to determine the amount of the damages, if any, to which Mr. E. Merritt is
entitled on account of said collision, and the Attorney-General of the Philippine Islands is
hereby authorized and directed to appear at the trial on the behalf of the Government of said
Islands, to defendant said Government at the same.

SEC. 2. This Act shall take effect on its passage.

Enacted, February 3, 1915.

Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it
also concede its liability to the plaintiff? If only the former, then it cannot be held that the Act created
any new cause of action in favor of the plaintiff or extended the defendant's liability to any case not
previously recognized.

All admit that the Insular Government (the defendant) cannot be sued by an individual without its
consent. It is also admitted that the instant case is one against the Government. As the consent of
the Government to be sued by the plaintiff was entirely voluntary on its part, it is our duty to look
carefully into the terms of the consent, and render judgment accordingly.

The plaintiff was authorized to bring this action against the Government "in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General Hospital
and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account of
said collision, . . . ." These were the two questions submitted to the court for determination. The Act
was passed "in order that said questions may be decided." We have "decided" that the accident was
due solely to the negligence of the chauffeur, who was at the time an employee of the defendant,
and we have also fixed the amount of damages sustained by the plaintiff as a result of the collision.
Does the Act authorize us to hold that the Government is legally liable for that amount? If not, we
must look elsewhere for such authority, if it exists.

The Government of the Philippine Islands having been "modeled after the Federal and State
Governments in the United States," we may look to the decisions of the high courts of that country
for aid in determining the purpose and scope of Act No. 2457.

In the United States the rule that the state is not liable for the torts committed by its officers or agents
whom it employs, except when expressly made so by legislative enactment, is well settled. "The
Government," says Justice Story, "does not undertake to guarantee to any person the fidelity of the
officers or agents whom it employs, since that would involve it in all its operations in endless
embarrassments, difficulties and losses, which would be subversive of the public interest." (Claussen
vs. City of Luverne, 103 Minn., 491, citing U. S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and
Beers vs. States, 20 How., 527; 15 L. Ed., 991.)

In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from the state
for personal injuries received on account of the negligence of the state officers at the state fair, a
state institution created by the legislature for the purpose of improving agricultural and kindred
industries; to disseminate information calculated to educate and benefit the industrial classes; and to
advance by such means the material interests of the state, being objects similar to those sought by
the public school system. In passing upon the question of the state's liability for the negligent acts of
its officers or agents, the court said:

No claim arises against any government is favor of an individual, by reason of the

misfeasance, laches, or unauthorized exercise of powers by its officers or agents. (Citing
Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86 N. C., 51, 53; 41 Am. Rep., 440;
Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Green vs. State, 73 Cal., 29; Bourn
vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency, sec. 319.)

As to the scope of legislative enactments permitting individuals to sue the state where the cause of
action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:

By consenting to be sued a state simply waives its immunity from suit. It does not thereby
concede its liability to plaintiff, or create any cause of action in his favor, or extend its liability
to any cause not previously recognized. It merely gives a remedy to enforce a preexisting
liability and submits itself to the jurisdiction of the court, subject to its right to interpose any
lawful defense.

In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of 1913,
which authorized the bringing of this suit, read:

SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit,

Waukesha County, Wisconsin, to bring suit in such court or courts and in such form or forms
as he may be advised for the purpose of settling and determining all controversies which he
may now have with the State of Wisconsin, or its duly authorized officers and agents, relative
to the mill property of said George Apfelbacher, the fish hatchery of the State of Wisconsin
on the Bark River, and the mill property of Evan Humphrey at the lower end of Nagawicka
Lake, and relative to the use of the waters of said Bark River and Nagawicka Lake, all in the
county of Waukesha, Wisconsin.

In determining the scope of this act, the court said:

Plaintiff claims that by the enactment of this law the legislature admitted liability on the part of
the state for the acts of its officers, and that the suit now stands just as it would stand
between private parties. It is difficult to see how the act does, or was intended to do, more
than remove the state's immunity from suit. It simply gives authority to commence suit for the
purpose of settling plaintiff's controversies with the estate. Nowhere in the act is there a
whisper or suggestion that the court or courts in the disposition of the suit shall depart from
well established principles of law, or that the amount of damages is the only question to be
 settled. The act opened the door of the court to the plaintiff. It did not pass upon the question
of liability, but left the suit just where it would be in the absence of the state's immunity from
suit. If the Legislature had intended to change the rule that obtained in this state so long and
to declare liability on the part of the state, it would not have left so important a matter to mere
inference, but would have done so in express terms. (Murdock Grate Co. vs.
Commonwealth, 152 Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)

In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and considered,
are as follows:

All persons who have, or shall hereafter have, claims on contract or for negligence against
the state not allowed by the state board of examiners, are hereby authorized, on the terms
and conditions herein contained, to bring suit thereon against the state in any of the courts of
this state of competent jurisdiction, and prosecute the same to final judgment. The rules of
practice in civil cases shall apply to such suits, except as herein otherwise provided.

And the court said:

This statute has been considered by this court in at least two cases, arising under different
facts, and in both it was held that said statute did not create any liability or cause of action
against the state where none existed before, but merely gave an additional remedy to
enforce such liability as would have existed if the statute had not been enacted. (Chapman
vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs. State, 121 Cal., 16.)

A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims
against the commonwealth, whether at law or in equity," with an exception not necessary to be here
mentioned. In construing this statute the court, in Murdock Grate Co. vs. Commonwealth (152
Mass., 28), said:

The statute we are discussing disclose no intention to create against the state a new and
heretofore unrecognized class of liabilities, but only an intention to provide a judicial tribunal
where well recognized existing liabilities can be adjudicated.

In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the
statute of New York, jurisdiction of claims for damages for injuries in the management of the canals
such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be conceded that the state
can be made liable for injuries arising from the negligence of its agents or servants, only by force of
some positive statute assuming such liability."

It being quite clear that Act No. 2457 does not operate to extend the Government's liability to any
cause not previously recognized, we will now examine the substantive law touching the defendant's
liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of article 1903 of
the Civil Code reads:

The state is liable in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it pertained to do the act
performed, in which case the provisions of the preceding article shall be applicable.

The supreme court of Spain in defining the scope of this paragraph said:

That the obligation to indemnify for damages which a third person causes to another by his
fault or negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on that
the person obligated, by his own fault or negligence, takes part in the act or omission of the
third party who caused the damage. It follows therefrom that the state, by virtue of such
provisions of law, is not responsible for the damages suffered by private individuals in
consequence of acts performed by its employees in the discharge of the functions pertaining
to their office, because neither fault nor even negligence can be presumed on the part of the
state in the organization of branches of public service and in the appointment of its agents;
on the contrary, we must presuppose all foresight humanly possible on its part in order that
each branch of service serves the general weal an that of private persons interested in its
operation. Between these latter and the state, therefore, no relations of a private nature
governed by the civil law can arise except in a case where the state acts as a judicial person
 capable of acquiring rights and contracting obligations. (Supreme Court of Spain, January 7,
1898; 83 Jur. Civ., 24.)

That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out of
fault or negligence; and whereas in the first article thereof. No. 1902, where the general
principle is laid down that where a person who by an act or omission causes damage to
another through fault or negligence, shall be obliged to repair the damage so done, reference
is made to acts or omissions of the persons who directly or indirectly cause the damage, the
following articles refers to this persons and imposes an identical obligation upon those who
maintain fixed relations of authority and superiority over the authors of the damage, because
the law presumes that in consequence of such relations the evil caused by their own fault or
negligence is imputable to them. This legal presumption gives way to proof, however,
because, as held in the last paragraph of article 1903, responsibility for acts of third persons
ceases when the persons mentioned in said article prove that they employed all the diligence
of a good father of a family to avoid the damage, and among these persons, called upon to
answer in a direct and not a subsidiary manner, are found, in addition to the mother or the
father in a proper case, guardians and owners or directors of an establishment or enterprise,
the state, but not always, except when it acts through the agency of a special agent,
doubtless because and only in this case, the fault or negligence, which is the original basis of
this kind of objections, must be presumed to lie with the state.

That although in some cases the state might by virtue of the general principle set forth in
article 1902 respond for all the damage that is occasioned to private parties by orders or
resolutions which by fault or negligence are made by branches of the central administration
acting in the name and representation of the state itself and as an external expression of its
sovereignty in the exercise of its executive powers, yet said article is not applicable in the
case of damages said to have been occasioned to the petitioners by an executive official,
acting in the exercise of his powers, in proceedings to enforce the collections of certain
property taxes owing by the owner of the property which they hold in sublease.

That the responsibility of the state is limited by article 1903 to the case wherein it
acts through a special agent(and a special agent, in the sense in which these words are
employed, is one who receives a definite and fixed order or commission, foreign to the
exercise of the duties of his office if he is a special official) so that in representation of the
state and being bound to act as an agent thereof, he executes the trust confided to him. This
concept does not apply to any executive agent who is an employee of the acting
administration and who on his own responsibility performs the functions which are inherent in
and naturally pertain to his office and which are regulated by law and the regulations."
(Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)

That according to paragraph 5 of article 1903 of the Civil Code and the principle laid down in
a decision, among others, of the 18th of May, 1904, in a damage case, the responsibility of
the state is limited to that which it contracts through a special agent, duly empowered by
a definite order or commission to perform some act or charged with some definite purpose
which gives rise to the claim, and not where the claim is based on acts or omissions
imputable to a public official charged with some administrative or technical office who can be
held to the proper responsibility in the manner laid down by the law of civil responsibility.
Consequently, the trial court in not so deciding and in sentencing the said entity to the
payment of damages, caused by an official of the second class referred to, has by erroneous
interpretation infringed the provisions of articles 1902 and 1903 of the Civil Code. (Supreme
Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)

It is, therefore, evidence that the State (the Government of the Philippine Islands) is only liable,
according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents,
officers and employees when they act as special agents within the meaning of paragraph 5 of article
1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an
agent.

For the foregoing reasons, the judgment appealed from must be reversed, without costs in this
instance. Whether the Government intends to make itself legally liable for the amount of damages
above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its
employees, by legislative enactment and by appropriating sufficient funds therefor, we are not called
upon to determine. This matter rests solely with the Legislature and not with the courts.
Arellano, C. J., Torres, Johnson, and Moreland, JJ., concur.

G.R. No. L-36084 August 31, 1977

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
HONORABLE AMANTE P. PURISIMA, the Presiding Judge of the court of first Instance of
Manila (Branch VII), and YELLOW BALL FREIGHT LINES, INC., respondents.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Santiago M. Kapunan, Solicitor
Oscar C. Fernandez and Special Attorney Renato P. Mabugat for petitioner.

Jose Q. Calingo for private respondent.

FERNANDO, Acting C.J.:

The jurisdictional issued raised by Solicitor General Estelito P. Mendoza on behalf of the Republic of
the Philippines in this certiorari and prohibition proceeding arose from the failure of respondent
Judge Amante P. Purisima of the Court of First Instance of Manila to apply the well-known and of-
reiterated doctrine of the non-suability of a State, including its offices and agencies, from suit without
its consent. it was so alleged in a motion to dismiss filed by defendant Rice and Corn Administration
in a pending civil suit in the sala of respondent Judge for the collection of a money claim arising from
an alleged breach of contract, the plaintiff being private respondent Yellow Ball Freight Lines,
Inc. 1 Such a motion to dismiss was filed on September 7, 1972. At that time, the leading case of Mobil
Philippines Exploration, Inc. v. Customs Arrastre Service, 2 were Justice Bengzon stressed the lack of
jurisdiction of a court to pass on the merits of a claim against any office or entity acting as part of the
machinery of the national government unless consent be shown, had been applied in 53 other
decisions. 3 There is thus more than sufficient basis for an allegation of jurisdiction infirmity against the
order of respondent Judge denying the motion to dismiss dated October 4, 1972. 4 What is more, the
position of the Republic has been fortified with the explicit affirmation found in this provision of the present
Constitution: "The State may not be sued without its consent." 5

The merit of the petition for certiorari and prohibition is thus obvious.

1. There is pertinence to this excerpt from Switzerland General Insurance Co., Ltd. v. Republic of the
Philippines: 6"The doctrine of non-suability recognized in this jurisdiction even prior to the effectivity of the
[1935] Constitution is a logical corollary of the positivist concept of law which, to para-phrase Holmes,
negates the assertion of any legal right as against the state, in itself the source of the law on which such a
right may be predicated. Nor is this all. Even if such a principle does give rise to problems, considering
lwphl@i tç

the vastly expanded role of government enabling it to engage in business pursuits to promote the general
welfare, it is not obeisance to the analytical school of thought alone that calls for its continued
applicability. Why it must continue to be so, even if the matter be viewed sociologically, was set forth
in Providence Washington Insurance Co. v. Republic thus: "Nonetheless, a continued adherence to the
doctrine of non-suability is not to be deplored for as against the inconvenience that may be caused
private parties, the loss of governmental efficiency and the obstacle to the performance of its multifarious
functions are far greater if such a fundamental principle were abandoned and the availability of judicial
remedy were not thus restricted. With the well-known propensity on the part of our people to go the court,
at the least provocation, the loss of time and energy required to defend against law suits, in the absence
of such a basic principle that constitutes such an effective obstacle, could very well be imagined." 7 It only
remains to be added that under the present Constitution which, as noted, expressly reaffirmed such a
doctrine, the following decisions had been rendered: Del mar v. The Philippine veterans
Administration; 8 Republic v. Villasor; 9 Sayson v. Singson; 10 and Director of the Bureau of Printing v.
Francisco. 11

2. Equally so, the next paragraph in the above opinion from the Switzerland General Insurance Company
decision is likewise relevant: "Nor is injustice thereby cause private parties. They could still proceed to
seek collection of their money claims by pursuing the statutory remedy of having the Auditor General
pass upon them subject to appeal to judicial tribunals for final adjudication. We could thus correctly
conclude as we did in the cited Provindence Washington Insurance decision: "Thus the doctrine of non-
suability of the government without its consent, as it has operated in practice, hardly lends itself to the
charge that it could be the fruitful parent of injustice, considering the vast and ever-widening scope of
state activities at present being undertaken. Whatever difficulties for private claimants may still exist, is,
from an objective appraisal of all factors, minimal. In the balancing of interests, so unavoidable in the
determination of what principles must prevail if government is to satisfy the public weal, the verdict must
be, as it has been these so many years, for its continuing recognition as a fundamental postulate of
constitutional law." 12

3. Apparently respondent Judge was misled by the terms of the contract between the private respondent,
plaintiff in his sala, and defendant Rice and Corn Administration which, according to him, anticipated the
case of a breach of contract within the parties and the suits that may thereafter arise. 13 The consent, to
be effective though, must come from the State acting through a duly enacted statute as pointed out by
Justice Bengzon in Mobil. Thus, whatever counsel for defendant Rice and Corn Administration agreed to
had no binding force on the government. That was clearly beyond the scope of his authority. At any
rate, Justice Sanchez, in Ramos v. Court of Industrial Relations, 14 was quite categorical as to its "not
[being] possessed of a separate and distinct corporate existence. On the contrary, by the law of its
creation, it is an office directly 'under the Office of the President of the Philippines." 15

WHEREFORE, the petitioner for certiorari is granted and the resolution of October 4, 1972 denying the
motion to dismiss filed by the Rice and Corn Administration nullified and set aside and the petitioner for
prohibition is likewise granted restraining respondent Judge from acting on civil Case No. 79082 pending
in his sala except for the purpose of ordering its dismissal for lack of jurisdiction. The temporary
restraining order issued on February 8, 1973 by this Court is made permanent terminating this case.
Costs against Yellow Ball Freight Lines, Inc.

Antonio, Aquino, Concepcion, Jr. and Santos, JJ., concur.

Barredo, J., took no part.

[G.R. NO. 150768 : August 20, 2008]

HEIRS OF MAMERTO MANGUIAT, represented by GERARDO MANGUIAT; HEIRS OF FELIPE

MARUDO, represented by JOSE MARUDO; HEIRS OF JULIANA MAILON, represented by GAVINA
MAILON MENDOZA; HEIRS OF LEONCIA MERCADO, represented by ANIANA MANGUIAT; HEIRS OF
VICENTE PEREZ, represented by SOTERO PEREZ; HEIRS OF VICENTE GARCIA, represented by
MACARIO GARCIA LUCIDO; and HEIRS OF TRANQUILINA MENDOZA, represented by RUFINA
MENDOZA, Petitioners, v. THE HON. COURT OF APPEALS and J.A. DEVELOPMENT
CORPORATION, Respondents.

[G.R. NO. 160176 : August 20, 2008]

HEIRS OF MAMERTO MANGUIAT, represented by GERARDO MANGUIAT; HEIRS OF FELIPE

MARUDO, represented by JOSE MARUDO; HEIRS OF JULIANA MAILON, represented by GAVINA
MAILON MENDOZA; HEIRS OF LEONCIA MERCADO, represented by ANIANA MANGUIAT; HEIRS OF
VICENTE PEREZ, represented by SOTERO PEREZ; HEIRS OF VICENTE GARCIA, represented by
MACARIO GARCIA LUCIDO; and HEIRS OF TRANQUILINA MENDOZA, represented by RUFINA
MENDOZA, Petitioners, v. THE HON. COURT OF APPEALS AND REPUBLIC OF THE
PHILIPPINES, Respondent.

DECISION

PUNO, C.J.:

Before us are two Petitions for Review on Certiorari assailing the Decisions of the Court of Appeals in CA-
G.R. SP No. 60770 and CA-G.R. SP No. 61703 dated August 29, 2001 and January 22, 2003, respectively,
and their Resolutions dated November 16, 2001 and September 29, 2003, respectively. In both cases, the
Court of Appeals set aside the partial decision of the Regional Trial Court of Tagaytay City, dated February
18, 2000, in Civil Case No. TG-1904.

The facts show that petitioners filed a complaint against respondent J.A. Development Corporation (JDC),
Bureau of Telecommunications (BUTEL), Juan dela Cruz, and Pedro dela Cruz on May 14, 1999 with the
Regional Trial Court of Tagaytay City. The complaint, docketed as Civil Case No. TG-1904, was for quieting
of title and cancellation of certificates of title over Lot 1993, commonly known as the "Calamba Estate."
Petitioners alleged that they succeeded to the rights of their predecessors-in-interest to whom Lot 1993 was
awarded on November 13, 1914 by virtue of a Sales Certificate, in accordance with the provisions of the
Friar Land Act. Petitioners, thus, sought to annul the Torrens title issued to respondent, BUTEL, Juan dela
Cruz, and Pedro dela Cruz.
On May 19, 1999, summons was served on respondent JDC through its employee, Jacqueline de los
Santos.1 On the same date, summons was served on BUTEL through a certain employee, Cholito
Anitola.2 The sheriff's return did not describe the position of Mr. Anitola at BUTEL.3

Respondent JDC moved to dismiss the complaint on the following grounds: (1) lack of jurisdiction of the
court over the subject matter of the case; (2) lack of cause of action; (3) prescription; and (4) improper
venue.4 With leave of court, it supplemented its motion by raising the additional ground of res judicataciting
the judgment of the same court in Civil Case No. TG-1516. It contended that Civil Case Nos. TG-1904 and
TG-1516 have identical parties and causes of action, and that the order of dismissal of the latter case has
long become final due to prescription, and laches has long set in.5 The motion to dismiss was denied on
January 11, 2000.6 JDC filed a motion for reconsideration which, to date, has not been resolved.

On July 1, 1999, petitioners moved to have BUTEL declared in default for its failure to file an answer despite
service of summons and to allow them to present their evidence ex parte.7 The motion was granted on
November 10, 1999.8 A week later, the petitioners presented their evidence before the branch clerk of court
acting as commissioner.

On February 18, 2000, the trial court promulgated a partial decision against BUTEL, the dispositive portion
of which states:

PREMISES CONSIDERED, this Court found and hold (sic) that the plaintiffs were able to prove satisfactorily
and convincingly their allegations in the complaint as against defendant Bureau of Telecommunication[s].

WHEREFORE, partial decision is hereby rendered:

A. Declaring that (sic) the plaintiffs as the equitable owner of Lot 1993-I and transfer certificate of title
covering the same is hereby ordered cancelled as null and void;

b. Ordering the transfer of possession of said Lot 1993-I to the plaintiffs;

c. Enjoining the defendant Bureau of Telecommunication[s], its representative, agents or privies to remove
any improvements they have on Lot 1993-I."9

On March 28, 2000, petitioners filed a motion to execute. On April 7, 2000, respondent JDC moved to set
aside the partial decision, arguing in the main that the decision constitutes a prejudgment of the merits of
the entire case.10 On July 17, 2000, the trial court denied the motion.11 On August 25, 2000, respondent
filed a motion for reconsideration of the order.12 On August 8, 2000, the trial court ordered the issuance of a
writ of execution.

On September 15, 2000, respondent JDC filed a Petition for Certiorari and prohibition with the Court of
Appeals to annul: (1) the partial decision dated February 18, 2000; (2) the order dated July 17, 2000; and
(3) the writ of execution dated August 8, 2000.13 The petition was raffled to the Fifteenth Division of the
appellate court and docketed as CA-G.R. SP No. 60770.

On October 31, 2000, the Republic of the Philippines, through the Office of the Solicitor General, filed a
petition for Annulment of Judgment with the Court of Appeals docketed as CA-G.R. SP No. 61703, and
raffled to its Ninth Division.14 It sought the nullification of the partial decision dated February 18, 2000 on
the ground of lack of jurisdiction. It alleged that the service of summons made on BUTEL was not valid as it
was not made upon the Solicitor General who is its statutory counsel and representative.

On August 29, 2001, the Fifteenth Division of the Court of Appeals promulgated its decision granting the
petition of respondent JDC. The dispositive portion states:

WHEREFORE, it is hereby resolved that the (sic): (a) the Partial Decision dated 18 February 2000; (b) the
Order dated 17 July 2000; and (c) Writ of Execution dated 10 August 2000 in Civil Case No. TG-1904
entitled "Heirs of Mamerto Manguiat, [e]t [a]l., Plaintiffs, v. J.A. Development Corporation, Bureau of
Telecommunication[s], Juan Dela Cruz, and Pedro Dela Cruz, Defendants[,"] are hereby ordered SET ASIDE,
for having been issued with grave abuse of discretion.

The public respondent is hereby ordered to follow strictly Sec. 3(c), Rule 9 of the 1997 Rules of Civil
Procedure.

SO ORDERED.15

Petitioners moved for reconsideration of the decision but the motion was denied on November 16,
2001.16 Hence, petitioners filed the instant Petition for Review on Certiorari with this Court, docketed as G.R.
No. 150768.

On January 22, 2003, the Ninth Division of the Court of Appeals promulgated its decision granting the
petition of the Republic of the Philippines and setting aside the judgment of the trial court in Civil Case No.
TG-1904 for lack of jurisdiction.17 Petitioners filed a motion for reconsideration but the motion was denied on
September 29, 2003. They then filed a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of
Civil Procedure with this Court which was docketed as G.R. No. 160176.

On May 25, 2005, this Court resolved to consolidate G.R. NOS. 150768 and 160176.

In G.R. No. 150768, petitioners contend that the Court of Appeals erred in setting aside the partial decision.
They claim that the trial court was correct in rendering the partial judgment as the causes of action against
the respondent, BUTEL, Juan dela Cruz, and Pedro dela Cruz were distinct and severable, involving distinct
lots or interests owned separately by each of the defendants but joined in one complaint to avoid multiplicity
of suits.18

On the other hand, respondent JDC contends that the partial decision was a pre-judgment of the entire case
because its interests were inseparable from the respondent, BUTEL, Juan dela Cruz, and Pedro dela Cruz.
JDC claims that its set of titles find their origin in the same title whose validity is assailed by the petitioners
in their complaint. It argues that the Court of Appeals correctly relied on Section 3(c), Rule 9 of the 1997
Rules of Civil Procedure when BUTEL was declared in default,19 viz.:

SECTION 3. Default, declaration of. - If the defending party fails to answer within the time allowed therefor,
the court shall, upon motion of the claiming party with notice to the defending party, and proof of such
failure, declare the defending party in default. Thereupon, the court shall proceed to render judgment
granting the claimant such relief as the pleading may warrant, unless the court in its discretion requires the
claimant to submit evidence. Such reception of evidence may be delegated to the clerk of court.

xxx

(c) Effect of partial default. - When a pleading asserting a claim states a common cause of action against
several defending parties, some of whom answer and the others fail to do so, the court shall try the case
against all upon the answers thus filed and render judgment upon the evidence presented.

In G.R. No. 160176, petitioners assert that summons was validly served on the Republic of the Philippines
considering that the sheriff's return states that it was "duly served." They further aver that Section 13, Rule
14 of the 1997 Rules of Civil Procedure does not limit service of summons to the Solicitor General but allows
service on other officers as the court may direct. They point out that the failure to inform the Solicitor
General of Civil Case No. TG-1904 can only be attributed to the gross negligence of the BUTEL.20

For its part, respondent Republic of the Philippines contends that summons must be served upon it through
the Solicitor General and that service of summons on an employee of the BUTEL is insufficient compliance
with Section 13, Rule 14 of the Rules of Court.21

In both cases before us, the decisive issue is whether jurisdiction over the BUTEL was validly acquired by
the Regional Trial Court through service of summons upon its employee whose authority to do so does not
appear from the sheriff's return.

We rule in favor of respondent, BUTEL, Juan dela Cruz, and Pedro dela Cruz.

Summons must be served upon a party for valid judgment to be rendered against him. This not only
comports with basic procedural law but the constitutional postulate of due process. The disputable
presumption that an official duty has been regularly performed will not apply where it is patent from the
sheriff's or server's return that it is defective.22

Rule 14, Section 13 of the 1997 Rules of Procedure provides:

SECTION 13. Service upon public corporations. - When the defendant is the Republic of the Philippines,
service may be effected on the Solicitor General; in case of a province, city or municipality, or like public
corporations, service may be effected on its executive head, or on such other officer or officers as the law or
the court may direct.23

It is clear under the Rules that where the defendant is the Republic of the Philippines, service of summons
must be made on the Solicitor General. The BUTEL is an agency attached to the Department of
Transportation and Communications created under E.O. No. 546 on July 23, 1979, and is in charge of
providing telecommunication facilities, including telephone systems to government offices. It also provides
its services to augment limited or inadequate existing similar private communication facilities. It extends its
services to areas where no communication facilities exist yet; and assists the private sector engaged in
telecommunication services by providing and maintaining backbone telecommunication network.24 It is
indisputably part of the Republic, and summons should have been served on the Solicitor General.

We now turn to the question of whether summons was properly served according to the Rules of Court.
Petitioners rely solely on the sheriff's return to prove that summons was properly served. We quote its
contents, viz.:
THIS IS TO CERTIFY that on the 19th day of May 1999, the undersigned caused the service of Summons and
Complaint upon defendant J.A. Development Corporation at the address indicated in the summons, the
same having been received by a certain Jacqueline delos Santos, a person employed thereat, of sufficient
age and discretion to receive such process, who signed on the lower portion of the Summons to
acknowledge receipt thereof.

Likewise, copy of the Summons and Complaint was served upon defendant Bureau of
Telecommunications at the address indicated in the Summons, a copy of the same was received
by a certain Cholito Anitola, a person employed thereat, who signed on the lower portion of the
Summons to acknowledge receipt thereof.25 (Emphasis supplied) c ralawl ibra ry

It is incumbent upon the party alleging that summons was validly served to prove that all requirements
were met in the service thereof. We find that this burden was not discharged by the petitioners. The records
show that the sheriff served summons on an ordinary employee and not on the Solicitor General.
Consequently, the trial court acquired no jurisdiction over BUTEL, and all proceedings therein are null and
void.

Further, we likewise affirm the decision of the Court of Appeals in CA-G.R. SP No. 60770, setting aside the
partial decision of the trial court for having been issued with grave abuse of discretion. It ruled that when
the trial court declared the BUTEL in default, allowed petitioners to present their evidence ex parteand
rendered a partial decision holding that petitioners are the owners of the subject property, such was
tantamount to prejudging the case against respondent JDC. The trial court ruled that petitioners validly
acquired the subject parcel of land without any consideration of the evidence that respondent JDC may
present to substantiate its claim of ownership over its aliquot part of the subject property. The trial court
should have followed the Rules of Court in this situation. Sec. 3(c) of Rule 9 states that "when a pleading
asserting a claim states a common cause of action against several defending parties, some of whom answer
and the others fail to do so, the court shall try the case against all upon the answers thus filed and render
judgment upon the evidence presented." Therefore, the answer filed by a defendant inure to the benefit of
all the defendants, defaulted or not, and all of them share a common fate in the action. It is not within the
authority of the trial court to divide the case before it by first hearing it ex parte as against the defaulted
defendant and rendering a default judgment (in the instant case, partial decision) against it, then
proceeding to hear the case, as to the non-defaulted defendant. This deprives the defaulted defendant of
due process as it is denied the benefit of the answer and the evidence which could have been presented by
its non-defaulted co-defendant.26

IN VIEW WHEREOF, the petitions are DENIED for lack of merit. The Decision and Resolution of the
Fifteenth Division of the Court of Appeals in CA-G.R. SP No. 60770, dated August 29, 2001 and November
16, 2001, respectively, are AFFIRMED. Likewise, the Decision and Resolution of the Ninth Division of the
Court of Appeals in CA-G.R. SP No. 61703, dated January 22, 2003 and September 29, 2003, respectively,
are AFFIRMED. The partial decision of the Regional Trial Court dated February 18, 2000, its order dated July
17, 2000, and the writ of execution dated August 8, 2000 are ANNULLED and SET ASIDE.

SO ORDERED.

G.R. No. L-26400 February 29, 1972

VICTORIA AMIGABLE, plaintiff-appellant,

vs.
NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE
PHILIPPINES, defendants-appellees.

MAKALINTAL, J.:p

This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No. R-5977, dismissing the plaintiff's complaint.

Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad Estate
in Cebu City as shown by Transfer Certificate of Title No. T-18060, which superseded Transfer
Certificate of Title No. RT-3272 (T-3435) issued to her by the Register of Deeds of Cebu on
February 1, 1924. No annotation in favor of the government of any right or interest in the property
appears at the back of the certificate. Without prior expropriation or negotiated sale, the government
used a portion of said lot, with an area of 6,167 square meters, for the construction of the Mango
and Gorordo Avenues.
It appears that said avenues were already existing in 1921 although "they were in bad condition and
very narrow, unlike the wide and beautiful avenues that they are now," and "that the tracing of said
roads was begun in 1924, and the formal construction in
1925." *

On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting payment of the portion of her lot which had been
appropriated by the government. The claim was indorsed to the Auditor General, who disallowed it in his 9th Indorsement dated December 9,
1958. A copy of said indorsement was transmitted to Amigable's counsel by the Office of the President on January 7, 1959.

On February 6, 1959 Amigable filed in the court a quo a complaint, which was later amended on
April 17, 1959 upon motion of the defendants, against the Republic of the Philippines and Nicolas
Cuenca, in his capacity as Commissioner of Public Highways for the recovery of ownership and
possession of the 6,167 square meters of land traversed by the Mango and Gorordo Avenues. She
also sought the payment of compensatory damages in the sum of P50,000.00 for the illegal
occupation of her land, moral damages in the sum of P25,000.00, attorney's fees in the sum of
P5,000.00 and the costs of the suit.

Within the reglementary period the defendants filed a joint answer denying the material allegations of
the complaint and interposing the following affirmative defenses, to wit: (1) that the action was
premature, the claim not having been filed first with the Office of the Auditor General; (2) that the
right of action for the recovery of any amount which might be due the plaintiff, if any, had already
prescribed; (3) that the action being a suit against the Government, the claim for moral damages,
attorney's fees and costs had no valid basis since as to these items the Government had not given
its consent to be sued; and (4) that inasmuch as it was the province of Cebu that appropriated and
used the area involved in the construction of Mango Avenue, plaintiff had no cause of action against
the defendants.

During the scheduled hearings nobody appeared for the defendants notwithstanding due notice, so
the trial court proceeded to receive the plaintiff's evidence ex parte. On July 29, 1959 said court
rendered its decision holding that it had no jurisdiction over the plaintiff's cause of action for the
recovery of possession and ownership of the portion of her lot in question on the ground that the
government cannot be sued without its consent; that it had neither original nor appellate jurisdiction
to hear, try and decide plaintiff's claim for compensatory damages in the sum of P50,000.00, the
same being a money claim against the government; and that the claim for moral damages had long
prescribed, nor did it have jurisdiction over said claim because the government had not given its
consent to be sued. Accordingly, the complaint was dismissed. Unable to secure a reconsideration,
the plaintiff appealed to the Court of Appeals, which subsequently certified the case to Us, there
being no question of fact involved.

The issue here is whether or not the appellant may properly sue the government under the facts of
the case.

In the case of Ministerio vs. Court of First Instance of Cebu,1 involving a claim for payment of the
value of a portion of land used for the widening of the Gorordo Avenue in Cebu City, this Court,
through Mr. Justice Enrique M. Fernando, held that where the government takes away property from
a private landowner for public use without going through the legal process of expropriation or
negotiated sale, the aggrieved party may properly maintain a suit against the government without
thereby violating the doctrine of governmental immunity from suit without its consent. We there said:
.

... . If the constitutional mandate that the owner be compensated for property taken
for public use were to be respected, as it should, then a suit of this character should
not be summarily dismissed. The doctrine of governmental immunity from suit cannot
serve as an instrument for perpetrating an injustice on a citizen. Had the government
followed the procedure indicated by the governing law at the time, a complaint would
have been filed by it, and only upon payment of the compensation fixed by the
judgment, or after tender to the party entitled to such payment of the amount fixed,
may it "have the right to enter in and upon the land so condemned, to appropriate the
same to the public use defined in the judgment." If there were an observance of
procedural regularity, petitioners would not be in the sad plaint they are now. It is
unthinkable then that precisely because there was a failure to abide by what the law
requires, the government would stand to benefit. It is just as important, if not more
so, that there be fidelity to legal norms on the part of officialdom if the rule of law
were to be maintained. It is not too much to say that when the government takes any
property for public use, which is conditioned upon the payment of just compensation,
 to be judicially ascertained, it makes manifest that it submits to the jurisdiction of a
court. There is no thought then that the doctrine of immunity from suit could still be
appropriately invoked.

Considering that no annotation in favor of the government appears at the back of her certificate of
title and that she has not executed any deed of conveyance of any portion of her lot to the
government, the appellant remains the owner of the whole lot. As registered owner, she could bring
an action to recover possession of the portion of land in question at anytime because possession is
one of the attributes of ownership. However, since restoration of possession of said portion by the
government is neither convenient nor feasible at this time because it is now and has been used for
road purposes, the only relief available is for the government to make due compensation which it
could and should have done years ago. To determine the due compensation for the land, the basis
should be the price or value thereof at the time of the taking.2

As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the
price of the land from the time it was taken up to the time that payment is made by the
government.3 In addition, the government should pay for attorney's fees, the amount of which should
be fixed by the trial court after hearing.

WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the
court a quo for the determination of compensation, including attorney's fees, to which the appellant is
entitled as above indicated. No pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo, Villamor and
Makasiar JJ., concur.

G.R. No. L-31635 August 31, 1971

ANGEL MINISTERIO and ASUNCION SADAYA, petitioners,

vs.
THE COURT OF FIRST INSTANCE OF CEBU, Fourth Branch, Presided by the Honorable,
Judge JOSE C. BORROMEO, THE PUBLIC HIGHWAY COMMISSIONER, and THE AUDITOR
GENERAL, respondents.

Eriberto Seno for petitioners.

Office of the Solicitor General Felix Q. Antonio, Acting First Assistant Solicitor General Antonio A.
Torres and Solicitor Norberto P. Eduardo for respondents.

FERNANDO, J.:

What is before this Court for determination in this appeal by certiorari to review a decision of the
Court of First Instance of Cebu is the question of whether or not plaintiffs, now petitioners, seeking
the just compensation to which they are entitled under the Constitution for the expropriation of their
property necessary for the widening of a street, no condemnation proceeding having been filed,
could sue defendants Public Highway Commissioner and the Auditor General, in their capacity as
public officials without thereby violating the principle of government immunity from suit without its
consent. The lower court, relying on what it considered to be authoritative precedents, held that they
could not and dismissed the suit. The matter was then elevated to us. After a careful consideration
and with a view to avoiding the grave inconvenience, not to say possible injustice contrary to the
constitutional mandate, that would be the result if no such suit were permitted, this Court arrives at a
different conclusion, and sustains the right of the plaintiff to file a suit of this character. Accordingly,
we reverse.

Petitioners as plaintiffs in a complaint filed with the Court of First Instance of Cebu, dated April 13,
1966, sought the payment of just compensation for a registered lot, containing an area of 1045
square meters, alleging that in 1927 the National Government through its authorized representatives
took physical and material possession of it and used it for the widening of the Gorordo Avenue, a
national road, Cebu City, without paying just compensation and without any agreement, either
written or verbal. There was an allegation of repeated demands for the payment of its price or return
of its possession, but defendants Public Highway Commissioner and the Auditor General refused to
restore its possession. It was further alleged that on August 25, 1965, the appraisal committee of the
City of Cebu approved Resolution No. 90, appraising the reasonable and just price of Lot No. 647-B
at P50.00 per square meter or a total price of P52,250.00. Thereafter, the complaint was amended
on June 30, 1966 in the sense that the remedy prayed for was in the alternative, either the
restoration of possession or the payment of the just compensation.

In the answer filed by defendants, now respondents, through the then Solicitor General, now
Associate Justice, Antonio P. Barredo, the principal defense relied upon was that the suit in reality
was one against the government and therefore should be dismissed, no consent having been
shown. Then on July 11, 1969, the parties submitted a stipulation of facts to this effect: "That the
plaintiffs are the registered owners of Lot 647-B of the Banilad estate described in the Survey plan
RS-600 GLRO Record No. 5988 and more particularly described in Transfer Certificate of Title No.
RT-5963 containing an area of 1,045 square meters; That the National Government in 1927 took
possession of Lot 647-B Banilad estate, and used the same for the widening of Gorordo Avenue;
That the Appraisal Committee of Cebu City approved Resolution No. 90, Series of 1965 fixing the
price of Lot No. 647-B at P50.00 per square meter; That Lot No. 647-B is still in the possession of
the National Government the same being utilized as part of the Gorordo Avenue, Cebu City, and that
the National Government has not as yet paid the value of the land which is being utilized for public
use."1

The lower court decision now under review was promulgated on January 30, 1969. As is evident
from the excerpt to be cited, the plea that the suit was against the government without its consent
having been manifested met with a favorable response. Thus: "It is uncontroverted that the land in
question is used by the National Government for road purposes. No evidence was presented
whether or not there was an agreement or contract between the government and the original owner
and whether payment was paid or not to the original owner of the land. It may be presumed that
when the land was taken by the government the payment of its value was made thereafter and no
satisfactory explanation was given why this case was filed only in 1966. But granting that no
compensation was given to the owner of the land, the case is undoubtedly against the National
Government and there is no showing that the government has consented to be sued in this case. It
may be contended that the present case is brought against the Public Highway Commissioner and
the Auditor General and not against the National Government. Considering that the herein
defendants are sued in their official capacity the action is one against the National Government who
should have been made a party in this case, but, as stated before, with its consent."2

Then came this petition for certiorari to review the above decision. The principal error assigned
would impugn the holding that the case being against the national government which was sued
without its consent should be dismissed, as it was in fact dismissed. As was indicated in the opening
paragraph of this opinion, this assignment of error is justified. The decision of the lower court cannot
stand. We shall proceed to explain why.

1. The government is immune from suit without its consent.3 Nor is it indispensable that it be the
party proceeded against. If it appears that the action, would in fact hold it liable, the doctrine calls for
application. It follows then that even if the defendants named were public officials, such a principle
could still be an effective bar. This is clearly so where a litigation would result in a financial
responsibility for the government, whether in the disbursements of funds or loss of property. Under
such circumstances, the liability of the official sued is not personal. The party that could be adversely
affected is government. Hence the defense of non-suability may be interposed.4

So it has been categorically set forth in Syquia v. Almeda Lopez:5 "However, and this is important,
where the judgment in such a case would result not only in the recovery of possession of the
property in favor of said citizen but also in a charge against or financial liability to the Government,
then the suit should be regarded as one against the government itself, and, consequently, it cannot
prosper or be validly entertained by the courts except with the consent of said Government."6

2. It is a different matter where the public official is made to account in his capacity as such for acts
contrary to law and injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in
Director of the Bureau of Telecommunications v. Aligean:7 "Inasmuch as the State authorizes only
legal acts by its officers, unauthorized acts of government officials or officers are not acts of the
State, and an action against the officials or officers by one whose rights have been invaded or
violated by such acts, for the protection of his rights, is not a suit against the State within the rule of
immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in
equity against a State officer or the director of a State department on the ground that, while claiming
to act for the State, he violates or invades the personal and property rights of the plaintiff, under an
unconstitutional act or under an assumption of authority which he does not have, is not a suit against
the State within the constitutional provision that the State may not be sued without its consent."8

3. It would follow then that the prayer in the amended complaint of petitioners being in the
alternative, the lower court, instead of dismissing the same, could have passed upon the claim of
plaintiffs there, now petitioners, for the recovery of the possession of the disputed lot, since no
proceeding for eminent domain, as required by the then Code of Civil Procedure, was
instituted.9 However, as noted in Alfonso v. Pasay City, 10 this Court speaking through Justice
Montemayor, restoration would be "neither convenient nor feasible because it is now and has been
used for road purposes." 11 The only relief, in the opinion of this Court, would be for the government
"to make due compensation, ..." 12 It was made clear in such decision that compensation should have
been made "as far back as the date of the taking." Does it result, therefore, that petitioners would be
absolutely remediless since recovery of possession is in effect barred by the above decision? If the
constitutional mandate that the owner be compensated for property taken for public use 13 were to be
respected, as it should, then a suit of this character should not be summarily dismissed. The doctrine
of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a
citizen. Had the government followed the procedure indicated by the governing law at the time, a
complaint would have been filed by it, and only upon payment of the compensation fixed by the
judgment, or after tender to the party entitled to such payment of the amount fixed, may it "have the
right to enter in and upon the land so condemned" to appropriate the same to the public use defined
in the judgment." 14 If there were an observance of procedural regularity, petitioners would not be in
the sad plaint they are now. It is unthinkable then that precisely because there was a failure to abide
by what the law requires, the government would stand to benefit. It is just as important, if not more
so, that there be fidelity to legal norms on the part of officialdom if the rule of law were to be
maintained. It is not too much to say that when the government takes any property for public use,
which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes
manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine of
immunity from suit could still be appropriately invoked. 15

Accordingly, the lower court decision is reversed so that the court may proceed with the complaint
and determine the compensation to which petitioners are entitled, taking into account the ruling in
the above Alfonso case: "As to the value of the property, although the plaintiff claims the present
market value thereof, the rule is that to determine due compensation for lands appropriated by the
Government, the basis should be the price or value at the time that it was taken from the owner and
appropriated by the Government." 16

WHEREFORE, the lower court decision of January 30, 1969 dismissing the complaint is reversed
and the case remanded to the lower court for proceedings in accordance with law.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Teehankee, Villamor and Makasiar, JJ., concur.

Concepcion, C.J., and Barredo, J., took no part.

G.R. No. 90478 November 21, 1991

REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT), petitioner,
vs.
SANDIGANBAYAN, BIENVENIDO R. TANTOCO, JR. and DOMINADOR R.
SANTIAGO, respondents.

Dominador R. Santiago for and in his own behalf and as counsel for respondent Tantoco, Jr.

NARVASA, J.:

Private respondents Bienvenido R. Tantoco, Jr. and Dominador R. Santiago — together with
Ferdinand E. Marcos, Imelda R. Marcos, Bienvenido R. Tantoco, Sr., Gliceria R. Tantoco, and Maria
Lourdes Tantoco-Pineda-are defendants in Civil Case No. 0008 of the Sandiganbayan. The case
was commenced on July 21, 1987 by the Presidential Commission on Good Government (PCGG) in
behalf of the Republic of the Philippines. The complaint which initiated the action was denominated
one "for reconveyance, reversion, accounting, restitution and damages," and was avowedly filed
pursuant to Executive Order No. 14 of President Corazon C. Aquino.

After having been served with summons, Tantoco, Jr. and Santiago, instead of filing their answer,
jointly filed a "MOTION TO STRIKE OUT SOME PORTIONS OF THE COMPLAINT AND FOR BILL
OF PARTICULARS OF OTHER PORTIONS" dated Nov. 3, 1987. 1 The PCGG filed an opposition
thereto, 2 and the movants, a reply to the opposition. 3 By order dated January 29, 1988, the
Sandiganbayan, in order to expedite proceedings and accommodate the defendants, gave the
PCGG forty-five (45) days to expand its complaint to make more specific certain allegations. 4

Basically, they sought

Tantoco and Santiago then presented a "motion for leave to file interrogatories under Rule 25 of the Rules of Court" dated February 1, 1988, and "Interrogatories under Rule 25." 5

an answer to the question: "Who were the Commissioners of the PCGG (aside from its Chairman,
Hon. Ramon Diaz, who verified the complaint) who approved or authorized the inclusion of Messrs.
Bienvenido R. Tantoco, Jr. and Dominador R. Santiago as defendants in the . . case?" 6 The PCGG
responded by filing a motion dated February 9, 1988 to strike out said motion and interrogatories as
being impertinent, "queer," "weird," or "procedurally bizarre as the purpose thereof lacks merit as it is
improper, impertinent and irrelevant under any
guise." 7

As this expanded complaint, Tantoco and Santiago

On March 18, 1988, in compliance with the Order of January 29, 1988, the PCGG filed an Expanded Complaint. 8

reiterated their motion for bill of particulars, through a Manifestation dated April 11, 1988. 9

the Sandiganbayan denied the motion to strike out, for bill of particulars, and
Afterwards, by Resolution dated July 4, 1988, 10

for leave to file interrogatories, holding them to be without legal and factual basis. Also denied was
the PCGG's motion to strike out impertinent pleading dated February 9, 1988. The Sandiganbayan
declared inter alia the complaint to be "sufficiently definite and clear enough," there are adequate
allegations . . which clearly portray the supposed involvement and/or alleged participation of
defendants-movants in the transactions described in detail in said Complaint," and "the other matters
sought for particularization are evidentiary in nature which should be ventilated in the pre-trial or trial
proper . ." It also opined that "(s)ervice of interrogatories before joinder of issue and without leave of
court is premature . . (absent) any special or extraordinary circumstances . . which would justify . .
(the same)."

Tantoco and Santiago then filed an Answer with Compulsory Counterclaim under date of July 18,
1988. 11 In response, the PCGG presented a "Reply to Answer with Motion to Dismiss Compulsory
Counterclaim " 12

On July 25, 1989, the PCGG submitted its PRE-TRIAL. 14 The pre-trial was
The case was set for pre-trial on July 31, 1989. 13

however reset to September 11, 1989, and all other parties were required to submit pre-trial briefs
on or before that date. 15

and on August 2, 1989, an "Amended

On July 27, 1989 Tantoco and Santiago filed with the Sandiganbayan a pleading denominated "Interrogatories to Plaintiff," 16

Interrogatories to Plaintiff"' 17 as well as a Motion for Production and Inspection of Documents. 18

The amended interrogatories chiefly sought factual details relative to specific averments of PCGG's amended complaint, through such questions, for
instance, as—

1. In connection with the allegations . . in paragraph 1 . ., what specific property or properties does the plaintiff claim it has the right to
recover from defendants Tantoco, Jr. and Santiago for being ill-gotten?

3. In connection with the allegations . . in paragraph 10 (a) . . what specific act or acts . . were committed by defendants Tantoco, Jr. and
Santiago in "concert with" defendant Ferdinand Marcos and in furtherance or pursuit, of the alleged systematic plan of said defendant
Marcos to accumulate ill-gotten wealth?"

5. In connection with . . paragraph 13 . ., what specific act or acts of the defendants Tantoco, Jr. and Santiago. . were committed by said
defendants as part, or in furtherance, of the alleged plan to conceal assets of defendants Ferdinand and Imelda Marcos?
 7. In connection with . . paragraph 15(c) . . is it plaintiff's position or theory of the case that Tourist Duty Free Shops, Inc., including all the
assets of said corporation, are beneficially owned by either or both defendants Ferdinand and Imelda Marcos and that the defendants
Tantoco, Jr. and Santiago, as well as, the other stockholders of record of the same corporation are mere "dummies" of said defendants
Ferdinand and /or Imelda R. Marcos?

On the other hand, the motion for production and inspection of documents prayed for examination and copying of—

1) the "official records and other evidence" on the basis of which the verification of the Amended Complaint asserted that the allegations
thereof are "true and correct;"

2) the documents listed in PCGG's Pre-Trial Brief as those "intended to be presented and . . marked as exhibits for the plaintiff;" and

3) "the minutes of the meeting of the PCGG which chronicles the discussion (if any) and the decision (of the Chairman and members) to file
the complaint" in the case at bar.

By Resolutions dated August 21, 1989 and August 25, 1989, the Sandiganbayan admitted the Amended Interrogatories and granted the motion for
production and inspection of documents (production being scheduled on September 14 and 15, 1989), respectively.

On September 1, 1989, the PCGG filed a Motion for Reconsideration of the Resolution of August 25, 1989 (allowing production and inspection of
documents). It argued that

1) since the documents subject thereof would be marked as exhibits during the pre-trial on September 11, 1989 anyway, the order for "their production
and inspection on September 14 and 15, are purposeless and unnecessary;"

2) movants already know of the existence and contents of the document which "are clearly described . . (in) plaintiff's Pre-Trial Brief;"

3) the documents are "privileged in character" since they are intended to be used against the PCGG and/or its Commissioners in violation of Section 4,
Executive Order No. 1, viz.:

(a) No civil action shall lie against the Commission or any member thereof for anything done or omitted in the discharge of the task
contemplated by this Order.

(b) No member or staff of the Commission shall be required to testify or produce evidence in any judicial, legislative, or administrative
proceeding concerning matters within its official cognizance.

which the Sandiganbayan treated as a motion for

It also filed on September 4, 1989 an opposition to the Amended Interrogatories, 19

reconsideration of the Resolution of August 21, 1989 (admitting the Amended Interrogatories). The
opposition alleged that —

1) the interrogatories "are not specific and do not name the person to whom they are propounded .
.," or "who in the PCGG, in particular, . . (should) answer the interrogatories;"

2) the interrogatories delve into "factual matters which had already been decreed . . as part of the
proof of the Complaint upon trial . .;"

3) the interrogatories "are frivolous" since they inquire about "matters of fact . . which defendants . .
sought to . . (extract) through their aborted Motion for Bill of Particulars;"

4) the interrogatories "are really in the nature of a deposition, which is prematurely filed and
irregularly utilized . . (since) the order of trial calls for plaintiff to first present its evidence."

Tantoco and Santiago filed a reply and opposition on September 18, 1989.

After hearing, the Sandiganbayan promulgated two (2) Resolutions on September 29, 1989, the first,
denying reconsideration (of the Resolution allowing production of documents), and the second,
reiterating by implication the permission to serve the amended interrogatories on the plaintiff
(PCGG). 20
Hence, this petition for certiorari.

The PCGG contends that said orders, both dated September 29, 1989, should be nullified because rendered with grave abuse of discretion amounting
to excess of jurisdiction. More particularly, it claims —

a) as regards the order allowing the amended interrogatories to the plaintiff PCGG:

1) that said interrogatories are not specific and do not name the particular individuals to whom they are propounded, being addressed only
to the PCGG;

2) that the interrogatories deal with factual matters which the Sandiganbayan (in denying the movants' motion for bill of particulars) had
already declared to be part of the PCGG's proof upon trial; and

3) that the interrogatories would make PCGG Commissioners and officers witnesses, in contravention of Executive Order No. 14 and
related issuances; and

b) as regards the order granting the motion for production of documents:

1) that movants had not shown any good cause therefor;

2) that some documents sought to be produced and inspected had already been presented in Court and marked preliminarily as PCGG's
exhibits, and the movants had viewed, scrutinized and even offered objections thereto and made comments thereon; and

3) that the other documents sought to be produced are either —

(a) privileged in character or confidential in nature and their use is proscribed by the immunity provisions of Executive Order No.
1, or

(b) non-existent, or mere products of the movants' suspicion and fear.

This Court issued a temporary restraining order on October 27, 1989, directing the Sandiganbayan to desist from enforcing its questioned resolutions of September 29, 1989 in Civil Case No. 0008. 21

After the issues were delineated and argued at no little length by the parties, the Solicitor General withdrew "as counsel for plaintiff . . with the reservation, however, conformably with Presidential Decree No. 478, the

to submit his
provisions of Executive Order No. 292, as well as the decisional law of 'Orbos v. Civil Service Commission, et al.,' (G.R. No. 92561, September 12, 1990) 22

comment/observation on incidents/matters pending with this . . Court if called for by

circumstances in the interest of the Government or if he is so required by the Court." 23 This,
the Court allowed by Resolution dated January 21, 1991. 24
Subsequently, PCGG Commissioner Maximo A. Maceren advised the Court that the cases from which the Solicitor General had withdrawn would henceforth be under his (Maceren's) charge "and/or any of the
following private attorneys: Eliseo B. Alampay, Jr., Mario E. Ongkiko, Mario Jalandoni and such other attorneys as it may later authorize." 25

The facts not being in dispute, and it appearing that the parties have fully ventilated their respective positions, the Court now proceeds to
decide the case.

and production and inspection of

Involved in the present proceedings are two of the modes of discovery provided in the Rules of Court: interrogatories to parties , 26

documents and things. 27 Now, it appears to the Court that among far too many lawyers (and
not a few judges), there is, if not a regrettable unfamiliarity and even outright ignorance about
the nature, purposes and operation of the modes of discovery, at least a strong yet
unreasoned and unreasonable disinclination to resort to them — which is a great pity for the
intelligent and adequate use of the deposition-discovery mechanism, coupled with pre-trial
procedure, could, as the experience of other jurisdictions convincingly demonstrates,
effectively shorten the period of litigation and speed up adjudication. 28 Hence, a few words
about these remedies is not at all inappropriate.
The resolution of controversies is, as everyone knows, the raison d'etre of courts. This
essential function is accomplished by first, the ascertainment of all the material and relevant
facts from the pleadings and from the evidence adduced by the parties, and second, after
that determination of the facts has been completed, by the application of the law thereto to
the end that the controversy may be settled authoritatively, definitely and finally.

It is for this reason that a substantial part of the adjective law in this jurisdiction is occupied
with assuring that all the facts are indeed presented to the Court; for obviously, to the extent
that adjudication is made on the basis of incomplete facts, to that extent there is faultiness in
the approximation of objective justice. It is thus the obligation of lawyers no less than of
judges to see that this objective is attained; that is to say, that there no suppression,
obscuration, misrepresentation or distortion of the facts; and that no party be unaware of any
fact material a relevant to the action, or surprised by any factual detail suddenly brought to
his attention during the trial. 29

this Court described the nature and object of litigation and in the
Seventy-one years ago, in Alonso v. Villamor, 30

process laid down the standards by which judicial contests are to be conducted in this
jurisdiction. It said:

A litigation is not a game of technicalities in which one, more deeply schooled and
skilled in the subtle art of movement and position, entraps and destroys the other. It
is, rather a contest in which each contending party fully and fairly lays before the
court the facts in issue and then brushing aside as wholly trivial and indecisive all
imperfections of form and technicalities of procedure, asks that justice be done on
the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality,
when it deserts its proper office as an aid to justice and becomes its great hindrance
and chief enemy, deserves scant consideration from courts. There should be no
vested right in technicalities. . . .

The message is plain. It is the duty of each contending party to lay before the court the facts
in issue-fully and fairly; i.e., to present to the court all the material and relevant facts known
to him, suppressing or concealing nothing, nor preventing another party, by clever and adroit
manipulation of the technical rules of pleading and evidence, from also presenting all the
facts within his knowledge.

Initially, that undertaking of laying the facts before the court is accomplished by the pleadings
filed by the parties; but that, only in a very general way. Only "ultimate facts" are set forth in
the pleadings; hence, only the barest outline of the facfual basis of a party's claims or
defenses is limned in his pleadings. The law says that every pleading "shall contain in a
methodical and logical form, a plain, concise and direct statement of the ultimate facts on
which the party pleading relies for his claim or defense, as the case may be, omitting the
statement of mere evidentiary facts." 31

Parenthetically, if this requirement is not observed, i.e., the ultimate facts are alleged too generally or "not averred with sufficient
definiteness or particularity to enable . . (an adverse party) properly to prepare his responsive pleading or to prepare for trial," a bill of
particulars seeking a "more definite statement" may be ordered by the court on motion of a party. The office of a bill of particulars is,
however, limited to making more particular or definite the ultimate facts in a pleading It is not its office to supply evidentiary matters. And the
common perception is that said evidentiary details are made known to the parties and the court only during the trial, when proof is adduced
on the issues of fact arising from the pleadings.

The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial. Indeed, it is the purpose and policy of the law that the parties — before the trial if not indeed even before the pre-
trial — should discover or inform themselves of all the facts relevant to the action, not only those known to them individually, but also those known to adversaries; in other words, the desideratum is that civil trials should
not be carried on in the dark; and the Rules of Court make this ideal possible through the deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been that ample
discovery before trial, under proper regulation, accomplished one of the most necessary of modern procedure: it not only eliminates unessential issue from trials thereby shortening them considerably, but also requires
parties to play the game with the cards on the table so that the possibility of fair settlement before trial is measurably increased. . ." 32

As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-
trial functions of notice-giving, issue-formulation and fact revelation theretofore performed primarily by the pleadings.
The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues between the parties, and (2) as a device for
ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable parties, consistent with recognized privileges, to obtain the fullest possible knowledge of the issues and facts before trials and
thus prevent that said trials are carried on in the dark. 33

To this end, the field of inquiry that may be covered by depositions or interrogatories is as broad as when the interrogated party is called as a witness to testify orally at trial. The inquiry extends to all facts which are
relevant, whether they be ultimate or evidentiary, excepting only those matters which are privileged. The objective is as much to give every party the fullest possible information of all the relevant facts before the trial as

to obtain evidence for use upon said trial. The principle is reflected in Section 2, Rule 24 (governing depositions) 34
which generally allows the examination of
a deponent —

1) "regarding any matter, not privileged, which is relevant to the subject of the
pending action, whether relating to the claim or defense of any other party;"

2) as well as:

(a) "the existence, description, nature, custody, condition and location of any books,
documents, or other tangible things" and

(b) "the identity and location of persons having knowledge of relevant facts."

What is chiefly contemplated is the discovery of every bit of information which may be useful
in the preparation for trial, such as the identity and location of persons having knowledge of
relevant facts; those relevant facts themselves; and the existence, description, nature,
custody, condition, and location of any books, documents, or other tangible things. Hence,
"the deposition-discovery rules are to be accorded a broad and liberal treatment. No longer
can the time-honored cry of "fishing expedition" serve to preclude a party from inquiring into
the facts underlying his opponent's case. Mutual knowledge of all the relevant facts gathered
by both parties is essential to proper litigation. To that end, either party may compel the other
to disgorge whatever facts he has in his possession. The deposition-discovery procedure
simply advances the stage at which the disclosure can be compelled from the time of trial to
the period preceding it, thus reducing the possibility, of surprise, . . . 35
In line with this principle of according liberal treatment to the deposition-discovery mechanism, such modes of discovery as (a) depositions (whether by oral examination or written interrogatories) under Rule 24, (b)
interrogatories to parties under Rule 25, and (c) requests for admissions under Rule 26, may be availed of without leave of court, and generally, without court intervention. The Rules of Court explicitly provide that leave

It is only when an answer has not yet been

of court is not necessary to avail of said modes of discovery after an answer to the complaint has been served. 36

filed (but after jurisdiction has been obtained over the defendant or property subject of the
action) that prior leave of court is needed to avail of these modes of discovery, the reason
being that at that time the issues are not yet joined and the disputed facts are not clear. 37

On the other hand, leave of court is required as regards discovery by (a) production or inspection of documents or things in accordance
with Rule 27, or (b) physical and mental examination of persons under Rule 28, which may be granted upon due application and a showing
of due cause.

To ensure that availment of the modes of discovery is otherwise untrammeled and efficacious, the law imposes serious sanctions on the party who refuses to make discovery, such as dismissing the action or
proceeding or part thereof, or rendering judgment by default against the disobedient party; contempt of court, or arrest of the party or agent of the party; payment of the amount of reasonable expenses incurred in
obtaining a court order to compel discovery; taking the matters inquired into as established in accordance with the claim of the party seeking discovery; refusal to allow the disobedient party support or oppose
designated claims or defenses; striking out pleadings or parts thereof; staying further proceedings. 38

Of course, there are limitations to discovery, even when permitted to be undertaken without leave and without judicial intervention. "As indicated by (the) Rules . . ., limitations inevitably arise when it can be shown that

And . . . further limitations come

the examination is being conducted in bad faith or in such a manner as to annoy, embarass, or oppress the person subject to the inquiry. 39

into existence when the inquiry touches upon the irrelevant or encroaches upon the
recognized domains of privilege." 40

In fine, the liberty of a party to make discovery is well nigh unrestricted if the matters inquired into are otherwise relevant and not privileged,
and the inquiry is made in good faith and within the bounds of the law.

It is in light of these broad principles underlying the deposition-discovery mechanism, in relation of course to the particular rules directly
involved, that the issues in this case will now be resolved.

The petitioner's objections to the interrogatories served on it in accordance with Rule 25 of the Rules of Court cannot be sustained.
 — that it was correct for them to
It should initially be pointed out — as regards the private respondents "Motion for Leave to File Interrogatories" dated February 1, 1988 41

seek leave to serve interrogatories, because discovery was being availed of before an
answer had been served. In such a situation, i.e., "after jurisdiction has been obtained over
any defendant or over property subject of the action" but before answer, Section 1 of Rule 24
(treating of depositions), in relation to Section 1 of Rule 25 (dealing with interrogatories to
parties) explicitly requires "leave of court." 42 But there was no need for the private
respondents to seek such leave to serve their "Amended Interrogatories to Plaintiff" (dated
August 2, 1989 43) after they had filed their answer to the PCGG's complaint, just as there
was no need for the Sandiganbayan to act thereon.

1. The petitioner's first contention — that the interrogatories in question are defective
because they (a) do not name the particular individuals to whom they are propounded, being
addressed only to the PCGG, and (b) are "fundamentally the same matters . . (private
respondents) sought to be clarified through their aborted Motion . . for Bill of Particulars" —
are untenable and quickly disposed of.

The first part of petitioner's submission is adequately confuted by Section 1, Rule 25 which
states that if the party served with interrogatories is a juridical entity such as "a public or
private corporation or a partnership or association," the same shall be "answered . . by any
officer thereof competent to testify in its behalf." There is absolutely no reason why this
proposition should not be applied by analogy to the interrogatories served on the PCGG.
That the interrogatories are addressed only to the PCGG, without naming any specific
commissioner o officer thereof, is utterly of no consequence, and may not be invoked as a
reason to refuse to answer. As the rule states, the interrogatories shall be answered "by any
officer thereof competent to testify in its behalf."

That the matters on which discovery is desired are the same matters subject of a prior
motion for bill of particulars addressed to the PCGG's amended complaint — and denied for
lack of merit — is beside the point. Indeed, as already pointed out above, a bill of particulars
may elicit only ultimate facts, not so-called evidentiary facts. The latter are without doubt
proper subject of discovery. 44
Neither may it be validly argued that the amended interrogatories lack specificity. The merest glance at them disproves the argument. The interrogatories are made to relate to individual paragraphs of the PCGG's
expanded complaint and inquire about details of the ultimate facts therein alleged. What the PCGG may properly do is to object to specific items of the interrogatories, on the ground of lack of relevancy, or privilege, or

that the inquiries are being made in bad faith, or simply to embarass or oppress it. 45
But until such an objection is presented and sustained,
the obligation to answer subsists.

2. That the interrogatories deal with factual matters which will be part of the PCGG's proof
upon trial, is not ground for suppressing them either. As already pointed out, it is the precise
purpose of discovery to ensure mutual knowledge of all the relevant facts on the part of all
parties even before trial, this being deemed essential to proper litigation. This is why either
party may compel the other to disgorge whatever facts he has in his possession; and the
stage at which disclosure of evidence is made is advanced from the time of trial to the period
preceding it.

3. Also unmeritorious is the objection that the interrogatories would make PCGG
Commissioners and officers witnesses, in contravention of Executive Order No. 14 and
related issuances. In the first place, there is nothing at all wrong in a party's making his
adversary his witness . 46 This is expressly allowed by Section 6, Rule 132 of the Rules of
Court, viz.:

Sec. 6. Direct examination of unwilling or hostile witnesses. — A party may . . . call

an adverse party or an officer, director, or managing agent of a public or private
corporation or of a partnership or association which is an adverse party, and
interrogate him by leading questions and contradict and impeach him in all respects
as if he had been called by the adverse party, and the witness thus called may be
contradicted and impeached by or on behalf of the adverse party also, and may be
cross-examined by the adverse party only upon the subject-matter of his examination
in chief.

The PCGG insinuates that the private respondents are engaged on a "fishing expedition,"
apart from the fact that the information sought is immaterial since they are evidently meant to
establish a claim against PCGG officers who are not parties to the action. It suffices to point
out that "fishing expeditions" are precisely permitted through the modes of
discovery. 47 Moreover, a defendant who files a counterclaim against the plaintiff is allowed
by the Rules to implead persons (therefore strangers to the action) as additional defendants
on said counterclaim. This may be done pursuant to Section 14, Rule 6 of the Rules, to wit:

Sec. 14. Bringing new parties. — When the presence of parties other than those to
the original action is required for the granting of complete relief in the determination
of a counterclaim or cross-claim, the court shall order them to be brought in as
defendants, if jurisdiction over them can be obtained."

The PCGG's assertion that it or its members are not amenable to any civil action "for
anything done or omitted in the discharge of the task contemplated by . . (Executive) Order
(No. 1)," is not a ground to refuse to answer the interrogatories. The disclosure of facto
relevant to the action and which are not self-incriminatory or otherwise privileged is one
thing; the matter of whether or not liability may arise from the facts disclosed in light of
Executive Order
No. 1, is another. No doubt, the latter proposition may properly be set up by way of defense
in the action.

The apprehension has been expressed that the answers to the interrogatories may be
utilized as foundation for a counterclaim against the PCGG or its members and officers. They
will be. The private respondents have made no secret that this is in fact their intention.
Withal, the Court is unable to uphold the proposition that while the PCGG obviously feels
itself at liberty to bring actions on the basis of its study and appreciation of the evidence in its
possession, the parties sued should not be free to file counterclaims in the same actions
against the PCGG or its officers for gross neglect or ignorance, if not downright bad faith or
malice in the commencement or initiation of such judicial proceedings, or that in the actions
that it may bring, the PCGG may opt not to be bound by rule applicable to the parties it has
sued, e.g., the rules of discovery.

So, too, the PCGG's postulation that none of its members may be "required to testify or
produce evidence in any judicial . . proceeding concerning matters within its official
cognizance," has no application to a judicial proceeding it has itself initiated. As just
suggested, the act of bringing suit must entail a waiver of the exemption from giving
evidence; by bringing suit it brings itself within the operation and scope of all the rules
governing civil actions, including the rights and duties under the rules of discovery.
Otherwise, the absurd would have to be conceded, that while the parties it has impleaded as
defendants may be required to "disgorge all the facts" within their knowledge and in their
possession, it may not itself be subject to a like compulsion.

The State is, of course, immune from suit in the sense that it cannot, as a rule, be sued
without its consent. But it is axiomatic that in filing an action, it divests itself of its sovereign
character and sheds its immunity from suit, descending to the level of an ordinary litigant.
The PCGG cannot claim a superior or preferred status to the State, even while assuming to
represent or act for the State. 48

that the State makes no implied waiver of immunity by filing suit except when in so
The suggestion 49

doing it acts in, or in matters concerning, its proprietary or non-governmental capacity, is

unacceptable; it attempts a distinction without support in principle or precedent. On the
contrary —

The consent of the State to be sued may be given expressly or impliedly. Express
consent may be manifested either through a general law or a special law. Implied
consent is given when the State itself commences litigation or when it enters into a
contract. 50
The immunity of the State from suits does not deprive it of the right to sue private parties in its own courts. The state as plaintiff may avail itself of the different forms of actions open to private litigants.
In short, by taking the initiative in an action against the private parties, the state surrenders its privileged position and comes down to the level of the defendant. The latter automatically acquires,
within certain limits, the right to set up whatever claims and other defenses he might have against the state. . . . (Sinco, Philippine Political Law, Tenth E., pp. 36-37, citing U.S. vs. Ringgold, 8 Pet.
150, 8 L. ed. 899)" 51

It can hardly be doubted that in exercising the right of eminent domain, the State exercises its jus imperii, as distinguished from its proprietary rights or jus gestionis. Yet, even in that area, it has been held that where
private property has been taken in expropriation without just compensation being paid, the defense of immunity from suit cannot be set up by the State against an action for payment by the owner. 52
The Court also finds itself unable to sustain the PCGG's other principal contention, of the nullity of the Sandiganbayan's Order for the
production and inspection of specified documents and things allegedly in its possession.

The Court gives short shrift to the argument that some documents sought to be produced and inspected had already been presented in
Court and marked preliminarily as PCGG's exhibits, the movants having in fact viewed, scrutinized and even offered objections thereto and
made comments thereon. Obviously, there is nothing secret or confidential about these documents. No serious objection can therefore be
presented to the desire of the private respondents to have copies of those documents in order to study them some more or otherwise use
them during the trial for any purpose allowed by law.

The PCGG says that some of the documents are non-existent. This it can allege in response to the corresponding question in the
interrogatories, and it will incur no sanction for doing so unless it is subsequently established that the denial is false.

The claim that use of the documents is proscribed by Executive Order No. 1 has already been dealt with. The PCGG is however at liberty to
allege and prove that said documents fall within some other privilege, constitutional or statutory.

Some of the
The Court finally finds that, contrary to the petitioner's theory, there is good cause for the production and inspection of the documents subject of the motion dated August 3, 1989. 53

documents are, according to the verification of the amended complaint, the basis of several
of the material allegations of said complaint. Others, admittedly, are to be used in evidence
by the plaintiff. It is matters such as these into which inquiry is precisely allowed by the rules
of discovery, to the end that the parties may adequately prepare for pre-trial and trial. The
only other documents sought to be produced are needed in relation to the allegations of the
counterclaim. Their relevance is indisputable; their disclosure may not be opposed.

One last word. Due no doubt to the deplorable unfamiliarity respecting the nature, purposes
and operation of the modes of discovery earlier
mentioned, 54 there also appears to be a widely entertained idea that application of said
modes is a complicated matter, unduly expensive and dilatory. Nothing could be farther from
the truth. For example, as will already have been noted from the preceding discussion, all
that is entailed to activate or put in motion the process of discovery by interrogatories to
parties under Rule 25 of the Rules of Court, is simply the delivery directly to a party of a letter
setting forth a list of least questions with the request that they be answered
individually. 55 That is all. The service of such a communication on the party has the effect of
imposing on him the obligation of answering the questions "separately and fully in writing
underoath," and serving "a copy of the answers on the party submitting the interrogatories
within fifteen (15) days after service of the interrogatories . . ." 56 The sanctions for refusing to
make discovery have already been mentioned. 57 So, too, discovery under Rule 26 is begun
by nothing more complex than the service on a party of a letter or other written
communication containing a request that specific facts therein set forth and/or particular
documents copies of which are thereto appended, be admitted in writing. 58 That is all. Again,
the receipt of such a communication by the party has the effect of imposing on him the
obligation of serving the party requesting admission with "a sworn statement either denying
specifically the matters of which an admission is requested or setting forth in detail the
reasons why he cannot truthfully either admit or deny those matters," failing in which "(e)ach
of the matters of which admission is requested shall be deemed admitted." 59 The taking of
depositions in accordance with Rule 24 (either on oral examination or by written
interrogatories) while somewhat less simple, is nonetheless by no means as complicated as
seems to be the lamentably extensive notion.

WHEREFORE, the petition is DENIED, without pronouncement as to costs. The temporary

restraining order issued on October 27, 1989 is hereby LIFTED AND SET ASIDE.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Paras, Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea,
Regalado and Davide, Jr., JJ., concur.
Melencio-Herrera, J., I also join Justice Cruz's concurrence.

Romero, J., took no part.

 Separate Opinions

CRUZ, J., concurring:

I am delighted to concurr with Mr. Justice Andres R. Narvasa in his

scholarly ponencia which, besides reaching a conclusion sustained by the applicable law and
jurisprudence, makes for reading both pleasurable and instructive. One function of the court
not generally appreciated is to educate the reader on the intricacies and even the mustique
of the law. The opinion performs this function with impressive expertise and makes the
modes of discovery less esoteric or inaccessible to many members of the bar.

# Separate Opinions

CRUZ, J., concurring:

I am delighted to concurr with Mr. Justice Andres R. Narvasa in his scholarly ponencia
which, besides reaching a conclusion sustained by the applicable law and jurisprudence,
makes for coding both pleasurable and instructive. One function of the court not generally
appreciated is to educate the reader on the intricacies and even the mustique of the law. The
opinion performs this function with impressive expertise and makes the modes of discovery
less esoteric or inaccessible to many members of the bar.

G.R. No. L-48214 December 19, 1978

ILDEFONSO SANTIAGO, represented by his Attorney-in-Fact, ALFREDO T.

SANTIAGO, petitioner,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, represented by the Director,
Bureau of Plant Industry, and the Regional Director, Region IX, Zamboanga City, respondent,

Ahmad D. Sahak for petitioner.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Octavio R. Ramirez and Solicitor
Mariano M. Martinez for respondents.

FERNANDO, J.:

The first impression yielded by a perusal of this petition for certiorari is its inherent weakness
considering the explicit provision in the present Constitution prohibiting a suit against the Republic
without its consent. 1 Here petitioner Ildefonso Santiago 2 filed on August 9, 1976 an action in the
Court of First Instance of Zamboanga City naming as defendant the government of the Republic of
the Philippines represented by the Director of the Bureau of Plant Industry. 3 His plea was for the
revocation of a deed of donation executed by him and his spouse in January of 1971, 4 with the
Bureau of Plant Industry as the donee. As alleged in such complaint, such Bureau, contrary to the
terms of the donation, failed to "install lighting facilities and water system on the property donated
and to build an office building and parking [lot] thereon which should have been constructed and
ready for occupancy on or before December 7, 1974. 5 That led him to conclude that under the
circumstances, he was exempt from compliance with such an explicit constitutional command. The
lower court, in the order challenged in this petition, was of a different view. It sustained a motion to
dismiss on the part of the defendant Republic of the Philippines, now named as one of the
respondents, the other respondent being the Court of First Instance of Zamboanga City, Branch II. It
premised such an order on the settled "rule that the state cannot be sued without its consent. This is
so, because the New Constitution of the Philippines expressly provides that the state may not be
sued without its consent. 6 Solicitor General Estelito P. Mendoza, 7 in the com ment on the petition
filed with this Court, is for the affirmance of the order of dismissal of respondent Court precisely to
accord deference to the above categorical constitutional mandate.

On its face, such a submission carries persuasion. Upon further reflection, this Tribunal is impressed
with the unique aspect of this petition for certiorari, dealing as it does with a suit for the revocation of
a donation to the Republic, which allegedly fatted to conform with what was agreed to by the donee.
If an order of dismissal would suffice, then the element of unfairness enters, the facts alleged being
hypothetically admitted. It is the considered opinion of this Court then that to conform to the high
dictates of equity and justice, the presumption of consent could be indulged in safely. That would
serve to accord to petitioner as plaintiff, at the very least, the right to be heard. certiorari lies.

1. This is not to deny the obstacle posed by the constitutional provision. It is expressed in language
plain and unmistakable: "The State may not be sued without its consent. 8 The Republic cannot be
proceeded against unless it allows itself to be sued. Neither can a department, bureau, agency,
office, or instrumentality of the government where the suit, according to the then Justice, now Chief
Justice, Castro in Del Mar v. Philippine Veterans Administration, 9 may result "in adverse
consequences to the public treasury, whether in the disbursements of funds or loss of
property. 10 Such a doctrine was reiterated in the following cases: Republic v. Villasor, 11 Sayson v.
Singson, 12 Director of the Bureau of Printing v. Francisco, 13 and Republic v. Purisima. 14

2. It is contended by counsel for petitioner that the above constitutional provision would be given a
retroactive application in this case if the suit for the revocation of donation were dismissed. That is
not the case at all. In Republic v. Purisima, this Court made clear that such a basic postulate is part
and parcel of the system of government implanted in the Philippines from the time of the acquisition
of sovereignty by the United States, and therefore, was implicit in the 1935 Constitution even in the
absence of any explicit language to that effect. This it did in a citation from Switzerland General
Insurance Co., Ltd. v. Republic of the Philippines: 15 "The doctrine of non-suability recognized in this
jurisdiction even prior to the effectivity of the [1935] Constitution is a logical corollary of the positivist
concept of law which, to paraphrase Holmes, negates the assertion of any legal right as against the
state, in itself the source of the law on which such a right may be predicated. Nor is this all. Even if
such a principle does give rise to problems, considering the vastly expanded role of government
enabling it to engage in business pursuits to promote the general welfare, it is not obeisance to the
analytical school of thought alone that calls for its continued applicability. 16 That is the teaching of
the leading case of Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, 17 promulgated in
December of 1966. As a matter of fact, the Switzerland General Insurance Co. decision was the
thirty-seventh of its kind after Mobil. Clearly, then, the contention that to dismiss the suit would be to
give the applicable constitutional provision a retroactive effect is, to put it at its mildest, untenable.

3. Petitioner's counsel invoked Santos v. Santos, 18 a 1952 decision. A more thorough analysis ought
to have cautioned him against reliance on such a case. It was therein clearly pointed out that the
government entity involved was originally the National Airports Corporation. Thereafter, it "was
abolished by Executive Order No. 365, series of 1950, and in its place and stead the Civil
Aeronautics Administration was created and took over all the assets and assumed all the liabilities of
the abolished corporation. The Civil Aeronautics Administration, even if it is not a juridical entity,
cannot legally prevent a party or parties from enforcing their proprietary rights under the cloak or
shield of lack of juridical personality, because to took over all the powers and assumed all the
obligations of the defunct corporation which had entered into the contract in question." 19 Then
came National Shipyard and Steel Corporation v. Court of Industrial Relations, 20 a 1963 decision,
where the then Justice, later Chief Justice, Concepcion, as ponente, stated that a government-
owned and controlled corporation "has a personality of its own distinct and separate from that of the
government. ... Accordingly, it may sue and be sued and may be subjected to court processes just
like any other corporation. (Section 13, Act 1459, as amended). 21 In three recent
decisions, Philippine National Bank v. Court of Industrial Relations, 22 Philippine National Bank v.
Honorable Judge Pabalan, 23and Philippine National Railways v. Union de Maquinistas, 24 this
constitutional provision on non-suability was unavailing in view of the suit being against a
government-owned or controlled corporation. That point apparently escaped the attention of counsel
for petitioner. Hence Santos v. Santos is hardly controlling.

4. It is to be noted further that the trend against the interpretation sought to be fastened in the broad
language of Santos v. Santos is quite discernible. Not long after, in Araneta v. Hon. M.
Gatmaitan, 25 decided in 1957, it was held that an action [against] Government officials, is essentially
one against the Government, ... . 26 In the same year, this Court, in Angat River Irrigation System v.
Angat River Workers 27 Union, after referring to the "basic and fundamental principle of the law that
the Government cannot be sued before courts of justice without its consent," pointed out that "this
privilege of non-suability of the Government" covers with the mantle of its protection "an entity," in
this case, the Angat River Irrigation System. 28 Then, in 1960, came Lim v. Brownell, Jr., 29 where
there was a reaffirmation of the doctrine that a "claim [constituting] a charge against, or financial
liability to, the Government cannot be entertained by the courts except with the consent of said
government. 30 Bureau of Printing v. Bureau of Printing Employees Association 31 came a year later; it
reiterated such a doctrine. It was not surprising therefore that in 1966, Mobil Philippines Exploration,
Inc. was decided the way it was. The remedy, where the liability is based on contract, according to
this Court, speaking through Justice J. P. Bengzon, is for plaintiff to file a claim with the general
office in accordance with the controlling statute, Commonwealth Act No. 327. 32 To repeat, that
doctrine has been adhered to ever since. The latest case in point is Travelers Indemnity Company v.
Barber Steamship Lines, Inc. 33 Justice Aquino's opinion concluded with this paragraph: "It is settled
that the Bureau of Customs, acting as part of the machinery of the national government in the
operation of the arrastre service, is immune from suit under the doctrine of non-suability of the State.
The claimant's remedy to recover the loss or damage to the goods under the custody of the customs
arrastre service is to file a claim with the Commission in Audit as contemplated in Act No. 3083 and
Commonwealth Act No. 327. 34 With the explicit provision found in the present Constitution, the
fundamental principle of non-suability becomes even more exigent in its command.

5. The reliance on Santos v. Santos as a prop for this petition having failed, it would ordinarily follow
that this suit cannot prosper. Nonetheless, as set forth at the outset, there is a novel aspect that
suffices to call for a contrary conclusion. It would be manifestly unfair for the Republic, as donee,
alleged to have violated the conditions under which it received gratuitously certain property,
thereafter to put as a barrier the concept of non-suitability. That would be a purely one-sided
arrangement offensive to one's sense of justice. Such conduct, whether proceeding from an
individual or governmental agency, is to be condemned. As a matter of fact, in case it is the latter
that is culpable, the affront to decency is even more manifest. The government, to paraphrase
Justice Brandeis, should set the example. If it is susceptible to the charge of having acted
dishonorably, then it forfeits public trust-and rightly so.

6. Fortunately, the constitutional provision itself snows a waiver. Where there is consent, a suit may
be filed. Consent need not be express. It can be implied. So it was more than implied in Ministerio v.
Court of First Instance of Cebu: 35 "The doctrine of governmental immunity from suit cannot serve as
an instrument for perpetrating an injustice on a citizen. 36 The fact that this decision arose from a suit
against the Public Highways Commissioner and the Auditor General for failure of the government to
pay for land necessary to widen a national highway, the defense of immunity without the consent
proving unavailing, is not material. The analogy is quite obvious. Where the government ordinarily
benefited by the taking of the land, the failure to institute the necessary condemnation proceedings
should not be a bar to an ordinary action for the collection of the just compensation due. Here, the
alleged failure to abide by the conditions under which a donation was given should not prove an
insuperable obstacle to a civil action, the consent likewise being presumed. This conclusion is
strengthened by the fact that while a donation partakes of a contract, there is no money claim, and
therefore reliance on Commonwealth Act No. 327 would be futile.

7. Our decision, it must be emphasized, goes no further than to rule that a donor, with the Republic
or any of its agency being the donee, is entitled to go to court in case of an alleged breach of the
conditions of such donation. He has the right to be heard. Under the circumstances, the fundamental
postulate of non-suability cannot stand in the way. It is made to accommodate itself to the demands
of procedural due process, which is the negation of arbitrariness and inequity. The government, in
the final analysis, is the beneficiary. It thereby manifests its adherence to the highest ethical
standards, which can only be ignored at the risk of losing the confidence of the people, the
repository of the sovereign power. The judiciary under this circumstance has the grave responsibility
of living up to the ideal of objectivity and impartiality, the very essence of the rule of law. Only by
displaying the neutrality expected of an arbiter, even if it happens to be one of the departments of a
litigant, can the decision arrived at, whatever it may be, command respect and be entitled to
acceptance.

WHEREFORE, the writ of certiorari prayed for is granted and the order of dismissal of October 20,
1977 is nullified, set aside and declared to be without force and effect. The Court of First Instance of
Zamboanga City, Branch II, is hereby directed to proceed with this case, observing the procedure
set forth in the Rules of Court. No costs.
Barredo, Antonio, Aquino, Concepcion, Jr. and Santos, JJ., concur.

G.R. No. L-6060 September 30, 1954

FERNANDO A. FROILAN, plaintiff-appellee,

vs.
PAN ORIENTAL SHIPPING CO., defendant-appellant,
REPUBLIC OF THE PHILIPPINES, intervenor-appellee.

Quisumbing, Sycip, Quisumbing and Salazar, for appellant.

Ernesto Zaragoza for appellee.
Hilarion U. Jarencio for the intervenor.

PARAS, C.J.:

The factual antecedents of this case are sufficiently recited in the brief filed by the intervenor-
appellee as follows:

1. On February 3, 1951, plaintiff-appellee, Fernando A. Froilan, filed a complaint against the

defendant-appellant, Pan Oriental Shipping Co., alleging that he purchased from the
Shipping Commission the vessel FS-197 for P200,000, paying P50,000 down and agreeing
to pay the balance in installments; that to secure the payment of the balance of the purchase
price, he executed a chattel mortgage of said vessel in favor of the Shipping Commission;
that for various reason, among them the non-payment of the installments, the Shipping
Commission took possession of said vessel and considered the contract of sale cancelled;
that the Shipping Commission chartered and delivered said vessel to the defendant-
appellant Pan Oriental Shipping Co. subject to the approval of the President of the
Philippines; that he appealed the action of the Shipping Commission to the President of the
Philippines and, in its meeting on August 25, 1950, the Cabinet restored him to all his rights
under his original contract with the Shipping Commission; that he had repeatedly demanded
from the Pan Oriental Shipping Co. the possession of the vessel in question but the latter
refused to do so. He, therefore, prayed that, upon the approval of the bond accompanying
his complaint, a writ of replevin be issued for the seizure of said vessel with all its equipment
and appurtenances, and that after hearing, he be adjudged to have the rightful possession
thereof (Rec. on App. pp. 2-8).

2. On February 3, 1951, the lower court issued the writ of replevin prayed for by Froilan and
by virtue thereof the Pan Oriental Shipping Co. was divested of its possession of said vessel
(Rec. on App. p. 47).

3. On March 1, 1951, Pan Oriental Shipping Co. filed its answer denying the right of Froilan
to the possession of the said vessel; it alleged that the action of the Cabinet on August 25,
1950, restoring Froilan to his rights under his original contract with the Shipping Commission
was null and void; that, in any event, Froilan had not complied with the conditions precedent
imposed by the Cabinet for the restoration of his rights to the vessel under the original
contract; that it suffered damages in the amount of P22,764.59 for wrongful replevin in the
month of February, 1951, and the sum of P17,651.84 a month as damages suffered for
wrongful replevin from March 1, 1951; it alleged that it had incurred necessary and useful
expenses on the vessel amounting to P127,057.31 and claimed the right to retain said vessel
until its useful and necessary expenses had been reimbursed (Rec. on App. pp. 8-53).

4. On November 10, 1951, after the leave of the lower court had been obtained, the
intervenor-appellee, Government of the Republic of the Philippines, filed a complaint in
intervention alleging that Froilan had failed to pay to the Shipping Commission (which name
was later changed to Shipping Administration) the balance due on the purchase price of the
vessel in question, the interest thereon, and its advances on insurance premium totalling
P162,142.95, excluding the dry-docking expenses incurred on said vessel by the Pan
Oriental Shipping Co.; that intervenor was entitled to the possession of the said vessel either
under the terms of the original contract as supplemented by Froilan's letter dated January
28, 1949, or in order that it may cause the extrajudicial sale thereof under the Chattel
Mortgage Law. It, therefore, prayed that Froilan be ordered to deliver the vessel in question
to its authorized representative, the Board of Liquidators; that Froilan be declared to be
 without any rights on said vessel and the amounts he paid thereon forfeited or alternately,
that the said vessel be delivered to the Board of Liquidators in order that the intervenor may
have its chattel mortgage extrajudicially foreclosed in accordance with the provisions of the
Chattel Mortgage Law; and that pending the hearing on the merits, the said vessel be
delivered to it (Rec. on App. pp. 54-66).

5. On November 29, 1951, the Pan Oriental Shipping Co. filed an answer to the complaint in
intervention alleging that the Government of the Republic of the Philippines was obligated to
deliver the vessel in question to it by virtue of a contract of bare-boat charter with option to
purchase executed on June 16, 1949, by the latter in favor of the former; it also alleged that it
had made necessary and useful expenses on the vessel and claimed the right of retention of
the vessel. It, therefore, prayed that, if the Republic of the Philippines succeeded in obtaining
possession of the said vessel, to comply with its obligations of delivering to it (Pan Oriental
Shipping co.) or causing its delivery by recovering it from Froilan (Rec. on App. pp. 69-81).

6. On November 29, 1951, Froilan tendered to the Board of Liquidators, which was
liquidating the affairs of the Shipping Administration, a check in the amount of P162,576.96
in payment of his obligation to the Shipping Administration for the said vessel as claimed in
the complaint in intervention of the Government of the Republic of the Philippines. The Board
of Liquidators issued an official report therefor stating that it was a 'deposit pending the
issuance of an order of the Court of First Instance of Manila' (Rec. on App. pp. 92-93).

7. On December 7, 1951, the Government of the Republic of the Philippines brought the
matter of said payment and the circumstance surrounding it to the attention of the lower court
"in order that they may be taken into account by this Honorable Court in connection with the
questions that are not pending before it for determination" (Rec. on App. pp. 82-86).

8. On February 3, 1952, the lower court held that the payment by Froilan of the amount of
P162,576.96 on November 29, 1951, to the Board of Liquidators constituted a payment and
a discharge of Froilan's obligation to the Government of the Republic of the Philippines and
ordered the dismissal of the latter's complaint in intervention. In the same order, the lower
court made it very clear that said order did not pre-judge the question involved between
Froilan and the Oriental Shipping Co. which was also pending determination in said court
(Rec. on App. pp. 92-93). This order dismissing the complaint in intervention, but reserving
for future adjudication the controversy between Froilan and the Pan Oriental Shipping Co.
has already become final since neither the Government of the Republic of the Philippines nor
the Pan Oriental Shipping Co. had appealed therefrom.

9. On May 10, 1952, the Government of the Republic of the Philippines filed a motion to
dismiss the counterclaim of the Pan Oriental Shipping Co. against it on the ground that the
purpose of said counterclaim was to compel the Government of the Republic of the
Philippines to deliver the vessel to it (Pan Oriental Shipping Co.) in the event that the
Government of the Republic of the Philippines recovers the vessel in question from Froilan.
In view, however, of the order of the lower court dated February 3, holding that the payment
made by Froilan to the Board of Liquidators constituted full payment of Froilan's obligation to
the Shipping Administration, which order had already become final, the claim of the Pan
Oriental Shipping Co. against the Republic of the Philippines was no longer feasible, said
counterclaim was barred by prior judgment and stated no cause of action. It was also alleged
that movant was not subject to the jurisdiction of the court in connection with the
counterclaim. (Rec. on App. pp. 94-97). This motion was opposed by the Pan Oriental
Shipping Co. in its written opposition dated June 4, 1952 (Rec. on app. pp. 19-104).

10. In an order dated July 1, 1952, the lower court dismissed the counterclaim of the Pan
Oriental Shipping Co. as prayed for by the Republic of the Philippines (Rec. on App. pp. 104-
106).

11. It if from this order of the lower court dismissing its counterclaim against the Government
of the Republic of the Philippines that Pan Oriental Shipping Co. has perfected the present
appeal (Rec. on App. p. 107).

The order of the Court of First Instance of Manila, dismissing the counterclaim of the defendant Pan
Oriental Shipping Co., from which the latter has appealed, reads as follows:
 This is a motion to dismiss the counterclaim interposed by the defendant in its answer to the
complaint in intervention.

"The counterclaim states as follows:

"COUNTERCLAIM

"As counterclaim against the intervenor Republic of the Philippines, the defendant alleges:

"1. That the defendant reproduces herein all the pertinent allegations of the foregoing answer
to the complaint in intervention

"2. That, as shown by the allegations of the foregoing answer to the complaint in
intervention, the defendant Pan Oriental Shipping Company is entitled to the possession of
the vessel and the intervenor Republic of the Philippines is bound under the contract of
charter with option to purchase it entered into with the defendant to deliver that possession to
the defendant — whether it actually has the said possession or it does not have that
possession from the plaintiff Fernando A. Froilan and deliver the same to the defendant;

"3. That, notwithstanding demand, the intervenor Republic of the Philippines has not to date
complied with its obligation of delivering or causing the delivery of the vessel to the
defendant Pan Oriental Shipping Company. 1âwphïl.nêt

"RELIEF

"WHEREFORE, the defendant respectfully prays that judgment be rendered ordering the
intervenor Republic of the Philippines alternatively to deliver to the defendants the
possession of the said vessel, or to comply with its obligation to the defendant or causing the
delivery to the latter of the said vessel by recovering the same from plaintiff, with costs.

"The defendant prays for such other remedy as the Court may deem just and
equitable in the premises."

The ground of the motion to dismiss are (a) That the cause of action is barred by prior
judgment; (b) That the counterclaim states no cause of action; and (c) That this Honorable
Court has no jurisdiction over the intervenor government of the Republic of the Philippines in
connection with the counterclaim of the defendant Pan Oriental Shipping Co.

The intervenor contends that the complaint in intervention having been dismissed and no
appeal having been taken, the dismissal of said complaint is tantamount to a judgment.

The complaint in intervention did not contain any claim whatsoever against the defendant
Pan Oriental Shipping Co.; hence, the counterclaim has no foundation.

The question as to whether the Court has jurisdiction over the intervenor with regard to the
counterclaim, the Court is of the opinion that it has no jurisdiction over said intervenor.

It appearing, therefore, that the grounds of the motion to dismiss are well taken, the
counterclaim of the defendant is dismissed, without pronouncement as to costs.

The defendant's appeal is predicated upon the following assignments of error:

I. The lower court erred in dismissing the counterclaim on the ground of prior judgment.

II. The lower court erred in dismissing the counterclaim on the ground that the counterclaim
had no foundation because made to a complaint in intervention that contained no claim
against the defendant.

III. The lower court erred in dismissing the counterclaim on the ground of alleged lack of
jurisdiction over the intervenor Republic of the Philippines.
We agree with appellant's contention that its counterclaim is not barred by prior judgment (order of
February 8, 1952, dismissing the complaint in intervention), first, because said counterclaim was
filed on November 29, 1951, before the issuance of the order invoked; and, secondly, because in
said order of February 8, the court dismissed the complaint in intervention, "without, of course,
precluding the determination of the right of the defendant in the instant case," and subject to the
condition that the "release and cancellation of the chattel mortgage does not, however, prejudge the
question involved between the plaintiff and the defendant which is still the subject of determination in
this case." It is to be noted that the first condition referred to the right of the defendant, as
distinguished from the second condition that expressly specified the controversy between the plaintiff
and the defendant. That the first condition reserved the right of the defendant as against the
intervenor, is clearly to be deduced from the fact that the order of February 8 mentioned the
circumstance that "the question of the expenses of drydocking incurred by the defendant has been
included in its counterclaim against the plaintiff," apparently as one of the grounds for granting the
motion to dismiss the complaint in intervention.

The defendant's failure to appeal from the order of February 8 cannot, therefore, be held as barring
the defendant from proceeding with its counterclaim, since, as already stated, said order preserved
its right as against the intervenor. Indeed, the maintenance of said right is in consonance with Rule
30, section 2, of the Rules of Court providing that "if a counterclaim has been pleaded by a
defendant prior to the service upon him of the plaintiff's motion to dismiss, the action shall not be
dismissed against the defendant's objection unless the counterclaim can remain pending for
independent adjudication by the court."

The lower court also erred in holding that, as the intervenor had not made any claim against the
defendant, the latter's counterclaim had no foundation. The complaint in intervention sought to
recover possession of the vessel in question from the plaintiff, and this claim is logically adverse to
the position assumed by the defendant that it has a better right to said possession than the plaintiff
who alleges in his complaint that he is entitled to recover the vessel from the defendant. At any rate
a counterclaim should be judged by its own allegations, and not by the averments of the adverse
party. It should be recalled that the defendant's theory is that the plaintiff had already lost his rights
under the contract with the Shipping Administration and that, on the other hand, the defendant is
relying on the charter contract executed in its favor by the intervenor which is bound to protect the
defendant in its possession of the vessel. In other words, the counterclaim calls for specific
performance on the part of the intervenor. As to whether this counterclaim is meritorious is another
question which is not now before us.

The other ground for dismissing the defendant's counterclaim is that the State is immune from suit.
This is untenable, because by filing its complaint in intervention the Government in effect waived its
right of nonsuability.

The immunity of the state from suits does not deprive it of the right to sue private parties in
its own courts. The state as plaintiff may avail itself of the different forms of actions open to
private litigants. In short, by taking the initiative in an action against a private party, the state
surrenders its privileged position and comes down to the level of the defendant. The latter
automatically acquires, within certain limits, the right to set up whatever claims and other
defenses he might have against the state. The United States Supreme Court thus explains:

"No direct suit can be maintained against the United States. But when an action is
brought by the United States to recover money in the hands of a party who has a
legal claim against them, it would be a very rigid principle to deny to him the right of
setting up such claim in a court of justice, and turn him around to an application to
Congress." (Sinco, Philippine Political Law, Tenth Ed., pp. 36-37, citing U. S. vs.
Ringgold, 8 Pet. 150, 8 L. ed. 899.)

It is however, contended for the intervenor that, if there was at all any waiver, it was in favor of the
plaintiff against whom the complaint in intervention was directed. This contention is untenable. As
already stated, the complaint in intervention was in a sense in derogation of the defendant's claim
over the possession of the vessel in question.

Wherefore, the appealed order is hereby reversed and set aside and the case remanded to the
lower court for further proceedings. So ordered, without costs.
G.R. No. L-8587 March 24, 1960

BENITO E. LIM, as administrator of the Intestate Estate of Arsenia Enriquez, plaintiff-appellant,

vs.
HERBERT BROWNELL, JR., Attorney General of the United States, and ASAICHI KAGAWA,
defendants-appellee, REPUBLIC OF THE PHILIPPINES, intervenor-appellee.

Angel S. Gamboa for appellant.

Townsend, Gilbert, Santos and Patajo for appellee.
Alfredo Catolico for intervenor.

GUTIERREZ DAVID, J.:

This is an appeal from an order of the Court of First Instance of Manila, dismissing plaintiff's action
for the recovery of real property for lack of jurisdiction over the subject matter.

The property in dispute consists of four parcels of land situated in Tondo, City of Manila, with a total
area of 29,151 square meters. The lands were, after the last world war, found by the Alien Property
Custodian of the United States to be registered in the name of Asaichi Kagawa, national of an
enemy country, Japan, as evidenced by Transfer Certificates of Title Nos. 64904 to 65140, inclusive,
for which reason the said Alien Property Custodian, on March 14, 1946, issued a vesting order on
the authority of the Trading with the Enemy Act of the United States, as amended, vesting in himself
the ownership over two of the said lots, Lots Nos. 1 and 2. On July, 6, 1948, the Philippine Alien
Property Administrator (successor of the Alien Property Custodian) under the authority of the same
statute, issued a supplemental vesting order, vesting in himself title to the remaining Lots Nos. 3 and
4. On August 3, 1948, the Philippine Alien Property Administrator (acting on behalf of the President
of the United States) and the President of the Philippines, executed two formal agreements, one
referring to Lots 1 and 2 and the other to Lots 3 and 4, whereby the said Administrator transferred all
the said four lots to the Republic of the Philippines upon the latter's undertaking fully to indemnify the
United States for all claims in relation to the property transferred, which claims are payable by the
United States of America or the Philippine Alien Property Administrator of the United States under
the Trading with the Enemy Act, as amended, and for all such costs and expenses of administration
as may by law be charged against the property or proceeds thereof hereby transferred." The transfer
agreements were executed pursuant to section 3 of the Philippine Property Act of 1946 and
Executive Order No. 9921, dated January 10, 1948, of the President of the United States.

On the theory that the lots in question still belonged to Arsenia Enriquez, the latter's son Benito E.
Lim filed on November 15, 1948 a formal notice of claim to the property with the Philippine Alien
Property Administrator. The notice was subsequently amended to permit Lim to prosecute the claim
as administrator of the intestate estate of the deceased Arsenia Enriquez, thus, in effect, substituting
the intestate estate as the claimant, it being alleged that the lots were once the property of Arsenia
Enriquez; that they were mortgaged by her to the Mercantile Bank of China; that the mortgage
having been foreclosed, the property was sold at public auction during the war to the Japanese
Asaichi Kagawa, who, by means of threat and intimidation succeeded in preventing Arsenia
Enriquez from exercising her right of redemption; and that Kagawa never acquired any valid title to
the property because he was ineligible under the Constitution to acquire residential land in the
Philippines by reason of alien age.

On March 7, 1950, the claim was disallowed by the Vested Property Claims Committee of the
Philippine Alien Property Administrator, and copy of the decision disallowing the claim was received
by claimant's counsel on the 15th of that month. The claimant, however, took no appeal to the
Philippine Alien Property Administrator, so that pursuant to the rules of procedure governing claims
before the Philippine Alien Property Administrator, the decision of the committee became final on
April 15, 1950, that is, twenty days after receipt of the decision by claimant's counsel.

On November 13, 1950, the claimant Benito E. Lim, as administrator of the intestate estate of
Arsenia Enriquez, filed a complaint in the Court of First Instance of Manila against the Philippine
Alien Property Administrator (later substituted by the Attorney General of the United States) for the
recovery of the property in question with back rents. The complaint was later amended to include
Asaichi Kagawa as defendant. As amended, it alleged that the lands in question formerly belonged
to Arsenia Enriquez and were mortgaged by her to the Mercantile Bank of China; that the mortgage
having been foreclosed, she was sentenced to pay the mortgage debt within 3 months; that within
those 3 months the bank commissioner, who had been appointed liquidator of said bank, assured
her that she could pay her mortgage debt little by little in monthly installments, and pursuant to that
arrangement the income derived from the mortgaged property were thereafter applied to her
indebtedness, that such payment of the mortgage debt continued until a few months after the
occupation of the City of Manila by the Japanese forces, when the Bank of Taiwan, having taken
over the administration and control of all banks in the Philippines, including the Mercantile Bank of
China, had the properties sold at public auction on October 26, 1942 by the sheriff of the city; that
the properties were awarded to Asaichi Kagawa and the sale was subsequently confirmed by the
court; that if Arsenia Enriquez failed to redeem the properties before the confirmation of the sale, it
was because of the financial depression and also because she was prevented from doing so by
Kagawa through threats and intimidation; that the auction sale was irregular and illegal because it
was made without publication or notice and because though the land was subdivided into lots, the
same was sold as a whole; that because of the irregularities mentioned, competitive bidding was
prevented or stifled with the result that the lands, which could have been easily sold for P300,000 at
then prevailing prices, were awarded to Kagawa whose bid was only P54,460.40, a price that was
"grossly inadequate and shocking to the conscience;" that the titles to the lands having been
subsequently transferred to Kagawa, the latter in June, 1943 illegally dispossessed Arsenia Enriquez
and kept possession of the properties until the liberation of the City of Manila; that as Arsenia
Enriquez was still the owner of the properties, the seizure thereof by the United States Attorney
General's predecessors on the assumption that they belong to Kagawa, as well as their decision
disallowing her claim, was contrary to law. Plaintiff, therefore, prayed that the sheriff's sale to
Kagawa and the vesting of the properties in the Philippine Alien Property Administrator and the
transfer thereof by the United States to the Republic of the Philippines be declared null and void; that
Arsenia Enriquez be adjudged owner of the said properties and the Register of Deeds of Manila be
ordered to issue the corresponding transfer certificates of title to her; and that the defendant Attorney
General of the United States be required to pay rental from March 14, 1946, and the Government of
the Philippines from August 3, 1948, at the rate of P30,000 per annum with legal interest.The
defendant Attorney General of the United States and the defendant-intervenor Republic of the
Philippines each filed an answer, alleging by way of affirmative defenses (1) that the action with
respect to Lots 1 and 2 had already prescribed, the same not having been brought within the period
prescribed in section 33 of the Trading with the Enemy Act, as amended, and (2) that the lower court
had no jurisdiction over the claim for rentals since the action in that regard constituted a suit against
the United States to which it had not given its consent.

The defendant Asaichi Kagawa was summoned by publication, but having failed to file an answer to
the complaint, he was declared in default. Thereafter, a preliminary hearing on the affirmative
defenses was held at the instance of the United States Attorney General pursuant to Section 5, Rule
8 of the Rules of Court. After said hearing, the court ordered the complaint dismissed on the ground
— as stated in the dispositive part of the order — that the "court has no jurisdiction over the subject
matter of this action, taking into consideration the provisions of Sec. 34 (must be 33) of the Trading
with the Enemy Act, as the requirements needed by the above-mentioned Act have not been fulfilled
by the herein plaintiff." From that order, plaintiff has taken the present appeal.

Judging from the context of the order complained of, it would appear that the dismissal of plaintiff's
action was actually based upon the principle that a foreign state or its government cannot be sued
without its consent. Considering, however, the law applicable, we do not think the order of dismissal
can be sustained in its entirety. There is no denying that an action against the Alien Property
Custodian, or the Attorney General of the United States as his successor, involving vested property
under the Trading with the Enemy Act located in the Philippines, is in substance an action against
the United States. The immunity of the state from suit, however, cannot be invoked where the action,
as in the present case, is instituted by a person who is neither an enemy or ally of an enemy for the
purpose of establishing his right, title or interest in vested property, and of recovering his ownership
and possession. Congressional consent to such suit has expressly been given by the United States.
(Sec. 3, Philippine Property Act of 1946; Philippine Alien Property Administration vs. Castelo, et al.,
89 Phil., 568.)

The order of dismissal, however, with respect to plaintiff's claim for damages against the defendant
Attorney General of the United States must be upheld. The relief available to a person claiming
enemy property which has been vested by the Philippines Alien Property Custodian is limited to
those expressly provided for in the Trading with the Enemy Act, which does not include a suit for
damages for the use of such vested property. That action, as held by this Court in the Castelo case
just cited, is not one of those authorized under the Act which may be instituted in the appropriate
courts of the Philippines under the provisions of section 3 of the Philippine Property Act of 1946.
Congressional consent to such suit has not been granted.
The claim for damages for the use of the property against the intervenor defendant Republic of the
Philippines to which is was transferred, likewise, cannot be maintained because of the immunity of
the state from suit. The claim obviously constitutes a charge against, or financial liability to, the
Government and consequently cannot be entertained by the courts except with the consent of said
government. (Syquia vs. Almeda Lopez, 84 Phil., 312; 47 Off. Gaz., 665; Compañia General de
Tabacos vs. Gov't of PI, 45 Phil., 663.) Plaintiff argues that by its intervention, the Republic of the
Philippines, in effect, waived its right of non-suability, but it will be remembered that the Republic
intervened in the case merely to unite with the defendant Attorney General of the United States in
resisting plaintiff's claims, and for that reason asked no affirmative relief against any party in the
answer in intervention it filed. On the other hand, plaintiff in his original complaint made no claim
against the Republic and only asked for damages against it for the use of the property when the
complaint was amended. In its answer to the amended complaint, the Republic "reproduced and
incorporated by reference" all the affirmative defenses contained in the answer of the defendant
Attorney General, one of which, as already stated, is that the lower court had no jurisdiction over the
claim for rentals because of lack of consent to be sued. Clearly, this is not a case where the state
takes the initiative in an action against a private party by filing a complaint in intervention, thereby
surrendering its privileged position and coming down to the level of the defendant — as what
happened in the case of Froilan vs. Pan Oriental Shipping Co., et al. 95 Phil., 905 cited by plaintiff —
but one where the state, as one of the defendants merely resisted a claim against it precisely on the
ground, among others, of its privileged position which exempts it from suit..

With respect to the recovery or return of the properties vested, section 33 of the Trading with the
Enemy Act, as amended, provides:

SEC. 33. Return of property; notice; institution of suits, computation of time. — No return
may be made pursuant to section 9 or 32 unless notice of claim has been filed: (a) in the
case of any property or interest acquired by the United States prior to December 18, 1941,
by August 9, 1948; or (b) in the case of any property or interest acquired by the United
States on or after December 18, 1941, by April 30, 1949, or two years from the vesting of the
property or interest in respect of which the claim is made, whichever is later. No suit pursuant
to section 9 may be instituted after April 30, 1949, or after the expiration of two years from
the date of the seizure by or vesting in the Alien Property Custodian, as the case may be, of
the property or interest in respect of which relief is sought, whichever is later, but in
computing such two years there shall be excluded any period during which there was
pending a suit or claim for return pursuant to section 9 or 32(a) hereof. (USCA, Tit. 50, App.,
p. 216.)

From the above provisions, it is evident that a condition precedent to a suit for the return of property
vested under the Trading with the Enemy Act is that it should be filed not later than April 30, 1949, or
within two years from the date of vesting, whichever is later, but in computing such two years, the
period during which there was pending a suit or claim for the return of the said property pursuant to
secs. 9 or 32(a) of the Act shall be excluded. That limitation, as held in a case, is jurisdictional. (See
Cisatlantic Corporation, et al. vs. Brownell, Jr., Civil Code No. 8-221, U.S. District Court, Southern
District, New York, affirmed by the United States Court of Appeals, 2nd Circuit, May 11, 1955
(Docket No. 23499), annexed as appendices "D" and "E" in appellees' brief.) Such being the case, it
is evident that the court below erred in dismissing the complaint, at least insofar as lots 3 and 4 of
the land in dispute are concerned. These lots were vested only on July 6, 1948 and consequently
the two-year period within which to file the action for their recovery expired on July 7, 1950. But in
computing that the two-year period, the time during which plaintiff's claim with the Philippine Alien
Property Administration was pending — from November 16, 1948 when the claim was filed to March
7, 1950 when it was dissallowed — should be excluded. The complaint thereof filed on November
13, 1950 is well within the prescribed period. As a matter of fact, the Attorney General of the United
States concedes that the dismissal of the complaint with respect to these lots was erroneous.
Indeed, he states that he had never asked for the dismissal of the complaint with respect to them
because the complaint insofar as those properties were concerned was filed within the period
provided for in the law.

On the other hand, lots 1 and 2 were vested by the Alien Property Custodian on March 14, 1946.
The two-year period, therefore, within which to file a suit for their return expired on March 14, 1948.
As no suit or claim for the return of said properties pursuant to sections 9 or 32(a) of the Trading with
the Enemy Act was filed by plaintiff within two years from the date of vesting, the "later" date and the
last on which suit could be brought was April 30, 1949. The claim filed by plaintiff with the Philippine
Alien Property Administration on November 15, 1948 obviously could not toll the two-year period that
had already expired on March 14, 1948. And the complaint in the present case having been filed
only on November 13, 1950, the same is already barred. (Pass vs. McGrath, 192 F. 2d 415;
Kroll vs. McGrath, 91 F. Supp. 173.) The lower court, therefore, had no jurisdiction to entertain the
action insofar as these lots are concerned.

Plaintiff contends that section 33 of the Trading with the Enemy Act cannot prevail over section 40 of
the Code of Civil Procedure, which provides that an action to recover real property prescribes after
10 years, on the theory that under international law questions relating to real property are governed
by the law of the place where the property is located and that prescription, being remedial, is
likewise governed by the laws of the forum. But the trading with the Enemy Act, by consent of the
Philippine Government, continued to be in force in the Philippines even after July 4, 1946 (Brownell,
Jr., vs. Sun Life Assurance Co. of Canada,* 50 Off. Gaz., 4814; Brownell, Jr. vs. Bautista, 95 Phil.,
853) and consequently, is as much part of the law of the land as section 40 of the Code of Civil
Procedure. Contrary to plaintiff's claim, therefore, there is here no conflict of laws involved. It should
be stated that in an action under the Trading with the Enemy Act for the recovery of property vested
thereunder, the rights of the parties must necessarily be governed by the terms of that Act. Indeed,
section 7 (c) thereof explicitly provides that the relief available to a claimant of vested property is
limited to those expressly provided for by its terms.

Needless to say, the defense of limitation as contained in section 33 of Trading with the Enemy Act,
as amended, may be invoked not only by the defendant Attorney General of the United States but
also by the intervenor Republic of the Philippines to which the lands in question were transferred. To
sustain plaintiff's claim and preclude the Republic from putting up that defense would render
nugatory the provisions of the Act. For in such case, a claimant who has failed to file his claim or suit
within the period provided for in section 33 of the Act and consequently has forfeited whatever right
she may have therein, could easily circumvent the law. It would also mean that the transfer of vested
property to the Republic would have the effect of permitting re-examination of the title to such vested
property which has already become absolute in the name of the United States, the transferor, for
failure of the claimant to assert his claim within the prescribed time. This absurdity, to say the least,
cannot be countenanced.

In view of the foregoing, the order appealed from insofar as it dismisses the complaint with respect
to Lots 1 and 2 and the claim for damages against the Attorney General of the United States and the
Republic of the Philippines, is affirmed, but revoked insofar as it dismisses the complaint with
respect to Lots 3 and 4, as to which the case is hereby remanded to the court below for further
proceedings. Without costs.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L.,
Endencia and Barrera, JJ., concur.

G.R. No. 113420 March 7, 1997

REPUBLIC OF THE PHILIPPINES, represented by the PRESIDENTIAL COMMISSION ON

GOOD GOVERNMENT, petitioner,
vs.
SANDIGANBAYAN (Third Division), PROVIDENT INTERNATIONAL RESOURCES CORP., and
PHILIPPINE CASINO OPERATORS CORPORATION, respondents.

PANGANIBAN, J.:

Two principal questions are presented for resolution in this petition: one, whether a proper judicial
action was filed against respondent corporations in compliance with, and within the period
contemplated in, Section 26, Article XVIII of the Constitution; and two, the validity of the
sequestration order signed and issued "For The Commission" by only one PCGG Commissioner.

These questions are resolved by the Court in this special civil action
for certiorari and mandamus with prayer for a writ of preliminary injunction and/or temporary
restraining order, seeking to set aside the Resolutions dated December 4, 1991,1 and October 27,
1993,2 of the Sandiganbayan (Third Division) in Civil Case No. 0132 entitled "Provident International
Resources Corporation and Philippine Casino Operators Corporation vs. Presidential Commission
on Good Government."

The earlier Resolution granted the motion for judgment on the pleadings filed by petitioners below,
declaring as automatically lifted the writ of sequestration issued against petitioner-corporations and
ordering the Presidential Commission on Good Government ("PCGG") to restore to them their
assets, properties, records and documents subject of the writ. The second Resolution denied
PCGG's motion for reconsideration.

The Facts

On March 19, 1986, pursuant to powers vested upon it by the President of the Philippines under
Executive Order No. 1, promulgated on February 28, 1986, the PCGG issued a writ3 of sequestration
against all assets, movable and immovable, of Provident International Resources Corporation4 and
Philippine Casino Operators Corporation ("respondent corporations").

On July 29, 1987, Petitioner Republic of the Philippines, through the Solicitor General, filed before
the Sandiganbayan a complaint, 5 docketed as Civil Case No. 0021, against Edward T. Marcelo,
Fabian C. Ver, Ferdinand E. Marcos and Imelda R. Marcos for reconveyance, reversion, accounting,
restitution and damages. Said complaint sought to recover from named defendants alleged ill-gotten
wealth. Among the corporations listed 6 in the complaint as being held and/or controlled by
Defendant Marcelo, and among the assets apparently acquired illegally by defendants, were
respondent corporations. Later, on October 30, 1991, the complaint was amended 7 to include both
corporations as parties-defendants.

Prior to such amendment, specifically on September 11, 1991, respondent corporations filed before
the Sandiganbayan a petition 8 for mandamus praying for the lifting of the writ of sequestration
issued by PCGG against them and for the restoration of their sequestered assets, properties,
records and documents, on the ground that PCGG failed to file the appropriate judicial action against
them within the period prescribed, under Section 26, 9Article XVIII of the 1987 Constitution.

On December 4, 1991, public respondent issued the assailed Resolution, the dispositive portion of
which states:

WHEREFORE, the Motion for Judgment on the Pleadings is hereby granted. As

prayed for, judgment is hereby rendered, as follows:

1) The writs of sequestration issued against herein petitioner-corporations are hereby

declared automatically lifted, as of August 2, 1987, for failure of the respondent to file
the proper judicial action against them within the period fixed in Section 26 of Article
XVIII of the 1987 Constitution.

2) The respondent PCGG is hereby ordered to restore to the petitioners' all their
assets, properties, records and documents, subject of the sequestration.

Without pronouncement as to costs. 10

Respondent Sandiganbayan based its ruling on PCGG vs. International Copra Export
Corporation 11 ("PCGG vs. Interco") and Republic vs. Sandiganbayan and Olivares 12 ("Republic vs.
Olivares") which similarly held that the mere listing or inclusion of corporations among certain
properties allegedly amassed, beneficially owned or controlled by individual party-defendants in a
complaint filed for recovery of ill-gotten wealth, does not justify the failure of PCGG to implead said
corporations in a proper judicial action within the period fixed in Section 26, Article XVIII of the
Constitution.

PCGG filed a motion for reconsideration. In denying said motion on the ground that the allegations
therein were "essentially a mere rehash of respondent's Answer to the Petition as well as Opposition
to the Motion for Judgment on the Pleading," public respondent further noted that the sequestration
order dated March 19, 1986, was issued and signed by only one PCGG commissioner in violation of
Section 3 of the PCGG Rules and Regulations. 13

Issues
In imputing against Respondent Sandiganbayan grave abuse of discretion amounting to lack or
excess of jurisdiction in granting respondent corporations' petition for mandamus, petitioner assigns
the following errors 14 in the assailed Resolutions:

1. declaring the writ of sequestration to have been automatically lifted

for alleged failure of petitioner to file the proper judicial action against
respondent corporations within the period fixed in Section 26, Article
XVIII of the 1987 Constitution;

2. applying the rulings in PCGG vs. Interco and Republic

vs. Olivares that the filing by petitioner of the judicial action against a
stockholder of the sequestered company is not the judicial action
contemplated by the Constitution; and

3. ruling that the sequestration order dated March 19, 1986, signed
by only one PCGG commissioner, violated Section 3 of the PCGG
Rules and Regulations requiring the authority of two (2) PCGG
commissioners for the issuance of such order.

The errors assigned may be condensed into two principal issues, to wit :

1. Whether a proper judicial action was filed against respondent

corporations in compliance with, and within the period contemplated
in, Section 26, Article XVIII of the Constitution; and

2. Whether the sequestration order issued on March 19, 1986 against

respondent-corporations was valid and effective despite having been
signed by only one commissioner, contrary to the PCGG Rules and
Regulations requiring the authority of at least two commissioners
therefor.

Petitioner contends that the complaint docketed as Civil Case No. 0021 filed on July 29, 1987,
against Edward Marcelo, et al. and amended on September 11, 1991, to implead respondent
corporations as defendants, is the proper judicial action contemplated under the subject provision of
the Constitution that would warrant the continuance of the sequestration. The Solicitor General
further claims that Civil Case No. 0021 justifies the application of the doctrine of "piercing the veil of
corporate fiction" since the records bear prima facie evidence that respondent corporations, which
are wholly owned and controlled by defendants therein, were used to hide their ill-gotten wealth.
Anyhow, he says, this issue has even been rendered moot and academic with the amendment of the
complaint impleading respondent corporations as parties-defendants in the aforementioned case. In
addition, petitioner postulates that Civil Case No. 0021 which sought to recover ill-gotten wealth was
an action in rem or quasi in rem, the alleged ill-gotten wealth (respondent corporations, among
others) of individual defendants, being the resor subject matter of the case.

As regards the second issue, petitioner avers that one signatory to the sequestration order complies
with the requirement under the PCGG Rules since said order was signed "FOR THE
COMMISSION." Petitioner explains that during the organizational stage of the PCGG, the rule of the
Commission in the issuance of sequestration orders was that "any Commissioner can file or issue a
sequestral order provided the order has the conformity, verbal or written, of another
Commissioner." 15 It cites the minutes of the meeting of the Commission on October 15, 1987, in
support of this contention:

The authority of at least two commissioners which is required under Sec. 3 of the
PCGG Rules and Regulations may be written or verbal authority. Such authority may
be reflected in the Minutes or the Commission meeting held en banc covering the
pertinent recommendation/approval on the issuance of the order; or the
Commissioner-in-charge intending to issue the Order may simply obtain the
concurrence of anotehr (sic) Commissioner after explaining the evidence supporting
such order.

It is sufficient for only one Commissioner to sign the Order "FOR THE
COMMISSION". After April 11, 1986, the Commission has encouraged the practice
of two Commissioners signing the Order. (Excerpt from Minutes of PCGG Meeting on
15 October 1987, Annex "L") 16
Respondent corporations, on the other hand, pray for the denial of the instant petition because
petitioner allegedly failed to take the appropriate remedy which should have been an appeal under
Rule 45 of the Rules of Court, and not a certiorari proceeding under Rule 65, since the petition does
not proffer a question of jurisdiction.

With respect to the issues raised by petitioner, respondent corporations aver that Republic
vs. Sandiganbayan, Lobregat, et a1. 17 ("Republic vs. Lobregat"), modifying PCGG
vs. Interco and Republic vs. Olivares, cannot be made to apply to the case at bench since the
assailed Resolutions had already become final and executory prior to the promulgation of the
decision in the first case mentioned. They also contend that the sequestration order signed by only
one PCGG Commissioner is null and void.

The Court's Ruling

Preliminary Issue: Propriety of Rule 65

as Mode of Appeal

Before proceeding to the resolution of the principal issues raised in the petition, we first dispose of
the procedural question on the propriety of certiorari under Rule 65 of the Rules of Court as the
remedy in assailing the subject Sandiganbayan Resolutions.

We answer in the affirmative, and treat this case as an exception to the general rule governing
petitions for certiorari. Normally, decisions of the Sandiganbayan are brought before this Court under
Rule 45, not Rule 65. 18However, where the issue raised is one purely of law, where public interest is
involved, and in case of urgency, certiorari is allowed notwithstanding the existence and availability
of the remedy of appeal.19 Certiorari may also be availed of where an appeal would be slow,
inadequate and insufficient. 20

The nature of this case is undeniably endowed with public interest and involves a matter of public
policy. 21 One of the foremost concerns of the Aquino Government in February 1986 (after the
Marcoses fled the country) was the recovery of unexplained or ill-gotten wealth reputedly amassed
by former President and Mrs. Ferdinand Marcos, their relatives, friends and business associates.
Thus, the Provisional Constitution (Proclamation No. 3) mandated the President to "give priority to
measures to achieve the mandate of the people to: . . . (d) recover ill-gotten properties amassed by
the leaders and supporters of the previous regime and protect the interest of the people through
orders of sequestration or freezing of assets or accounts . . . ." 22 Not too long ago, in Republic
vs. Lobregat, the Court described this undertaking as "surely . . . an enterprise 'of great pith and
moment'; it was attended by 'great expectations'; it was initiated not only out of considerations of
simple justice but also out of sheer necessity — the national coffers were empty, or nearly so."
Hence, the Presidential Commission on Good Government was created by Executive Order No. 1 to
assist the President in the recovery of unexplained wealth whether located in the Philippines or
abroad. Executive Order No. 14 further conferred on the Sandiganbayan exclusive and original
jurisdiction over all cases of ill-gotten wealth, and provided that "technical rules of procedure and
evidence shall not be strictly applied to . . . (said) civil cases." 23

We further opined in the same case that:

Political normalization of the country — which fortunately came not too long after the
EDSA Revolution of 1986 — did not abrogate, or diminish the strength of the lofty
state policy for recovery of ill-gotten wealth, no matter that its prosecution has thus
far yielded what not a few are disposed to regard as at best only mixed results, or
was attended by much abuse on the part of some of its officers or "fiscal agents";
indeed, that circumstance should vigorously argue for its more sustained and
effective pursuit and implementation.

And equally, if not more, important, strong paramount public policy is not to be set at
naught by technical rules of procedure or by narrow constructions of constitutional
provisions that frustrate their clear intent or unreasonably restrict their scope. . . . 24

First Issue: Requisite Judicial Action

Filed Within Period Prescribed
This issue is not novel. We have sufficiently and extensively discussed and resolved this in Republic
vs. Lobregatwhich was a consolidation of twenty petitions before this court presenting a common
issue summed this wise:

Does inclusion in the complaints filed by the PCGG before the Sandiganbayan of
specific allegations of corporations being "dummies" or under the control of one or
another of the defendants named therein and used as instruments for acquisition, or
as being depositaries or products, of ill-gotten wealth; or the annexing to said
complaints of a list of said firms, but without actually impleading them as defendants,
satisfy the constitutional requirement that in order to maintain a seizure effected in
accordance with Executive Order No. 1, s. 1986, the corresponding "judicial action or
proceeding" should be filed within the six-month period prescribed in Section 26,
Article XVIII, of the (1987) Constitution? 25

As in this case, the corporations, in which defendants in the original complaints allegedly owned and
controlled substantial interest, were not impleaded as parties-defendants but merely mentioned or
listed, and specifically described in the complaints as instruments in the illegal acquisition of wealth,
or as depositaries of illegal wealth, or as constituting the fruits thereof. In fact, one of the respondent-
corporations (Marcelo Fiberglass Corporation, the assets of which were also sequestered) in that
case was of exactly the same status as herein respondent-corporations, having been likewise listed
in Civil Case No. 0021 as one of the companies controlled by therein defendant Edward Marcelo. 26

We ruled then that impleading the corporations in which the complaints sought to recover
defendants' shares of stock — allegedly purchased with misappropriated public funds, in breach of
fiduciary duty, or otherwise under illicit or anomalous conditions — "clearly appear(ed) to be
unnecessary. If warranted by the evidence, judgments may be handed down against the
corresponding defendants divesting them of ownership of their (shares of) stock, the acquisition
thereof being illegal and consequently burdened with a constructive trust, and imposing on them the
obligation of surrendering them to the Government." 27

We explained thus:

And as to corporations organized with ill-gotten wealth, but are not themselves guilty
of misappropriation, fraud or other illicit conduct — in other words, the companies
themselves are the object or thing involved in the action, the res thereof — there is
no need to implead them either. Indeed, their impleading is not proper on the
strength alone of their being formed with ill-gotten funds, absent any other particular
wrongdoing on their part. The judgment may simply be directed against the shares of
stock shown to have been issued in consideration of ill-gotten wealth.

. . . Distinguished, in terms of juridical personality and legal culpability from their

erring members or stockholders, said corporations are not themselves guilty of the
sins of the latter, of the embezzlement, asportation, etc., that gave rise to the
Government's cause of action for recovery; their creation or organization was merely
the result of their members' (or stockholders') manipulations and maneuvers to
conceal the illegal origins of the assets or monies invested therein. In this light, they
are simply the res in the actions for the recovery of illegally acquired wealth, and
there is, in principle, no cause of action against them and no ground to implead them
as defendants in said actions.

xxx xxx xxx

Even in those cases where it might reasonably be argued that the failure of the
Government to implead the sequestered corporations as defendants is indeed a
procedural aberration, as where said firms were allegedly used, and actively
cooperated with the defendants, as instruments of conduits for conversion of public
funds or property or illicit or fraudulent obtention of favored Government contracts,
etc., slight reflection would nevertheless lead to the conclusion that the defect is not
fatal, but one correctible under applicable adjective rules — e.g., Section 10, Rule 5
of the Rules of Court [specifying the remedy of amendment during trial to authorize
or to conform to the evidence]; Section 1, Rule 20 [governing amendments before
trial], in relation to the rule respecting the omission of so-called necessary or
indispensable parties, set out in Section 11, Rule 3 of the Rules of Court. It is
relevant in this context to advert to the old, familiar doctrines that the omission to
 implead such parties "is a mere technical defect which can be cured at any stage of
the proceedings even after judgment"; and that, particularly in the case of
indispensable parties, since their presence and participation is essential to the very
life of the action, for without them no judgment may be rendered, amendments of the
complaint in order to implead them should be freely allowed, even on appeal, in fact
even after rendition of judgment by this Court, where it appears that the complaint
otherwise indicates their identity and character as such indispensable parties.

Again, even conceding the adjective imperfection of the omission to implead the
sequestered corporations as indispensable or necessary parties, it bears repeating
that their sequestrations would not thereby be rendered functus officio, since, as
already pointed out, judicial actions or proceedings have in truth been filed
concerning or regarding said sequestration in literal and faithful compliance with
Section 26, Article XVIII of the Constitution. 28

The instant petition falls squarely within the case cited. Respondent corporations were among the
properties listed in the original complaint (Civil Case No. 0021) as having been illegally accumulated
by the defendants "in flagrant breach of public trust and of their fiduciary obligations as public
officers, with gross abuse of power and authority and in brazen violation of the Constitution and laws
of the Philippines." They were subsequently impleaded as parties-defendants in the same case by
way of an amended complaint duly granted by public respondent. 29 Hence, we reiterate our rule
cited above that, with these premises, there was faithful compliance with Section 26, Article XVIII of
the Constitution.

The seeming contradictions of the Court's rulings in Republic vs. Lobregat and in the Republic
vs. Interco and Republic vs. Olivares cases have already been clarified in the recent case
of Republic vs. Sandiganbayan, Sipalay Trading Corporation and Allied Banking Corporation 30 in this
manner:

These fresh pronouncements, 31 however, did not reverse, abandon or supplant

"INTERCO". What the Court did was to explain the two apparently colliding
dispositions by making this "hairline", but critical, distinction:

XVI. The "Interco" and "PJI" Rulings

This Court is not unmindful of the fact that its Resolution of July 26,
1991 on the petitioner's motion for reconsideration in G.R. No. 92755
(PCGG vs. Interco) appears to sustain the proposition that actual
impleading in the recovery action of a corporation under
sequestration for being a repository of illegally-acquired wealth, is
necessary and requisite for such proposed or pending seizure to
come under the protective umbrella of the Constitution. But Interco is
to be differentiated from the cases now under review in that in the
former, as already elsewhere herein made clear, there was a lack of
proof, even of theprima facie kind, that Eduardo Cojuangco, Jr.
owned any stock in Interco, the evidence on record being in fact that
said corporation had been organized as a family corporation of the
Luys.

So, too, this Court's judgment in the so-called "PJI Case" (Republic of
the Philippines [PCGG] v. Sandiganbayan and Rosario Olivares) may
not be regarded as on all fours with the cases under consideration.
The PJI Case involved the shares of stock in the name of eight (8)
natural persons which had never been sequestered at all. What
happened was that the PCGG simply arrogated unto itself the right to
vote those unsequestered shares on the bare claim that the eight (8)
registered owners thereof were "dummies" of Benjamin Romualdez,
the real owners of the shares; and all that the PCGG had done as
predicate for that act of appropriation of the stock, was to include all
the shares of PJI in a list (Annex A) appended to its complaint in
Sandiganbayan Case No. 0035, describing them as among the
properties illegally acquired by Romualdez. Unfortunately, as
in Interco, the PCGG failed to substantiate by competent evidence its
theory of clandestine ownership of Romualdez; and since moreover,
 there had been no sequestration of the alleged dummies' shares of
stock, it was undoubtedly correct for the Sandiganbayan to grant the
latter's motion for them to be recognized and declared as the true
owners of the stock in question, which judgment this Court
subsequently pronounced to be free from grave abuse of discretion.

We need only to recall at this juncture that, as in "INTERCO", evidence of the PCGG
is nil to even come up with a prima facie case against SIPALAY (and ALLIED). This
similitude is the one decisive factor that draws the instant case away from the "Final
Dispositions" made by the Court in the 1995 "Republic vs. Sandiganbayan" case —
thus making "INTERCO", as supported by the "Aetna" and "Seno" cases, the
controlling precedent. The principle of Stare Decisis, indeed, is most compelling, for
"when the court has once 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 where the facts
are substantially the same." 32

Second Issue: Validity of Sequestration Order

Signed by Only One Commissioner

Section 3 of the PCGG Rules and Regulations promulgated on April 11, 1986, provides:

Sec. 3. Who may issue. A writ of sequestration or a freeze or hold order may be
issued by the Commission upon the authority of at least two Commissioners, based
on the affirmation or complaint of an interested party or motu proprio when the
Commission has reasonable grounds to believe that the issuance thereof is
warranted.

The questioned sequestration order was, however, issued on March 19, 1986, prior to the
promulgation of the PCGG Rules and Regulations. As a consequence, we cannot reasonably expect
the Commission to abide by said rules which were nonexistent at the time the subject writ was
issued by then Commissioner Mary Concepcion Bautista. Basic is the rule that no statute, decree,
ordinance, rule or regulation (and even policies) shall be given retrospective effect unless explicitly
stated so. 33 We find no provision in said Rules which expressly gives them retroactive effect, or
implies the abrogation of previous writs issued nor in accordance with the same Rules. Rather, what
said Rules provide is that they "shall be effective immediately," which, in legal parlance, is
understood as "upon promulgation." Only penal laws are given retroactive effect insofar as they favor
the accused. 34

We distinguish this case from Republic vs. Sandiganbayan, Romualdez and Dio Island
Resort 35 where the sequestration order against Dio Island Resort, dated April 14, 1986, was
prepared, issued and signed not by two commissioners of the PCGG, but by the head of its task
force in Region VIII. In holding that said order was not valid since it was not issued in accordance
with PCGG Rules and Regulations, we explained:

(Sec. 3 of the PCGG Rules and Regulations), couched in clear and simple language,
leaves no room for interpretation. On the basis thereof, it is indubitable that under no
circumstances can a sequestration or freeze order be validly issued by one not a
Commissioner of the PCGG.

xxx xxx xxx

Even assuming arguendo that Atty. Ramirez had been given prior authority by the
PCGG to place Dio Island Resort under sequestration, nevertheless, the
sequestration order he issued is still void since PCGG may not delegate its authority
to sequester to its representatives and subordinates, and any such delegation is
invalid and ineffective.

We further said:

In the instant case, there was clearly no prior determination made by the PCGG of
a prima facie basis for the sequestration of Dio Island Resort, Inc. . . .

xxx xxx xxx

 The absence of a prior determination by the PCGG of a prima facie basis for the
sequestration order is, unavoidably, a fatal defect which rendered the sequestration
of respondent corporation and its properties void ab initio. Being void ab initio, it is
deemed non-existent, as though it had never been issued, and therefore is not
subject to ratification by the PCGG.

What were obviously lacking in the above case were the basic requisites for the validity of a
sequestration order which we laid down in BASECO vs. PCGG, 36 thus:

Section (3) of the Commission's Rules and Regulations provides that sequestration
or freeze (and takeover) orders issue upon the authority of at least two
commissioners, based on the affirmation or complaint of an interested party, or motu
proprio when the Commission has reasonable grounds to believe that the issuance
thereof is warranted. 37

In the case at bar, there is no question as to the presence of prima facie evidence justifying the
issuance of the sequestration order against respondent corporations. But the said order cannot be
nullified for lack of the other requisite (authority of at least two commissioners) since, as explained
earlier, such requisite was nonexistent at the time the order was issued.

In all cases involving alleged ill-gotten wealth brought by or against the Presidential Commission on
Good Government, it is the policy of this Court to set aside technicalities and formalities that serve
merely to delay or impede their judicious resolution. This Court prefers to have such cases resolved
on the merits before the Sandiganbayan. Substantial justice to all parties, not mere legalisms or
perfection of form, should now be relentlessly pursued. Eleven years have passed since the
government started its search for and reversion of such alleged ill-gotten wealth. The definitive
resolution of such cases on the merits is thus long overdue. If there is adequate proof of illegal
acquisition, accumulation, misappropriation, fraud or illicit conduct, let it be brought out now. Let the
titles over these properties be finally determined and quieted down with all reasonable speed, free of
delaying technicalities and annoying procedural sidetracks.

WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed Resolutions of
the Sandiganbayan (Third Division) are SET ASIDE. The temporary restraining order is hereby
made PERMANENT. The Court further DIRECTS the Sandiganbayan to resolve, with all deliberate
dispatch, pursuant to the mandate of the Constitution for a speedy disposition of cases, the instant
and all similar cases pending before it involving recovery of ill-gotten wealth through the conduct of
continuous trial.

SO ORDERED.