HILADO ET AL VS. JUDGE REYES Julita Campos Benedicto, the surviving spouse of the deceased Roberto S.

Benedicto, was appointed Administratrix of the estate of Benedicto, and letters of administration were thereafter issued in her favor. Herein petitioners had, during the lifetime of Benedicto, filed two complaints for damages or collection of sums of money, against Roberto Benedicto et al. In the initial inventory of the estate which private respondent submitted in the case before the Manila RTC, she listed, among other liabilities of the estate, the claims of petitioners subject of the above-said Bacolod RTC cases. From January 2002 until November 2003, the Branch Clerk of Court of Branch 21 of the Manila RTC allowed petitioners through counsel Sedigo and Associates to regularly and periodically examine the records of the case and to secure certified true copies thereof. By December 2003, however, Atty. Grace Carmel Paredes, an associate of petitioners counsel, was denied access to the last folder-record of the case which, according to the courts clerical staff, could not be located and was probably inside the chambers of public respondent for safekeeping. In their petition, petitioners contend that the records of the case are public records to which the public has the right to access, inspect and obtain official copies thereof, recognition of which right is enjoined under Section 7, Article III of the Constitution and Section 2, Rule 135 and Section 11, Rule 136 of the Rules of Court. Issue: WON the petitioners right to information was violated? Held: Insofar as the right to information relates to judicial records, the term "judicial record" or "court record" does not only refer to the orders, judgment or verdict of the courts. It comprises the official collection of all papers, exhibits and pleadings filed by the parties, all processes issued and returns made thereon, appearances, and word-for-word testimony which took place during the trial and which are in the possession, custody, or control of the judiciary or of the courts for purposes of rendering court decisions. It has also been described to include any paper, letter, map, book, other document, tape, photograph, film, audio or video recording, court reporters notes, transcript, data compilation, or other materials, whether in physical or electronic form, made or

received pursuant to law or in connection with the transaction of any official business by the court, and includes all evidence it has received in a case. It bears emphasis that the interest of the public hinges on its right to transparency in the administration of justice, to the end that it will serve to enhance the basic fairness of the judicial proceedings, safeguard the integrity of the fact-finding process, and foster an informed public discussion of governmental affairs. Decisions and opinions of a court are of course matters of public concern or interest for these are the authorized expositions and interpretations of the laws, binding upon all citizens, of which every citizen is charged with knowledge. Justice thus requires that all should have free access to the opinions of judges and justices, and it would be against sound public policy to prevent, suppress or keep the earliest knowledge of these from the public. Unlike court orders and decisions, however, pleadings and other documents filed by parties to a case need not be matters of public concern or interest. For they are filed for the purpose of establishing the basis upon which the court may issue an order or a judgment affecting their rights and interests. In thus determining which part or all of the records of a case may be accessed to, the purpose for which the parties filed them is to be considered. In intestate proceedings, the heirs file pleadings and documents for the purpose of establishing their right to a share of the estate. As for the creditors, their purpose is to establish their claim to the estate and be paid therefor before the disposition of the estate. Information regarding the financial standing of a person at the time of his death and the manner by which his private estate may ultimately be settled is not a matter of general, public concern or one in which a citizen or the public has an interest by which its legal rights or liabilities maybe affected. Granting unrestricted public access and publicity to personal financial information may constitute an unwarranted invasion of privacy to which an individual may have an interest in limiting its disclosure or dissemination. If the information sought then is not a matter of public concern or interest, denial of access thereto does not violate a citizens constitutional right to information. The accessory right to access public records may, however, be

restricted on a showing of good cause. How "good cause" can be determined, the Supreme Judicial Court of Massachusetts in Republican Company v. Appeals Court teaches: The publics right of access to judicial records, including transcripts, evidence, memoranda, and court orders, maybe restricted, but only on a showing of "good cause." "To determine whether good cause is shown, a judge must balance the rights of the parties based on the particular facts of each case." In so doing, the judge "must take into account all relevant factors, including, but not limited to, the nature of the parties and the controversy, the type of information and the privacy interests involved, the extent of community interest, and the reason for the request. And even then, the right is subject to inherent supervisory and protective powers of every court over its own records and files. In fine, this Court finds the petition for mandamus meritorious, petitioners being "interested persons" who have a legitimate reason or purpose for accessing the records of the case.

Gloria Macapagal-Arroyo v. Hon. Leila M. De Lima (G.R. No. 199034) and Jose Miguel T. Arroyo vs. Sec. Leila M. De Lima (G.R. No. 199046), November 18, 2011 : Dissent of Justice Sereno

DISSENTING OPINION
SERENO, J.: I. THE FACTS [Late last Tuesday, November 15, 2011, the Supreme issued an immediately executory Temporary Restraining Order (TRO) enjoining the implementation of DOJ Department Circular No. 41 and Watchlist Order and thereby allowing the petitioners Arroyo spouses to leave the Philippines after complying with the conditions in the Resolution. The respondent Secretary of Justice Leila De Lime however prevented the Arroyos from leaving. The government, through the Office of the Solicitor General, immediately filed a Consolidated Urgent Motion for Reconsideration and/or to Lift Temporary Restraining Order. Petitioner Gloria Macapagal Arroyo also filed an Urgent Motion for Respondents to Cease and Desist from Preventing Petitioner GMA from Leaving the Country. She also moved to cite the Respondent Secretary of Justice in contempt for failure to comply with the TRO. On November 18, 2011, the Court conducted a special en banc session to tackle the pending incidents of the consolidated cases.] II. THE ISSUES

Among the more important issues resolved by the Court during the special en banc session were as follows: 1. Should the Resolution granting the prayer for a TRO be reconsidered? 2. Was there compliance with the 2nd condition of the TRO? If there is none, should the TRO be suspended in the meantime? III. THE RULING 1. [The Justices maintained their 8-5 vote on the issuance of the TRO. The majority thus require[d] Secretary De Lima to IMMEDIATELY COMPLY with the said temporary restraining order by allowing petitioners to leave the country.] YES, the Resolution granting the petitioners prayer for a TRO should be reconsidered. [T]his Court cannot ignore a basic constitutional precept: the presumption of validity of official actions. Especially when the practice of issuing watch list orders, has

been practiced for decades by the Department of Justice, and many other analogous practices has been observed as well by many other governmental agencies, including this court, through analogous restrictive practices. This Court cannot turn to a blind eye what is involved in running a government. xxx. What this all means is that a full hearing must be conducted before this Court decides to grant a TRO to petitioners, none of whom, by their very own documents, are under any life-threatening, emergency, medical situation. While in the end we may ultimately strike down the issuance of Watch List Orders by the Department of Justice or uphold such orders and additionally provide standards before the power to restrict travel of persons under preliminary investigation can be exercised, what is at stake this very day is a fundamental question of whether we should presume that officials can perform the functions they have been performing for ages in order that we maintain order in the running of a country. Therefore, with all due respect, it is completely wrong for this Court to bend over backwards to accommodate the request of petitioners for a TRO to be issued ex parte without hearing the side of the government. xxx. xxx xxx xxx

When out of the countrys jurisdiction, by being corporeally absent therefrom, public respondents legal remedies against petitioners will be subject to the jurisdiction and the pleasure of the various countries where they will flee. Out of the countries that had been mentioned by petitioners to be subject of her medical tour, only two (2) of the countries cited have extradition treaties with the Philippines. It still needs verification whether the extradition with Spain has already been rendered effective through concurrence to the same by the Senate. The moment she flies out of Philippine air space, our countrys ability to enforce its laws will now be subject to the wishes of a foreign government. A PhP2 Million Peso bond is crumbs for one who, if proven, has actually obtained multiples more from the countrys coffers. Neither will the appointment of a substitute replace the effective justice that can be enforced only when a State has physical custody of a person who has been proven guilty of violation of the state laws. A conviction against her may lie as a formal judgment, but there may effectively be no service of sentence. That is of course, all premised on the theory that petitioners may ultimately be convicted for one of the crimes for which they are charged. That result can only add to the very long saga of our peoples desperate attempts to try to redeem its self-respect by showing to the world that contrary to the common observation of outsiders, impunity is not allowed to reign in this country. Should the Court contribute to such possible despair by not waiting for the oral argument on 22 November 2011 before issuing a TRO? The principal physician of former President Gloria Macapagal-Arroyo, Dr. Juliet Gopez-Cervantes, and her surgeon, Dr. Mario Ver, have all certified to her continuing recovery and her positive prognosis, especially after 6 to 8 months. There has been no

allegation in her pleadings that those certifications are false, nor that her doctors are incompetent. They should then be believed by this Court that there is no medical emergency warranting an immediate flight. What is waiting four (4) more days from today, when oral arguments are conducted, compared with the possibility that there is genuine, and not just publicly-imagined intention, on the part of the petitioners to evade legal processes. This Court can afford to wait until 22 November 2011, without prejudicing any of the constitutional rights of the petitioner, considering the potentials that loom in the distance and the fears that weigh on the minds of our people - that justice will be again be frustrated if the simple operation of bringing back an accused person from abroad, will prove to be impossible to effect, even by this Court. Xxx. Considering that petitioners herein are not under any medical emergency, as certified by petitioner Gloria Arroyos own doctors, can this Court not just wait for the Comment and the oral arguments to be shortly conducted?

2. [The Court voted 76[1] that there was no compliance with the 2nd condition of the TRO. But it nonetheless voted by the same 7-6 margin that there was no need to explicitly state the legal effect on the TRO of the noncompliance by petitioners with the 2nd condition. The November 18, 2011 Resolution instead noted the SPA executed by Gloria Macapagal-Arroyo, appointing Atty. Ferdinand Topacio as her legal, and merely stated that she shall commit to the Court that she shall instruct her legal representative to amend par. (iii) of par. (b) above to state: to receive summons or documentary evidence and forthwith submit this compliance with the Court;] NO, there was no compliance with the 2nd condition of the TRO; hence, YES, the TRO should be suspended in the meantime. The majority, by a 7-6 voting [sic], denied the minoritys proposition that a resolution be issued including a phrase that the TRO is suspended pending compliance with the second condition of the 15 November 2011 Resolution. The majority argued that such a clarification is unnecessary, because it is clear that the TRO is conditional, and cannot be made use of until compliance has been done. It was therefore the sense of the majority that, as an offshoot of the winning vote that there was failure by petitioners to comply with Condition Number 2, the TRO is implicitly deemed suspended until there is compliance with such condition. Everyone believed that it would be clear to all that a conditional TRO is what it is, conditional. Below is the relevant excerpt from the Special Power of Attorney dated 15 November 2011, the failed compliance of petitioners with Condition Number 2 in our Resolution dated 15 November 2011:
That I, GLORIA MACAPAGAL ARROYO, of legal age, married, Filipino with residence at 14 Badjao Street, Pansol, Quezon City, do hereby name, constitute and appoint ATTY. FERDINAND TOPACIO, likewise of legal age, Filipino, with office address at Ground floor, Skyway Twin Towers, H.

1. 2. 3. 4. 5. 6. 7.

Javier St., Ortigas Center, Pasig, Metro Manila, as my legal representative in the Philippines and to be my true and lawful attorney-in-fact, for my name, place and stead, to do and perform the following acts and things, to wit: To sign, verify, and file a written statement; To make and present to the court an application in connection with any proceedings in the suit; To produce summons or receive documentary evidence; To make and file compromise or a confession of judgment and to refer the case to arbitration; To deposit and withdraw any money for the purpose of any proceeding; To obtain copies of documents and papers; and Generally to do all other lawful acts necessary for the conduct of the said case. (Emphasis supplied.)

While this opinion was being written, Court Administrator and Acting Chief of the Public Information Office (PIO) Atty. Midas Marquez informed the press that the Temporary Restraining Order (TRO) was effective, i.e., in full force and effect. Contrary to this interpretation, as stated, it was the understanding of a majority that the TRO is suspended pending compliance with our earlier Resolution. The operational ineffectivity of the TRO is implied for it is a basic principle that the failure of petitioners to comply with one of the conditions in the Resolution dated 15 November 2011 is a jurisdictional defect that suspends, at the least, the effectivity of the TRO. Therefore, the TRO, until faithful compliance with the terms thereof, is legally ineffective. It was a human mistake, understandable on the part of the Clerk of Court, considering the way the TRO was rushed, to have issued the same despite non-compliance by petitioners with one of the strict conditions imposed by the Court. Nevertheless, good faith and all, the legal effect of such non-compliance is the same petitioners cannot make use thereof for failure to comply faithfully with a condition imposed by this Court for its issuance. The Court Administrator cum Acting Chief of the PIO is hereby advised to be careful not to go beyond his role in such offices, and that he has no authority to interpret any of our judicial issuances, including the present Resolution, a function he never had from the beginning. Furthermore, it is hereby clarified that it is mandatory for the Clerk of Court to ensure that there is faithful compliance with all the conditions imposed in our 15 November 2011 resolution, including our second condition, before issuing any certification that the compliance with the TRO has been made, and only then can the TRO become effective.

Hazel Ma. C. Antolin, Petitioner vs. Abelardo T. Domondon, Jose A. Gangan and Violeta J. Josef, Respondents, G.R. No. 165036; 5 July 2010 Hazel Ma. C. Antolin, Petitioner vs. Antonieta Fortuna-Ibe, Respondent, G.R. No. 175705; 5 July 2010 Facts: Hazel Ma. C. Antolin (Petitioner) failed the Certified Public Accountant (CPA) Licensure Exam she took in October 1997. Convinced she deserved to pass the Exam, she wrote to the Board of Accountancy (Board), requesting that her answer sheets be re-corrected. She was shown her answer sheets but since these showed only shaded marks, she was unable to determine why she failed the Exam. Consequently, she asked the Board for copies of the questionnaire, her answer sheets, the answer keys and an explanation of the grading system (collectively, the Examination Papers). Her request was denied on two grounds: (1) Section 36, Article III of the Rules and Regulations Governing the Regulation and Practice of Professionals, as amended by Professional Regulation Commission (PRC) Resolution No. 332, series of 1994, only allowed access to her answer sheets, and reconsideration of the result of her examination can be made only on grounds of mechanical error in the grading of the answer sheets, or malfeasance; and (2) the Board was precluded from releasing the Examination Papers (other than the answer sheets) by Section 20, Article IV of PRC Resolution No. 338, series of 1994. The Board later informed her that her exam was investigated and no mechanical error was found in the grading. Petitioner filed a Petition for Mandamus with Damages, with application for preliminary mandatory injunction, against the Board and its members before the Regional Trial Court (RTC), praying that the Board provide her with all documents that would show whether the Board fairly administered the exam and correctly graded her answers, and if warranted, to issue to her a certificate of registration as a CPA. She later amended her Petition to clarify that she only wanted access to the documents requested, not recorrection of her exam, deleting in the process her original prayer for issuance of a certificate of registration as CPA. Petitioner passed the May 1998 CPA Licensure Exam and took her oath as a CPA. Consequently, the RTC denied her application for mandatory injunction for being moot. She amended her Petition a second time to implead the PRC and to ask, in addition to access to the documents she had requested, that if warranted, appropriate revisions in the October 1997 Exam results be made by the Board and the PRC. The RTC considered the matter moot and dismissed the petition. On her motion, however, the RTC reconsidered the dismissal, holding that her passing of the subsequent CPA examination did not render the petition moot because the relief and if warranted, to issue to her a certificate of registration as Certified Public Accountant was deleted from the original petition. As regards whether she had the constitutional right to have access to the documents she requested, the RTC resolved to let the parties first adduce evidence, and to have PRC air its side of the case. The RTC also ordered the PRC to preserve and safeguard the questionnaire, petitioners answer sheets, and the answer keys for theOctober 1997 CPA Licensure Exam.

When their motion for reconsideration was denied, respondents brought the case to the Court of Appeals (CA) which set aside the RTCs decision and ordered the dismissal of the case because: (1) the petition was mooted when petitioner passed the May 1998 CPA exam; (2) Section 20, Article IV of PRC Resolution No. 338, series of 1994, constituted a valid limitation on her right to information and access to government documents; (3) the ExaminationDocuments were not of public concern, because she merely sought review of her failing marks; (4) it was not the ministerial or mandatory function of the respondents to review and reassess the answers to examination questions of a failing examinee; and (5) she failed to exhaust administrative remedies when she did not elevate thematter to the PRC before seeking judicial intervention. Petitioner, thus, brought thematter to the SupremeCourt. Issues: (1)Whether or not petitioner may seek judicial intervention to compel the re-correction of her examination; (2)Whether or not petitioner failed to exhaust the administrative remedies; (3)Whether or not the casewasmooted by petitioners passing theMay 1998 CPA Licensure Examination; and (4)Whether or not petitioner has the constitutional right to have access to the Examination Papers. Held: (1) Any claimfor re-correction or revision of petitioners 1997 examination cannot be compelled bymandamus. In AgustinRamos vs. Sandoval [G.R. No. 84470, February 2, 1989 (Minute Resolution)], where therespondent Judgewas questioned for dismissing therein petitioners mandamus action to compel the Medical Board of Examiners and the Professional Regulation Commission to re-correct their ratings, the Supreme Court held that (t)he function of reviewing and reassessing the petitioners answers to the examination questions, in the light of the facts and arguments presented by them x x x is a discretionary function of theMedical Board, not aministerial andmandatory one, hence, not within the scope of thewrit ofmandamus. For a writ of mandamus to issue, the applicant must have a well-defined, clear, and certain legal right to the thing demanded. The corresponding duty of the respondent to perform the required act must be equally clear. No such clarity exists here. And despite petitioners assertion that she did not demand re-correction, the most cursory perusal of her Second Amended Petition and her prayer that respondents make the appropriate revisions on the results of her examination belied this claim. (2) Like the claimants in Agustin, petitioners remedy fromthe Boards refusal to release the Examination Papers should have been through an appeal to the PRC. Under Section 5(c) of Presidential Decree No. 223, the PRC has the power to review and approve the policies, resolutions, rules and regulations, orders and decisions of the various professional Boards, including the results of their licensure examinations, and the decisions of the Boards on administrative cases shall be final and executory unless appealed to the PRC within 30 days from promulgation. Contrarys to petitioners claim, this power is not limited to administrative investigations but encompasses requests for documents. And since the PRC itself issued the resolution (PRC Resolution No. 338) questioned by petitioner, itwas in the best position to resolve questions addressed to its area of expertise.

One of the reasons for exhaustion of administrative remedies is thewell-entrenched doctrine on separation of powers,which enjoins upon the Judiciary a becoming policy of non-interference with matters falling primarily (albeit not exclusively) within the competence of other departments. However, the principle of exhaustion of administrative remedies is subject to exceptions, among which iswhen only a question of lawis involved. Whether or not petitioner had a constitutional right to demand access to the Examination Papers was one such question of law which cannot be resolvedwith finality by the administrative officer. (3) An issue becomes moot and academic when it ceases to present a justiciable controversy, so that a declaration on the issue would be of no practical use or value. In this jurisdiction, any citizenmay challenge any attempt to obstruct the exercise of his or her right to information andmay seek its enforcement by mandamus. And since every citizen possesses the inherent right to be informed by the mere fact of citizenship, petitioners belated passing of the CPA Board Exams did not automatically mean that her interest in the Examination Papers had become mere superfluity. Undoubtedly, the constitutional question presented, in view of the likelihood that the issues in this case would be repeated, warranted review. (4) Like all the constitutional guarantees, the right to information is not absolute; it is limited to matters of public concern and is further subject to such limitations as may be provided by law (Section 7, Article III, 1987 Constitution). Similarly, the States policy of full disclosure is limited to transactions involving public interest, and is subject to reasonable conditions prescribed by law (Sec. 28, Art. II, 1987 Constitution). The Court has always grappled with the meanings of public interest and public concern which embrace a broad spectrum of subjects which the public may want to know, either because these directly affect their lives, or simply because such matters naturally arouse the interest of an ordinary citizen, and which are, in the final analysis, up to the courts to determine on a case by case basis [Legaspi v. Civil ServiceCommission, 234 Phil. 521, 535 (1987)]. National board examinations such as the CPA Board Exams are matters of public concern. The populace in general, and the examinees in particular, would understandably be interested in the fair and competent administration of these exams in order to ensure that only those qualified are admitted into the accounting profession. And as with all matters pedagogical, these examinations could be notmerely quantitativemeans of assessment, but alsomeans to further improve the teaching and learning of the art and science of accounting. The Court, nonetheless, realizes that there may be valid reasons to limit access to the Examination Papers in order to properly administer the exam. More than the mere convenience of the examiner, it may well be that there exist inherent difficulties in the preparation, generation, encoding, administration, and checking of these multiple choice exams that require that the questions and answers remain confidential for a limited duration. The PRC, however, had not been given an opportunity to explain the reasons

behind their regulations or articulate the justification for keeping the Examination Papers confidential. In view of the far-reaching implications of this case, whichmay impact on every board examination administered by the PRC, and in order that all relevant issuesmay be ventilated, the Court deemed it best to remand the case to theRTC for further proceedings.

Air Philippines v. Pennswell, Inc.

Tuesday, January 05, 2010 5:56 PM

Facts Petitioner is a domestic corporation engaged in the business of air transportation services. Meanwhile, respondent is engaged in the business of manufacturing and selling industrial chemicals, solvents, and special lubricants. Respondent sold to petitioner sundry goods in trade. Petitioner, however, has yet to fully pay the amount specified in the contract. With that, respondent filed a Complaint for a Sum of Money against petitioner. Petitioner contends that it has valid and justifiable reasons for not paying. It alleged that it was defrauded because respondent misrepresented certain items as constituting a new product line. These items were in truth and in fact identical with the products that petitioner previously purchased. Upon discovering the alleged fraud, petitioner and respondent held a conference, where both agreed that the respondent would return the amount paid. Petitioner, however, received a demand letter from respondent regarding the payment of the sum in question. During the pendency of the trial, petitioner prayed that respondent be compelled to give a detailed list of the ingredients and chemical components of some of its products. This is for petitioner to conduct a comparative analysis of the respondent's products. The Regional Trial Court (RTC) granted this petition. Upon reconsideration, respondent contends that it cannot be compelled to disclose such because the matter is confidential. What the petitioner inquired upon constituted a trade secret that the respondent couldn't be forced to divulge. RTC then reversed its decision. The Court of Appeals (CA) affirmed such, saying that: The Supreme Court inGarcia v. Board of Investments(177 SCRA 374 [1989]) held that trade secrets and confidential, commercial and financial information are exempt from public scrutiny. This is reiterated inChavez v. Presidential Commission on Good Government(299 SCRA 744 [1998]) where the Supreme Court enumerated the kinds of information and transactions that are recognized as restrictions on or privileges against compulsory disclosure. There, the Supreme Court explicitly stated that: The drafters of the Constitution also unequivocally affirmed that, aside from national security matters and intelligence information,trade or industrial secrets(pursuant to the Intellectual Property Code and other related laws) as well as banking transactions (pursuant to the Secrecy of Bank Deposits Act) re also exempt from compulsory disclosure. It is thus clear from the foregoing that a party cannot be compelled to produce, release or disclose documents, papers, or any object which are considered trade secrets. Issue Whether the chemical components of respondent's products are trade or industrial secrets that are not subject to compulsory disclosure Held Whether the chemical components of respondent's products are trade or industrial secrets that are not subject to compulsory disclosure YES. A trade secret is defined as a plan or process, tool, mechanism or compound known only
Consti II Page 1

to its owner and those of his employees to whom it is necessary to confide it. The definition also extends to a secret formula or process not patented, but known only to certain individuals using it in compounding some article of trade having a commercial value. A trade secret mayconsist of any formula, pattern, device, or compilation of information that: (1) is used in one's business; and (2) gives the employer an opportunity to obtain an advantage over competitors who do not possess the information. Generally, a trade secret is a process or device intended for continuous use in the operation of the business, for example, a machine or formula, but can be a price list or catalogue or specialized customer list. It is indubitable that trade secrets constitute proprietary rights. The inventor, discoverer, or possessor of a trade secret or similar innovation has rights therein which may be treated as property, and ordinarily an injunction will be granted to prevent the disclosure of the trade secret by one who obtained the information "in confidence" or through a "confidential relationship." American jurisprudence has utilized the following factorsto determine if an information is a trade secret, to wit:

1. the extent to which the information is known outside of the employer's business; 2. the extent to which the information is known by employees and others involved in the business; 3. the extent of measures taken by the employer to guard the secrecy of the information; 4. the value of the informationto the employerand to competitors; 5. the amount of effort or money expended by the company in developing the information; and 6. the extent to which the information could be easily or readily obtained through an independent source. The chemical composition, formulation, and ingredients of respondents special lubricants are trade secrets within the contemplation of the law. Respondent was established to engage in the business of general manufacturing and selling of, and to deal in, distribute, sell or otherwise dispose of goods, wares, merchandise, products, including but not limited to industrial chemicals, solvents, lubricants, acids, alkalies, salts, paints, oils, varnishes, colors, pigments and similar preparations, among others. It is unmistakable to our minds that the manufacture and production of respondents products proceed from a formulation of a secret list of ingredients. In the creation of its lubricants, respondent expended efforts, skills, research, and resources. What it had achieved by virtue of its investments may not be wrested from respondent on the mere pretext that it is necessary for petitioners defense against a collection for a sum of money.By and large, the value of the information to respondent is crystal clear. The ingredients constitute the very fabric of respondents production and business. No doubt, the information is also valuable to respondents competitors. To compel its disclosure is to cripple respondents business, and to place it at an undue disadvantage.

Philippine Savings Bank v. Senate Impeachment Court, G.R. No. 200238, February 9, 2012

RESOLUTION
(Re Application by Petitioners of a TRO) I. THE FACTS Philippine Savings Bank (PS Bank) and its President, Pascual M. Garcia III, filed before the Supreme Court an original civil action for certiorari and prohibition with application for temporary restraining order and/or writ of preliminary injunction. The TRO was sought to stop the Senate, sitting as impeachment court, from further implementing the Subpoena Ad Testificandum et Duces Tecum, dated February 6, 2012, that it issued against the Branch Manager of PS Bank, Katipunan Branch. The subpoena assailed by petitioners covers the foreign currency denominated accounts allegedly owned by the impeached Chief Justice Renato Corona of the Philippine Supreme Court. II. THE ISSUE Should a TRO be issued against the impeachment court to enjoin it from further implementing the subpoena with respect to the alleged foreign currency denominated accounts of CJ Corona? III. THE RULING [The Court en banc ISSUED A TEMPORARY RESTRAINING ORDER enjoining the respondents from implementing the subpoena. It also REQUIRED the respondents to COMMENT on the [merits of the] petition.] YES, a TRO should be issued against the impeachment court to enjoin it from further implementing the subpoena with respect to the alleged foreign currency denominated accounts of CJ Corona. There are two requisite conditions for the issuance of a preliminary injunction:

(1) the right to be protected exists prima facie, and (2) the acts sought to be enjoined are violative of that right. It must be proven that the violation sought to be prevented would cause an irreparable injustice. A clear right to maintain the confidentiality of the foreign currency deposits of the Chief Justice is provided under Section 8 of Republic Act No. 6426, otherwise known as the Foreign Currency Deposit Act of the Philippines (RA 6426). This law establishes the absolute confidentiality of foreign currency deposits: xxx xxx xxx

Under R.A. No. 6426 there is only a single exception to the secrecy of foreign currency deposits, that is, disclosure is allowed only upon the written permission of the depositor. In Intengan v. Court of Appeals, the Court ruled that where the accounts in question are U.S. dollar deposits, the applicable law is not Republic Act No. 1405 but RA 6426. Similarly, in the recent case of Government Service Insurance System v. 15th Division of the Court of Appeals, the Court also held that RA 6426 is the applicable law for foreign currency deposits and not Republic Act No. 1405. xxx. xxx xxx xxx

The written consent under RA 6426 constitutes a waiver of the depositors right to privacy in relation to such deposit. In the present case, neither the prosecution nor the Impeachment Court has presented any such written waiver by the alleged depositor, Chief Justice Renato C. Corona. Also, while impeachment may be an exception to the secrecy of bank deposits under RA 1405, it is not an exemption to the absolute confidentiality of foreign currency deposits under RA 6426.

Boy Scouts of America v. Dale

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Citation. 22 Ill.530 U.S. 640, 120 S. Ct. 2446, 147 L. Ed. 2d 554 (2000) Brief Fact Summary. The Respondent, Dale (Respondent), was an eagle scout whose membership in the boy scouts was revoked when the Petitioners, the Boy Scouts of America (Petitioner), learned that he was a homosexual. Synopsis of Rule of Law. While individuals are given a right to freely associate, associations are not forced to include members whose beliefs may affect its own ability to express the message it wishes to convey. Facts. The Respondent, a life-long boy scout, was an assistant scout master in New Jersey, when the Petitioner learned of his homosexuality and revoked his membership. The Respondent brought suit to enjoin the action and the New Jersey court, under its public accommodations law, required the Petitioner to admit the Respondent.

Issue. This case questions whether an organization can be compelled to accept a member whose activities and beliefs may be against the very nature of the organization.

Held. Reversed. The court found that, while the Petitioners laws and oaths do not mention sexuality, the purpose of the organization to foster morally straight and clean membership would be disregarded if the Petitioner was forced to accept the Respondent. Further, the First Amendment Rights of the association would be violated if it were forced, under the guise of law, to send a message that it accepted homosexual conduct when, on its own assertions, it did not. The Supreme Court of the United States (Supreme Court) held that to require the Petitioner to accept Respondent was an abridgment of the Petitioners freedom of expression. Dissent. Justice John Paul Stevens (J. Stevens) dissented, noting that by allowing the Petitioner to revoke the Respondents membership, the Supreme Court was allowing the organization to prevail over the anti-discrimination laws of the state. Discussion. An organization cannot be compelled to accept a member whose beliefs do not align with the tenants upon, which the organization stands. To do so would violate the First Amendment constitutional rights of the entire organization and its members, who also align themselves with the principals on which the organization stands.

MANOTOK V. CLT REALTY Based on the foregoing patent irregularities, the court finds the attendance of fraud in the issuance of TCT No. 4211 and all its derivative titles which preceded the defendants titles. Evidently, TCT No. 4211 cannot be validly traced from OCT No. 994. Being void ab initio, it did not give rise to any transmissible rights with respect to the land purportedly invalid, and resultantly, the defendants, being the holders of the latest derivatives, cannot assert any right of ownership over the lands in question. The void ab initio land titles issued cannot ripen into private ownership. MANOTOK V. CLT REALTY 2009 The fact of expropriation is extremely significant, for titles acquired by the State by way of expropriation are deemed cleansed of whatever previous flaws may have attended these titles.

As Justice Vitug explained in Republic v. Court of Appeals, and then Associate Justice Puno reiterated in Reyes v. NHA: "In an rem proceeding, condemnation acts upon the property. After condemnation, the paramount title is in the public under a new and independent title; thus, by giving notice to all claimants to a disputed title, condemnation proceedings provide a judicial process for securing better title against all the world than may be obtained by voluntary conveyance." This doctrine was derived from the opinion of then Chief Judge Stephen Breyer in Cadorette v. U.S., that by giving notice to all claimants to a disputed title, condemnation proceedings provide a judicial process for securing better title against all the world than may be obtained by voluntary conveyance." The titles of the Republic, as the predecessor-in-interest of the MANOTOKS, are presumed valid by virtue of their acquisition resulting from the exercise of its inherent power of eminent domain that need not be granted even by the fundamental law. Thus, the alleged flaws concerning the certificates of title issued previous to the exercise of the State of its inherent power did not affect or render invalid the subsequent transfers after the forced sale.

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No. 171101, November 22, 2011

RESOLUTION
VELASCO, JR., J.: I. THE FACTS On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition filed by HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLIs Stock Distribution Plan (SDP) and placing the subject lands in Hacienda Luisita under compulsory coverage of the Comprehensive Agrarian Reform Program (CARP) of the government. The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are operative facts that occurred in the interim and which the Court cannot validly ignore. Thus, the Court declared that the revocation of the SDP must, by application of the operative fact principle, give way to the right of the original 6,296 qualified farmworkers-beneficiaries (FWBs) to choose whether they want to remain as HLI stockholders or [choose actual land distribution]. It thus ordered the Department of Agrarian Reform (DAR) to immediately schedule meetings with the said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their thumbmarks, as the case may be, over their printed names. The parties thereafter filed their respective motions for reconsideration of the Court decision. II. THE ISSUES (1) Is the operative fact doctrine available in this case? (2) Is Sec. 31 of RA 6657 unconstitutional?

(3) Cant the Court order that DARs compulsory acquisition of Hacienda Lusita cover the full 6,443 hectares allegedly covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco), and not just the 4,915.75 hectares covered by HLIs SDP? (4) Is the date of the taking (for purposes of determining the just compensation payable to HLI) November 21, 1989, when PARC approved HLIs SDP? (5) Has the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10, 1999 (since Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11, 1989), and thus the qualified FWBs should now be allowed to sell their land interests in Hacienda Luisita to third parties, whether they have fully paid for the lands or not? (6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of HLI be reconsidered? III. THE RULING [The Court PARTIALLY GRANTED the motions for reconsideration of respondents PARC, et al. with respect to the option granted to the original farmworkersbeneficiaries (FWBs) of Hacienda Luisita to remain with petitioner HLI, which option the Court thereby RECALLED and SET ASIDE. It reconsidered its earlier decision that the qualified FWBs should be given an option to remain as stockholders of HLI, and UNANIMOUSLY directed immediate land distribution to the qualified FWBs.] 1. YES, the operative fact doctrine is applicable in this case. [The Court maintained its stance that the operative fact doctrine is applicable in this case since, contrary to the suggestion of the minority, the doctrine is not limited only to invalid or unconstitutional laws but also applies to decisions made by the President or the administrative agencies that have the force and effect of laws. Prior to the nullification or recall of said decisions, they may have produced acts and consequences that must be respected. It is on this score that the operative fact doctrine should be applied to acts and consequences that resulted from the implementation of the PARC Resolution approving the SDP of HLI. The majority stressed that the application of the operative fact doctrine by the Court in its July 5, 2011 decision was in fact favorable to the FWBs because not only were they allowed to retain the benefits and homelots they received under the stock distribution scheme, they were also given the option to choose for themselves whether they want to remain as stockholders of HLI or not.] 2. NO, Sec. 31 of RA 6657 NOT unconstitutional. [The Court maintained that the Court is NOT compelled to rule on the constitutionality of Sec. 31 of RA 6657, reiterating that it was not raised at the earliest opportunity and that the resolution thereof is not the lis mota of the case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of the modes of acquisition under RA 9700. The majority clarified that in its July 5, 2011 decision, it made no ruling in favor of the constitutionality of Sec. 31 of RA 6657, but

found nonetheless that there was no apparent grave violation of the Constitution that may justify the resolution of the issue of constitutionality.] 3. NO, the Court CANNOT order that DARs compulsory acquisition of Hacienda Lusita cover the full 6,443 hectares and not just the 4,915.75 hectares covered by HLIs SDP. [Since what is put in issue before the Court is the propriety of the revocation of the SDP, which only involves 4,915.75 has. of agricultural land and not 6,443 has., then the Court is constrained to rule only as regards the 4,915.75 has. of agricultural land. Nonetheless, this should not prevent the DAR, under its mandate under the agrarian reform law, from subsequently subjecting to agrarian reform other agricultural lands originally held by Tadeco that were allegedly not transferred to HLI but were supposedly covered by RA 6657. However since the area to be awarded to each FWB in the July 5, 2011 Decision appears too restrictive considering that there are roads, irrigation canals, and other portions of the land that are considered commonly-owned by farmworkers, and these may necessarily result in the decrease of the area size that may be awarded per FWB the Court reconsiders its Decision and resolves to give the DAR leeway in adjusting the area that may be awarded per FWB in case the number of actual qualified FWBs decreases. In order to ensure the proper distribution of the agricultural lands of Hacienda Luisita per qualified FWB, and considering that matters involving strictly the administrative implementation and enforcement of agrarian reform laws are within the jurisdiction of the DAR, it is the latter which shall determine the area with which each qualified FWB will be awarded. On the other hand, the majority likewise reiterated its holding that the 500hectare portion of Hacienda Luisita that have been validly converted to industrial use and have been acquired by intervenors Rizal Commercial Banking Corporation (RCBC) and Luisita Industrial Park Corporation (LIPCO), as well as the separate 80.51-hectare SCTEX lot acquired by the government, should be excluded from the coverage of the assailed PARC resolution. The Court however ordered that the unused balance of the proceeds of the sale of the 500-hectare converted land and of the 80.51-hectare land used for the SCTEX be distributed to the FWBs.] 4. YES, the date of taking is November 21, 1989, when PARC approved HLIs SDP. [For the purpose of determining just compensation, the date of taking is November 21, 1989 (the date when PARC approved HLIs SDP) since this is the time that the FWBs were considered to own and possess the agricultural lands in Hacienda Luisita. To be precise, these lands became subject of the agrarian reform coverage through the stock distribution scheme only upon the approval of the SDP, that is, on November 21, 1989. Such approval is akin to a notice of coverage ordinarily issued under compulsory acquisition. On the contention of the minority (Justice Sereno) that the date of the notice of coverage [after PARCs revocation of the SDP], that is, January

2, 2006, is determinative of the just compensation that HLI is entitled to receive, the Court majority noted that none of the cases cited to justify this position involved the stock distribution scheme. Thus, said cases do not squarely apply to the instant case. The foregoing notwithstanding, it bears stressing that the DAR's land valuation is only preliminary and is not, by any means, final and conclusive upon the landowner. The landowner can file an original action with the RTC acting as a special agrarian court to determine just compensation. The court has the right to review with finality the determination in the exercise of what is admittedly a judicial function.] 5. NO, the 10-year period prohibition on the transfer of awarded lands under RA 6657 has NOT lapsed on May 10, 1999; thus, the qualified FWBs should NOT yet be allowed to sell their land interests in Hacienda Luisita to third parties. [Under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after 10 years from the issuance and registration of the emancipation patent (EP) or certificate of land ownership award (CLOA). Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-year prohibitive period has not even started. Significantly, the reckoning point is the issuance of the EP or CLOA, and not the placing of the agricultural lands under CARP coverage. Moreover, should the FWBs be immediately allowed the option to sell or convey their interest in the subject lands, then all efforts at agrarian reform would be rendered nugatory, since, at the end of the day, these lands will just be transferred to persons not entitled to land distribution under CARP.] 6. YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of HLI should be reconsidered. [The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given the present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital stock is [just] 33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as HLI stockholders, which is unlikely, control will never be in the hands of the FWBs. Control means the majority of [sic] 50% plus at least one share of the common shares and other voting shares. Applying the formula to the HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 total HLI capital shares divided by 2 plus one [1] HLI share). The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire control over HLI.]

REPUBLIC vs. LIM

GR no. 161656, June 29, 2005

FACTS: In 1938, the Republic instituted a special civil action for expropriation of a land in Lahug, Cebu City for the purpose of establishing a military reservation for the Philippine Army. The said lots were registered in the name of Gervasia and Eulalia Denzon. The Republic deposited P9,500 in the PNB then took possession of the lots. Thereafter, on May 1940, the CFI rendered its Decision ordering the Republic to pay the Denzons the sum of P4,062.10 as just compensation. The Denzons appealled to the CA but it was dismissed on March 11, 1948. An entry of judgment was made on April 5, 1948. In 1950, one of the heirs of the Denzons, filed with the National Airports Corporation a claim for rentals for the two lots, but it "denied knowledge of the matter." On September 6, 1961, Lt. Cabal rejected the claim but expressed willingness to pay the appraised value of the lots within a reasonable time. For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons successors-in-interest, Valdehueza and Panerio, filed with the same CFI an action for recovery of possession with damages against the Republic and AFP officers in possession of the property. On November 1961, Titles of the said lots were issued in the names of Valdehueza and Panerio with the annotation "subject to the priority of the National Airports Corporation to acquire said parcels of land, Lots 932 and 939 upon previous payment of a reasonable market value". On July 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding that they are the owners and have retained their right as such over lots because of the Republics failure to pay the amount of P4,062.10, adjudged in the expropriation proceedings. However, in view of the annotation on their land titles, they were ordered to execute a deed of sale in favor of the Republic. They appealed the CFIs decision to the SC. The latter held that Valdehueza and Panerio are still the registered owners of Lots 932 and 939, there having been no payment of just compensation by the Republic. SC still ruled that they are not entitled to recover possession of the lots but may only demand the payment of their fair market value. Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein respondent, as security for their loans. For their failure to pay Lim despite demand, he had the mortgage foreclosed in 1976. The lot title was issued in his name. On 1992, respondent Lim filed a complaint for quieting of title with the RTC against the petitioners herein. On 2001, the RTC rendered a decision in favor of Lim, declaring that he is the

absolute and exclusive owner of the lot with all the rights of an absolute owner including the right to possession. Petitioners elevated the case to the CA. In its Decision dated September 18, 2003, it sustained the RTC Decision saying: ...This is contrary to the rules of fair play because the
concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment for the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered " just"...

Petitioner, through the OSG, filed with the SC a petition for review alleging that they remain as the owner of Lot 932. ISSUE: Whether the Republic has retained ownership of Lot 932 despite its failure to pay respondents predecessors-in-interest the just compensation therefor pursuant to the judgment of the CFI rendered as early as May 14, 1940.

HELD: One of the basic principles enshrined in our Constitution is that no person shall be
deprived of his private property without due process of law; and in expropriation cases, an essential element of due process is that there must be just compensation whenever private property is taken for public use.7 Accordingly, Section 9, Article III, of our Constitution mandates: "Private property shall not be taken for public use without just compensation." The Republic disregarded the foregoing provision when it failed and refused to pay respondents predecessors-in-interest the just compensation for Lots 932 and 939. The Court of Appeals is correct in saying that Republics delay is contrary to the rules of fair play. In jurisdictions similar to ours, where an entry to the expropriated property precedes the payment of compensation, it has been held that if the compensation is not paid in a reasonable time, the party may be treated as a trespasser ab initio. As early as May 19, 1966, in Valdehueza, this Court mandated the Republic to pay respondents predecessors-in-interest the sum of P16,248.40 as "reasonable market value of the two lots in question." Unfortunately, it did not comply and allowed several decades to pass without obeying this Courts mandate. It is tantamount to confiscation of private property. While it is true that all private properties are subject to the need of government, and the government may take them whenever the necessity or the exigency of the occasion demands, however from the taking of private property by the government under the power of eminent domain, there arises an implied promise to compensate the owner for his loss. There is a recognized rule that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. So, how could the Republic acquire ownership over Lot 932 when it has not paid its owner the just

compensation, required by law, for more than 50 years? Clearly, without full payment of just compensation, there can be no transfer of title from the landowner to the expropriator. SC ruled in earlier cases that expropriation of lands consists of two stages. First is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise. The second is concerned with the determination by the court of "the just compensation for the property sought to be taken." It is only upon the completion of these two stages that expropriation is said to have been completed In Republic v. Salem Investment Corporation, we ruled that, "the process is not completed until payment of just compensation." Thus, here, the failure of the Republic to pay respondent and his predecessors-in-interest for a period of 57 years rendered the expropriation process incomplete. Thus, SC ruled that the special circumstances prevailing in this case entitle respondent to recover possession of the expropriated lot from the Republic. While the prevailing doctrine is that "the non-payment of just compensation does not entitle the private landowner to recover possession of the expropriated lots, however, in cases where the government failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation proceedings, the owners concerned shall have the right to recover possession of their property. After all, it is the duty of the government, whenever it takes property from private persons against their will, to facilitate the payment of just compensation. In Cosculluela v. Court of Appeals, we defined just compensation as not only the correct determination of the amount to be paid to the property owner but also the payment of the property within a reasonable time. Without prompt payment, compensation cannot be considered "just."

Expropriation; abandonment of public purpose. In this case, the Mactan Cebu International Airport Authority (MCIAA) and/or its predecessor agency had not actually used the lots subject of the final decree of expropriation in Civil Case No. R-1881 for the purpose they were originally taken by the government, i.e., for the expansion and development of Lahug Airport. In

fact, the Lahug Airport had been closed and abandoned. Also, in this case, it was preponderantly established by evidence that the National Airport Corporation, MCIAAs predecessor, through its team of negotiators, had given assurance to the affected landowners that they would be entitled to repurchase their respective lots in the event they are no longer used for airport purposes. The SC held that the government acquires only such rights in expropriated parcels of land as may be allowed by the character of its title over the properties. This means that in the event the particular public use for which a parcel of land is expropriated is abandoned, the owner shall not be entitled to recover or repurchase it as a matter of right, unless such recovery or repurchase is expressed in or irresistibly deducible from the condemnation judgment. The SC held that the decision in Civil Case No. R-1881 enjoined MCIAA, as a condition of approving expropriation, to allow recovery or repurchase upon abandonment of the Lahug airport project. In effect, the government merely held the properties condemned in trust until the proposed public use or purpose for which the lots were condemned was actually consummated by the government. Since the government failed to perform the obligation that is the basis of the transfer of the property, then the lot owners can demand the reconveyance of their old properties after the payment of the condemnation price. A condemnor should commit to use the property pursuant to the purpose stated in the petition for expropriation, failing which it should file another petition for the new purpose. If not, then it behooves the condemnor to return the said property to its private owner, if the latter so desires. The government cannot plausibly keep the property it expropriated in any manner it pleases and, in the process, dishonor the judgment of expropriation. Anunciacion Vda. De Ouano, et al. v. Republic of the Philippines, et al./MactanCebu International Airport [MCIAA] v. Ricardo L. Inocian, in his personal capacity and as Attorney-in-Fact of Olympia E. Esteves, et al. and Aletha Suico Magat in her personal capacity and as Attorney-in-Fact of Philip M. Suico, et al. G.R. Nos. 168770 & 168812, February 9, 2011. Expropriation; reconveyance of expropriated property. In accordance with Art. 1187 of the Civil Code on mutual compensation, MCIAA may keep whatever income or fruits it may have obtained from the parcels of land expropriated. In turn, the landowners need not require the accounting of interests earned by the amounts they received as just compensation. Following Art. 1189 of the Civil Code providing that if the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor, the landowners do not have to settle the appreciation of the values of their respective lots as part of the reconveyance process, since the value increase is merely the natural effect of nature and time. Anunciacion Vda. De Ouano, et al. v. Republic of the Philippines, et al./Mactan-Cebu International Airport [MCIAA] v. Ricardo L. Inocian, in his personal capacity and as Attorney-in-Fact of Olympia E. Esteves, et al. and Aletha Suico Magat in her personal capacity and as Attorney-in-Fact of Philip M. Suico, et al. G.R. Nos. 168770 & 168812, February 9, 2011.

NAPOCOR, vs. TIANGCO

FACTS: Respondents are owners of a parcel of land with an area of 152,187 square meters at Barangay Sampaloc, Tanay, Rizal. NPC requires 19,423 square meters of the respondents aforementioned property, across which its 500Kv Kalayaan-San Jose Transmission Line Project will traverse. NPCs Segregation Plan# for the purpose shows that the desired right-of-way will cut through the respondents land. Within the portion sought to be expropriated stand fruit-bearing tress, such as mango, avocado, jackfruit, casuy, santol, calamansi, sintones and coconut trees. After repeated unsuccessful negotiations, NPC filed an expropriation complaint against the land of the respondent in the RTC of Tanay, Rizal. The RTC issued a writ of possession in favor of NPC after paying the deposit requirement. The trial court rendered its decision on the value of the property using the 1984 tax declaration. (which is incorrect as stated in the decision of the supreme court) The respondents filed a motion for recon. but it was denied by RTC. So They filed an appeal and the CA gave merit to the contention of the respondents and made its revised valuation using the 1993 tax declaration (increasing the value of the property). The case went up to the SC.

ISSUE: 1. Whether or not the property should be valued using the 1984 or the 1993 tax declarations. 2. Whether or not Sec. 3-A of R.A. No. 6395, as amended by P.D. 938 will apply. HELD 1. In eminent domain cases, the time of taking is the filing of the complaint, if there was no actual taking prior thereto. Hence, in this case, the value of the property at the time of the filing of the complaint on November 20, 1990 should be considered in determining the just compensation due the respondents. Normally, the time of taking coincides with the filing of complaint for expropriation as ruled in the case of Power Corporation v. Court of Appeals, et al.The expropriation proceedings in this case having been initiated by NPC on November 20, 1990, property values on such month and year should lay the basis for the proper determination of just compensation. 2. It should not apply in the case at bar, the acquisition of such easement is not gratis. The limitations on the use of the property taken for an indefinite period would deprive its owner of the normal use thereof. For this reason, the latter is entitled to payment of a just compensation, which must be neither more nor less than the monetary equivalent of the land taken.

PC v. Ibrahim, et al., - Eminent Domain

G.R. No. 168732, June 29, 2007
The NPC constructed underground tunnels on the property of the respondents without their knowledge and consent and without any expropriation proceeding. It contended that it constructed an easement on the property. Was there taking of the property considering that the owners were deprived of their beneficial use and enjoyment of the same, hence, entitled to just compensation? Yes. The manner in which the easement was created by the NPC, violated the due process rights of the owners as it was without notice and indemnity to them and did not go through proper expropriation proceedings. NPC could have, at any time, validly exercised the power of eminent domain to acquire the easement over the property as this power encompasses not only the taking or appropriation of title to and possession of the expropriated property but likewise covers even the imposition of a mere burden upon the owner of the condemned property. (Rep. v. PLDT, 136 Phil. 20 (1969)). Significantly, though, landowners cannot be deprived of their right over their land until expropriation proceedings are instituted in court. The court must then see to it that the taking is for pubic use, that there is payment of just compensation and that there is due process of law. In disregarding this procedure and failing to recognize the owners ownership of the subterrain portion, NPC took a risk and exposed itself to greater liability with the passage of time. It must be emphasized that the acquisition of the easement is not without expense. The underground tunnels imposed limitations on the owners use of the property for an indefinite period and deprived them of its ordinary use. The owners are clearly entitled to the payment of just compensation. Notwithstanding the fact that NPC only occupied the sub-terrain portion, it is liable to pay not merely an easement fee but rather the full compensation for the land. This is so because, the nature of the easement practically deprived the owners of its normal beneficial use. The owners, as the owners of the property thus expropriated, are entitled to a just compensation which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. (NPC v. Ibrahim, et al., G.R. No. 168732, June 29, 2007).

Valuation of the property.

NPC contended that if ever it is liable, it should be made to pay the value of the land from the time it constructed the tunnels. Is the contention correct? Why? No. To it to use the date it constructed the tunnels as the date of valuation would be grossly unfair. First, it did not enter the land under warrant or color of legal authority or with intent to expropriate the same. It did not notify the owners and wrongly assumed that it had the right to dig the tunnels under their property. Secondly, the improvements introduced in no way contributed to an increase in the value of the land. The valuation should be based at the time of the discovery of the construction of the underground tunnels. (NPC v. Ibrahim, et al., G.R. No. 168732, June 29, 2007).

It is undisputed that there is a legal easement of right-of-way in favor of the Republic. Andayas transfer certificates of title contained the reservation that the lands covered thereby are subject to the provisions of the Land Registration Act and the Public Land Act. Section 112 of the Public Land Act provides that land granted by patent shall be subject to a right-of-way not exceeding 60 meters in width for public highways, irrigation ditches, aqueducts, and other similar works of the government or any public enterprise, free of charge, except only for the value of the improvements existing thereon that may be affected. In view of this, the Court of Appeals declared that all Republic needs to do is to enforce such right without having to initiate expropriation proceedings and without having to pay any just compensation. Hence, the Republic may appropriate the 701 square meters necessary for the construction of the floodwalls without paying for it. Is the Republic liable for just compensation if in enforcing the legal easement of right-of-way on a property, the remaining area would be rendered unusable and uninhabitable? Yes, it is liable to pay consequential damages if in enforcing the legal easement on Andayas property, the remaining area would be rendered unusable and uninhabitable. Taking, in the exercise of the power of eminent domain, occurs not only when the government actually deprives or dispossess the property owner of his property or of its ordinary use, but also when there is a practical destruction or material impairment of the value of his property. Using this standard, there was undoubtedly a taking of the remaining area of Andayas property. True, no burden was imposed thereon and Andaya still retained title and possession of the property. But, the nature and the effect of the floodwalls would deprive Andaya of the normal use of the remaining areas. It would prevent ingress and egress to the property and turn it into a catch basin for the floodwaters coming from the Agusan River. For this reason, Andaya is entitled to payment of just compensation, which must be neither more nor less than the monetary equivalent of the land. One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property without due process of law; and in expropriation cases, an essential element of due process is that there must be just compensation whenever private property is taken for public use. Noteworthy, Section 9, Article III of our Constitution mandates that private property shall not be taken for public use without just compensation. (Rep. v. Lim, G.R. No. 161656, June 29, 2005, 462 SCRA 265; Rep. v. Andaya, G.R. No. 160656, June 15, 2007).

Napocor vs Macabangkit Sangkay Facts: NPC Constructed an underground tunnel that traversed the property of Macabangkit Sangkay, the respondents were asking for just compensation for the NPC's act of inconspicuously constructing the said tunnel and depriving the respondents of the benefits of the said land due to the impacts of the tunnel, such as shaking of the ground and the disturbing noise coming from the facility. Several issues were raised such as the prescription of the action and the actual existence of the tunnel which was easily proven by the heirs with the use of topographical survey and sketch maps. RTC rendered a decision in favor of the Heirs awarding them 113,000,000 as just compensation plus damages and an attorneys fee equivalent to 15% of the awarded claim. CA affirmed the RTC's decision without any qualification. Meanwhile, 2 of the respondents Counsel were having a difficulty on the question of who among the 2, particularly Atty. Dibaratun and Atty. Ballelos. were entitled to the attorneys fees and how much is exactly the amount they are entitled to receive. Issue: 1) Whether or not the amount of Atty. Fee which is 15% of the equivalent of 113M PHP, is erroneous? 2) What is the standard used in calculating the amount of fee entitled to an Attorney? 3) Who Among the Counsel is entitled to the fee? Held: Both Atty. Dibaratun and Atty. Ballelos posited that their entitlement to attorneys fees was contingent. Yet, a contract for a contingent fees is an agreement in writing by which the fees, usually a fixed percentage of what may be recovered in the action, are made to depend upon the success in the effort to enforce or defend a supposed right. Contingent fees depend upon an express contract, without which the attorney can only recover on the basis of quantum meruit.71 With neither Atty. Dibaratun nor Atty. Ballelos presenting a written agreement bearing upon their supposed contingent fees, the only way to determine their right to appropriate attorneys fees is to apply the principle of quantum meruit. Quantum meruit literally meaning as much as he deserves is used as basis for determining an attorneys professional fees in the absence of an express agreement.72 The recovery of attorneys fees on the basis of quantum meruit is a device that prevents an unscrupulous client from running away with the fruits of the legal services of counsel without paying for it and also avoids unjust enrichment on the part of the attorney himself.73 An attorney must show that he is entitled to reasonable compensation for the effort in pursuing the clients cause, taking into account certain factors in fixing the amount of legal fees. Rule 20.01 of the Code of Professional Responsibility lists the guidelines for determining the proper amount of attorney fees, to wit:

Rule 20.1 A lawyer shall be guided by the following factors in determining his fees: a) The time spent and the extent of the services rendered or required; b) The novelty and difficult of the questions involved; c) The important of the subject matter; d) The skill demanded; e) The probability of losing other employment as a result of acceptance of the proffered case; f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs; g) The amount involved in the controversy and the benefits resulting to the client from the service; h) The contingency or certainty of compensation; i) The character of the employment, whether occasional or established; and j) The professional standing of the lawyer. Whether it is Atty. Dibaratun or Atty. Ballelos, or both, who should receive attorneys fees from the Heirs of Macabangkit is a question that the Court must next determine and settle by considering the amount and quality of the work each performed and the results each obtained. Atty. Dibaratun, the attorney from the outset, unquestionably carried the bulk of the legal demands of the case. He diligently prepared and timely filed in behalf of the Heirs of Macabangkit every pleading and paper necessary in the full resolution of the dispute, starting from the complaint until the very last motion filed in this Court. He consistently appeared during the trial, and examined and crossexamined all the witnesses presented at that stage of the proceedings. The nature, character, and substance of each pleading and the motions he prepared for the Heirs of Macabangkit indicated that he devoted substantial time and energy in researching and preparing the case for the trial. He even advanced P250,000.00 out of his own pocket to defray expenses from the time of the filing of the motion to execute pending appeal until the case reached the Court. 77 His representation of all the Heirs of Macabangkit was not denied by any of them. n fairness and justice, the Court accords full recognition to Atty. Dibaratun as the counsel de parte of the Heirs of Macabangkit who discharged his responsibility in the prosecution of the clients cause to its successful end. It is he, not Atty. Ballelos, who was entitled to the full amount of attorneys fees that the clients ought to pay to their attorney. Given the amount and quality of his legal work, his diligence and the time he expended in ensuring the success of his prosecution of the clients cause, he deserves the recognition, notwithstanding that some of the clients might appear to have retained Atty. Ballelos after the rendition of a favorable judgment. Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser, Manta and Edgar, the only parties who engaged him. The Court considers his work in the case as very minimal. His compensation under the quantum meruit principle is fixed at P5,000.00, and only the Heirs of Macabangkit earlier named are liable to him.

FIRST DIVISION

LEPANTO CONSOLIDATED MINING CO., Petitioner,

G.R. No. 162331

Present:

PANGANIBAN, CJ Chairperson, - versus YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO, SR., and CHICO-NAZARIO, JJ.

WMC RESOURCES INTL. PTY. LTD., WMC PHILIPPINES, INC. and SAGITTARIUS MINES, INC., Respondents. Promulgated:

November 20, 2006 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, assailing the Decision1[1] of the Court of Appeals in CA-G.R. SP No. 74161, dated 21 November 2003, which dismissed herein petitioners Petition for Review of the Decision2[2] of the Office of the President dated 23 July 2002 affirming in toto the Order3[3] of the Secretary of the Department of Environment and Natural Resources (DENR) dated 18 December 2001 approving the application for and the consequent registration of FTAA No. 02-95-XI from WMC Philippines to Sagittarius Mines, Inc.

On 22 March 1995, the Philippine Government and WMC Philippines, the local wholly-owned subsidiary of WMC Resources International Pty. Ltd. (WMC Resources) executed a Financial and Technical Assistance Agreement, denominated as the Columbio FTAA No. 02-95-XI (Columbio FTAA) for the purpose of large scale exploration, development, and commercial exploration of possible mineral resources in an initial contract area of 99,387 hectares located in the provinces of South Cotabato, Sultan Kudarat, Davao del Sur, and North Cotabato in accordance with Executive Order No. 279 and Department Administrative Order No. 63, Series of 1991.

The Columbio FTAA is covered in part by 156 mining claims held under various Mineral Production Sharing Agreements (MPSA) by Southcot Mining Corporation, Tampakan Mining Corporation, and Sagittarius Mines, Inc. (collectively called the Tampakan Companies), in accordance with the Tampakan Option Agreement entered into by WMC Philippines and the Tampakan Companies on 25 April 1991, as amended by Amendatory Agreement dated 15 July 1994, for purposes of exploration of the mining claims in Tampakan, South Cotabato. The Option Agreement, among other things, provides for the grant of the right of first refusal to the Tampakan Companies in case WMC Philippines desires to dispose of its rights and interests in the mining claims covering the area subject of the agreement.

WMC Resources subsequently divested itself of its rights and interests in the Columbio FTAA, and on 12 July 2000 executed a Sale and Purchase Agreement with petitioner Lepanto over its entire shareholdings in WMC Philippines, subject to the exercise of the Tampakan Companies exercise of their right of first refusal to purchase the subject shares. On 28 August 2000, petitioner sought the

approval of the 12 July 2000 Agreement from the DENR Secretary.

In an Agreement dated 6 October 2000, however, the Tampakan Companies sought to exercise its right of first refusal. Thus, in a letter dated 13 October 2000, petitioner assailed the Tampakan Companies exercise of its right of first refusal, alleging that the Tampakan Companies failed to match the terms and conditions set forth in the 12 July 2000 Agreement.

Thereafter, petitioner filed a case4[4] for Injunction, Specific Performance, Annulment of Contracts and Contractual Interference with the Regional Trial Court of Makati, Branch 135, against WMC Resources, WMC Philippines, and the Tampakan Companies. WMC Philippines and the Tampakan Companies moved for the dismissal of said case. Said Motion to Dismiss having been denied, WMC Philippines challenged the order dismissing the Motion on appeal5[5] before the

Court of Appeals which subsequently ordered the dismissal of the case on the ground of forum shopping in this wise:

Nevertheless, the Court finds that private respondent is guilty of forumshopping. There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in courts but also in connection with litigation commenced in the courts while an administrative processes and in anticipation of an unfavorable administrative ruling and a favorable court ruling.

In this case, petitioners argue that private respondent is guilty of forum shopping for having lodged the complain before respondent Court pending action by the Secretary of the DENR through the Mines and Geo-Sciences Bureau (MGB) on its approval of the Sale and Purchase Agreement dated July 12, 2000. Private respondent on the other hand, opposes the foregoing contention arguing that the MGB will be merely exercising its administrative not quasi-judicial power.

The action before respondent court was filed by private respondent to compel petitioner WMC Resources to convey its equity in WMC Phils. and Hillcrest to the former. Meanwhile, in the case before the MGB, private respondent sought the approval of Sale and that the MGBs authority over the case is purely administrative, but further review shows that private respondent raised contentious issues which need resolution by the MGB before it can recommend any approval to the Secretary of the DENR. Particularly, in its letter dated October 13, 2000 to the Secretary of the DENR, private respondent posed its objection to the approval of the Sales and Purchase agreements between WMC Resources and the Tampakan Companies, asserting that the latter failed to validly exercise its right of first refusal. Also, in its letter to the Director of the MGB dated December 8, 2000, private respondent spelled out in detail its reasons for objecting to the agreement between WMC Resources and the Tampakan Companies, and in the same breath, argued for the approval of its own contract. And because of the opposing claims posited by private respondent and petitioners, the MGB was constrained to require the parties to submit their respective comments. At the juncture, the MGBs authority ceased to be administrative. Evidently, the MGB has to review all these opposing contentions and resolve the same. A resolution of the MGB on which contract to recommend or endorse to the Secretary of the DENR for approval will necessarily include a declaration on the validity of the different Sale and Purchase Agreements executed between the disagreeing parties, as well as on the exercise of the Tampakan Companies exercise of its right of first refusal and its qualification as a

contractor under the FTAA. Even the MGB is aware that the dispute revolves around these sales and purchase agreements. Hence, it cannot be gainsaid that the MGB will be exercising its quasi-judicial powers in resolving the conflict before it. Whether the MGB can validly exercise such jurisdiction over the controversy is another issue but nonetheless immaterial in determining whether private respondent is guilty of forumshopping. What is determinative is the filing of two (2) separate actions in different for a based principally on the same cause on the supposition that one or the other court would make a favorable disposition. Thus, it is not highly unlikely that respondent Court and MGB will come up with conflicting pronouncements on the dispute, thereby creating a quandary as to which one will prevail. Private respondents act undisputably constitutes a clear case of forum-shopping, a ground for summary dismissal with prejudice of the action. The respondent court committed grave abuse of discretion in refusing to dismiss Civil Case No. 01-087 on ground of forum-shopping.6[6]

With the denial of petitioners Motion for Reconsideration, the case7[7] was elevated to this Court. In a Decision dated 24 September 2003, the Court affirmed the Decision of the appellate court and dismissed the petition. In said Decision, the Court elucidated that:

True, the questioned agreements of sale between petitioner and WMC on one hand and between WMC and the Tampakan Companies on the other pertain to transfer of shares of stock from one entity to another. But said shares of stock represent ownership of mining rights or interest in mining agreements. Hence, the power of the MGB to rule on the validity of the questioned agreements of sale, which was raised by petitioner before the DENR, is inextricably linked to the very nature of such agreements over which the MGB has jurisdiction under the law. Unavoidably, there is identity of reliefs that petitioner seeks from both the MGB and the RTC.

Forum shopping exists when both actions involve the same transactions, same essential facts and circumstances and raise identical causes of actions, subject matter, and issues. Such elements are evidently present in both the proceedings before the MGB and before the trial court. The case instituted with the RTC was thus correctly ordered dismissed by the appellate court on the ground of forum shopping. Besides, not only did petitioner commit forum shopping but it also failed to exhaust administrative remedies by opting to go ahead in seeking reliefs from the court even while those same reliefs were appropriately awaiting resolution by the MGB.8[8]

In the interim, on 10 January 2001, contending that the 12 July Agreement between petitioner and WMC Philippines had expired due to failure to meet the necessary preconditions for its validity, WMC Resources and the Tampakan Companies executed another Sale and Purchase Agreement, where Sagittarius Mines, Inc. was designated assignee and corporate vehicle which would acquire the shareholdings and undertake the Columbio FTAA activities. On 15 January 2001, Sagittarius Mines, Inc. increased its authorized capitalization to P250 million. Subsequently, WMC Resources and Sagittarius Mines, Inc. executed a Deed of Absolute Sale of Shares of Stocks on 23 January 2001.

After due consideration and evaluation of the financial and technical qualifications of Sagittarius Mines, Inc., the DENR Secretary approved the transfer of the Columbio FTAA from WMC Philippines to Sagittarius Mines, Inc. in the assailed Order. According to said Order, pursuant to Section 66 of Department Administrative Order No. 96-40, as amended, Sagittarius Mines, Inc. meets the

qualification requirements as Contractor-Transferee of FTAA No. 02-95-XI, and that the application for transfer of said FTAA went thru the procedure and other requirements set forth under the law.

Aggrieved by the transfer of the Columbio FTAA in favor of Sagittarius Mines, Inc., petitioner filed a Petition for Review of the Order of the DENR Secretary with the Office of the President. Petitioner assails the validity of the 18 December 2001 Order on the ground that: 1) it violates the constitutional right of Lepanto to due process; 2) it preempts the resolution of very crucial legal issues pending with the regular courts; and 3) it blatantly violates Section 40 of the Mining Act.

In a Decision dated 23 July 2002, the Office of the President dismissed the petition in this wise:

At the outset, it bears emphasis that quite contrary to the argument of petitioner Lepanto, the above Order of the DENR Secretary is not violative of the Mining Law. Since the subject Columbio FTAA was granted in accordance with the pertinent provisions of Executive Order No. 279 and Department Administrative Order No. 63 on 22 March 1995, or prior to the effectivity of the Philippine Mining Act of 1995, especially as it highlights the non-impairment of existing mining and/or quarrying rights, under Section 14.1 (b) thereof, only the consent of DENR Secretary is required. To hold otherwise would be to unduly impose a burden on transferor WMC and thereby restrict its freedom to dispose of or alienate this property right without due process. Thus, under the Revised Implementing Rules and Regulations of the Philippine Mining Act of 1995, Chapter XXX thereof expressly echoes the guaranty:

Section 272. Non-Impairment of Existing Mining/Quarrying Rights.- All valid and existing mining lease contracts, permits/licenses, leases pending renewal, Mineral Production Sharing Agreements, FTAA granted under Executive Order No. 279, at the date of the Act shall remain valid, shall not be impaired and shall be recognized by the Government x x x.

x x x Provided, finally, That this provision is applicable only to all FTAA/MPSA applications filed under Department Administrative Order No. 63 prior to the effectivity of the act and these implementing rules and regulations.

As correctly stated by the MGB Director and affirmed by the DENR Secretary, Section 14.1 of the Columbio FTAA provides that the FTAA may be transferred provided that the Secretary consents to the same. Pursuant to Section 112 of the Mining Act and Section 272 of DAO No. 96-40, as amended, on non-impairment of existing mining rights, the subject application for transfer of the Columbio FTAA to Sagittarius requires only the approval of the DENR Secretary.

Moreover, there is no merit in petitioner Lepantos argument that the DENR Secretary and consequently, this Office, has no jurisdiction over the subject matter in issue. The assailed Order of the DENR Secretary was pursuant to the latters exercise of the well-entrenched doctrine of primary jurisdiction of administrative agencies.

By virtue of the operation of the doctrine of primary jurisdiction, courts cannot and will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the tribunal to determine technical and intricate matters of fact and where a uniformity of ruling is essential to comply with the purposes regulatory statute administered. (Province of Zamboanga del Norte v. Court of Appeals, 342 SCRA 549 [2000]; Factoran v. Court of Appeals, 320 SCRA 530 [1999]; Brett v. Intermediate Appellate Court, 191 SCRA 687 [1990]; Qualitrans Limousine Service, Inc. v. Royal Class Limousine Service, 179 SCRA 569 [1989]). Thus, even though an action may be lodged in court that is ostensibly for annulment or rescission of what appears to be an ordinary civil contract cognizable by a civil court, the doctrine of primary jurisdiction still applies. (Industrial Enterprises, Inc. v. Court of Appeals, 184 SCRA 426 [1990]).

Section 4, Chapter 1, Title XIV, Book IV of the Administrative Code of 1987 specifies the powers and functions of the DENR. Also, the Philippine Mining Act of 1995 provides that the DENR shall be the primary government agency responsible for the conservation, management, development, and proper use of the States mineral resources including those in reservations, watershed areas, and lands of the public domain. The Secretary shall have the authority to enter into mineral agreements on behalf of the Government upon the recommendation of the Director, promulgate such rules and regulations as may be necessary to implement the intent and provisions of this Act. (Chapter II, Section 8). Since an FTAA is a contract involving financial or technical assistance for large-scale exploration, development and utilization of mineral resources (Ibid., Chapter 1, Section 3 [r]), any issue affecting the same is indubitably within the primary jurisdiction of the DENR, as in fact, the government enters into FTAAs through the DENR (Ibid., Chapter VI, Section 33).

There is no dispute that the instant case involves and requires the special technical knowledge and expertise of the DENR. In the determination by the DENR of a qualified person pursuant to the Philippine Mining Act of 1995, such person must possess the technical and financial capability to undertake mineral resources development. (Chapter I, Section 3 *aq]) Obviously, this determination peculiarly lies within the expertise of the DENR.

The validity of the successive transfers is not a civil issue, contrary to the allegation of petitioner Lepanto, because validity of transfer depends on technical qualifications of the transferee and compliance with the DENR requirements on qualifications, all of which require administrative expertise. Notably, petitioner Lepanto is estopped from assailing the primary jurisdiction of the DENR since petitioner Lepanto itself anchored its Petition (cf. pp. 4-5) on the contention that, allegedly, the Tampakan Companies failed to match the terms and conditions of the July 12 Agreement with petitioner Lepanto in that they did not possess the financial and technical qualifications under the Mining Act and its Implementing Rules. Petitioner Lepantos objections therefore go into the very qualifications of a transferee which is a technical issue.

This contention is a recognition by petitioner Lepanto itself of the fact that the crucial and determinative issue in the instant case is grounded on the financial and technical qualifications of a transferee, which issue, indisputably, is within the exclusive domain and expertise of the DENR and not of the courts.

xxxx

Moreover, petitioner Lepanto, by its conduct, is again estopped from assailing the DENRs jurisdiction after actively participating in the proceedings therein and seeking affirmative relief. A party who invoked the jurisdiction [of] a tribunal and actively participated in the proceedings therein cannot impugn such jurisdiction when faced with an adverse decision. (cf. Briad Agro Development Corporation v. dela Serna, 174 SCRA 524 [1989]).9[9] [Emphasis ours]

With the denial of its Motion for Reconsideration, petitioner lodged an appeal before the Court of Appeals which was consequently dismissed by the appellate court in the herein assailed Decision. According to the Court of Appeals:

Petitioner forcefully argues that the DENR Secretary had usurped the power of the President of the Philippines to approve the transfer of FTAA, as under the provision of Section 40 of the Philippine Mining Act of 1995, any transfer or assignment of an FTAA has to be approved not by the DENR Secretary but by the President.

The argument does not wash.

The issue hinges on the applicability of Section 40 of RA 7942 or the Philippine Mining Act of 1995, which took force on 14 April 1995, on the transfer of FTAA from WMC to the Tampakan Companies, particularly the Sagittarius Mines, Inc.

The said law provides:

Sec. 40. Assignment/Transfer A financial or technical assistance agreement may be assigned or transferred, in whole or in part, to a qualified person subject to the prior approval of the President: Provided, that the President shall notify Congress of every financial or technical assistance agreement assigned or converted in accordance with this provision within thirty (30) days from the date of approval.

However, the above provision does not apply to the Columbio FTAA which was entered into by and between the Philippine Government and WMCP on 22 March 1995, or prior to the effectivity of RA No. 7942. Section 14.1 of the Columbio FTAA, under which the Tampakan Companies claim their rights to first refusal, reads:

14.1 Assignment

The Contractor may assign, transfer, convey or otherwise dispose of all or any part of its interest in the Agreement provided that such assignment, transfer, conveyance or disposition does not infringe any Philippine law applicable to foreign ownership:

(a) to an Affiliate provided that it gives notice of such assignment to the Secretary within 30 days after such assignment; or (b) to any third party provided that the Secretary consents to the same, which consent shall not be unreasonably withheld.

Section 10, Article III of the Philippine Constitution enjoins Congress from passing a law impairing the obligation of contracts. It is axiomatic that a law that impairs an obligation of contract also violates the due process clause. The obligation of an existing contract is impaired when its terms and conditions are changed by law, ordinance, or any issuance having the force of law, thereby weakening the position or diminishing the rights of a party to the contract. The extent of the change is not material. It is not a question of degree or manner or cause, but of encroaching in any respect on its obligations or dispensing with any part of its force. Impairment has also been predicated on laws which, without destroying contracts, derogate from substantial contractual rights.

The condition of RA No. 7942 requiring the further approval of the President, if made to apply retroactively to the Columbio FTAA, would impair the obligation of

contracts simply because it constitutes a restriction on the right of the contractor to assign or transfer its interest in an FTAA. In other words, it diminished the vested rights of the contractor to assign or transfer its interests on mere approval of the DENR Secretary. The restriction is therefore substantive, and not merely procedural, contrary to the contention of petitioner.

xxxx

Likewise militating against the petitioners side is the doctrine that statutes are to be construed as having only a prospective operation unless the purpose and intention of the Legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used. In case of doubt, the doubt must be resolved against the retrospective effect. At any rate, even if RA No. 7942 be accorded a retroactive effect, this does not ipso facto permit the application of the requirement of securing a prior presidential consent to the transfer of FTAA, for, to iterate, this would impair the obligation of contract. In such a case, the correct application of RA No. 7942 is for the provisions to [be] made to apply on existing FTAAs only if the same would not result in impairment of obligation of contracts.

This is as it should be. To hold otherwise would be to unduly impose a burden on transferor WMC and thereby restrict its freedom to dispose of or alienate its property right without due process. It constitutes impairment of obligation of contracts, which the Fundamental Law enjoins, and contravenes the doctrine of prospective application of laws.10[10]

Hence, the instant Petition.

The pivotal issue to be resolved herein involves the propriety of the application to the Columbio FTAA of Republic Act No. 7942 or the Philippine

Mining Act of 1995, particularly Section 40 thereof requiring the approval of the President of the assignment or transfer of financial or technical assistance agreements. Petitioner maintains that respondents failed to comprehend the express language of Section 40 of the Philippine Mining Act of 1995 requiring the approval of the President on the transfer or assignment of a financial or technical assistance agreement.

To resolve this matter, it is imperative at this point to stress the fact that the Columbio FTAA was entered into by the Philippine Government and WMC Philippines on 22 March 1995, undoubtedly before the Philippine Mining Act of 1995 took effect on 14 April 1995. Furthermore, it is undisputed that said FTAA was granted in accordance with Executive Order No. 279 and Department Administrative Order No. 63, Series of 1991, which does not contain any similar condition on the transfer or assignment of financial or technical assistance agreements. Thus, it would seem that what petitioner would want this Court to espouse is the retroactive application of the Philippine Mining Act of 1995 to the Columbio FTAA, a valid agreement concluded prior to the naissance of said piece of legislation.

This posture of petitioner would clearly contradict the established legal doctrine that statutes are to be construed as having only a prospective operation unless the contrary is expressly stated or necessarily implied from the language

used in the law. As reiterated in the case of Segovia v. Noel,11[11] a sound cannon of statutory construction is that a statute operates prospectively only and never retroactively, unless the legislative intent to the contrary is made manifest either by the express terms of the statute or by necessary implication.

Article 4 of the Civil Code provides that: Laws shall not have a retroactive effect unless therein otherwise provided. According to this provision of law, in order that a law may have retroactive effect it is necessary that an express provision to this effect be made in the law, otherwise nothing should be understood which is not embodied in the law.12[12] Furthermore, it must be borne in mind that a law is a rule established to guide our actions without no binding effect until it is enacted, wherefore, it has no application to past times but only to future time, and that is why it is said that the law looks to the future only and has no retroactive effect unless the legislator may have formally given that effect to some legal provisions.13[13]

In the case at bar, there is an absence of either an express declaration or an implication in the Philippine Mining Act of 1995 that the provisions of said law shall be made to apply retroactively, therefore, any section of said law must be made to apply only prospectively, in view of the rule that a statute ought not to receive a construction making it act retroactively, unless the words used are so clear, strong, and imperative that no other meaning can be annexed to them, or unless the intention of the legislature cannot be otherwise satisfied.14[14]

Be that as it may, assuming for the sake of argument that We are to apply the Philippine Mining Act of 1995 retrospectively to the Columbio FTAA, the lack of presidential approval will not be fatal as to render the transfer illegal, especially since, as in the instant case, the alleged lack of presidential approval has been remedied when petitioner appealed the matter to the Office of the President which approved the Order of the DENR Secretary granting the application for transfer of the Columbio FTAA to Sagittarius Mines, Inc. As expounded by the Court in the Resolution of the Motion for Reconsideration in the La Bugal-BLaan Tribal Association, Inc. v. Ramos15[15] case, involving the same FTAA subject of the instant case:

x x x Moreover, when the transferee of an FTAA is another foreign corporation, there is a logical application of the requirement of prior approval by the President of the Republic and notification to Congress in the event of assignment or transfer of an FTAA. In this situation, such approval and notification are appropriate safeguards, considering that the new contractor is the subject of a foreign government.

On the other hand, when the transferee of the FTAA happens to be a Filipino corporation, the need for such safeguard is not critical; hence, the lack of prior approval and notification may not be deemed fatal as to render the transfer invalid. Besides, it is not as if approval by the President is entirely absent in this instance. x x x That case involved the review of the Decision of the Court of Appeals dated November 21, 2003 in CA G.R. SP No. 74161, which affirmed the DENR Order dated December 31, 2001 and the Decision of the Office of the President dated July 23, 2002, both approving the assignment of the WMCP FTAA to Sagittarius.16[16] (Emphasis ours.)

Furthermore, if petitioner was indeed of the mind that Section 40 of the Philippine Mining Act of 1995 is applicable to the Columbio FTAA, thus necessitating the approval of the President for the validity of its transfer or assignment, it would seem contradictory that petitioner sought the approval of the DENR Secretary, and not that of the President, of its 12 July 2000 Sale and Purchase Agreement with WMC Resources. Hence, it may be glimpsed from the very act of petitioner that it recognized that the provision of the Columbio FTAA regarding the consent of the DENR Secretary with respect to the transfer of said FTAA must be upheld.

It is engrained in jurisprudence that the constitutional prohibition on the impairment of the obligation of contract does not prohibit every change in existing laws,17[17] and to fall within the prohibition, the change must not only impair the obligation of the existing contract, but the impairment must be substantial.18[18] Substantial impairment as conceived in relation to impairment of contracts has been explained in the case of Clemons v. Nolting,19[19] which stated that: a law which changes the terms of a legal contract between parties, either in the time or mode of performance, or imposes new conditions, or dispenses with those expressed, or authorizes for its satisfaction something different from that provided in its terms, is law which impairs the obligation of a contract and is therefore null and void. Section 40 of the Philippine Mining Act of 1995 requiring the approval of the President with respect to assignment or transfer of FTAAs, if made applicable retroactively to the Columbio FTAA, would be tantamount to an impairment of the obligations under said contract as it would effectively restrict the right of the parties thereto to assign or transfer their interests in the said FTAA.

By imposing a new condition apart from those already contained in the agreement, before the parties to the Columbio FTAA may assign or transfer its rights and interest in the said agreement, Section 40 of the Philippine Mining Act of 1995, if made to apply to the Columbio FTAA, will effectively modify the terms of the original contract and thus impair the obligations of the parties thereto and restrict the exercise of their vested rights under the original agreement. Such modification to the Columbio FTAA,

particularly in the conditions imposed for its valid transfer is equivalent to an impairment of said contract violative of the Constitution.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The Decision of the Court of Appeals in CA G.R. SP No. 74161 dated 21 November 2003 is hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

RE: QUERY OF MR. ROGER C. PRIORESCHI RE EXEMPTION FROM LEGAL AND FILING FEES OF THE GOOD SHEPHERD FOUNDATION, INC.

A. M. No. 09-6-9-SC

Present:

PUNO, CJ, QUISUMBING*, YNARES-SANTIAGO*, CARPIO, CORONA, CARPIO MORALES, CHICO-NAZARIO, VELASCO, JR., NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO**, and

ABAD**, JJ.

Promulgated: August 19, 2009

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RESOLUTION

BERSAMIN, J.:

In his letter dated May 22, 2009 addressed to the Chief Justice, Mr. Roger C. Prioreschi, administrator of the Good Shepherd Foundation, Inc., wrote:

The Good Shepherd Foundation, Inc. is very grateful for your 1rst. Indorsement to pay a nominal fee of Php 5,000.00 and the balance upon the collection action of 10 million pesos, thus giving us access to the Justice System previously denied by an up-front excessive court fee. The Hon. Court Administrator Jose Perez pointed out to the need of complying with OCA Circular No. 42-2005 and Rule 141 that reserves this privilege to indigent persons. While judges are appointed to interpret the law, this type of law seems to be extremely detailed with requirements that do not leave much room for interpretations.

In addition, this law deals mainly with individual indigent and it does not include Foundations or Associations that work with and for the most Indigent persons. As seen in our Article of Incorporation, since 1985 the Good Shepherd Foundation, Inc. reached-out to the poorest among the poor, to the newly born and abandoned babies, to children who never saw the smile of their mother, to old people who cannot afford a few pesos to pay for common prescriptions, to broken families who returned to a normal life. In other words, we have been working hard for the very Filipino people, that the Government and the society cannot reach to, or have rejected or abandoned them. Can the Courts grant to our Foundation who works for indigent and underprivileged people, the same option granted to indigent people? The two Executive Judges, that we have approached, fear accusations of favoritism or other kind of attack if they approve something which is not clearly and specifically stated in the law or approved by your HONOR. Can your Honor help us once more? Grateful for your understanding, God bless you and your undertakings. We shall be privileged if you find time to visit our orphanage the Home of Love and the Spiritual Retreat Center in Antipolo City.

To answer the query of Mr. Prioreschi, the Courts cannot grant to foundations like the Good Shepherd Foundation, Inc. the same exemption from payment of legal fees granted to indigent litigants even if the foundations are working for indigent and underprivileged people.

The basis for the exemption from legal and filing fees is the free access clause, embodied in Sec. 11, Art. III of the 1987 Constitution, thus:

Sec. 11. Free access to the courts and quasi judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty.

The importance of the right to free access to the courts and quasi judicial bodies and to adequate legal assistance cannot be denied. A move to remove the provision on free access from the Constitution on the ground that it was already covered by the equal protection clause was defeated by the desire to give constitutional stature to such specific protection of the poor.20[1]

In implementation of the right of free access under the Constitution, the Supreme Court promulgated rules, specifically, Sec. 21, Rule 3, Rules of Court,21[2] and Sec. 19, Rule 141, Rules of Court,22[3] which respectively state thus:

Sec. 21. Indigent party. A party may be authorized to litigate his action, claim or defense as an indigent if the court, upon an ex parte application and hearing, is satisfied that the party is one who has no money or property sufficient and available for food, shelter and basic necessities for himself and his family.

Such authority shall include an exemption from payment of docket and other lawful fees, and of transcripts of stenographic notes which the court may order to be furnished him. The amount of the docket and other lawful fees which the indigent was exempted from paying shall be a lien on any judgment rendered in the case favorable to the indigent, unless the court otherwise provides.

Any adverse party may contest the grant of such authority at any time before judgment is rendered by the trial court. If the court should determine after hearing that the party declared as an indigent is in fact a person with sufficient income or property, the proper docket and other lawful fees shall be assessed and collected by the clerk of court. If payment is not made within the time fixed by the court, execution shall issue for the payment thereof, without prejudice to such other sanctions as the court may impose. (22a)

Sec. 19. Indigent litigants exempt from payment of legal fees. Indigent litigants (a) whose gross income and that of their immediate family do not exceed an amount double the monthly minimum wage of an employee and (b) who do not own real property with a fair market value as stated in the current tax declaration of more than three hundred thousand (P300,000.00) pesos shall be exempt from payment of legal fees. The legal fees shall be a lien on any judgment rendered in the case favorable to the indigent litigant unless the court otherwise provides. To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and his immediate family do not earn a gross income abovementioned, and they do not own any real property with the fair value aforementioned, supported by an affidavit of a disinterested person attesting to the truth of the litigants affidavit. The current tax declaration, if any, shall be attached to the litigants affidavit. Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause to dismiss the complaint or action or to strike out the pleading of that party, without prejudice to whatever criminal liability may have been incurred.

The clear intent and precise language of the aforequoted provisions of the Rules of Court indicate that only a natural party litigant may be regarded as an indigent litigant. The Good Shepherd Foundation, Inc., being a corporation invested by the State with a juridical personality separate and distinct from that

of its members,23[4] is a juridical person. Among others, it has the power to acquire and possess property of all kinds as well as incur obligations and bring civil or criminal actions, in conformity with the laws and regulations of their organization.24[5] As a juridical person, therefore, it cannot be accorded the exemption from legal and filing fees granted to indigent litigants.

That the Good Shepherd Foundation, Inc. is working for indigent and underprivileged people is of no moment. Clearly, the Constitution has explicitly premised the free access clause on a persons poverty, a condition that only a natural person can suffer.

There are other reasons that warrant the rejection of the request for exemption in favor of a juridical person. For one, extending the exemption to a juridical person on the ground that it works for indigent and underprivileged people may be prone to abuse (even with the imposition of rigid documentation

requirements), particularly by corporations and entities bent on circumventing the rule on payment of the fees. Also, the scrutiny of compliance with the documentation requirements may prove too time-consuming and wasteful for the courts.

IN VIEW OF THE FOREGOING, the Good Shepherd Foundation, Inc. cannot be extended the exemption from legal and filing fees despite its working for indigent and underprivileged people.

SO ORDERED.