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G.R. No. L-45081

July 15, 1936

JOSE A. ANGARA, petitioner,


vs.
THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL
CASTILLO, and DIONISIO C. MAYOR,respondents.
Godofredo Reyes for petitioner.
Office of the Solicitor General Hilado for respondent Electoral
Commission.
Pedro Ynsua in his own behalf.
No appearance for other respondents.
LAUREL, J.:
This is an original action instituted in this court by the petitioner, Jose
A. Angara, for the issuance of a writ of prohibition to restrain and
prohibit the Electoral Commission, one of the respondents, from
taking further cognizance of the protest filed by Pedro Ynsua,
another respondent, against the election of said petitioner as
member of the National Assembly for the first assembly district of the
Province of Tayabas.
The facts of this case as they appear in the petition and as admitted
by the respondents are as follows:
(1) That in the elections of September 17, 1935, the
petitioner, Jose A. Angara, and the respondents, Pedro
Ynsua, Miguel Castillo and Dionisio Mayor, were candidates
voted for the position of member of the National Assembly
for the first district of the Province of Tayabas;

(2) That on October 7, 1935, the provincial board of


canvassers, proclaimed the petitioner as member-elect of
the National Assembly for the said district, for having
received the most number of votes;
(3) That on November 15, 1935, the petitioner took his oath
of office;
(4) That on December 3, 1935, the National Assembly in
session assembled, passed the following resolution:
[No. 8]
RESOLUCION CONFIRMANDO LAS
ACTAS DE AQUELLOS DIPUTADOS
CONTRA QUIENES NO SE HA
PRESENTADO PROTESTA.
Se resuelve: Que las actas de eleccion de
los Diputados contra quienes no se hubiere
presentado debidamente una protesta antes
de la adopcion de la presente resolucion
sean, como por la presente, son aprobadas
y confirmadas.
Adoptada, 3 de diciembre, 1935.
(5) That on December 8, 1935, the herein respondent Pedro
Ynsua filed before the Electoral Commission a "Motion of
Protest" against the election of the herein petitioner, Jose A.
Angara, being the only protest filed after the passage of
Resolutions No. 8 aforequoted, and praying, among otherthings, that said respondent be declared elected member of

the National Assembly for the first district of Tayabas, or that


the election of said position be nullified;
(6) That on December 9, 1935, the Electoral Commission
adopted a resolution, paragraph 6 of which provides:
6. La Comision no considerara ninguna protesta que
no se haya presentado en o antes de este dia.
(7) That on December 20, 1935, the herein petitioner, Jose
A. Angara, one of the respondents in the aforesaid protest,
filed before the Electoral Commission a "Motion to Dismiss
the Protest", alleging (a) that Resolution No. 8 of Dismiss the
Protest", alleging (a) that Resolution No. 8 of the National
Assembly was adopted in the legitimate exercise of its
constitutional prerogative to prescribe the period during
which protests against the election of its members should be
presented; (b) that the aforesaid resolution has for its object,
and is the accepted formula for, the limitation of said period;
and (c) that the protest in question was filed out of the
prescribed period;
(8) That on December 27, 1935, the herein respondent,
Pedro Ynsua, filed an "Answer to the Motion of Dismissal"
alleging that there is no legal or constitutional provision
barring the presentation of a protest against the election of a
member of the National Assembly after confirmation;
(9) That on December 31, 1935, the herein petitioner, Jose
A. Angara, filed a "Reply" to the aforesaid "Answer to the
Motion of Dismissal";
(10) That the case being submitted for decision, the Electoral
Commission promulgated a resolution on January 23, 1936,
denying herein petitioner's "Motion to Dismiss the Protest."

The application of the petitioner sets forth the following grounds for
the issuance of the writ prayed for:
(a) That the Constitution confers exclusive jurisdiction upon
the electoral Commission solely as regards the merits of
contested elections to the National Assembly;
(b) That the Constitution excludes from said jurisdiction the
power to regulate the proceedings of said election contests,
which power has been reserved to the Legislative
Department of the Government or the National Assembly;
(c) That like the Supreme Court and other courts created in
pursuance of the Constitution, whose exclusive jurisdiction
relates solely to deciding the merits of controversies
submitted to them for decision and to matters involving their
internal organization, the Electoral Commission can regulate
its proceedings only if the National Assembly has not availed
of its primary power to so regulate such proceedings;
(d) That Resolution No. 8 of the National Assembly is,
therefore, valid and should be respected and obeyed;
(e) That under paragraph 13 of section 1 of the ordinance
appended to the Constitution and paragraph 6 of article 7 of
the Tydings-McDuffie Law (No. 127 of the 73rd Congress of
the United States) as well as under section 1 and 3 (should
be sections 1 and 2) of article VIII of the Constitution, this
Supreme Court has jurisdiction to pass upon the
fundamental question herein raised because it involves an
interpretation of the Constitution of the Philippines.
On February 25, 1936, the Solicitor-General appeared and filed an
answer in behalf of the respondent Electoral Commission interposing
the following special defenses:

(a) That the Electoral Commission has been created by the


Constitution as an instrumentality of the Legislative
Department invested with the jurisdiction to decide "all
contests relating to the election, returns, and qualifications of
the members of the National Assembly"; that in adopting its
resolution of December 9, 1935, fixing this date as the last
day for the presentation of protests against the election of
any member of the National Assembly, it acted within its
jurisdiction and in the legitimate exercise of the implied
powers granted it by the Constitution to adopt the rules and
regulations essential to carry out the power and functions
conferred upon the same by the fundamental law; that in
adopting its resolution of January 23, 1936, overruling the
motion of the petitioner to dismiss the election protest in
question, and declaring itself with jurisdiction to take
cognizance of said protest, it acted in the legitimate exercise
of its quasi-judicial functions a an instrumentality of the
Legislative Department of the Commonwealth Government,
and hence said act is beyond the judicial cognizance or
control of the Supreme Court;
(b) That the resolution of the National Assembly of
December 3, 1935, confirming the election of the members
of the National Assembly against whom no protest had thus
far been filed, could not and did not deprive the electoral
Commission of its jurisdiction to take cognizance of election
protests filed within the time that might be set by its own
rules:
(c) That the Electoral Commission is a body invested with
quasi-judicial functions, created by the Constitution as an
instrumentality of the Legislative Department, and is not an
"inferior tribunal, or corporation, or board, or person" within
the purview of section 226 and 516 of the Code of Civil
Procedure, against which prohibition would lie.

The respondent Pedro Ynsua, in his turn, appeared and filed an


answer in his own behalf on March 2, 1936, setting forth the following
as his special defense:
(a) That at the time of the approval of the rules of the
Electoral Commission on December 9, 1935, there was no
existing law fixing the period within which protests against
the election of members of the National Assembly should be
filed; that in fixing December 9, 1935, as the last day for the
filing of protests against the election of members of the
National Assembly, the Electoral Commission was exercising
a power impliedly conferred upon it by the Constitution, by
reason of its quasi-judicial attributes;
(b) That said respondent presented his motion of protest
before the Electoral Commission on December 9, 1935, the
last day fixed by paragraph 6 of the rules of the said
Electoral Commission;
(c) That therefore the Electoral Commission acquired
jurisdiction over the protest filed by said respondent and over
the parties thereto, and the resolution of the Electoral
Commission of January 23, 1936, denying petitioner's
motion to dismiss said protest was an act within the
jurisdiction of the said commission, and is not reviewable by
means of a writ of prohibition;
(d) That neither the law nor the Constitution requires
confirmation by the National Assembly of the election of its
members, and that such confirmation does not operate to
limit the period within which protests should be filed as to
deprive the Electoral Commission of jurisdiction over protest
filed subsequent thereto;

(e) That the Electoral Commission is an independent entity


created by the Constitution, endowed with quasi-judicial
functions, whose decision are final and unappealable;
( f ) That the electoral Commission, as a constitutional
creation, is not an inferior tribunal, corporation, board or
person, within the terms of sections 226 and 516 of the Code
of Civil Procedure; and that neither under the provisions of
sections 1 and 2 of article II (should be article VIII) of the
Constitution and paragraph 13 of section 1 of the Ordinance
appended thereto could it be subject in the exercise of its
quasi-judicial functions to a writ of prohibition from the
Supreme Court;
(g) That paragraph 6 of article 7 of the Tydings-McDuffie Law
(No. 127 of the 73rd Congress of the united States) has no
application to the case at bar.
The case was argued before us on March 13, 1936. Before it was
submitted for decision, the petitioner prayed for the issuance of a
preliminary writ of injunction against the respondent Electoral
Commission which petition was denied "without passing upon the
merits of the case" by resolution of this court of March 21, 1936.
There was no appearance for the other respondents.
The issues to be decided in the case at bar may be reduced to the
following two principal propositions:
1. Has the Supreme Court jurisdiction over the Electoral
Commission and the subject matter of the controversy upon
the foregoing related facts, and in the affirmative,
2. Has the said Electoral Commission acted without or in
excess of its jurisdiction in assuming to the cognizance of the

protest filed the election of the herein petitioner


notwithstanding the previous confirmation of such election by
resolution of the National Assembly?
We could perhaps dispose of this case by passing directly upon the
merits of the controversy. However, the question of jurisdiction
having been presented, we do not feel justified in evading the issue.
Being a case prim impressionis, it would hardly be consistent with
our sense of duty to overlook the broader aspect of the question and
leave it undecided. Neither would we be doing justice to the industry
and vehemence of counsel were we not to pass upon the question of
jurisdiction squarely presented to our consideration.
The separation of powers is a fundamental principle in our system of
government. It obtains not through express provision but by actual
division in our Constitution. Each department of the government has
exclusive cognizance of matters within its jurisdiction, and is
supreme within its own sphere. But it does not follow from the fact
that the three powers are to be kept separate and distinct that the
Constitution intended them to be absolutely unrestrained and
independent of each other. The Constitution has provided for an
elaborate system of checks and balances to secure coordination in
the workings of the various departments of the government. For
example, the Chief Executive under our Constitution is so far made a
check on the legislative power that this assent is required in the
enactment of laws. This, however, is subject to the further check that
a bill may become a law notwithstanding the refusal of the President
to approve it, by a vote of two-thirds or three-fourths, as the case
may be, of the National Assembly. The President has also the right to
convene the Assembly in special session whenever he chooses. On
the other hand, the National Assembly operates as a check on the
Executive in the sense that its consent through its Commission on
Appointments is necessary in the appointments of certain officers;
and the concurrence of a majority of all its members is essential to
the conclusion of treaties. Furthermore, in its power to determine

what courts other than the Supreme Court shall be established, to


define their jurisdiction and to appropriate funds for their support, the
National Assembly controls the judicial department to a certain
extent. The Assembly also exercises the judicial power of trying
impeachments. And the judiciary in turn, with the Supreme Court as
the final arbiter, effectively checks the other departments in the
exercise of its power to determine the law, and hence to declare
executive and legislative acts void if violative of the Constitution.
But in the main, the Constitution has blocked out with deft strokes
and in bold lines, allotment of power to the executive, the legislative
and the judicial departments of the government. The overlapping and
interlacing of functions and duties between the several departments,
however, sometimes makes it hard to say just where the one leaves
off and the other begins. In times of social disquietude or political
excitement, the great landmarks of the Constitution are apt to be
forgotten or marred, if not entirely obliterated. In cases of conflict, the
judicial department is the only constitutional organ which can be
called upon to determine the proper allocation of powers between the
several departments and among the integral or constituent units
thereof.
As any human production, our Constitution is of course lacking
perfection and perfectibility, but as much as it was within the power of
our people, acting through their delegates to so provide, that
instrument which is the expression of their sovereignty however
limited, has established a republican government intended to operate
and function as a harmonious whole, under a system of checks and
balances, and subject to specific limitations and restrictions provided
in the said instrument. The Constitution sets forth in no uncertain
language the restrictions and limitations upon governmental powers
and agencies. If these restrictions and limitations are transcended it
would be inconceivable if the Constitution had not provided for a
mechanism by which to direct the course of government along
constitutional channels, for then the distribution of powers would be

mere verbiage, the bill of rights mere expressions of sentiment, and


the principles of good government mere political apothegms.
Certainly, the limitation and restrictions embodied in our Constitution
are real as they should be in any living constitution. In the United
States where no express constitutional grant is found in their
constitution, the possession of this moderating power of the courts,
not to speak of its historical origin and development there, has been
set at rest by popular acquiescence for a period of more than one
and a half centuries. In our case, this moderating power is granted, if
not expressly, by clear implication from section 2 of article VIII of our
constitution.
The Constitution is a definition of the powers of government. Who is
to determine the nature, scope and extent of such powers? The
Constitution itself has provided for the instrumentality of the judiciary
as the rational way. And when the judiciary mediates to allocate
constitutional boundaries, it does not assert any superiority over the
other departments; it does not in reality nullify or invalidate an act of
the legislature, but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an
actual controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in what is
termed "judicial supremacy" which properly is the power of judicial
review under the Constitution. Even then, this power of judicial
review is limited to actual cases and controversies to be exercised
after full opportunity of argument by the parties, and limited further to
the constitutional question raised or the very lis mota presented. Any
attempt at abstraction could only lead to dialectics and barren legal
questions and to sterile conclusions unrelated to actualities.
Narrowed as its function is in this manner, the judiciary does not pass
upon questions of wisdom, justice or expediency of legislation. More
than that, courts accord the presumption of constitutionality to
legislative enactments, not only because the legislature is presumed
to abide by the Constitution but also because the judiciary in the

determination of actual cases and controversies must reflect the


wisdom and justice of the people as expressed through their
representatives in the executive and legislative departments of the
governments of the government.
But much as we might postulate on the internal checks of power
provided in our Constitution, it ought not the less to be remembered
that, in the language of James Madison, the system itself is not "the
chief palladium of constitutional liberty . . . the people who are
authors of this blessing must also be its guardians . . . their eyes
must be ever ready to mark, their voice to pronounce . . . aggression
on the authority of their constitution." In the Last and ultimate
analysis, then, must the success of our government in the unfolding
years to come be tested in the crucible of Filipino minds and hearts
than in consultation rooms and court chambers.
In the case at bar, the national Assembly has by resolution (No. 8) of
December 3, 1935, confirmed the election of the herein petitioner to
the said body. On the other hand, the Electoral Commission has by
resolution adopted on December 9, 1935, fixed said date as the last
day for the filing of protests against the election, returns and
qualifications of members of the National Assembly, notwithstanding
the previous confirmation made by the National Assembly as
aforesaid. If, as contended by the petitioner, the resolution of the
National Assembly has the effect of cutting off the power of the
Electoral Commission to entertain protests against the election,
returns and qualifications of members of the National Assembly,
submitted after December 3, 1935, then the resolution of the
Electoral Commission of December 9, 1935, is mere surplusage and
had no effect. But, if, as contended by the respondents, the Electoral
Commission has the sole power of regulating its proceedings to the
exclusion of the National Assembly, then the resolution of December
9, 1935, by which the Electoral Commission fixed said date as the
last day for filing protests against the election, returns and

qualifications of members of the National Assembly, should be


upheld.
Here is then presented an actual controversy involving as it does a
conflict of a grave constitutional nature between the National
Assembly on the one hand, and the Electoral Commission on the
other. From the very nature of the republican government established
in our country in the light of American experience and of our own,
upon the judicial department is thrown the solemn and inescapable
obligation of interpreting the Constitution and defining constitutional
boundaries. The Electoral Commission, as we shall have occasion to
refer hereafter, is a constitutional organ, created for a specific
purpose, namely to determine all contests relating to the election,
returns and qualifications of the members of the National Assembly.
Although the Electoral Commission may not be interfered with, when
and while acting within the limits of its authority, it does not follow that
it is beyond the reach of the constitutional mechanism adopted by
the people and that it is not subject to constitutional restrictions. The
Electoral Commission is not a separate department of the
government, and even if it were, conflicting claims of authority under
the fundamental law between department powers and agencies of
the government are necessarily determined by the judiciary in
justifiable and appropriate cases. Discarding the English type and
other European types of constitutional government, the framers of
our constitution adopted the American type where the written
constitution is interpreted and given effect by the judicial department.
In some countries which have declined to follow the American
example, provisions have been inserted in their constitutions
prohibiting the courts from exercising the power to interpret the
fundamental law. This is taken as a recognition of what otherwise
would be the rule that in the absence of direct prohibition courts are
bound to assume what is logically their function. For instance, the
Constitution of Poland of 1921, expressly provides that courts shall
have no power to examine the validity of statutes (art. 81, chap. IV).
The former Austrian Constitution contained a similar declaration. In

countries whose constitutions are silent in this respect, courts have


assumed this power. This is true in Norway, Greece, Australia and
South Africa. Whereas, in Czechoslovakia (arts. 2 and 3, Preliminary
Law to constitutional Charter of the Czechoslovak Republic,
February 29, 1920) and Spain (arts. 121-123, Title IX, Constitutional
of the Republic of 1931) especial constitutional courts are
established to pass upon the validity of ordinary laws. In our case,
the nature of the present controversy shows the necessity of a final
constitutional arbiter to determine the conflict of authority between
two agencies created by the Constitution. Were we to decline to take
cognizance of the controversy, who will determine the conflict? And if
the conflict were left undecided and undetermined, would not a void
be thus created in our constitutional system which may be in the long
run prove destructive of the entire framework? To ask these
questions is to answer them. Natura vacuum abhorret, so must we
avoid exhaustion in our constitutional system. Upon principle, reason
and authority, we are clearly of the opinion that upon the admitted
facts of the present case, this court has jurisdiction over the Electoral
Commission and the subject mater of the present controversy for the
purpose of determining the character, scope and extent of the
constitutional grant to the Electoral Commission as "the sole judge of
all contests relating to the election, returns and qualifications of the
members of the National Assembly."
Having disposed of the question of jurisdiction, we shall now proceed
to pass upon the second proposition and determine whether the
Electoral Commission has acted without or in excess of its
jurisdiction in adopting its resolution of December 9, 1935, and in
assuming to take cognizance of the protest filed against the election
of the herein petitioner notwithstanding the previous confirmation
thereof by the National Assembly on December 3, 1935. As able
counsel for the petitioner has pointed out, the issue hinges on the
interpretation of section 4 of Article VI of the Constitution which
provides:

"SEC. 4. There shall be an Electoral Commission composed of three


Justice of the Supreme Court designated by the Chief Justice, and of
six Members chosen by the National Assembly, three of whom shall
be nominated by the party having the largest number of votes, and
three by the party having the second largest number of votes therein.
The senior Justice in the Commission shall be its Chairman. The
Electoral Commission shall be the sole judge of all contests relating
to the election, returns and qualifications of the members of the
National Assembly." It is imperative, therefore, that we delve into the
origin and history of this constitutional provision and inquire into the
intention of its framers and the people who adopted it so that we may
properly appreciate its full meaning, import and significance.
The original provision regarding this subject in the Act of Congress of
July 1, 1902 (sec. 7, par. 5) laying down the rule that "the assembly
shall be the judge of the elections, returns, and qualifications of its
members", was taken from clause 1 of section 5, Article I of the
Constitution of the United States providing that "Each House shall be
the Judge of the Elections, Returns, and Qualifications of its own
Members, . . . ." The Act of Congress of August 29, 1916 (sec. 18,
par. 1) modified this provision by the insertion of the word "sole" as
follows: "That the Senate and House of Representatives,
respectively, shall be the sole judges of the elections, returns, and
qualifications of their elective members . . ." apparently in order to
emphasize the exclusive the Legislative over the particular case s
therein specified. This court has had occasion to characterize this
grant of power to the Philippine Senate and House of
Representatives, respectively, as "full, clear and complete"
(Veloso vs. Boards of Canvassers of Leyte and Samar [1919], 39
Phil., 886, 888.)
The first step towards the creation of an independent tribunal for the
purpose of deciding contested elections to the legislature was taken
by the sub-committee of five appointed by the Committee on
Constitutional Guarantees of the Constitutional Convention, which

sub-committee submitted a report on August 30, 1934,


recommending the creation of a Tribunal of Constitutional Security
empowered to hear legislature but also against the election of
executive officers for whose election the vote of the whole nation is
required, as well as to initiate impeachment proceedings against
specified executive and judicial officer. For the purpose of hearing
legislative protests, the tribunal was to be composed of three justices
designated by the Supreme Court and six members of the house of
the legislature to which the contest corresponds, three members to
be designed by the majority party and three by the minority, to be
presided over by the Senior Justice unless the Chief Justice is also a
member in which case the latter shall preside. The foregoing
proposal was submitted by the Committee on Constitutional
Guarantees to the Convention on September 15, 1934, with slight
modifications consisting in the reduction of the legislative
representation to four members, that is, two senators to be
designated one each from the two major parties in the Senate and
two representatives to be designated one each from the two major
parties in the House of Representatives, and in awarding
representation to the executive department in the persons of two
representatives to be designated by the President.
Meanwhile, the Committee on Legislative Power was also preparing
its report. As submitted to the Convention on September 24, 1934
subsection 5, section 5, of the proposed Article on the Legislative
Department, reads as follows:
The elections, returns and qualifications of the members of
either house and all cases contesting the election of any of
their members shall be judged by an Electoral Commission,
constituted, as to each House, by three members elected by
the members of the party having the largest number of votes
therein, three elected by the members of the party having the
second largest number of votes, and as to its Chairman, one

Justice of the Supreme Court designated by the Chief


Justice.
The idea of creating a Tribunal of Constitutional Security with
comprehensive jurisdiction as proposed by the Committee on
Constitutional Guarantees which was probably inspired by the
Spanish plan (art. 121, Constitution of the Spanish Republic of
1931), was soon abandoned in favor of the proposition of the
Committee on Legislative Power to create a similar body with
reduced powers and with specific and limited jurisdiction, to be
designated as a Electoral Commission. The Sponsorship Committee
modified the proposal of the Committee on Legislative Power with
respect to the composition of the Electoral Commission and made
further changes in phraseology to suit the project of adopting a
unicameral instead of a bicameral legislature. The draft as finally
submitted to the Convention on October 26, 1934, reads as follows:
(6) The elections, returns and qualifications of the Members
of the National Assembly and all cases contesting the
election of any of its Members shall be judged by an
Electoral Commission, composed of three members elected
by the party having the largest number of votes in the
National Assembly, three elected by the members of the
party having the second largest number of votes, and three
justices of the Supreme Court designated by the Chief
Justice, the Commission to be presided over by one of said
justices.
During the discussion of the amendment introduced by Delegates
Labrador, Abordo, and others, proposing to strike out the whole
subsection of the foregoing draft and inserting in lieu thereof the
following: "The National Assembly shall be the soled and exclusive
judge of the elections, returns, and qualifications of the Members",
the following illuminating remarks were made on the floor of the

Convention in its session of December 4, 1934, as to the scope of


the said draft:
xxx

xxx

xxx

Mr. VENTURA. Mr. President, we have a doubt here as to


the scope of the meaning of the first four lines, paragraph 6,
page 11 of the draft, reading: "The elections, returns and
qualifications of the Members of the National Assembly and
all cases contesting the election of any of its Members shall
be judged by an Electoral Commission, . . ." I should like to
ask from the gentleman from Capiz whether the election and
qualification of the member whose elections is not contested
shall also be judged by the Electoral Commission.
Mr. ROXAS. If there is no question about the election of the
members, there is nothing to be judged; that is why the word
"judge" is used to indicate a controversy. If there is no
question about the election of a member, there is nothing to
be submitted to the Electoral Commission and there is
nothing to be determined.
Mr. VENTURA. But does that carry the idea also that the
Electoral Commission shall confirm also the election of those
whose election is not contested?
Mr. ROXAS. There is no need of confirmation. As the
gentleman knows, the action of the House of
Representatives confirming the election of its members is
just a matter of the rules of the assembly. It is not
constitutional. It is not necessary. After a man files his
credentials that he has been elected, that is sufficient, unless
his election is contested.

Mr. VENTURA. But I do not believe that that is sufficient, as


we have observed that for purposes of the auditor, in the
matter of election of a member to a legislative body, because
he will not authorize his pay.
Mr. ROXAS. Well, what is the case with regards to the
municipal president who is elected? What happens with
regards to the councilors of a municipality? Does anybody
confirm their election? The municipal council does this: it
makes a canvass and proclaims in this case the municipal
council proclaims who has been elected, and it ends there,
unless there is a contest. It is the same case; there is no
need on the part of the Electoral Commission unless there is
a contest. The first clause refers to the case referred to by
the gentleman from Cavite where one person tries to be
elected in place of another who was declared elected. From
example, in a case when the residence of the man who has
been elected is in question, or in case the citizenship of the
man who has been elected is in question.
However, if the assembly desires to annul the power of the
commission, it may do so by certain maneuvers upon its first
meeting when the returns are submitted to the
assembly. The purpose is to give to the Electoral
Commission all the powers exercised by the assembly
referring to the elections, returns and qualifications of the
members. When there is no contest, there is nothing to be
judged.
Mr. VENTURA. Then it should be eliminated.
Mr. ROXAS. But that is a different matter, I think Mr.
Delegate.

Mr. CINCO. Mr. President, I have a similar question as that


propounded by the gentleman from Ilocos Norte when I
arose a while ago. However I want to ask more questions
from the delegate from Capiz. This paragraph 6 on page 11
of the draft cites cases contesting the election as separate
from the first part of the sections which refers to elections,
returns and qualifications.

assembly believe that a member has not the qualifications


provided by law, they cannot remove him for that reason.

Mr. ROXAS. That is merely for the sake of clarity. In fact the
cases of contested elections are already included in the
phrase "the elections, returns and qualifications." This
phrase "and contested elections" was inserted merely for the
sake of clarity.

Mr. LABRADOR. I mean with respect to the qualifications of


the members.

Mr. CINCO. Under this paragraph, may not the Electoral


Commission, at its own instance, refuse to confirm the
elections of the members."
Mr. ROXAS. I do not think so, unless there is a protest.

Mr. LABRADOR. So that the right to remove shall only be


retained by the Electoral Commission.
Mr. ROXAS. By the assembly for misconduct.

Mr. ROXAS. Yes, by the Electoral Commission.


Mr. LABRADOR. So that under this draft, no member of the
assembly has the right to question the eligibility of its
members?
Mr. ROXAS. Before a member can question the eligibility, he
must go to the Electoral Commission and make the question
before the Electoral Commission.

Mr. LABRADOR. Mr. President, will the gentleman yield?


THE PRESIDENT. The gentleman may yield, if he so
desires.

Mr. LABRADOR. So that the Electoral Commission shall


decide whether the election is contested or not contested.
Mr. ROXAS. Yes, sir: that is the purpose.

Mr. ROXAS. Willingly.


Mr. LABRADOR. Does not the gentleman from Capiz believe
that unless this power is granted to the assembly, the
assembly on its own motion does not have the right to
contest the election and qualification of its members?
Mr. ROXAS. I have no doubt but that the gentleman is right.
If this draft is retained as it is, even if two-thirds of the

Mr. PELAYO. Mr. President, I would like to be informed if the


Electoral Commission has power and authority to pass upon
the qualifications of the members of the National Assembly
even though that question has not been raised.
Mr. ROXAS. I have just said that they have no power,
because they can only judge.

10

In the same session, the first clause of the aforesaid draft reading
"The election, returns and qualifications of the members of the
National Assembly and" was eliminated by the Sponsorship
Committee in response to an amendment introduced by Delegates
Francisco, Ventura, Vinzons, Rafols, Lim, Mumar and others. In
explaining the difference between the original draft and the draft as
amended, Delegate Roxas speaking for the Sponsorship Committee
said:
xxx

xxx

practicamente a dejar el asunto a los miembros del Tribunal


Supremo?
El Sr. ROXAS. Si y no. Creemos que si el tribunal o la
Commission esta constituido en esa forma, tanto los
miembros de la mayoria como los de la minoria asi como los
miembros de la Corte Suprema consideraran la cuestion
sobre la base de sus meritos, sabiendo que el partidismo no
es suficiente para dar el triunfo.

xxx

Sr. ROXAS. La diferencia, seor Presidente, consiste


solamente en obviar la objecion apuntada por varios
Delegados al efecto de que la primera clausula del draft que
dice: "The elections, returns and qualifications of the
members of the National Assembly" parece que da a la
Comision Electoral la facultad de determinar tambien la
eleccion de los miembros que no ha sido protestados y para
obviar esa dificultad, creemos que la enmienda tien razon en
ese sentido, si enmendamos el draft, de tal modo que se lea
como sigue: "All cases contesting the election", de modo que
los jueces de la Comision Electoral se limitaran solamente a
los casos en que haya habido protesta contra las actas."
Before the amendment of Delegate Labrador was voted
upon the following interpellation also took place:
El Sr. CONEJERO. Antes de votarse la enmienda, quisiera
El Sr. PRESIDENTE. Que dice el Comite?
El Sr. ROXAS. Con mucho gusto.
El Sr. CONEJERO. Tal como esta el draft, dando tres
miembros a la mayoria, y otros tres a la minoria y tres a la
Corte Suprema, no cree Su Seoria que esto equivale

El Sr. CONEJERO. Cree Su Seoria que en un caso como


ese, podriamos hacer que tanto los de la mayoria como los
de la minoria prescindieran del partidismo?
El Sr. ROXAS. Creo que si, porque el partidismo no les daria
el triunfo.
xxx

xxx

xxx

The amendment introduced by Delegates Labrador, Abordo and


others seeking to restore the power to decide contests relating to the
election, returns and qualifications of members of the National
Assembly to the National Assembly itself, was defeated by a vote of
ninety-eight (98) against fifty-six (56).
In the same session of December 4, 1934, Delegate Cruz (C.)
sought to amend the draft by reducing the representation of the
minority party and the Supreme Court in the Electoral Commission to
two members each, so as to accord more representation to the
majority party. The Convention rejected this amendment by a vote of
seventy-six (76) against forty-six (46), thus maintaining the nonpartisan character of the commission.
As approved on January 31, 1935, the draft was made to read as
follows:

11

(6) All cases contesting the elections, returns and


qualifications of the Members of the National Assembly shall
be judged by an Electoral Commission, composed of three
members elected by the party having the largest number of
votes in the National Assembly, three elected by the
members of the party having the second largest number of
votes, and three justices of the Supreme Court designated
by the Chief Justice, the Commission to be presided over by
one of said justices.
The Style Committee to which the draft was submitted revised it as
follows:
SEC. 4. There shall be an Electoral Commission composed
of three Justices of the Supreme Court designated by the
Chief Justice, and of six Members chosen by the National
Assembly, three of whom shall be nominated by the party
having the largest number of votes, and three by the party
having the second largest number of votes therein. The
senior Justice in the Commission shall be its chairman. The
Electoral Commission shall be the sole judge of the election,
returns, and qualifications of the Members of the National
Assembly.
When the foregoing draft was submitted for approval on February 8,
1935, the Style Committee, through President Recto, to effectuate
the original intention of the Convention, agreed to insert the phrase
"All contests relating to" between the phrase "judge of" and the
words "the elections", which was accordingly accepted by the
Convention.
The transfer of the power of determining the election, returns and
qualifications of the members of the legislature long lodged in the
legislative body, to an independent, impartial and non-partisan

tribunal, is by no means a mere experiment in the science of


government.
Cushing, in his Law and Practice of Legislative Assemblies (ninth
edition, chapter VI, pages 57, 58), gives a vivid account of the
"scandalously notorious" canvassing of votes by political parties in
the disposition of contests by the House of Commons in the following
passages which are partly quoted by the petitioner in his printed
memorandum of March 14, 1936:
153. From the time when the commons established their
right to be the exclusive judges of the elections, returns, and
qualifications of their members, until the year 1770, two
modes of proceeding prevailed, in the determination of
controverted elections, and rights of membership. One of the
standing committees appointed at the commencement of
each session, was denominated the committee of privileges
and elections, whose functions was to hear and investigate
all questions of this description which might be referred to
them, and to report their proceedings, with their opinion
thereupon, to the house, from time to time. When an election
petition was referred to this committee they heard the parties
and their witnesses and other evidence, and made a report
of all the evidence, together with their opinion thereupon, in
the form of resolutions, which were considered and agreed
or disagreed to by the house. The other mode of proceeding
was by a hearing at the bar of the house itself. When this
court was adopted, the case was heard and decided by the
house, in substantially the same manner as by a committee.
The committee of privileges and elections although a select
committee. The committee of privileges and elections
although a select committee was usually what is called an
open one; that is to say, in order to constitute the committee,
a quorum of the members named was required to be

12

present, but all the members of the house were at liberty to


attend the committee and vote if they pleased.
154. With the growth of political parties in parliament
questions relating to the right of membership gradually
assumed a political character; so that for many years
previous to the year 1770, controverted elections had been
tried and determined by the house of commons, as mere
party questions, upon which the strength of contending
factions might be tested. Thus, for Example, in 1741, Sir
Robert Walpole, after repeated attacks upon his government,
resigned his office in consequence of an adverse vote upon
the Chippenham election. Mr. Hatsell remarks, of the trial of
election cases, as conducted under this system, that "Every
principle of decency and justice were notoriously and openly
prostituted, from whence the younger part of the house were
insensibly, but too successfully, induced to adopt the same
licentious conduct in more serious matters, and in questions
of higher importance to the public welfare." Mr. George
Grenville, a distinguished member of the house of commons,
undertook to propose a remedy for the evil, and, on the 7th
of March, 1770, obtained the unanimous leave of the house
to bring in a bill, "to regulate the trial of controverted
elections, or returns of members to serve in parliament." In
his speech to explain his plan, on the motion for leave, Mr.
Grenville alluded to the existing practice in the following
terms: "Instead of trusting to the merits of their respective
causes, the principal dependence of both parties is their
private interest among us; and it is scandalously notorious
that we are as earnestly canvassed to attend in favor of the
opposite sides, as if we were wholly self-elective, and not
bound to act by the principles of justice, but by the
discretionary impulse of our own inclinations; nay, it is well
known, that in every contested election, many members of
this house, who are ultimately to judge in a kind of judicial

capacity between the competitors, enlist themselves as


parties in the contention, and take upon themselves the
partial management of the very business, upon which they
should determine with the strictest impartiality."
155. It was to put an end to the practices thus described, that
Mr. Grenville brought in a bill which met with the approbation
of both houses, and received the royal assent on the 12th of
April, 1770. This was the celebrated law since known by the
name of the Grenville Act; of which Mr. Hatsell declares, that
it "was one of the nobles works, for the honor of the house of
commons, and the security of the constitution, that was ever
devised by any minister or statesman." It is probable, that the
magnitude of the evil, or the apparent success of the
remedy, may have led many of the contemporaries of the
measure to the information of a judgement, which was not
acquiesced in by some of the leading statesmen of the day,
and has not been entirely confirmed by subsequent
experience. The bill was objected to by Lord North, Mr. De
Grey, afterwards chief justice of the common pleas, Mr. Ellis,
Mr. Dyson, who had been clerk of the house, and Mr.
Charles James Fox, chiefly on the ground, that the
introduction of the new system was an essential alteration of
the constitution of parliament, and a total abrogation of one
of the most important rights and jurisdictions of the house of
commons.
As early as 1868, the House of Commons in England solved the
problem of insuring the non-partisan settlement of the controverted
elections of its members by abdicating its prerogative to two judges
of the King's Bench of the High Court of Justice selected from a rota
in accordance with rules of court made for the purpose. Having
proved successful, the practice has become imbedded in English
jurisprudence (Parliamentary Elections Act, 1868 [31 & 32 Vict. c.
125] as amended by Parliamentary Elections and Corrupt Practices

13

Act. 1879 [42 & 43 Vict. c. 75], s. 2; Corrupt and Illegal Practices
Preventions Act, 1883 [46 & 47 Vict. c. 51;, s. 70; Expiring Laws
Continuance Act, 1911 [1 & 2 Geo. 5, c. 22]; Laws of England, vol.
XII, p. 408, vol. XXI, p. 787). In the Dominion of Canada, election
contests which were originally heard by the Committee of the House
of Commons, are since 1922 tried in the courts. Likewise, in the
Commonwealth of Australia, election contests which were originally
determined by each house, are since 1922 tried in the High Court. In
Hungary, the organic law provides that all protests against the
election of members of the Upper House of the Diet are to be
resolved by the Supreme Administrative Court (Law 22 of 1916,
chap. 2, art. 37, par. 6). The Constitution of Poland of March 17,
1921 (art. 19) and the Constitution of the Free City of Danzig of May
13, 1922 (art. 10) vest the authority to decide contested elections to
the Diet or National Assembly in the Supreme Court. For the purpose
of deciding legislative contests, the Constitution of the German Reich
of July 1, 1919 (art. 31), the Constitution of the Czechoslovak
Republic of February 29, 1920 (art. 19) and the Constitution of the
Grecian Republic of June 2, 1927 (art. 43), all provide for an
Electoral Commission.
The creation of an Electoral Commission whose membership is
recruited both from the legislature and the judiciary is by no means
unknown in the United States. In the presidential elections of 1876
there was a dispute as to the number of electoral votes received by
each of the two opposing candidates. As the Constitution made no
adequate provision for such a contingency, Congress passed a law
on January 29, 1877 (United States Statutes at Large, vol. 19, chap.
37, pp. 227-229), creating a special Electoral Commission composed
of five members elected by the Senate, five members elected by the
House of Representatives, and five justices of the Supreme Court,
the fifth justice to be selected by the four designated in the Act. The
decision of the commission was to be binding unless rejected by the
two houses voting separately. Although there is not much of a moral
lesson to be derived from the experience of America in this regard,

judging from the observations of Justice Field, who was a member of


that body on the part of the Supreme Court (Countryman, the
Supreme Court of the United States and its Appellate Power under
the Constitution [Albany, 1913] Relentless Partisanship of
Electoral Commission, p. 25 et seq.), the experiment has at least
abiding historical interest.
The members of the Constitutional Convention who framed our
fundamental law were in their majority men mature in years and
experience. To be sure, many of them were familiar with the history
and political development of other countries of the world. When ,
therefore, they deemed it wise to create an Electoral Commission as
a constitutional organ and invested it with the exclusive function of
passing upon and determining the election, returns and qualifications
of the members of the National Assembly, they must have done so
not only in the light of their own experience but also having in view
the experience of other enlightened peoples of the world. The
creation of the Electoral Commission was designed to remedy
certain evils of which the framers of our Constitution were cognizant.
Notwithstanding the vigorous opposition of some members of the
Convention to its creation, the plan, as hereinabove stated, was
approved by that body by a vote of 98 against 58. All that can be said
now is that, upon the approval of the constitutional the creation of the
Electoral Commission is the expression of the wisdom and "ultimate
justice of the people". (Abraham Lincoln, First Inaugural Address,
March 4, 1861.)
From the deliberations of our Constitutional Convention it is evident
that the purpose was to transfer in its totality all the powers
previously exercised by the legislature in matters pertaining to
contested elections of its members, to an independent and impartial
tribunal. It was not so much the knowledge and appreciation of
contemporary constitutional precedents, however, as the long-felt
need of determining legislative contests devoid of partisan
considerations which prompted the people, acting through their

14

delegates to the Convention, to provide for this body known as the


Electoral Commission. With this end in view, a composite body in
which both the majority and minority parties are equally represented
to off-set partisan influence in its deliberations was created, and
further endowed with judicial temper by including in its membership
three justices of the Supreme Court.
The Electoral Commission is a constitutional creation, invested with
the necessary authority in the performance and execution of the
limited and specific function assigned to it by the Constitution.
Although it is not a power in our tripartite scheme of government, it
is, to all intents and purposes, when acting within the limits of its
authority, an independent organ. It is, to be sure, closer to the
legislative department than to any other. The location of the provision
(section 4) creating the Electoral Commission under Article VI
entitled "Legislative Department" of our Constitution is very
indicative. Its compositions is also significant in that it is constituted
by a majority of members of the legislature. But it is a body separate
from and independent of the legislature.
The grant of power to the Electoral Commission to judge all contests
relating to the election, returns and qualifications of members of the
National Assembly, is intended to be as complete and unimpaired as
if it had remained originally in the legislature. The express lodging of
that power in the Electoral Commission is an implied denial of the
exercise of that power by the National Assembly. And this is as
effective a restriction upon the legislative power as an express
prohibition in the Constitution (Ex parte Lewis, 45 Tex. Crim. Rep., 1;
State vs.Whisman, 36 S.D., 260; L.R.A., 1917B, 1). If we concede
the power claimed in behalf of the National Assembly that said body
may regulate the proceedings of the Electoral Commission and cut
off the power of the commission to lay down the period within which
protests should be filed, the grant of power to the commission would
be ineffective. The Electoral Commission in such case would be
invested with the power to determine contested cases involving the

election, returns and qualifications of the members of the National


Assembly but subject at all times to the regulative power of the
National Assembly. Not only would the purpose of the framers of our
Constitution of totally transferring this authority from the legislative
body be frustrated, but a dual authority would be created with the
resultant inevitable clash of powers from time to time. A sad
spectacle would then be presented of the Electoral Commission
retaining the bare authority of taking cognizance of cases referred to,
but in reality without the necessary means to render that authority
effective whenever and whenever the National Assembly has chosen
to act, a situation worse than that intended to be remedied by the
framers of our Constitution. The power to regulate on the part of the
National Assembly in procedural matters will inevitably lead to the
ultimate control by the Assembly of the entire proceedings of the
Electoral Commission, and, by indirection, to the entire abrogation of
the constitutional grant. It is obvious that this result should not be
permitted.
We are not insensible to the impassioned argument or the learned
counsel for the petitioner regarding the importance and necessity of
respecting the dignity and independence of the national Assembly as
a coordinate department of the government and of according validity
to its acts, to avoid what he characterized would be practically an
unlimited power of the commission in the admission of protests
against members of the National Assembly. But as we have pointed
out hereinabove, the creation of the Electoral Commission carried
with it ex necesitate rei the power regulative in character to limit the
time with which protests intrusted to its cognizance should be filed. It
is a settled rule of construction that where a general power is
conferred or duty enjoined, every particular power necessary for the
exercise of the one or the performance of the other is also conferred
(Cooley, Constitutional Limitations, eight ed., vol. I, pp. 138, 139). In
the absence of any further constitutional provision relating to the
procedure to be followed in filing protests before the Electoral
Commission, therefore, the incidental power to promulgate such

15

rules necessary for the proper exercise of its exclusive power to


judge all contests relating to the election, returns and qualifications of
members of the National Assembly, must be deemed by necessary
implication to have been lodged also in the Electoral Commission.
It is, indeed, possible that, as suggested by counsel for the petitioner,
the Electoral Commission may abuse its regulative authority by
admitting protests beyond any reasonable time, to the disturbance of
the tranquillity and peace of mind of the members of the National
Assembly. But the possibility of abuse is not argument against the
concession of the power as there is no power that is not susceptible
of abuse. In the second place, if any mistake has been committed in
the creation of an Electoral Commission and in investing it with
exclusive jurisdiction in all cases relating to the election, returns, and
qualifications of members of the National Assembly, the remedy is
political, not judicial, and must be sought through the ordinary
processes of democracy. All the possible abuses of the government
are not intended to be corrected by the judiciary. We believe,
however, that the people in creating the Electoral Commission
reposed as much confidence in this body in the exclusive
determination of the specified cases assigned to it, as they have
given to the Supreme Court in the proper cases entrusted to it for
decision. All the agencies of the government were designed by the
Constitution to achieve specific purposes, and each constitutional
organ working within its own particular sphere of discretionary action
must be deemed to be animated with the same zeal and honesty in
accomplishing the great ends for which they were created by the
sovereign will. That the actuations of these constitutional agencies
might leave much to be desired in given instances, is inherent in the
perfection of human institutions. In the third place, from the fact that
the Electoral Commission may not be interfered with in the exercise
of its legitimate power, it does not follow that its acts, however illegal
or unconstitutional, may not be challenge in appropriate cases over
which the courts may exercise jurisdiction.

But independently of the legal and constitutional aspects of the


present case, there are considerations of equitable character that
should not be overlooked in the appreciation of the intrinsic merits of
the controversy. The Commonwealth Government was inaugurated
on November 15, 1935, on which date the Constitution, except as to
the provisions mentioned in section 6 of Article XV thereof, went into
effect. The new National Assembly convened on November 25th of
that year, and the resolution confirming the election of the petitioner,
Jose A. Angara was approved by that body on December 3, 1935.
The protest by the herein respondent Pedro Ynsua against the
election of the petitioner was filed on December 9 of the same year.
The pleadings do not show when the Electoral Commission was
formally organized but it does appear that on December 9, 1935, the
Electoral Commission met for the first time and approved a resolution
fixing said date as the last day for the filing of election protest. When,
therefore, the National Assembly passed its resolution of December
3, 1935, confirming the election of the petitioner to the National
Assembly, the Electoral Commission had not yet met; neither does it
appear that said body had actually been organized. As a mater of
fact, according to certified copies of official records on file in the
archives division of the National Assembly attached to the record of
this case upon the petition of the petitioner, the three justices of the
Supreme Court the six members of the National Assembly
constituting the Electoral Commission were respectively designated
only on December 4 and 6, 1935. If Resolution No. 8 of the National
Assembly confirming non-protested elections of members of the
National Assembly had the effect of limiting or tolling the time for the
presentation of protests, the result would be that the National
Assembly on the hypothesis that it still retained the incidental
power of regulation in such cases had already barred the
presentation of protests before the Electoral Commission had had
time to organize itself and deliberate on the mode and method to be
followed in a matter entrusted to its exclusive jurisdiction by the
Constitution. This result was not and could not have been
contemplated, and should be avoided.

16

From another angle, Resolution No. 8 of the National Assembly


confirming the election of members against whom no protests had
been filed at the time of its passage on December 3, 1935, can not
be construed as a limitation upon the time for the initiation of election
contests. While there might have been good reason for the legislative
practice of confirmation of the election of members of the legislature
at the time when the power to decide election contests was still
lodged in the legislature, confirmation alone by the legislature cannot
be construed as depriving the Electoral Commission of the authority
incidental to its constitutional power to be "the sole judge of all
contest relating to the election, returns, and qualifications of the
members of the National Assembly", to fix the time for the filing of
said election protests. Confirmation by the National Assembly of the
returns of its members against whose election no protests have been
filed is, to all legal purposes, unnecessary. As contended by the
Electoral Commission in its resolution of January 23, 1936,
overruling the motion of the herein petitioner to dismiss the protest
filed by the respondent Pedro Ynsua, confirmation of the election of
any member is not required by the Constitution before he can
discharge his duties as such member. As a matter of fact,
certification by the proper provincial board of canvassers is sufficient
to entitle a member-elect to a seat in the national Assembly and to
render him eligible to any office in said body (No. 1, par. 1, Rules of
the National Assembly, adopted December 6, 1935).
Under the practice prevailing both in the English House of Commons
and in the Congress of the United States, confirmation is neither
necessary in order to entitle a member-elect to take his seat. The
return of the proper election officers is sufficient, and the memberelect presenting such return begins to enjoy the privileges of a
member from the time that he takes his oath of office (Laws of
England, vol. 12, pp. 331. 332; vol. 21, pp. 694, 695; U. S. C. A., Title
2, secs. 21, 25, 26). Confirmation is in order only in cases of
contested elections where the decision is adverse to the claims of
the protestant. In England, the judges' decision or report in

controverted elections is certified to the Speaker of the House of


Commons, and the House, upon being informed of such certificate or
report by the Speaker, is required to enter the same upon the
Journals, and to give such directions for confirming or altering the
return, or for the issue of a writ for a new election, or for carrying into
execution the determination as circumstances may require (31 & 32
Vict., c. 125, sec. 13). In the United States, it is believed, the order or
decision of the particular house itself is generally regarded as
sufficient, without any actual alternation or amendment of the return
(Cushing, Law and Practice of Legislative Assemblies, 9th ed., sec.
166).
Under the practice prevailing when the Jones Law was still in force,
each house of the Philippine Legislature fixed the time when protests
against the election of any of its members should be filed. This was
expressly authorized by section 18 of the Jones Law making each
house the sole judge of the election, return and qualifications of its
members, as well as by a law (sec. 478, Act No. 3387) empowering
each house to respectively prescribe by resolution the time and
manner of filing contest in the election of member of said bodies. As
a matter of formality, after the time fixed by its rules for the filing of
protests had already expired, each house passed a resolution
confirming or approving the returns of such members against whose
election no protests had been filed within the prescribed time. This
was interpreted as cutting off the filing of further protests against the
election of those members not theretofore contested (Amistad vs.
Claravall [Isabela], Second Philippine Legislature, Record First
Period, p. 89; Urguello vs. Rama [Third District, Cebu], Sixth
Philippine Legislature; Fetalvero vs. Festin [Romblon], Sixth
Philippine Legislature, Record First Period, pp. 637-640;
Kintanar vs. Aldanese [Fourth District, Cebu], Sixth Philippine
Legislature, Record First Period, pp. 1121, 1122;
Aguilar vs. Corpus [Masbate], Eighth Philippine Legislature, Record
First Period, vol. III, No. 56, pp. 892, 893). The Constitution has
repealed section 18 of the Jones Law. Act No. 3387, section 478,

17

must be deemed to have been impliedly abrogated also, for the


reason that with the power to determine all contest relating to the
election, returns and qualifications of members of the National
Assembly, is inseparably linked the authority to prescribe regulations
for the exercise of that power. There was thus no law nor
constitutional provisions which authorized the National Assembly to
fix, as it is alleged to have fixed on December 3, 1935, the time for
the filing of contests against the election of its members. And what
the National Assembly could not do directly, it could not do by
indirection through the medium of confirmation.
Summarizing, we conclude:
(a) That the government established by the Constitution
follows fundamentally the theory of separation of power into
the legislative, the executive and the judicial.
(b) That the system of checks and balances and the
overlapping of functions and duties often makes difficult the
delimitation of the powers granted.
(c) That in cases of conflict between the several departments
and among the agencies thereof, the judiciary, with the
Supreme Court as the final arbiter, is the only constitutional
mechanism devised finally to resolve the conflict and allocate
constitutional boundaries.

execute and perform, closer for purposes of classification to


the legislative than to any of the other two departments of
the governments.
(f ) That the Electoral Commission is the sole judge of all
contests relating to the election, returns and qualifications of
members of the National Assembly.
(g) That under the organic law prevailing before the present
Constitution went into effect, each house of the legislature
was respectively the sole judge of the elections, returns, and
qualifications of their elective members.
(h) That the present Constitution has transferred all the
powers previously exercised by the legislature with respect
to contests relating to the elections, returns and
qualifications of its members, to the Electoral Commission.
(i) That such transfer of power from the legislature to the
Electoral Commission was full, clear and complete, and
carried with it ex necesitate rei the implied power inter alia to
prescribe the rules and regulations as to the time and
manner of filing protests.

(d) That judicial supremacy is but the power of judicial review


in actual and appropriate cases and controversies, and is the
power and duty to see that no one branch or agency of the
government transcends the Constitution, which is the source
of all authority.

( j) That the avowed purpose in creating the Electoral


Commission was to have an independent constitutional
organ pass upon all contests relating to the election, returns
and qualifications of members of the National Assembly,
devoid of partisan influence or consideration, which object
would be frustrated if the National Assembly were to retain
the power to prescribe rules and regulations regarding the
manner of conducting said contests.

(e) That the Electoral Commission is an independent


constitutional creation with specific powers and functions to

(k) That section 4 of article VI of the Constitution repealed


not only section 18 of the Jones Law making each house of

18

the Philippine Legislature respectively the sole judge of the


elections, returns and qualifications of its elective members,
but also section 478 of Act No. 3387 empowering each
house to prescribe by resolution the time and manner of
filing contests against the election of its members, the time
and manner of notifying the adverse party, and bond or
bonds, to be required, if any, and to fix the costs and
expenses of contest.
(l) That confirmation by the National Assembly of the election
is contested or not, is not essential before such memberelect may discharge the duties and enjoy the privileges of a
member of the National Assembly.

Electoral Commission is an inferior tribunal, corporation, board or


person within the purview of sections 226 and 516 of the Code of
Civil Procedure.
The petition for a writ of prohibition against the Electoral Commission
is hereby denied, with costs against the petitioner. So ordered.
Avancea, C. J., Diaz, Concepcion, and Horrilleno, JJ., concur.

Separate Opinions
ABAD SANTOS, J., concurring:

(m) That confirmation by the National Assembly of the


election of any member against whom no protest had been
filed prior to said confirmation, does not and cannot deprive
the Electoral Commission of its incidental power to prescribe
the time within which protests against the election of any
member of the National Assembly should be filed.
We hold, therefore, that the Electoral Commission was acting within
the legitimate exercise of its constitutional prerogative in assuming to
take cognizance of the protest filed by the respondent Pedro Ynsua
against the election of the herein petitioner Jose A. Angara, and that
the resolution of the National Assembly of December 3, 1935 can not
in any manner toll the time for filing protests against the elections,
returns and qualifications of members of the National Assembly, nor
prevent the filing of a protest within such time as the rules of the
Electoral Commission might prescribe.
In view of the conclusion reached by us relative to the character of
the Electoral Commission as a constitutional creation and as to the
scope and extent of its authority under the facts of the present
controversy, we deem it unnecessary to determine whether the

I concur in the result and in most of the views so ably expressed in


the preceding opinion. I am, however, constrained to withhold my
assent to certain conclusions therein advanced.
The power vested in the Electoral Commission by the Constitution of
judging of all contests relating to the election, returns, and
qualifications of the members of the National Assembly, is judicial in
nature. (Thomas vs. Loney, 134 U.S., 372; 33 Law. ed., 949, 951.)
On the other hand, the power to regulate the time in which notice of a
contested election may be given, is legislative in character.
(M'Elmoyle vs. Cohen, 13 Pet., 312; 10 Law. ed., 177; Missouri vs.
Illinois, 200 U. S. 496; 50 Law. ed., 572.)
It has been correctly stated that the government established by the
Constitution follows fundamentally the theory of the separation of
powers into legislative, executive, and judicial. Legislative power is
vested in the National Assembly. (Article VI, sec. 1.) In the absence
of any clear constitutional provision to the contrary, the power to
regulate the time in which notice of a contested election may be

19

given, must be deemed to be included in the grant of legislative


power to the National Assembly.
The Constitution of the United States contains a provision similar to
the that found in Article VI, section 4, of the Constitution of the
Philippines. Article I, section 5, of the Constitution of the United
States provides that each house of the Congress shall be the judge
of the elections, returns, and qualifications of its own members.
Notwithstanding this provision, the Congress has assumed the power
to regulate the time in which notice of a contested election may be
given. Thus section 201, Title 2, of the United States Code Annotated
prescribes:
Whenever any person intends to contest an election of any
Member of the House of Representatives of the United
States, he shall, within thirty days after the result of such
election shall have been determined by the officer or board
of canvassers authorized by law to determine the same, give
notice, in writing, to the Member whose seat he designs to
contest, of his intention to contest the same, and, in such
notice, shall specify particularly the grounds upon which he
relies in the contest. (R. S., par. 105.)
The Philippine Autonomy Act, otherwise known as the Jones Law,
also contained a provision to the effect that the Senate and House of
Representatives, respectively, shall be the sole judges of the
elections, returns, and qualifications of their elective members.
Notwithstanding this provision, the Philippine Legislature passed the
Election Law, section 478 of which reads as follows:
The Senate and the House of Representatives shall by
resolution respectively prescribe the time and manner of
filing contest in the election of members of said bodies, the
time and manner of notifying the adverse party, and bond or
bonds, to be required, if any, and shall fix the costs and

expenses of contest which may be paid from their respective


funds.
The purpose sought to be attained by the creation of the Electoral
Commission was not to erect a body that would be above the law,
but to raise legislative elections contests from the category of political
to that of justiciable questions. The purpose was not to place the
commission beyond the reach of the law, but to insure the
determination of such contests with the due process of law.
Section 478 of the Election Law was in force at the time of the
adoption of the Constitution, Article XV, section 2, of which provides
that
All laws of the Philippine Islands shall continue in force until
the inauguration of the Commonwealth of the Philippines;
thereafter, such laws shall remain operative, unless
inconsistent with this Constitution, until amended, altered,
modified, or repealed by the National Assembly, and all
references in such laws to the Government or officials of the
Philippine Islands shall be construed, in so far as applicable,
to refer to the Government and corresponding officials under
this Constitution.
The manifest purpose of this constitutional provision was to insure
the orderly processes of government, and to prevent any hiatus in its
operations after the inauguration of the Commonwealth of the
Philippines. It was thus provided that all laws of the Philippine Islands
shall remain operative even after the inauguration of the
Commonwealth of the Philippines, unless inconsistent with the
Constitution, and that all references in such laws to the government
or officials of the Philippine Islands shall be construed, in so far as
applicable, to refer to the government and corresponding officials
under the Constitution. It would seem to be consistent not only with
the spirit but the letter of the Constitution to hold that section 478 of

20

the Election Law remains operative and should now be construed to


refer to the Electoral Commission, which, in so far as the power to
judge election contests is concerned, corresponds to either the
Senate or the House of Representative under the former regime. It is
important to observe in this connection that said section 478 of the
Election Law vested the power to regulate the time and manner in
which notice of a contested election may be given, not in the
Philippine Legislature but in the Senate and House of
Representatives singly. In other words, the authority to prescribe the
time and manner of filing contests in the elections of members of the
Philippine Legislature was by statute lodged separately in the bodies
clothed with power to decide such contests. Construing section 478
of the Election Law to refer to the National Assembly, as required by
Article XV, section 2, of the Constitution, it seems reasonable to
conclude that the authority to prescribe the time and manner of filing
contests in the election of members of the National Assembly is
vested in the Electoral Commission, which is now the body clothed
with power to decide such contests.
In the light of what has been said, the resolution of the National
Assembly of December 3, 1935, could not have the effect of barring
the right of the respondent Pedro Ynsua to contest the election of the
petitioner. By the same token, the Electoral Commission was
authorized by law to adopt its resolution of December 9, 1935, which
fixed the time with in which written contests must be filed with the
commission.
Having been filed within the time fixed by its resolutions, the Electoral
Commission has jurisdiction to hear and determine the contest filed
by the respondent Pedro Ynsua against the petitioner Jose A.
Angara.

EN BANC

21

unconstitutional sections 2, 51, and 52 of R.A. No. 7854 on the


following grounds:
G.R. No. 118577 March 7, 1995
JUANITO MARIANO, JR. et al., petitioners,
vs.
THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF
MAKATI, HON. JEJOMAR BINAY, THE MUNICIPAL TREASURER,
AND SANGGUNIANG BAYAN OF MAKATI, respondents.
G.R. No. 118627 March 7, 1995
JOHN R. OSMEA, petitioner,
vs.
THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF
MAKATI, HON. JEJOMAR BINAY, MUNICIPAL TREASURER, AND
SANGGUNIANG BAYAN OF MAKATI, respondents.

PUNO, J.:
At bench are two (2) petitions assailing certain provisions of Republic
Act No. 7854 as unconstitutional. R.A. No. 7854 as unconstitutional.
R.A. No. 7854 is entitled, "An Act Converting the Municipality of
Makati Into a Highly Urbanized City to be known as the City of
Makati." 1
G.R. No. 118577 involves a petition for prohibition and declaratory
relief. It was filed by petitioners Juanito Mariano, Jr., Ligaya S.
Bautista, Teresita Tibay, Camilo Santos, Frankie Cruz, Ricardo
Pascual, Teresita Abang, Valentina Pitalvero, Rufino Caldoza,
Florante Alba, and Perfecto Alba. Of the petitioners, only Mariano,
Jr., is a resident of Makati. The others are residents of Ibayo Ususan,
Taguig, Metro Manila. Suing as taxpayers, they assail as

1. Section 2 of R.A. No. 7854 did not properly


identify the land area or territorial jurisdiction of
Makati by metes and bounds, with technical
descriptions, in violation of Section 10, Article X of
the Constitution, in relation to Sections 7 and 450 of
the Local Government Code;
2. Section 51 of R.A. No. 7854 attempts to alter or
restart the "three consecutive term" limit for local
elective officials, in violation of Section 8, Article X
and Section 7, Article VI of the Constitution.
3. Section 52 of R.A. No. 7854 is unconstitutional
for:
(a) it increased the legislative district
of Makati only by special law (the
Charter in violation of the
constitutional provision requiring a
general reapportionment law to be
passed by Congress within three (3)
years following the return of every
census;
(b) the increase in legislative district
was not expressed in the title of the
bill; and
(c) the addition of another legislative
district in Makati is not in accord with
Section 5 (3), Article VI of the
Constitution for as of the latest

22

survey (1990 census), the


population of Makati stands at only
450,000.
G.R. No. 118627 was filed by the petitioner John H. Osmea as
senator, taxpayer, and concerned citizen. Petitioner assails section
52 of R.A. No. 7854 as unconstitutional on the same grounds as
aforestated.
We find no merit in the petitions.
I
Section 2, Article I of R.A. No. 7854 delineated the land areas of the
proposed city of Makati, thus:
Sec. 2. The City of Makati. The Municipality of
Makati shall be converted into a highly urbanized city
to be known as the City of Makati, hereinafter
referred to as the City, which shall comprise the
present territory of the Municipality of Makati in
Metropolitan Manila Area over which it has
jurisdiction bounded on the northeast by Pasig River
and beyond by the City of Mandaluyong and the
Municipality of Pasig; on the southeast by the
municipalities of Pateros and Taguig; on the
southwest by the City of Pasay and the Municipality
of Taguig; and, on the northwest, by the City of
Manila.
The foregoing provision shall be without prejudice to
the resolution by the appropriate agency or forum of
existing boundary disputes or cases involving
questions of territorial jurisdiction between the City

of Makati and the adjoining local government units.


(Emphasis supplied)
In G.R. No. 118577, petitioners claim that this delineation violates
sections 7 and 450 of the Local Government Code which require that
the area of a local government unit should be made by metes and
bounds with technical descriptions. 2
The importance of drawing with precise strokes the territorial
boundaries of a local unit of government cannot be overemphasized.
The boundaries must be clear for they define the limits of the
territorial jurisdiction of a local government unit. It can legitimately
exercise powers of government only within the limits, its acts
are ultra vires. Needless to state, any uncertainty in the boundaries
of local government units will sow costly conflicts in the exercise of
governmental powers which ultimately will prejudice the people's
welfare. This is the evil sought to avoided by the Local Government
Code in requiring that the land area of a local government unit must
be spelled out in metes and bounds, with technical descriptions.
Given the facts of the cases at bench, we cannot perceive how this
evil can be brought about by the description made in section 2 of
R.A. No. 7854, Petitioners have not demonstrated that the
delineation of the land area of the proposed City of Makati will cause
confusion as to its boundaries. We note that said delineation did not
change even by an inch the land area previously covered by Makati
as a municipality. Section 2 did not add, subtract, divide, or multiply
the established land area of Makati. In language that cannot be any
clearer, section 2 stated that, the city's land area "shall comprise
the present territory of the municipality."
The deliberations of Congress will reveal that there is a legitimate
reason why the land area of the proposed City of Makati was not
defined by metes and bounds, with technical descriptions. At the time
of the consideration of R.A. No. 7854, the territorial dispute between

23

the municipalities of Makati and Taguig over Fort Bonifacio was


under court litigation. Out of a becoming sense of respect to co-equal
department of government, legislators felt that the dispute should be
left to the courts to decide. They did not want to foreclose the dispute
by making a legislative finding of fact which could decide the issue.
This would have ensued if they defined the land area of the proposed
city by its exact metes and bounds, with technical descriptions. 3 We
take judicial notice of the fact that Congress has also refrained from using
the metes and bounds description of land areas of other local government
units with unsettled boundary disputes. 4

We hold that the existence of a boundary dispute does not per


se present an insurmountable difficulty which will prevent Congress
from defining with reasonable certitude the territorial jurisdiction of a
local government unit. In the cases at bench, Congress maintained
the existing boundaries of the proposed City of Makati but as an act
of fairness, made them subject to the ultimate resolution by the
courts. Considering these peculiar circumstances, we are not
prepared to hold that section 2 of R.A. No. 7854 is unconstitutional.
We sustain the submission of the Solicitor General in this
regard, viz.:
Going now to Sections 7 and 450 of the Local
Government Code, it is beyond cavil that the
requirement stated therein, viz.: "the territorial
jurisdiction of newly created or converted cities
should be described by meted and bounds, with
technical descriptions" was made in order to
provide a means by which the area of said cities
may be reasonably ascertained. In other words, the
requirement on metes and bounds was meant
merely as tool in the establishment of local
government units. It is not an end in itself. Ergo, so
long as the territorial jurisdiction of a city may be
reasonably ascertained, i.e., by referring to common

boundaries with neighboring municipalities, as in this


case, then, it may be concluded that the legislative
intent behind the law has been sufficiently served.
Certainly, Congress did not intends that laws
creating new cities must contain therein detailed
technical descriptions similar to those appearing in
Torrens titles, as petitioners seem to imply. To
require such description in the law as a
condition sine qua non for its validity would be to
defeat the very purpose which the Local
Government Code to seeks to serve. The manifest
intent of the Code is to empower local government
units and to give them their rightful due. It seeks to
make local governments more responsive to the
needs of their constituents while at the same time
serving as a vital cog in national development. To
invalidate R.A. No. 7854 on the mere ground that no
cadastral type of description was used in the law
would serve the letter but defeat the spirit of the
Code. It then becomes a case of the master serving
the slave, instead of the other way around. This
could not be the intendment of the law.
Too well settled is the rule that laws must be
enforced when ascertained, although it may not be
consistent with the strict letter of the statute. Courts
will not follow the letter of the statute when to do so
would depart from the true intent of the legislature or
would otherwise yield conclusions inconsistent with
the general purpose of the act. (Torres v. Limjap, 56
Phil., 141; Taada v. Cuenco, 103 Phil. 1051;
Hidalgo v. Hidalgo, 33 SCRA 1105). Legislation is an
active instrument of government, which, for
purposes of interpretation, means that laws have

24

ends to achieve, and statutes should be so


construed as not to defeat but to carry out such ends
and purposes (Bocolbo v. Estanislao, 72 SCRA 520).
The same rule must indubitably apply to the case at
bar.
II
Petitioners in G.R. No. 118577 also assail the constitutionality of
section 51, Article X of R.A. No. 7854. Section 51 states:
Sec. 51. Officials of the City of Makati. The
represent elective officials of the Municipality of
Makati shall continue as the officials of the City of
Makati and shall exercise their powers and functions
until such time that a new election is held and the
duly elected officials shall have already qualified and
assume their offices: Provided, The new city will
acquire a new corporate existence. The appointive
officials and employees of the City shall likewise
continues exercising their functions and duties and
they shall be automatically absorbed by the city
government of the City of Makati.
They contend that this section collides with section 8, Article X and
section 7, Article VI of the Constitution which provide:
Sec. 8. The term of office of elective local officials,
except barangay officials, which shall be determined
by law, shall be three years and no such official shall
serve for more than three consecutive terms.
Voluntary renunciation of the office for any length of
time shall not be considered as an interruption in the
continuity of his service for the full term for which he
was elected.

xxx xxx xxx


Sec. 7. The Members of the House of
Representatives shall be elected for a term of three
years which shall begin, unless otherwise provided
by law, at noon on the thirtieth day of June next
following their election.
No Member of the House of Representatives shall
serve for more than three consecutive terms.
Voluntary renunciation of the office for any length of
time shall not be considered as an interruption in the
continuity of his service for the full term for which he
was elected.
Petitioners stress that under these provisions, elective local officials,
including Members of the House of Representative, have a term of
three (3) years and are prohibited from serving for more than
three (3) consecutive terms. They argue that by providing that the
new city shall acquire a new corporate existence, section 51 of R.A.
No. 7854 restarts the term of the present municipal elective officials
of Makati and disregards the terms previously served by them. In
particular, petitioners point that section 51 favors the incumbent
Makati Mayor, respondent Jejomar Binay, who has already served for
two (2) consecutive terms. They further argue that should Mayor
Binay decide to run and eventually win as city mayor in the coming
elections, he can still run for the same position in 1998 and seek
another three-year consecutive term since his previous three-year
consecutive term as municipal mayorwould not be counted. Thus,
petitioners conclude that said section 51 has been conveniently
crafted to suit the political ambitions of respondent Mayor Binay.
We cannot entertain this challenge to the constitutionality of section
51. The requirements before a litigant can challenge the
constitutionality of a law are well delineated. They are: 1) there must

25

be an actual case or controversy; (2) the question of constitutionality


must be raised by the proper party; (3) the constitutional question
must be raised at the earliest possible opportunity; and (4) the
decision on the constitutional question must be necessary to the
determination of the case itself. 5
Petitioners have far from complied with these requirements. The
petition is premised on the occurrence of many contingent
events, i.e., that Mayor Binay will run again in this coming mayoralty
elections; that he would be re-elected in said elections; and that he
would seek re-election for the same position in the 1998 elections.
Considering that these contingencies may or may not happen,
petitioners merely pose a hypothetical issue which has yet to ripen to
an actual case or controversy. Petitioners who are residents of
Taguig (except Mariano) are not also the proper parties to raise this
abstract issue. Worse, they hoist this futuristic issue in a petition for
declaratory relief over which this Court has no jurisdiction.
III
Finally, petitioners in the two (2) cases at bench assail the
constitutionality of section 52, Article X of R.A. No. 7854. Section 52
of the Charter provides:
Sec. 52. Legislative Districts. Upon its conversion
into a highly-urbanized city, Makati shall thereafter
have at least two (2) legislative districts that shall
initially correspond to the two (2) existing districts
created under Section 3(a) of Republic Act. No. 7166
as implemented by the Commission on Elections to
commence at the next national elections to be held
after the effectivity of this Act. Henceforth, barangays
Magallanes, Dasmarias and Forbes shall be with
the first district, in lieu of Barangay Guadalupe-Viejo

which shall form part of the second district.


(emphasis supplied)
They contend. that the addition of another legislative district in Makati
is unconstitutional for: (1) reapportionment 6cannot made by a special
law, (2) the addition of a legislative district is not expressed in the title of the
bill 7 and (3) Makati's population, as per the 1990 census, stands at only four
hundred fifty thousand (450,000).

These issues have been laid to rest in the recent case of Tobias
v. Abalos. 8 In said case, we ruled that reapportionment of legislative
districts may be made through a special law, such as in the charter of a new
city. The Constitution 9 clearly provides that Congress shall be composed of
not more than two hundred fifty (250) members, unless otherwise fixed by
law. As thus worded, the Constitution did not preclude Congress from
increasing its membership by passing a law, other than a general
reapportionment of the law. This is its exactly what was done by Congress in
enacting R.A. No. 7854 and providing for an increase in Makati's legislative
district. Moreover, to hold that reapportionment can only be made through a
general apportionment law, with a review of all the legislative districts allotted
to each local government unit nationwide, would create an inequitable
situation where a new city or province created by Congress will be denied
legislative representation for an indeterminate period of time. 10 The
intolerable situations will deprive the people of a new city or province a
particle of their sovereignty. 11 Sovereignty cannot admit of any kind of
subtraction. It is indivisible. It must be forever whole or it is not sovereignty.

Petitioners cannot insist that the addition of another legislative district


in Makati is not in accord with section 5(3), Article VI 12 of the
Constitution for as of the latest survey (1990 census), the population of
Makati stands at only four hundred fifty thousand (450,000). 13 Said section
provides, inter alia, that a city with a population of at least two hundred fifty
thousand (250,000) shall have at least one representative. Even granting
that the population of Makati as of the 1990 census stood at four hundred
fifty thousand (450,000), its legislative district may still be increased since it
has met the minimum population requirement of two hundred fifty thousand
(250,000). In fact, section 3 of the Ordinance appended to the Constitution
provides that a city whose population has increased to more than two

26

hundred fifty thousand (250,000) shall be entitled to at least one


congressional representative. 14

Finally, we do not find merit in petitioners' contention that the creation


of an additional legislative district in Makati should have been
expressly stated in the title of the bill. In the same case of Tobias
v. Abalos, op cit., we reiterated the policy of the Court favoring a
liberal construction of the "one title-one subject" rule so as not to
impede legislation. To be sure, with Constitution does not command
that the title of a law should exactly mirror, fully index, or completely
catalogue all its details. Hence, we ruled that "it should be sufficient
compliance if the title expresses the general subject and all the
provisions are germane to such general subject."
WHEREFORE, the petitions are hereby DISMISSED for lack of merit
No costs.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Romero,
Bellosillo, Melo, Quiason, Vitug, Kapunan, Mendoza and Francisco,
JJ., concur.
Separate Opinions
DAVIDE, JR., J., concurring:
I concur in the well written opinion of Mr. Justice Reynato S. Puno. I
wish, however, to add a few observations.

with the criteria established in the local government code and subject
to the approval by a majority of the votes cast in a plebiscite in the
political units directly affected." These criteria are now set forth in
Section 7 of the Local Government Code of 1991 (R.A. No. 7160).
One of these is that the territorial jurisdiction of the local government
unit to be created or converted should be properly identified by
metes and bounds with technical descriptions.
The omission of R.A. No. 7854 (An Act Converting the Municipality of
Makati Into a Highly Urbanized City to be Known as the City of
Makati) to describe the territorial boundaries of the city by metes and
bounds does not make R.A. No. 7854 unconstitutional or illegal. The
Constitution does not provide for a description by metes and bounds
as a condition sine qua non for the creation of a local government
unit or its conversion from one level to another. The criteria provided
for in Section 7 of R.A. No. 7854 are not absolute, for, as a matter of
fact, the section starts with the clause "as a general rule." The
petitioners' reliance on Section 450 of R.A. No. 7160 is unavailing
Said section only applies to the conversion of a municipality or a
cluster of barangays into a COMPONENT CITY, not a highly
urbanized city. It pertinently reads as follows:
Sec. 450. Requisite for creation. (a) A municipality
or a cluster of barangays may be converted into a
component city if it has an average annual income,
as certified by the Department of Finance, of at least
Twenty million pesos (P20,000,000.00) for the last
two (2) consecutive years based on 1991 constant
prices, and if it has either of the following requisites:

I.

xxx xxx xxx

Section 10, Article X of the Constitution provides that "[n]o province,


city, municipality or barangay may be created, divided, merged,
abolished, or its boundary substantially altered, except in accordance

(b) The territorial jurisdiction of a newly created city


shall be properly identified by metes and bounds. . . .

27

The constitution classifies cities as either highly urbanized or


component. Section 12 of Article X thereof provides:
Sec. 12. Cities that are highly urbanized, as
determined by law, and component cities whose
charters prohibit their voters from voting for
provincial elective officials, shall be independent of
the province. The voters of component cities within a
province, whose charters contain no such
prohibition, shall not be deprived of their right to vote
for elective provincial officials.
And Section 451 of R.A. No. 7160 provides:
Sec. 451. Cities Classified. A city may either be
component or highly urbanized: Provided, however,
That the criteria established in this Code shall not
affect the classification and corporate status of
existing cities.
Independent component cities are those component
cities whose charters prohibit their voters from voting
for provincial elective officials. Independent
component cities shall be independent of the
province.

Within three years following the return of every


census, the Congress shall make a reapportionment
of legislative districts based on the standards
provided in this section.
In short, the clause refers to a general reapportionment law.
The increase under R.A. No. 7854 is a permissible increase under
Sections 1 and 3 of the Ordinance appended to the Constitution
which reads:
Sec. 1. For purposes of the election of Members of
the House of Representatives of the First Congress
of the Philippines under the Constitution proposed
by the 1986 Constitutional Commission and
subsequent elections, and until otherwise provided
by law, the Members thereof shall be elected from
legislative districts apportioned among the
provinces, cities, and the Metropolitan Manila
Area as follows:
METROPOLITAN MANILA AREA
xxx xxx xxx
MAKATI one (1)

II.
xxx xxx xxx
Strictly speaking, the increase in the number of legislative seats for
the City of Makati provided for in R.A. No. 7854 is not an increase
justified by the clause unless otherwise fixed by law in paragraph 1,
Section 5, Article VI of the Constitution. That clause contemplates of
the reapportionment mentioned in the succeeding paragraph (4) of
the said Section which reads in full as follows:

Sec. 3. Any province that may hereafter be


created, or any city whose population may hereafter
increase to more than two hundred fifty thousand
shall be entitled in the immediately following election
to at least one Member or such number of Members
as it may be entitled to on the basis of the number of

28

its inhabitants and according to the standards set


forth in paragraph (3), Section 5 of Article VI of the
Constitution. The number of Members apportioned
to the province out of which such new province was
created, or where the city, whose population has so
increased, is geographically located shall be
correspondingly adjusted by the Commission on
Elections but such adjustment shall not be made
within one hundred and twenty days before the
election. (Emphases supplied)
Separate Opinions
DAVIDE, JR., J., concurring:
I concur in the well written opinion of Mr. Justice Reynato S. Puno. I
wish, however, to add a few observations.

Constitution does not provide for a description by metes and bounds


as a condition sine qua non for the creation of a local government
unit or its conversion from one level to another. The criteria provided
for in Section 7 of R.A. No. 7854 are not absolute, for, as a matter of
fact, the section starts with the clause "as a general rule." The
petitioners' reliance on Section 450 of R.A. No. 7160 is unavailing
Said section only applies to the conversion of a municipality or a
cluster of barangays into a COMPONENT CITY, not a highly
urbanized city. It pertinently reads as follows:
Sec. 450. Requisite for creation. (a) A municipality
or a cluster of barangays may be converted into a
component city if it has an average annual income,
as certified by the Department of Finance, of at least
Twenty million pesos (P20,000,000.00) for the last
two (2) consecutive years based on 1991 constant
prices, and if it has either of the following requisites:

I.

xxx xxx xxx

Section 10, Article X of the Constitution provides that "[n]o province,


city, municipality or barangay may be created, divided, merged,
abolished, or its boundary substantially altered, except in accordance
with the criteria established in the local government code and subject
to the approval by a majority of the votes cast in a plebiscite in the
political units directly affected." These criteria are now set forth in
Section 7 of the Local Government Code of 1991 (R.A. No. 7160).
One of these is that the territorial jurisdiction of the local government
unit to be created or converted should be properly identified by
metes and bounds with technical descriptions.

(b) The territorial jurisdiction of a newly created city


shall be properly identified by metes and bounds. . . .

The omission of R.A. No. 7854 (An Act Converting the Municipality of
Makati Into a Highly Urbanized City to be Known as the City of
Makati) to describe the territorial boundaries of the city by metes and
bounds does not make R.A. No. 7854 unconstitutional or illegal. The

The constitution classifies cities as either highly urbanized or


component. Section 12 of Article X thereof provides:
Sec. 12. Cities that are highly urbanized, as
determined by law, and component cities whose
charters prohibit their voters from voting for
provincial elective officials, shall be independent of
the province. The voters of component cities within a
province, whose charters contain no such
prohibition, shall not be deprived of their right to vote
for elective provincial officials.

29

And Section 451 of R.A. No. 7160 provides:


Sec. 451. Cities Classified. A city may either be
component or highly urbanized: Provided, however,
That the criteria established in this Code shall not
affect the classification and corporate status of
existing cities.
Independent component cities are those component
cities whose charters prohibit their voters from voting
for provincial elective officials. Independent
component cities shall be independent of the
province.
II.
Strictly speaking, the increase in the number of legislative seats for
the City of Makati provided for in R.A. No. 7854 is not an increase
justified by the clause unless otherwise fixed by law in paragraph 1,
Section 5, Article VI of the Constitution. That clause contemplates of
the reapportionment mentioned in the succeeding paragraph (4) of
the said Section which reads in full as follows:
Within three years following the return of every
census, the Congress shall make a reapportionment
of legislative districts based on the standards
provided in this section.
In short, the clause refers to a general reapportionment law.
The increase under R.A. No. 7854 is a permissible increase under
Sections 1 and 3 of the Ordinance appended to the Constitution
which reads:

Sec. 1. For purposes of the election of Members of


the House of Representatives of the First Congress
of the Philippines under the Constitution proposed
by the 1986 Constitutional Commission and
subsequent elections, and until otherwise provided
by law, the Members thereof shall be elected from
legislative districts apportioned among the
provinces, cities, and the Metropolitan Manila
Area as follows:
METROPOLITAN MANILA AREA
xxx xxx xxx
MAKATI one (1)
xxx xxx xxx
Sec. 3. Any province that may hereafter be
created, or any city whose population may hereafter
increase to more than two hundred fifty thousand
shall be entitled in the immediately following election
to at least one Member or such number of Members
as it may be entitled to on the basis of the number of
its inhabitants and according to the standards set
forth in paragraph (3), Section 5 of Article VI of the
Constitution. The number of Members apportioned
to the province out of which such new province was
created, or where the city, whose population has so
increased, is geographically located shall be
correspondingly adjusted by the Commission on
Elections but such adjustment shall not be made
within one hundred and twenty days before the
election. (Emphases supplied)

30

Footnotes

4 Ibid, citing as example the City of Mandaluyong.


1 R.A. No. 7854 is a consolidation of House Bill No. 12240
sponsored by Congressman Joker Arroyo and Senate Bill
No. 1244 sponsored by Senator Vicente Sotto III.

5 Dumlao v. COMELEC, 95 SCRA 392 (19180); Cruz,


Constitutional Law, 1991 ed., p. 24.
6 Section 5(4), Article VI of the Constitution provides:

2 Sec. 7. Creation and Conversion. As a general rule,


the creation of a local government unit or its conversion
from one level to another level shall be based on verifiable
indicators of viability and projected capacity to provide
services, to wit:
xxx xxx xxx
(c) Land Area. It must be contiguous, unless it
comprises two (2) or more islands or is separated by a
local government unit independent of the others; properly
identified by metes and bounds with technical descriptions
and sufficient to provide for such basic services and
facilities to meet the requirements of its populace.
Compliance with the foregoing indicators shall be attested
to by the Department of Finance the National Statistics
Office (NSO), and the Lands Management Bureau (LMB)
of the Department of Environment and Natural Resources
(DENR).
xxx xxx xxx
Sec. 450. Requisites for Creation. . . .
(b) The territorial jurisdiction of a newly-created city shall
be properly identified by metes and bounds. . . .
3 August 18, 1994, Senate Deliberations on H.B. No.
12240, pp. 23-28.

(4) Within three years following the return of every census,


the Congress shall make a reapportionment of legislative
districts based on the standards provided in this section.
7 Section 26(1), Article VI of the Constitution provides:
Sec. 26 (1) Every bill passed by the Congress shall,
embrace only one subject which shall be expressed in the
title thereof.
8 G.R. No. 114783, December 8, 1994.
9 Section 5(1), Article VI.
10 In this connection, we take judicial notice of the fact
that since 1986 up to this time, Congress has yet to pass a
general reapportionment law.
11 Section 1, Article II provides that "the Philippines is a
democratic and republican state. Sovereignty resides in
the people and all government authority from them."
12 Sec. 5. . . .
(3) Each legislative district shall comprise, as far as
practicable, contiguous, compact, and adjacent
territory. Each city with a population of at least two
hundred fifty thousand, or each province, shall have at
least one representative.

31

xxx xxx xxx


13 As per the certificate issued by Administration Tomas
Africa of the National Census and Statistics Office, the
population of Makati as of 1994 stood at 508,174; August
4, 1994, Senate Deliberations on House Bill No. 12240
(converting Makati into a highly urbanized city), p. 15.
14 Sec. 3 provides: "Any province that may hereafter be
created, or any city whose population may hereafter
increase to more than two hundred fifty thousand shall be
entitled in the immediately following election to at least one
Member or such number of Members as it may be entitled
to on the basis of the number of its inhabitants and
according to the standards set forth in paragraph (3),
Section 5 of Article VI of the Constitution. The number of
Members apportioned to the province out of which such
new province was created or where the city, whose
population has so increased, is geographically located
shall be correspondingly adjusted by the Commission on
Elections but such adjustment shall not be made within
one hundred, and twenty days before the election."

EN BANC
[G.R. No. 152295. July 9, 2002]

ANTONIETTE
V.C.
MONTESCLAROS,
MARICEL
CARANZO, JOSEPHINE ATANGAN, RONALD ATANGAN

32

and CLARIZA DECENA, and OTHER YOUTH OF THE LAND


SIMILARLY SITUATED, petitioners, vs. COMMISSION ON
ELECTIONS, DEPARTMENT OF INTERIOR AND LOCAL
GOVERNMENT, DEPARTMENT OF BUDGET AND
MANAGEMENT, EXECUTIVE SECRETARY of the OFFICE
OF THE PRESIDENT, SENATOR FRANKLIN DRILON in his
capacity as Senate President and SENATOR AQUILINO
PIMENTEL in his capacity as Minority Leader of the
Senate of the Philippines, CONGRESSMAN JOSE DE
VENECIA in his capacity as Speaker, CONGRESSMAN
AGUSTO L. SYJOCO in his capacity as Chairman of the
Committee on Suffrage and Electoral Reforms, and
CONGRESSMAN EMILIO C. MACIAS II in his capacity as
Chairman of the Committee on Local Government of the
House of Representatives, THE PRESIDENT OF THE
PAMBANSANG KATIPUNAN NG MGA SANGGUNIANG
KABATAAN,
AND
ALL
THEIR
AGENTS
AND
REPRESENTATIVES, respondents.

Petitioners, who are all 20 years old, filed this petition as a


taxpayers and class suit, on their own behalf and on behalf of other
youths similarly situated. Petitioners claim that they are in danger of
being disqualified to vote and be voted for in the SK elections should
the SK elections on May 6, 2002 be postponed to a later date. Under
the Local Government Code of 1991 (R.A. No. 7160), membership in
the SK is limited to youths at least 15 but not more than 21 years old.
Petitioners allege that public respondents connived,
confederated and conspired to postpone the May 6, 2002 SK
elections and to lower the membership age in the SK to at least 15
but less than 18 years of age. Petitioners assail the alleged
conspiracy because youths at least 18 but not more than 21 years
old will be summarily and unduly dismembered, unfairly
discriminated, unnecessarily disenfranchised, unjustly disassociated
and obnoxiously disqualified from the SK organization. [1]
Thus, petitioners pray for the issuance of a temporary
restraining order or preliminary injunction -

DECISION

a) To prevent, annul or declare unconstitutional any law, decree,


Comelec resolution/directive and other respondents issuances,
orders and actions and the like in postponing the May 6, 2002 SK
elections.

The Case

b) To command the respondents to continue the May 6, 2002 SK


elections set by the present law and in accordance with Comelec
Resolutions No. 4713 and 4714 and to expedite the funding of the
SK elections.

CARPIO, J.:

Before us is a petition for certiorari, prohibition and mandamus


with prayer for a temporary restraining order or preliminary injunction.
The petition seeks to prevent the postponement of the Sangguniang
Kabataan (SK for brevity) elections originally scheduled last May 6,
2002. The petition also seeks to prevent the reduction of the age
requirement for membership in the SK.

c) In the alternative, if the SK elections will be postponed for


whatever reason, there must be a definite date for said elections, for
example, July 15, 2002, and the present SK membership, except
those incumbent SK officers who were elected on May 6, 1996, shall
be allowed to run for any SK elective position even if they are more
than 21 years old.

33

d) To direct the incumbent SK officers who are presently


representing the SK in every sanggunian and the NYC to vacate their
post after the barangay elections.[2]

The Facts
The SK is a youth organization originally established by
Presidential Decree No. 684 as the Kabataang Barangay (KB for
brevity). The KB was composed of all barangay residents who were
less than 18 years old, without specifying the minimum age. The KB
was organized to provide its members with the opportunity to
express their views and opinions on issues of transcendental
importance.[3]
The Local Government Code of 1991 renamed the KB to SK
and limited SK membership to those youths at least 15 but not more
than 21 years of age. [4] The SK remains as a youth organization in
every barangay tasked to initiate programs to enhance the
social, political, economic, cultural, intellectual, moral, spiritual, and
physical development of the youth.[5] The SK in every barangay is
composed of a chairperson and seven members, all elected by
the Katipunan ng Kabataan. The Katipunan ng Kabataan in every
barangay is composed of all citizens actually residing in the
barangay for at least six months and who meet the membership age
requirement.
The first SK elections took place on December 4, 1992. RA No.
7808 reset the SK elections to the first Monday of May of 1996 and
every three years thereafter. RA No. 7808 mandated the Comelec to
supervise the conduct of the SK elections under rules the Comelec
shall promulgate. Accordingly, the Comelec on December 4, 2001
issued Resolution Nos. 4713[6] and 4714[7] to govern the SK elections
on May 6, 2002.

On February 18, 2002, petitioner Antoniette V.C. Montesclaros


(Montesclaros for brevity) sent a letter [8] to the Comelec, demanding
that the SK elections be held as scheduled on May 6,
2002. Montesclaros also urged the Comelec to respond to her letter
within 10 days upon receipt of the letter, otherwise, she will seek
judicial relief.
On February 20, 2002, Alfredo L. Benipayo (Chairman Benipayo
for brevity), then Comelec Chairman, wrote identical letters to the
Speaker of the House[9] and the Senate President[10] about the status
of pending bills on the SK and Barangay elections. In his letters, the
Comelec Chairman intimated that it was operationally very difficult to
hold both elections simultaneously in May 2002. Instead, the
Comelec Chairman expressed support for the bill of Senator Franklin
Drilon that proposed to hold the Barangay elections in May 2002 and
postpone the SK elections to November 2002.
Ten days lapsed without the Comelec responding to the letter of
Montesclaros. Subsequently, petitioners received a copy of
Comelec En Banc Resolution No. 4763[11] dated February 5, 2002
recommending to Congress the postponement of the SK elections to
November 2002 but holding the Barangay elections in May 2002 as
scheduled.[12]
On March 6, 2002, the Senate and the House of
Representatives passed their respective bills postponing the SK
elections. On March 11, 2002, the Bicameral Conference Committee
(Bicameral Committee for brevity) of the Senate and the House came
out with a Report[13] recommending approval of the reconciled bill
consolidating Senate Bill No. 2050[14] and House Bill No. 4456.[15] The
Bicameral Committees consolidated bill reset the SK and Barangay
elections to July 15, 2002 and lowered the membership age in the
SK to at least 15 but not more than 18 years of age.
On March 11, 2002, petitioners filed the instant petition.

34

On March 11, 2002, the Senate approved the Bicameral


Committees consolidated bill and on March 13, 2002, the House of
Representatives approved the same. The President signed the
approved bill into law on March 19, 2002.

GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR


EXCESS OF JURISDICTION WHEN THEY WILLFULLY FAILED TO
FUND THE SK ELECTION PURPORTEDLY TO POSTPONE THE
SAME IN ORDER TO IMPLEMENT THEIR ILLEGAL SCHEME AND
MACHINATION IN SPITE OF THE FACT THAT THERE ARE
AVAILABLE FUNDS FOR THE PURPOSE.

The Issues
IV.
Petitioners[16] raise the following grounds in support of their
petition:
I.
RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY AND
UNCONSTITUTIONALLY THUS CONSTITUTED (SIC) WITH
GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN THEY INTENDED TO
POSTPONE THE SK ELECTIONS.
II.
RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY AND
UNCONSTITUTIONALLY THUS CONSTITUTED (SIC) WITH
GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN THEY INTENDED TO
DISCRIMINATE, DISENFRANCHISE, SINGLE OUT AND
DISMEMBER THE SK MEMBERS WHO ARE 18 BUT NOT
LESS[17] (SIC) THAN 21 YEARS OLD COMPOSED OF ABOUT 7
MILLION YOUTH.
III.
RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY AND
UNCONSTITUTIONALLY THUS CONSTITUTED (SIC) WITH

THE INCUMBENT SK OFFICERS WANTED TO PERPETUALLY SIT


ON THEIR RESPECTIVE OFFICES CONTRARY TO THE
ENVISION (SIC) OF THE CREATION OF THE SK ORGANIZATION,
HENCE, IN VIOLATION OF LAW AND CONSTITUTION.[18]

The Courts Ruling


The petition is bereft of merit.
At the outset, the Court takes judicial notice of the following
events that have transpired since petitioners filed this petition:
1. The May 6, 2002 SK elections and May 13, 2002
Barangay elections were not held as scheduled.
2. Congress enacted RA No. 9164 [19] which provides that
voters and candidates for the SK elections must be at
least 15 but less than 18 years of age on the day of the
election.[20] RA No. 9164 also provides that there shall
be a synchronized SK and Barangay elections on July
15, 2002.
3. The Comelec promulgated Resolution No. 4846, the
rules and regulations for the conduct of the July 15,
2002 synchronized SK and Barangay elections.

35

Petitioners, who all claim to be 20 years old, argue that the


postponement of the May 6, 2002 SK elections disenfranchises
them, preventing them from voting and being voted for in the SK
elections. Petitioners theory is that if the SK elections were
postponed to a date later than May 6, 2002, the postponement would
disqualify from SK membership youths who will turn 21 years old
between May 6, 2002 and the date of the new SK
elections. Petitioners claim that a reduction in the SK membership
age to 15 but less than 18 years of age from the then membership
age of 15 but not more than 21 years of age would disqualify about
seven million youths. The public respondents failure to hold the
elections on May 6, 2002 would prejudice petitioners and other
youths similarly situated.
Thus, petitioners instituted this petition to: (1) compel public
respondents to hold the SK elections on May 6, 2002 and should it
be postponed, the SK elections should be held not later than July 15,
2002; (2) prevent public respondents from passing laws and issuing
resolutions and orders that would lower the membership age in the
SK; and (3) compel public respondents to allow petitioners and those
who have turned more than 21 years old on May 6, 2002 to
participate in any re-scheduled SK elections.
The Courts power of judicial review may be exercised in
constitutional cases only if all the following requisites are complied
with, namely: (1) the existence of an actual and appropriate case or
controversy; (2) a personal and substantial interest of the party
raising the constitutional question; (3) the exercise of judicial review
is pleaded at the earliest opportunity; and (4) the constitutional
question is the lis mota of the case.[21]
In the instant case, there is no actual controversy requiring the
exercise of the power of judicial review. While seeking to prevent a
postponement of the May 6, 2002 SK elections, petitioners are
nevertheless amenable to a resetting of the SK elections to any date
not later than July 15, 2002. RA No. 9164 has reset the SK elections

to July 15, 2002, a date acceptable to petitioners. With respect to the


date of the SK elections, there is therefore no actual controversy
requiring judicial intervention.
Petitioners prayer to prevent Congress from enacting into law a
proposed bill lowering the membership age in the SK does not
present an actual justiciable controversy. A proposed bill is not
subject to judicial review because it is not a law. A proposed bill
creates no right and imposes no duty legally enforceable by the
Court. A proposed bill, having no legal effect, violates no
constitutional right or duty. The Court has no power to declare a
proposed bill constitutional or unconstitutional because that would be
in the nature of rendering an advisory opinion on a proposed act of
Congress. The
power
of
judicial
review
cannot
be
[22]
exercised in vacuo. The second paragraph of Section 1, Article VIII
of the Constitution states
Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of
the Government. (Emphasis supplied)
Thus, there can be no justiciable controversy involving the
constitutionality of a proposed bill. The Court can exercise its power
of judicial review only after a law is enacted, not before.
Under the separation of powers, the Court cannot restrain
Congress from passing any law, or from setting into motion the
legislative mill according to its internal rules. Thus, the following acts
of Congress in the exercise of its legislative powers are not subject to
judicial restraint: the filing of bills by members of Congress, the
approval of bills by each chamber of Congress, the reconciliation by
the Bicameral Committee of approved bills, and the eventual
approval into law of the reconciled bills by each chamber of

36

Congress.Absent a clear violation of specific constitutional limitations


or of constitutional rights of private parties, the Court cannot exercise
its power of judicial review over the internal processes or procedures
of Congress.[23]
The Court has also no power to dictate to Congress the object
or subject of bills that Congress should enact into law. The judicial
power to review the constitutionality of laws does not include the
power to prescribe to Congress what laws to enact. The Court has
no power to compel Congress by mandamus to enact a law allowing
petitioners, regardless of their age, to vote and be voted for in the
July 15, 2002 SK elections. To do so would destroy the delicate
system of checks and balances finely crafted by the Constitution for
the three co-equal, coordinate and independent branches of
government.
Under RA No. 9164, Congress merely restored the age
requirement in PD No. 684, the original charter of the SK, which fixed
the maximum age for membership in the SK to youths less than 18
years old. Petitioners do not have a vested right to the permanence
of the age requirement under Section 424 of the Local Government
Code of 1991. Every law passed by Congress is always subject to
amendment or repeal by Congress. The Court cannot restrain
Congress from amending or repealing laws, for the power to make
laws includes the power to change the laws.[24]
The Court cannot also direct the Comelec to allow over-aged
voters to vote or be voted for in an election that is limited under RA
No. 9164 to youths at least 15 but less than 18 years old. A law is
needed to allow all those who have turned more than 21 years old on
or after May 6, 2002 to participate in the July 15, 2002 SK
elections. Youths from 18 to 21 years old as of May 6, 2002 are also
no longer SK members, and cannot participate in the July 15, 2002
SK elections. Congress will have to decide whether to enact an
amendatory law. Petitioners remedy is legislation, not judicial
intervention.

Petitioners have no personal and substantial interest in


maintaining this suit. A party must show that he has been, or is about
to be denied some personal right or privilege to which he is lawfully
entitled.[25] A party must also show that he has a real interest in the
suit. By real interest is meant a present substantial interest, as
distinguished from a mere expectancy or future, contingent,
subordinate, or inconsequential interest.[26]
In the instant case, petitioners seek to enforce a right originally
conferred by law on those who were at least 15 but not more than 21
years old. Now, with the passage of RA No. 9164, this right is limited
to those who on the date of the SK elections are at least 15 but less
than 18 years old. The new law restricts membership in the SK to
this specific age group. Not falling within this classification,
petitioners have ceased to be members of the SK and are no longer
qualified to participate in the July 15, 2002 SK elections.Plainly,
petitioners no longer have a personal and substantial interest in the
SK elections.
This petition does not raise any constitutional issue. At the time
petitioners filed this petition, RA No. 9164, which reset the SK
elections and reduced the age requirement for SK membership, was
not yet enacted into law. After the passage of RA No. 9164,
petitioners failed to assail any provision in RA No. 9164 that could be
unconstitutional. To grant petitioners prayer to be allowed to vote and
be voted for in the July 15, 2002 SK elections necessitates assailing
the constitutionality of RA No. 9164. This, petitioners have not done.
The Court will not strike down a law unless its constitutionality is
properly raised in an appropriate action and adequately argued. [27]
The only semblance of a constitutional issue, albeit erroneous,
that petitioners raise is their claim that SK membership is a property
right within the meaning of the Constitution. [28] Since certain public
offices are reserved for SK officers, petitioners also claim a
constitutionally protected opportunity to occupy these public
offices. In petitioners own words, they and others similarly situated

37

stand to lose their opportunity to work in the government positions


reserved for SK members or officers.[29] Under the Local Government
Code of 1991, the president of the federation of SK organizations in
a municipality, city or province is an ex-officio member of the
municipal council, city council or provincial board, respectively.[30] The
chairperson of the SK in the barangay is an ex-officio member of the
Sangguniang Barangay.[31] The president of the national federation of
SK organizations is an ex-officio member of the National Youth
Commission, with rank of a Department Assistant Secretary.[32]
Congress exercises the power to prescribe the qualifications for
SK membership. One who is no longer qualified because of an
amendment in the law cannot complain of being deprived of a
proprietary right to SK membership. Only those who qualify as SK
members can contest, based on a statutory right, any act
disqualifying them from SK membership or from voting in the SK
elections. SK membership is not a property right protected by the
Constitution because it is a mere statutory right conferred by
law.Congress may amend at any time the law to change or even
withdraw the statutory right.
A public office is not a property right. As the Constitution
expressly states, a [P]ublic office is a public trust. [33] No one has a
vested right to any public office, much less a vested right to an
expectancy of holding a public office. In Cornejo v. Gabriel,
[34]
decided in 1920, the Court already ruled:
Again, for this petition to come under the due process of law
prohibition, it would be necessary to consider an office a property. It
is, however, well settled x x x that a public office is not property
within the sense of the constitutional guaranties of due process
of law, but is a public trust or agency. x x x The basic idea of the
government x x x is that of a popular representative government, the
officers being mere agents and not rulers of the people, one where
no one man or set of men has a proprietary or contractual right to an
office, but where every officer accepts office pursuant to the

provisions of the law and holds the office as a trust for the people he
represents. (Emphasis supplied)
Petitioners, who apparently desire to hold public office, should
realize from the very start that no one has a proprietary right to public
office. While the law makes an SK officer an ex-officio member of a
local government legislative council, the law does not confer on
petitioners a proprietary right or even a proprietary expectancy to sit
in local legislative councils. The constitutional principle of a public
office as a public trust precludes any proprietary claim to public
office. Even the State policy directing equal access to opportunities
for public service[35] cannot bestow on petitioners a proprietary right
to SK membership or a proprietary expectancy to ex-officio public
offices.
Moreover, while the State policy is to encourage the youths
involvement in public affairs,[36] this policy refers to those who belong
to the class of people defined as the youth.Congress has the power
to define who are the youth qualified to join the SK, which itself is a
creation of Congress. Those who do not qualify because they are
past the age group defined as the youth cannot insist on being part
of the youth. In government service, once an employee reaches
mandatory retirement age, he cannot invoke any property right to
cling to his office. In the same manner, since petitioners are now past
the maximum age for membership in the SK, they cannot invoke any
property right to cling to their SK membership.
The petition must also fail because no grave abuse of discretion
attended the postponement of the SK elections. RA No. 9164 is now
the law that prescribes the qualifications of candidates and voters for
the SK elections. This law also fixes the date of the SK
elections. Petitioners are not even assailing the constitutionality of
RA No. 9164. RA No. 9164 enjoys the presumption of
constitutionality and will apply to the July 15, 2002 SK elections.

38

Petitioners have not shown that the Comelec acted illegally or


with grave abuse of discretion in recommending to Congress the
postponement of the SK elections. The very evidence relied upon by
petitioners contradict their allegation of illegality. The evidence
consist of the following: (1) Comelec en banc Resolution No. 4763
dated February 5, 2002 that recommended the postponement of the
SK elections to 2003; (2) the letter of then Comelec Chairman
Benipayo addressed to the Speaker of the House of Representatives
and the President of the Senate; and (3) the Conference Committee
Report consolidating Senate Bill No. 2050 and House Bill No. 4456.
The Comelec exercised its power and duty to enforce and
administer all laws and regulations relative to the conduct of an
election, plebiscite, initiative, referendum and recall[37] and to
recommend to Congress effective measures to minimize election
spending.[38] The Comelecs acts enjoy the presumption of regularity
in the performance of official duties. [39] These acts cannot constitute
proof, as claimed by petitioners, that there exists a connivance and
conspiracy (among) respondents in contravention of the present law.
As the Court held in Pangkat Laguna v. Comelec,[40] the Comelec,
as the government agency tasked with the enforcement and
administration of elections laws, is entitled to the presumption of
regularity of official acts with respect to the elections.
The 1987 Constitution imposes upon the Comelec the duty of
enforcing and administering all laws and regulations relative to the
conduct of elections. Petitioners failed to prove that the Comelec
committed grave abuse of discretion in recommending to Congress
the postponement of the May 6, 2002 SK elections. The evidence
cited by petitioners even establish that the Comelec has
demonstrated an earnest effort to address the practical problems in
holding the SK elections on May 6, 2002. The presumption remains
that the decision of the Comelec to recommend to Congress the
postponement of the elections was made in good faith in the regular
course of its official duties.

Grave abuse of discretion is such capricious and whimsical


exercise of judgment that is patent and gross as to amount to an
evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law.[41] Public respondents having acted strictly pursuant
to their constitutional powers and duties, we find no grave abuse of
discretion in their assailed acts.
Petitioners contend that the postponement of the SK elections
would allow the incumbent SK officers to perpetuate themselves in
power, depriving other youths of the opportunity to serve in elective
SK positions. This argument deserves scant consideration. While RA
No. 9164 contains a hold-over provision, incumbent SK officials can
remain in office only until their successors have been elected or
qualified. On July 15, 2002, when the SK elections are held, the holdover period expires and all incumbent SK officials automatically
cease to hold their SK offices and their ex-officio public offices.
In sum, petitioners have no personal and substantial interest in
maintaining this suit. This petition presents no actual justiciable
controversy. Petitioners do not cite any provision of law that is
alleged to be unconstitutional. Lastly, we find no grave abuse of
discretion on the part of public respondents.
WHEREFORE, the petition is DISMISSED for utter lack of merit.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza,
Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Austria-Martinez, and Corona, JJ., concur.

[1]

Rollo, pp. 4-5.

[2]

Ibid., pp. 14-15.

39

Second Whereas Clause of PD No. 684; See also Mercado vs. Board of Election
Supervisors of Ibaan, Batangas, 243 SCRA 422 (1995).
[3]

This was the same membership qualification in Section 116 of the Local Government
Code of 1983. Earlier, PD No. 1102, issued on February 28, 1977, had increased the
age requirement to twenty-one years of age or less.
[4]

Section 426 of the Local Government Code enumerates the powers and functions of
the Sangguniag Kabataan as follows: Section 426.Powers and Functions of the
Sangguniang Kabataan. The Sangguniang Kabataan shall: (a) Promulgate resolutions
necessary to carry out the objectives of the youth in the barangay in accordance with
the applicable provisions of this Code; (b) Initiate programs designed to enhance the
social, political, economic, cultural, intellectual, moral, spiritual, and physical
development of the members; (c) Hold fund-raising activities, the proceeds of which
shall be tax-exempt and shall accrue to the general fund of the sangguniang
kabataan: Provided, however, That in the appropriation thereof, the specific purpose
for which such activity has been held shall be first satisfied; (d) Create such bodies or
committees as it may deem necessary to effectively carry out its programs and
activities; (e) Submit annual and end-of-term reports to the sangguniang barangay on
their projects and activities for the survival and development of the youth in the
barangay; (f) Consult and coordinate with all youth organizations in the barangay for
policy formulation and program implementation; (g) Coordinate with the appropriate
national agency for the implementation of youth development projects and programs
at the national level; (h) Exercise such other powers and perform such other duties
and functions as the sangguniang barangay may determine or delegate; and (i)
Exercise such other powers and perform such other duties and functions as may be
prescribed by law or ordinance.
[5]

Rollo, pp. 47-55. Resolution No. 4713 is entitled Rules and Regulation on the
Registration of Members of the Katipunan ng Kabataan in Connection with the May 6,
2002 Election of Members of the Sangguniang Kabataan.
[6]

Ibid., pp. 56-61. Resolution No. 4714 is entitled Calendar of Activities and Periods of
Certain Prohibited Acts in Connection with the May 6, 2002 Election of Members of the
Sangguniang Kabataan.
[7]

[8]

Ibid., pp. 62-63.

[9]

Ibid., p. 64.

[10]

Ibid., p. 65.

Entitled In Re: Position of the Commission on Elections on the Postponement or


Synchronization of the Barangay and Sangguniang Kabataan (SK) Elections within the
year 2002.

[13]

An Act amending Republic Act No. 7160, otherwise known as the `Local
Government Code of 1991, as amended, resetting the elections of the Sangguniang
Kabataan officials to the first Monday of November, 2002, and for other purposes.
[14]

An Act providing for a synchronized Barangay and Sangguniang Kabataan elections


on the second Monday of November 2002, repealing Republic Act No. 8524, and for
other purposes.
[15]

[16]

Represented by Atty. Abraham A. Mantilla.

[17]

This should read more.

[18]

Rollo, pp. 25-26.

An Act Providing for Synchronized Barangay and Sangguniang Kabataan Elections,


Amending Republic Act No. 7160, As Amended, Otherwise Known As `The Local
Government Code of 1991, And For Other Purposes.
[19]

[20]

Sections 6 and 7 of RA No. 9164.

[21]

Integrated Bar of the Philippines vs. Zamora, 338 SCRA 81 (2000).

[22]

Allied Broadcasting Center, Inc. v. Republic, 190 SCRA 782 (1990).

Santiago v. Guingona, 298 SCRA 756 (1998); See also Arroyo v. De Venecia, 277
SCRA 268 (1997); Tolentino v. Secretary of Finance, 249 SCRA 628 (1995).
[23]

[24]

Isagani A. Cruz, Philippine Political Law, 1998 Ed., p. 152.

[25]

Bayan (Bagong Alyansang Makabayan) v. Zamora, 342 SCRA 449 (2000).

[26]

Caruncho III v. Commission on Elections, 315 SCRA 693 (1999).

[27]

See Reyes v. Court of Appeals, 320 SCRA 486 (1999).

[28]

Petition dated March 11, 2002, p. 3; Rollo, p. 8.

[29]

Ibid.

[30]

Section 438, Local Government Code of 1991.

[31]

Section 390, Local Government Code of 1991.

[32]

Section 5, RA No. 8044.

[33]

Section 1, Article XI of the 1987 Constitution.

[34]

41 Phil. 188 (1920).

[11]

[12]

Ibid., pp. 66-68.

Ibid., pp. 69-71.

40

[35]

Section 26, Article II of the 1987 Constitution.

[36]

Section 13, Article II of the 1987 Constitution.

[37]

Section 2, paragraph (1), Article IX-C of the 1987 Constitution.

[38]

Section 2, paragraph (7), Article IX-C of the 1987 Constitution.

[39]

Salcedo vs. Comelec, 312 SCRA 447 (1999).

[40]

G.R. No. 148075, February 4, 2002.

[41]

Integrated Bar of the Philippines v. Zamora, see note 21.

EN BANC
[G.R. No. 93100. June 19, 1997]

ATLAS FERTILIZER CORPORATION, petitioner, vs. THE


HONORABLE SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM,respondent.
[G.R. No. 97855. June 19, 1997]

41

PHILIPPINE FEDERATION OF FISHFARM PRODUCERS,


INC., petitioner, vs. THE HONORABLE SECRETARY OF
THE DEPARTMENT OF AGRARIAN REFORM, respondent.
RESOLUTION

Constitution mandate the State to promote equality in economic and


employment opportunities.
4. The questioned provisions deprive petitioner of its governmentinduced investments in aquaculture even as Sections 2 and 3, Article
XIII of the Constitution mandate the State to respect the freedom of
enterprise and the right of enterprises to reasonable returns on
investments and to expansion and growth.

ROMERO, J.:
Before this Court are consolidated petitions questioning the
constitutionality of some portions of Republic Act No. 6657 otherwise
known as the Comprehensive Agrarian Reform Law.[1]
Petitioners Atlas Fertilizer Corporation, [2] Philippine Federation
of Fishfarm Producers, Inc. and petitioner-in-intervention Archies
Fishpond, Inc. and Arsenio Al. Acuna[3] are engaged in the
aquaculture industry utilizing fishponds and prawn farms. They assail
Sections 3 (b), 11, 13, 16 (d), 17 and 32 of R.A. 6657, as well as the
implementing guidelines and procedures contained in Administrative
Order Nos. 8 and 10 Series of 1988 issued by public respondent
Secretary of the Department of Agrarian Reform as unconstitutional.
Petitioners claim that the questioned provisions of CARL violate
the Constitution in the following manner:
1. Sections 3 (b), 11, 13, 16 (d), 17 and 32 of CARL extend agrarian
reform to aquaculture lands even as Section 4, Article XIII of the
constitution limits agrarian reform only to agriculture lands.
2. The questioned provisions similarly treat of aquaculture lands and
agriculture lands when they are differently situated, and differently
treat aquaculture lands and other industrial lands, when they are
similarly situated in violation of the constitutional guarantee of the
equal protection of the laws.
3. The questioned provisions distort employment benefits and
burdens in favor of aquaculture employees and against other
industrial workers even as Section 1 and 3, Article XIII of the

The constitutionality of the above-mentioned provisions has


been
ruled
upon
in
the
case
of Luz Farms, Inc. v. Secretary of Agrarian Reform[4] regarding
the
inclusion of land devoted to the raising of livestock, poultry and swine
in its coverage.
The issue now before this Court is the constitutionality of the
same above-mentioned provisions insofar as they include in its
coverage lands devoted to the aquaculture industry, particularly
fishponds and prawn farms.
In their first argument, petitioners contend that in the case
of Luz Farms, Inc. v. Secretary of Agrarian Reform,[5] this Court has
already ruled impliedly that lands devoted to fishing are not
agriculture lands. In aquaculture, fishponds and prawn farms, the use
of land is only incidental to and not the principal factor in productivity
and, hence, as held inLuz Farms, they too should be excluded from
R.A. 6657 just as lands devoted to livestock, swine, and poultry have
been excluded for the same reason. They also argue that they are
entitled to the full benefit of Luz Farms to the effect that only five
percent of the total investment in aquaculture activities, fishponds,
and prawn farms, is in the form of land, and therefore, cannot be
classified as agricultural activity. Further, that in fishponds and prawn
farms, there are no farmers, nor farm workers, who till lands, and no
agrarian unrest, and therefore, the constitutionally intended
beneficiaries under Section 4, Art. XIII, 1987 Constitution do not exist
in aquaculture.
In their second argument, they contend that R.A. 6657, by
including in its coverage, the raising of fish and aquaculture
operations including fishponds and prawn ponds, treating them as in
the same class or classification as agriculture or farming violates the

42

equal protection clause of the Constitution and is, therefore, void.


Further, the Constitutional Commission debates show that the intent
of the constitutional framers is to exclude industrial lands, to which
category lands devoted to aquaculture, fishponds, and fish farms
belong.

In the event that the individual or entity realizes a profit, an additional


ten percent (10%) of the net profit after tax shall be distributed to said
regular and other farmworkers within ninety (90) days of the end of
the fiscal year. x x x

Petitioners also claim that Administrative Order Nos. 8 and 10


issued by the Secretary of the Department of Agrarian Reform are,
likewise, unconstitutional, as held in Luz Farms, and are therefore
void as they implement the assailed provisions of CARL.

While the Court will not hesitate to declare a law or an act void
when confronted squarely with constitutional issues, neither will it
preempt the Legislative and the Executive branches of the
government in correcting or clarifying, by means of amendment, said
law or act. On February 20, 1995, Republic Act No. 7881 [6] was
approved by Congress. Provisions of said Act pertinent to the
assailed provisions of CARL are the following:

The provisions of CARL being assailed as unconstitutional are


as follows:
(a) Section 3(b) which includes the raising of fish in the definition
of Agricultural, Agricultural Enterprise or Agricultural Activity.
(Underscoring Supplied)
(b) Section 11 which defines commercial farms as private agricultural
lands devoted to fishponds and prawn ponds x x x. (Underscoring
Supplied)
(c) Section 13 which calls upon petitioner to execute a productionsharing plan.
(d) Section 16 (d) and 17 which vest on the Department of Agrarian
reform the authority to summarily determine the just compensation to
be paid for lands covered by the comprehensive Agrarian reform
Law.

Section 1. Section 3, Paragraph (b) of Republic Act No. 6657 is


hereby amended to read as follows:
Sec. 3. Definitions. -- For the purpose of this Act, unless the context
indicates otherwise:
(b) Agriculture, Agricultural Enterprise or Agricultural Activity means
the cultivation of the soil, planting of crops, growing of fruit trees,
including the harvesting of such farm products and other farm
activities and practices performed by a farmer in conjunction with
such farming operations done by persons whether natural or juridical.
Sec. 2. Section 10 of Republic Act No. 6657 is hereby amended to
read as follows:
Sec. 10. Exemptions and Exclusions.--

(e) Section 32 which spells out the production-sharing plan


mentioned in Section 13x x x (W)hereby three percent (3%) of the gross sales from the
production of such lands are distributed within sixty (60) days at the
end of the fiscal year as compensation to regular and other
farmworkers in such lands over and above the compensation they
currently receive: Provided, That these individuals or entities realize
gross sales in excess of five million pesos per annum unless the
DAR, upon proper application, determines a lower ceiling.

xxx xxx xxx


b) Private lands actually, directly and exclusively used for prawn
farms and fishponds shall be exempt from the coverage of this Act:
Provided, That said prawn farms and fishponds have not been
distributed and Certificate of Land Ownership Award (CLOA) issued
to agrarian reform beneficiaries under the Comprehensive Agrarian
Reform Program.

43

In cases where the fishponds or prawn farms have been subjected to


the Comprehensive Agrarian Reform Law, by voluntary offer to sell,
or commercial farms deferment or notices of compulsory acquisition,
a simple and absolute majority of the actual regular workers or
tenants must consent to the exemption within one (1) year from the
effectivity of this Act. When the workers or tenants do not agree to
this exemption, the fishponds or prawn farms shall be distributed
collectively to the worker-beneficiaries or tenants who shall form a
cooperative or association to manage the same.
In cases where the fishponds or prawn farms have not been
subjected to the Comprehensive Agrarian Reform Law, the consent
of the farm workers shall no longer be necessary, however, the
provision of Section 32-A hereof on incentives shall apply.
xxx xxx xxx
Sec. 3. Section 11, paragraph 1 is hereby amended to read as
follows:
Sec. 11. Commercial Farming.-- Commercial Farms, which are
private agricultural lands devoted to salt beds, fruit farms, orchards,
vegetable and cut-flower farms, and cacao, coffee and rubber
plantations, shall be subject to immediate compulsory acquisition and
distribution after ten (10) years from the effectivity of this Act. In the
case of new farms, the ten-year period shall begin from the first year
of commercial production and operation, as determined by the DAR.
During the ten-year period, the Government shall initiate steps
necessary to acquire these lands, upon payment of just
compensation for the land and the improvements thereon, preferably
in favor of organized cooperatives or associations, which shall
thereafter manage the said lands for the workers-beneficiaries.
Sec. 4. There shall be incorporated after Section 32 of Republic Act
No. 6657 a section to read as follows:
Sec. 32-A. Incentives.-- Individuals or entities owning or operating
fishponds and prawn farms are hereby mandated to execute within
six (6) months from the effectivity of this Act, an incentive plan with

their regular fishpond or prawn farm workers organization, if any,


whereby seven point five percent (7.5%) of their net profit before tax
from the operation of the fishpond or prawn farms are distributed
within sixty (60) days at the end of the fiscal year as compensation to
regular and other pond workers in such ponds over and above the
compensation they currently receive.
In order to safeguard the right of the regular fishpond or prawn farm
workers under the incentive plan, the books of the fishpond or prawn
owners shall be subject to periodic audit or inspection by certified
public accountants chosen by the workers.
The foregoing provisions shall not apply to agricultural lands
subsequently converted to fishponds or prawn farms provided the
size of the land converted does not exceed the retention limit of the
landowner.
The above-mentioned provisions of R.A. No. 7881 expressly
state that fishponds and prawn farms are excluded from the
coverage of CARL. In view of the foregoing, the question concerning
the constitutionality of the assailed provisions has become moot and
academic with the passage of R.A. No. 7881.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Melo, Puno, Vitug,
Mendoza,
Hermosisima,
Jr.,
Panganiban, and Torres,
Jr.,
JJ., concur.
Padilla, Bellosillo, Kapunan, and Francisco, JJ., on leave.

[1]

Herein referred to as CARL.

[2]

G.R. No. 93100.

[3]

G.R. No. 97855.

[4]

192 SCRA 51 (1990).

44

[5]

Supra.

[6]

An Act Amending Certain Provisions of Republic Act No. 6657,


Entitled An Act Instituting A Comprehensive Agrarian Reform
Program To Promote Social Justice And Industrialization,
Providing The Mechanism For Its Implementation, And For
Other Purposes.

EN BANC
[G.R. No. 147780. May 10, 2001]
PANFILO LACSON, MICHAEL RAY B. AQUINO and CESAR O.
MANCAO, petitioners,
vs. SECRETARY
HERNANDO
PEREZ, P/DIRECTOR LEANDRO MENDOZA, and P/SR.
SUPT. REYNALDO BERROYA, respondents.
[G.R. No. 147781. May 10, 2001]
MIRIAM DEFENSOR-SANTIAGO, petitioner, vs. ANGELO REYES,
Secretary of National Defense, et al., respondents.
[G.R. No. 147799. May 10, 2001]
RONALDO A. LUMBAO, petitioner, vs. SECRETARY HERNANDO
PEREZ, GENERAL DIOMEDIO VILLANUEVA, P/DIR.

45

LEANDRO MENDOZA and P/SR. SUPT. REYNALDO


BERROYA, respondents.
[G.R. No. 147810. May 10, 2001]
THE

LABAN NG DEMOKRATIKONG PILIPINO, petitioner,


vs. THE DEPARTMENT OF JUSTICE, SECRETARY
HERNANDO PEREZ, THE ARMED FORCES OF THE
PHILIPPINES, GENERAL DIOMEDIO VILLANUEVA, THE
PHILIPPINE NATIONAL POLICE, and DIRECTOR
GENERAL LEANDRO MENDOZA, respondents.
RESOLUTION

MELO, J.:
On May 1, 2001, President Macapagal-Arroyo, faced by an
angry and violent mob armed with explosives, firearms, bladed
weapons, clubs, stones and other deadly weapons assaulting and
attempting to break into Malacaang, issued Proclamation No. 38
declaring that there was a state of rebellion in the National Capital
Region. She likewise issued General Order No. 1 directing the
Armed Forces of the Philippines and the Philippine National Police to
suppress the rebellion in the National Capital Region. Warrantless
arrests of several alleged leaders and promoters of the rebellion
were thereafter effected.
Aggrieved by the warrantless arrests, and the declaration of a
state of rebellion, which allegedly gave a semblance of legality to the
arrests, the following four related petitions were filed before the
Court(1) G.R. No. 147780 for prohibition, injunction, mandamus,
and habeas corpus (with an urgent application for the issuance of
temporary restraining order and/or writ of preliminary injunction) filed
by Panfilo M. Lacson, Michael Ray B. Aquino, and Cezar O. Mancao;
(2) G.R. No. 147781 for mandamus and/or review of the factual basis
for the suspension of the privilege of the writ of habeas corpus, with
prayer for a temporary restraining order filed by Miriam Defensor-

Santiago; (3) G.R. No. 147799 for prohibition and injunction with
prayer for a writ of preliminary injunction and/or restraining order filed
by Rolando A. Lumbao; and (4) G.R. No. 147810 for certiorari and
prohibition filed by the political party Laban ng Demokratikong
Pilipino.
All the foregoing petitions assail the declaration of a state of
rebellion by President Gloria Macapagal-Arroyo and the warrantless
arrests allegedly effected by virtue thereof, as having no basis both
in fact an in law. Significantly, on May 6, 2001, President MacapagalArroyo ordered the lifting of the declaration of a state of rebellion in
Metro Manila. Accordingly, the instant petitions have been rendered
moot and academic. As to petitioners claim that the proclamation of a
state of rebellion is being used by the authorities to justify
warrantless arrests, the Secretary of Justice denies that it has issued
a particular order to arrest specific persons in connection with the
rebellion. He states that what is extant are general instructions to law
enforcement officers and military agencies to implement
Proclamation No. 38. Indeed, as stated in respondents Joint
Comments:
[I]t is already the declared intention of the Justice Department
and police authorities to obtain regular warrants of arrests from
the courts for all acts committed prior to and until May 1, 2001
which means that preliminary investigators will henceforth be
conducted.
(Comment, G.R. No. 147780, p. 28; G.R. No. 147781, p. 18; G.R.
No. 147799, p. 16; G.R. No. 147810, p. 24)
With this declaration, petitioners
warrantless arrests should be laid to rest.

apprehensions

as

to

In quelling or suppressing the rebellion, the authorities may only


resort to warrantless arrests of persons suspected of rebellion, as
provided under Section 5, Rule 113 of the Rules of Court, if the
circumstances so warrant. The warrantless arrest feared by
petitioners is, thus, not based on the declaration of a state of
rebellion.

46

Moreover, petitioners contention in G.R. No. 147780 (Lacson


Petition), 147781 (Defensor-Santiago Petition), and 147799 (Lumbao
Petition) that they are under imminent danger of being arrested
without warrant do not justify their resort to the extraordinary
remedies of mandamus and prohibition, since an individual subjected
to warrantless arrest is not without adequate remedies in the ordinary
course of law. Such an individual may ask for a preliminary
investigation under Rule 112 of the Rules of court, where he may
adduce evidence in his defense, or he may submit himself to inquest
proceedings to determine whether or not he should remain under
custody and correspondingly be charged in court. Further, a person
subject of a warrantless arrest must be delivered to the proper
judicial authorities within the periods provided in Article 125 of the
Revised Penal Code, otherwise the arresting officer could be held
liable for delay in the delivery of detained persons. Should the
detention be without legal ground, the person arrested can charge
the arresting officer with arbitrary detention. All this is without
prejudice to his filing an action for damages against the arresting
officer under Article 32 of the Civil Code. Verily, petitioners have a
surfeit of other remedies which they can avail themselves of, thereby
making the prayer for prohibition and mandamus improper at this
time (Sections 2 and 3, Rule 65, Rules of Court).
Aside from the foregoing reasons, several considerations
likewise inevitably call for the dismissal of the petitions at bar.

G.R. No. 147780

In connection with their alleged impending warrantless arrest,


petitioners Lacson, Aquino, and Mancao pray that the appropriate
court before whom the informations against petitioners are filed be
directed to desist from arraigning and proceeding with the trial of the
case, until the instant petition is finally resolved. This relief is clearly
premature considering that as of this date, no complaints or charges
have been filed against any of the petitioners for any crime. And in
the event that the same are later filed, this court cannot enjoin

criminal prosecution conducted in accordance with the Rules of


Court, for by that time any arrest would have been in pursuance of a
duly issued warrant.
As regards petitioners prayer that the hold departure orders
issued against them be declared null and void ab initio, it is to be
noted that petitioners are not directly assailing the validity of the
subject hold departure orders in their petition. The are not even
expressing intention to leave the country in the near future. The
prayer to set aside the same must be made in proper proceedings
initiated for that purpose.
Anent petitioners allegations ex abundante ad cautelam in
support of their application for the issuance of a writ of habeas
corpus, it is manifest that the writ is not called for since its purpose is
to relieve petitioners from unlawful restraint (Ngaya-an v. Balweg,
200 SCRA 149 [1991]), a matter which remains speculative up to this
very day.

G.R. No. 147781

The petition herein is denominated by petitioner DefensorSantiago as one for mandamus. It is basic in matters relating to
petitions for mandamus that the legal right of the petitioner to the
performance of a particular act which is sought to be compelled must
be clear and complete. Mandamus will not issue the right to relief is
clear at the time of the award (Palileo v. Ruiz Castro, 85 Phil.
272). Up to the present time, petitioner Defensor-Santiago has not
shown that she is in imminent danger of being arrested without a
warrant. In point of fact, the authorities have categorically stated that
petitioner will not be arrested without a warrant.

G.R. No. 147799

47

Petitioner Lumbao, leader of the Peoples Movement against


Poverty (PMAP), for his part, argues that the declaration of a state of
rebellion is violative of the doctrine of separation of powers, being an
encroachment on the domain of the judiciary which has the
constitutional prerogative to determine or interpret what took place
on May 1, 2001, and that the declaration of a state of rebellion
cannot be an exception to the general rule on the allocation of the
governmental powers.
We disagree. To be sure, section 18, Article VII of the
Constitution expressly provides that [t]he President shall be the
Commander-in-Chief of all armed forces of the Philippines and
whenever it becomes necessary, he may call out such armed forces
to prevent or suppress lawless violence, invasion or rebellion thus,
we held in Integrated Bar of the Philippines v. Hon. Zamora, (G.R.
No. 141284, August 15, 2000):
xxx The factual necessity of calling out the armed forces is not easily
quantifiable and cannot be objectively established since matters
considered for satisfying the same is a combination of several factors
which are not always accessible to the courts. Besides the absence
of testual standards that the court may use to judge necessity,
information necessary to arrive at such judgment might also prove
unmanageable for the courts. Certain pertinent information
necessary to arrive at such judgment might also prove
unmanageable for the courts. Certain pertinent information might be
difficult to verify, or wholly unavailable to the courts. In many
instances, the evidence upon which the President might decide that
there is a need to call out the armed forces may be of a nature not
constituting technical proof.
On the other hand, the President as Commander-in-Chief has a vast
intelligence network to gather information, some of which may be
classified as highly confidential or affecting the security of the
state. In the exercise of the power to call, on-the-spot decisions may
be imperatively necessary in emergency situations to avert great loss
of human lives and mass destruction of property. xxx
(at pp. 22-23)

The Court, in a proper case, may look into the sufficiency of the
factual basis of the exercise of this power. However, this is no longer
feasible at this time, Proclamation No. 38 having been lifted.

G.R. No. 147810

Petitioner Laban ng Demoktratikong Pilipino is not a real partyin-interest. The rule requires that a party must show a personal stake
in the outcome of the case or an injury to himself that can be
redressed by a favorable decision so as to warrant an invocation of
the courts jurisdiction and to justify the exercise of the courts
remedial powers in his behalf (KMU Labor Center v. Garcia, Jr., 239
SCRA 386 [1994]). Here, petitioner has not demonstrated any injury
to itself which would justify resort to the Court. Petitioner is a juridical
person not subject to arrest. Thus, it cannot claim to be threatened
by a warrantless arrest. Nor is it alleged that its leaders, members,
and supporters are being threatened with warrantless arrest and
detention for the crime of rebellion. Every action must be brought in
the name of the party whose legal right has been invaded or
infringed, or whose legal right is under imminent threat of invasion or
infringement.
At best, the instant petition may be considered as an action for
declaratory relief, petitioner claiming that its right to freedom of
expression and freedom of assembly is affected by the declaration of
a state of rebellion and that said proclamation is invalid for being
contrary to the Constitution.
However, to consider the petition as one for declaratory relief
affords little comfort to petitioner, this Court not having jurisdiction in
the first instance over such a petition. Section 5[1], Article VIII of the
Constitution limits the original jurisdiction of the Court to cases
affecting ambassadors, other public ministers and consuls, and over
petitions
for certiorari,
prohibition, mandamus, quo
warranto,
and habeas corpus.

48

WHEREFORE, premises considered, the petitions are hereby


DISMISSED. However, in G.R. No. 147780, 147781, and 147799,
respondents, consistent and congruent with their undertaking earlier
adverted to, together with their agents, representatives, and all
persons acting for and in their behalf, are hereby enjoined from
arresting petitioners therein without the required judicial warrant for
all acts committed in relation to or in connection with the May 1, 2001
siege of Malacanang.
SO ORDERED.
Davide,
Jr.,
C.J.,
Bellosillo,
Puno,
Panganiban, and Gonzaga-Reyes, JJ., concur.

Mendoza,

Vitug, J., see separate opinion.


Kapunan, and Sandoval-Gutierrez, JJ., see dissenting opinion.
Pardo, J., join the dissent of J. Kapunan.
Quisumbing, Buena, Ynares-Santiago, and De Leon, Jr., JJ., on
leave.
EN BANC
[G.R. No. 159085. February 3, 2004]
SANLAKAS, represented by REP. J.V. Bautista, and PARTIDO
NG MANGGAGAWA, represented by REP. RENATO
MAGTUBO petitioners,
vs.EXECUTIVE
SECRETARY
SECRETARY ANGELO REYES, GENERAL NARCISO
ABAYA,
DIR.
GEN.
HERMOGENES
EBDANE, respondents.
[G.R. No. 159103. February 3, 2004]
SOCIAL JUSTICE SOCIETY (SJS) OFFICERS/MEMBERS namely,
SAMSON S. ALCANTARA, ED VINCENT S. ALBANO,
RENE B. GOROSPE, EDWIN R. SANDOVAL and
RODOLFO D. MAPILE, petitioners, vs. HON. EXECUTIVE

49

SECRETARY ALBERTO G. ROMULO, HON. SECRETARY


OF JUSTICE SIMEON DATUMANONG, HON. SECRETARY
OF NATIONAL DEFENSE ANGELO REYES, and HON.
SECRETARY JOSE LINA, JR., respondents.
[G.R. No. 159185. February 3, 2004]
REP. ROLEX T. SUPLICO, REP. CARLOS M. PADILLA, REP.
CELSO L. LOBREGAT, REP. HUSSIN U. AMIN, REP.
ABRAHAM KAHLIL B. MITRA, REP. EMMYLOU J.
TALINO-SANTOS, and REP. GEORGILU R. YUMULHERMIDA, petitioners, vs. PRESIDENT
GLORIA
MACAPAGAL-ARROYO; and EXECUTIVE SECRETARY
ALBERTO G. ROMULO, respondents.
[G.R. No. 159196. February 3, 2004]
AQUILINO Q. PIMENTEL, JR. as a Member of the
Senate, petitioner, vs. SECRETARY ALBERTO ROMULO,
AS EXECUTIVE SECRETARY; SECRETARY ANGELO
REYES, AS SECRETARY OF NATIONAL DEFENSE;
GENERAL NARCISO ABAYA, AS CHIEF OF STAFF OF
THE ARMED FORCES; SECRETARY JOSE LINA, et
al., respondents.
DECISION
TINGA, J.:
They came in the middle of the night. Armed with high-powered
ammunitions and explosives, some three hundred junior officers and
enlisted men of the Armed Forces of the Philippines (AFP) stormed
into the Oakwood Premiere apartments in Makati City in the wee
hours of July 27, 2003. Bewailing the corruption in the AFP, the
soldiers demanded, among other things, the resignation of the
President, the Secretary of Defense and the Chief of the Philippine
National Police (PNP).[1]
In the wake of the Oakwood occupation, the President issued
later in the day Proclamation No. 427 and General Order No. 4, both

declaring a state of rebellion and calling out the Armed Forces to


suppress the rebellion. Proclamation No. 427 reads in full:
PROCLAMATIONNO.427
DECLARINGASTATEOFREBELLION
WHEREAS,certainelementsoftheArmedForcesofthePhilippines,
armedwithhighpoweredfirearmsandexplosives,actinguponthe
instigationandcommandanddirectionofknownandunknownleaders,
haveseizedabuildinginMakatiCity,putbombsinthearea,publicly
declaredwithdrawalofsupportfor,andtookarmsagainsttheduly
constitutedGovernment,andcontinuetorisepubliclyandshowopen
hostility,forthepurposeofremovingallegiancetotheGovernmentcertain
bodiesoftheArmedForcesofthePhilippinesandthePhilippineNational
Police,anddeprivingthePresidentoftheRepublicofthePhilippines,
whollyorpartially,ofherpowersandprerogativeswhichconstitutethe
crimeofrebellionpunishableunderArticle134oftheRevisedPenalCode,
asamended;
WHEREAS,thesemisguidedelementsoftheArmedForcesofthe
Philippinesarebeingsupported,abettedandaidedbyknownandunknown
leaders,conspiratorsandplottersinthegovernmentserviceandoutsidethe
government;
WHEREAS,underSection18,ArticleVIIofthepresentConstitution,
wheneveritbecomesnecessary,thePresident,astheCommanderinChief
oftheArmedForcesofthePhilippines,maycalloutsuchArmedForcesto
suppresstherebellion;
NOW,THEREFORE,I,GLORIAMACAPAGALARROYO,byvirtueof
thepowersvestedinmebylaw,herebyconfirmtheexistenceofanactual
andongoingrebellion,compellingmetodeclareastateofrebellion.
Inviewoftheforegoing,IamissuingGeneralOrderNo.4inaccordance
withSection18,ArticleVIIoftheConstitution,callingouttheArmed
ForcesofthePhilippinesandthePhilippineNationalPolicetoimmediately

50

carryoutthenecessaryactionsandmeasurestosuppressandquellthe
rebellionwithdueregardtoconstitutionalrights.
General Order No. 4 is similarly worded:
GENERALORDERNO.4
DIRECTINGTHEARMEDFORCESOFTHEPHILIPPINESANDTHE
PHILIPPINENATIONALPOLICETOSUPPRESSREBELLION
WHEREAS,certainelementsoftheArmedForcesofthePhilippines,
armedwithhighpoweredfirearmsandexplosives,actinguponthe
instigationandcommandanddirectionofknownandunknownleaders,
haveseizedabuildinginMakatiCity,putbombsinthearea,publicly
declaredwithdrawalofsupportfor,andtookarmsagainsttheduly
constitutedGovernment,andcontinuetorisepubliclyandshowopen
hostility,forthepurposeofremovingallegiancetotheGovernmentcertain
bodiesoftheArmedForcesofthePhilippinesandthePhilippineNational
Police,anddeprivingthePresidentoftheRepublicofthePhilippines,
whollyorpartially,ofherpowersandprerogativeswhichconstitutethe
crimeofrebellionpunishableunderArticle134etseq.oftheRevisedPenal
Code,asamended;
WHEREAS,thesemisguidedelementsoftheArmedForcesofthe
Philippinesarebeingsupported,abettedandaidedbyknownandunknown
leaders,conspiratorsandplottersinthegovernmentserviceandoutsidethe
government;
WHEREAS,underSection18,ArticleVIIofthepresentConstitution,
wheneveritbecomesnecessary,thePresident,astheCommanderinChief
ofallArmedForcesofthePhilippines,maycalloutsuchArmedForcesto
suppresstherebellion;
NOW,THEREFORE,I,GLORIAMACAPAGALARROYO,byvirtueof
thepowersvestedinmebytheConstitutionasPresidentoftheRepublicof
thePhilippinesandCommanderinChiefofallthearmedforcesofthe
PhilippinesandpursuanttoProclamationNo.427datedJuly27,2003,do

herebycallupontheArmedForcesofthePhilippinesandthePhilippine
NationalPolicetosuppressandquelltherebellion.
IherebydirecttheChiefoftheArmedForcesofthePhilippinesandthe
ChiefofthePhilippineNationalPoliceandtheofficersandmenofthe
ArmedForcesofthePhilippinesandthePhilippineNationalPoliceto
immediatelycarryoutthenecessaryandappropriateactionsandmeasures
tosuppressandquelltherebellionwithdueregardtoconstitutionalrights.
By the evening of July 27, 2003, the Oakwood occupation had
ended. After hours-long negotiations, the soldiers agreed to return to
barracks. The President, however, did not immediately lift the
declaration of a state of rebellion and did so only on August 1, 2003,
through Proclamation No. 435:
DECLARINGTHATTHESTATEOFREBELLIONHASCEASEDTO
EXIST
WHEREAS,byvirtueofProclamationNo.427datedJuly27,2003,astate
ofrebellionwasdeclared;
WHEREAS,byvirtueofGeneralOrderNo.4datedJuly27,2003,which
wasissuedonthebasisofProclamationNo.427datedJuly27,2003,and
pursuanttoArticleVII,Section18oftheConstitution,theArmedForcesof
thePhilippinesandthePhilippineNationalPoliceweredirectedtosuppress
andquelltherebellion;
WHEREAS,theArmedForcesofthePhilippinesandthePhilippine
NationalPolicehaveeffectivelysuppressedandquelledtherebellion.
NOW,THEREFORE,I,GLORIAMACAPAGALARROYO,Presidentof
thePhilippines,byvirtueofthepowersvestedinmebylaw,herebydeclare
thatthestateofrebellionhasceasedtoexist.
In the interim, several petitions were filed before this Court
challenging the validity of Proclamation No. 427 and General Order
No. 4.

51

In G.R. No. 159085 (Sanlakas and PM v. Executive Secretary,


et al.),[2] party-list organizations Sanlakas and Partido ng
Manggagawa (PM), contend that Section 18, Article VII of the
Constitution does not require the declaration of a state of rebellion to
call out the armed forces.[3] They further submit that, because of the
cessation of the Oakwood occupation, there exists no sufficient
factual basis for the proclamation by the President of a state of
rebellion for an indefinite period.[4]

that the declaration of a state of rebellion opens the door to the


unconstitutional implementation of warrantless arrests for the crime
of rebellion.[15]

Petitioners in G.R. No. 159103 (SJS Officers/Members v. Hon.


Executive Secretary, et al.) are officers/members of the Social
Justice Society (SJS), Filipino citizens, taxpayers, law professors and
bar reviewers.[5] Like Sanlakas and PM, they claim that Section 18,
Article VII of the Constitution does not authorize the declaration of a
state of rebellion.[6] They contend that the declaration is a
constitutional anomaly that confuses, confounds and misleads
because [o]verzealous public officers, acting pursuant to such
proclamation or general order, are liable to violate the constitutional
right of private citizens.[7] Petitioners also submit that the
proclamation is a circumvention of the report requirement under the
same Section 18, Article VII, commanding the President to submit a
report to Congress within 48 hours from the proclamation of martial
law.[8] Finally, they contend that the presidential issuances cannot be
construed as an exercise of emergency powers as Congress has not
delegated any such power to the President.[9]

The Court agrees with the Solicitor General that the issuance of
Proclamation No. 435, declaring that the state of rebellion has
ceased to exist, has rendered the case moot.As a rule, courts do not
adjudicate moot cases, judicial power being limited to the
determination of actual controversies.[18] Nevertheless, courts will
decide a question, otherwise moot, if it is capable of repetition yet
evading review.[19] The case at bar is one such case.

In G.R. No. 159185 (Rep. Suplico et al. v. President MacapagalArroyo and Executive Secretary Romulo), petitioners brought suit as
citizens and as Members of the House of Representatives whose
rights, powers and functions were allegedly affected by the
declaration of a state of rebellion. [10] Petitioners do not challenge the
power of the President to call out the Armed Forces. [11] They argue,
however, that the declaration of a state of rebellion is a superfluity,
and is actually an exercise of emergency powers. [12] Such exercise,
it is contended, amounts to a usurpation of the power of Congress
granted by Section 23 (2), Article VI of the Constitution. [13]
In G.R. No. 159196 (Pimentel v. Romulo, et al.), petitioner
Senator assails the subject presidential issuances as an
unwarranted, illegal and abusive exercise of a martial law power that
has no basis under the Constitution. [14] In the main, petitioner fears

Required to comment, the Solicitor General argues that the


petitions have been rendered moot by the lifting of the declaration.
[16]
In addition, the Solicitor General questions the standing of the
petitioners to bring suit.[17]

Once before, the President on May 1, 2001 declared a state of


rebellion and called upon the AFP and the PNP to suppress the
rebellion through Proclamation No. 38 and General Order No. 1. On
that occasion, an angry and violent mob armed with explosives,
firearms, bladed weapons, clubs, stones and other deadly weapons
assaulted and attempted to break into Malacaang. [20] Petitions were
filed before this Court assailing the validity of the Presidents
declaration. Five days after such declaration, however, the President
lifted the same. The mootness of the petitions in Lacson v. Perez and
accompanying cases[21] precluded this Court from addressing the
constitutionality of the declaration.
To prevent similar questions from reemerging, we seize this
opportunity to finally lay to rest the validity of the declaration of a
state of rebellion in the exercise of the Presidents calling out power,
the mootness of the petitions notwithstanding.
Only petitioners Rep. Suplico et al. and Sen. Pimentel, as
Members of Congress, have standing to challenge the subject
issuances. In Philippine Constitution Association v. Enriquez, [22] this
Court recognized that:
TotheextentthepowersofCongressareimpaired,soisthepowerofeach
memberthereof,sincehisofficeconfersarighttoparticipateintheexercise
ofthepowersofthatinstitution.

52

AnactoftheExecutivewhichinjurestheinstitutionofCongresscausesa
derivativebutnonethelesssubstantialinjury,whichcanbequestionedbya
memberofCongress.Insuchacase,anymemberofCongresscanhavea
resorttothecourts.
Petitioner Members of Congress claim that the declaration of a state
of rebellion by the President is tantamount to an exercise of
Congress emergency powers, thus impairing the lawmakers
legislative powers. Petitioners also maintain that the declaration is a
subterfuge to avoid congressional scrutiny into the Presidents
exercise of martial law powers.
Petitioners Sanlakas and PM, and SJS Officers/Members, have
no legal standing or locus standi to bring suit. Legal standing
or locus standi has been defined as a personal and substantial
interest in the case such that the party has sustained or will sustain
direct injury as a result of the governmental act that is being
challenged. The gist of the question of standing is whether a party
alleges such personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation
of issues upon which the court depends for illumination of difficult
constitutional questions.[23]
Petitioners Sanlakas and PM assert that:
2.Asabasicprincipleoftheorganizationsandasanimportantplankin
theirprograms,petitionersarecommittedtoassert,defend,protect,uphold,
andpromotetherights,interests,andwelfareofthepeople,especiallythe
poorandmarginalizedclassesandsectorsofPhilippinesociety.Petitioners
arecommittedtodefendandasserthumanrights,includingpoliticaland
civilrights,ofthecitizens.
3.Membersofthepetitionerorganizationsresorttomassactionsand
mobilizationsintheexerciseoftheirConstitutionalrightstopeaceably
assembleandtheirfreedomofspeechandofexpressionunderSection4,
ArticleIIIofthe1987Constitution,asavehicletopubliclyventilatetheir
grievancesandlegitimatedemandsandtomobilizepublicopinionto
supportthesame.[24][Emphasisintheoriginal.]

Petitioner party-list organizations claim no better right than the


Laban ng Demokratikong Pilipino, whose standing this Court rejected
in Lacson v. Perez:
petitionerhasnotdemonstratedanyinjurytoitselfwhichwouldjustifythe
resorttotheCourt.Petitionerisajuridicalpersonnotsubjectto
arrest.Thus,itcannotclaimtobethreatenedbyawarrantlessarrest.Noris
itallegedthatitsleaders,members,andsupportersarebeingthreatened
withwarrantlessarrestanddetentionforthecrimeofrebellion.Everyaction
mustbebroughtinthenameofthepartywhoselegalrightshasbeen
invadedorinfringed,orwhoselegalrightisunderimminentthreatof
invasionorinfringement.
Atbest,theinstantpetitionmaybeconsideredasanactionfordeclaratory
relief,petitionerclaimingthatit[]srighttofreedomofexpressionand
freedomofassemblyisaffectedbythedeclarationofastateofrebellion
andthatsaidproclamationisinvalidforbeingcontrarytotheConstitution.
However,toconsiderthepetitionasonefordeclaratoryreliefaffordslittle
comforttopetitioner,thisCourtnothavingjurisdictioninthefirstinstance
oversuchapetition.Section5[1],ArticleVIIIoftheConstitutionlimitsthe
originaljurisdictionofthecourttocasesaffectingambassadors,other
publicministersandconsuls,andoverpetitionsforcertiorari,
prohibition,mandamus,quowarranto,andhabeascorpus.[25]
Even assuming that petitioners are peoples organizations, this
status would not vest them with the requisite personality to question
the validity of the presidential issuances, as this Court made clear
in Kilosbayan v. Morato: [26]
TheConstitutionprovidesthattheStateshallrespecttheroleof
independentpeoplesorganizationstoenablethepeopletopursueand
protect,withinthedemocraticframework,theirlegitimateandcollective
interestsandaspirationsthroughpeacefulandlawfulmeans,thattheirright
toeffectiveandreasonableparticipationatalllevelsofsocial,political,and
economicdecisionmakingshallnotbeabridged.(Art.XIII,1516)

53

Theseprovisionshavenotchangedthetraditionalrulethatonlyrealparties
ininterestorthosewithstanding,asthecasemaybe,mayinvokethe
judicialpower.ThejurisdictionofthisCourt,evenincasesinvolving
constitutionalquestions,islimitedbythecaseandcontroversyrequirement
ofArt.VIII,5.Thisrequirementliesattheveryheartofthejudicial
function.Itiswhatdifferentiatesdecisionmakinginthecourtsfrom
decisionmakinginthepoliticaldepartmentsofthegovernmentandbarsthe
bringingofsuitsbyjustanyparty.[27]
That petitioner SJS officers/members are taxpayers and citizens
does not necessarily endow them with standing. A taxpayer may
bring suit where the act complained of directly involves the illegal
disbursement of public funds derived from taxation. [28] No such illegal
disbursement is alleged.
On the other hand, a citizen will be allowed to raise a
constitutional question only when he can show that he has personally
suffered some actual or threatened injury as a result of the allegedly
illegal conduct of the government; the injury is fairly traceable to the
challenged action; and the injury is likely to be redressed by a
favorable action.[29]Again, no such injury is alleged in this case.
Even granting these petitioners have standing on the ground
that the issues they raise are of transcendental importance, the
petitions must fail.
It is true that for the purpose of exercising the calling out power
the Constitution does not require the President to make a declaration
of a state of rebellion. Section 18, Article VII provides:
Sec.18.ThePresidentshallbetheCommanderinChiefofallarmedforces
ofthePhilippinesandwheneveritbecomesnecessary,hemaycallout
sucharmedforcestopreventorsuppresslawlessviolence,invasionor
rebellion.Incaseofinvasionorrebellion,whenthepublicsafetyrequires
it,hemay,foraperiodnotexceedingsixtydays,suspendtheprivilegeof
thewritofhabeascorpusorplacethePhilippinesoranypartthereofunder
martiallaw.Withinfortyeighthoursfromtheproclamationofmartiallaw
orthesuspensionofthewritofhabeascorpus,thePresidentshallsubmita
reportinpersonorinwritingtotheCongress.TheCongress,votingjointly,
byavoteofatleastamajorityofallitsMembersinregularorspecial

session,mayrevokesuchproclamationorsuspension,whichrevocation
shallnotbesetasidebythePresident.UpontheinitiativeofthePresident,
theCongressmay,inthesamemanner,extendsuchproclamationor
suspensionforaperiodtobedeterminedbytheCongress,iftheinvasionor
rebellionshallpersistandpublicsafetyrequiresit.
TheCongress,ifnotinsession,shall,withintwentyfourhoursfollowing
suchproclamationorsuspension,conveneinaccordancewithitsrules
withoutneedofacall.
TheSupremeCourtmayreview,inanappropriateproceedingfiledbyany
citizen,thesufficiencyofthefactualbasisfortheproclamationofmartial
laworthesuspensionoftheprivilegeofthewritofhabeascorpusorthe
extensionthereof,andmustpromulgateitsdecisionthereonwithinthirty
daysfromitsfiling.
AstateofmartiallawdoesnotsuspendtheoperationoftheConstitution,
norsupplantthefunctioningofthecivilcourtsorlegislativeassemblies,nor
authorizetheconfermentofthejurisdictiononmilitarycourtsandagencies
overcivilianswherecivilcourtsareabletofunction,norautomatically
suspendtheprivilegeofthewrit.
Thesuspensionoftheprivilegeofthewritshallapplyonlytopersons
judiciallychargedforrebellionoroffensesinherentinordirectlyconnected
withinvasion.
Duringthesuspensionoftheprivilegeofthewrit,anypersonthusarrested
ordetainedshallbejudiciallychargedwithinthreedays,otherwiseheshall
bereleased.[Emphasissupplied.]
The above provision grants the President, as Commander-inChief, a sequence of graduated power[s]. [30] From the most to the
least benign, these are: the calling out power, the power to suspend
the privilege of the writ of habeas corpus, and the power to declare
martial law. In the exercise of the latter two powers, the Constitution
requires the concurrence of two conditions, namely, an actual
invasion or rebellion, and that public safety requires the exercise of
such power.[31] However, as we observed in Integrated Bar of the

54

Philippines v. Zamora,[32] [t]hese conditions are not required in the


exercise of the calling out power. The only criterion is that whenever
it becomes necessary, the President may call the armed forces to
prevent or suppress lawless violence, invasion or rebellion.

Commander-in-Chief provisions, as well as the presidential oath of


office, the President serves as Chief of State or Chief of
Government, Commander-in-Chief, Chief of Foreign Relations and
Chief of Public Opinion.[33]

Nevertheless, it is equally true that Section 18, Article VII


does not expressly prohibit the President from declaring a state of
rebellion. Note that the Constitution vests the President not only
with Commander-in-Chief powers
but,
first
and
foremost,
with Executive powers.

First to find definitive new piers for the authority of the Chief of
State, as the protector of the people, was President Andrew
Jackson. Coming to office by virtue of a political revolution, Jackson,
as President not only kept faith with the people by driving the
patricians from power. Old Hickory, as he was fondly called, was the
first President to champion the indissolubility of the Union by
defeating South Carolinas nullification effort.[34]

Section 1, Article VII of the 1987 Philippine Constitution states:


The executive power shall be vested in the President. As if by
exposition, Section 17 of the same Article provides: He shall ensure
that the laws be faithfully executed. The provisions trace their history
to the Constitution of the United States.
The specific provisions of the U.S. Constitution granting the U.S.
President executive and commander-in-chief powers have remained
in their original simple form since the Philadelphia Constitution of
1776, Article II of which states in part:
Section1.1.TheExecutivePowershallbevestedinaPresidentofthe
UnitedStatesofAmerica....
....
Section2.1.ThePresidentshallbeCommanderinChiefoftheArmyand
NavyoftheUnitedStates....
....
Section3.heshalltakecarethatthelawsbefaithfullyexecuted.[ArticleII
ExecutivePower]
Recalling in historical vignettes the use by the U.S. President of
the above-quoted provisions, as juxtaposed against the
corresponding action of the U.S. Supreme Court, is instructive. Clad
with the prerogatives of the office and endowed with sovereign
powers, which are drawn chiefly from the Executive Power and

The Federal Tariff Acts of 1828 and 1832 that Congress enacted
did not pacify the hotspurs from South Carolina. Its State Legislature
ordered an election for a convention, whose members quickly
passed an Ordinance of Nullification. The Ordinance declared the
Tariff Acts unconstitutional, prohibited South Carolina citizens from
obeying them after a certain date in 1833, and threatened secession
if the Federal Government sought to oppose the tariff laws. The
Legislature then implemented the Ordinance with bristling punitive
laws aimed at any who sought to pay or collect customs duties. [35]
Jackson bided his time. His task of enforcement would not be
easy. Technically, the President might send troops into a State only if
the Governor called for help to suppress an insurrection, which would
not occur in the instance. The President could also send troops to
see to it that the laws enacted by Congress were faithfully
executed. But these laws were aimed at individual citizens, and
provided no enforcement machinery against violation by a
State. Jackson prepared to ask Congress for a force bill. [36]
In a letter to a friend, the President gave the essence of his
position. He wrote: . . . when a faction in a State attempts to nullify a
constitutional law of Congress, or to destroy the Union, the balance
of the people composing this Union have a perfect right to coerce
them to obedience. Then in a Proclamation he issued on December
10, 1832, he called upon South Carolinians to realize that there could
be no peaceable interference with the execution of the laws, and
dared them, disunion by armed force is treason. Are you ready to
incur its guilt? [37]

55

The Proclamation frightened nullifiers, non-nullifiers and tightrope walkers. Soon, State Legislatures began to adopt resolutions of
agreement, and the President announced that the national voice
from Maine on the north to Louisiana on the south had declared
nullification and accession confined to contempt and infamy.[38]
No other President entered office faced with problems so
formidable, and enfeebled by personal and political handicaps so
daunting, as Abraham Lincoln.

international law, a blockade could be instituted only as a measure of


war under the sovereign power of the State. Since under the
Constitution only Congress is exclusively empowered to declare war,
it is only that body that could impose a blockade and all prizes seized
before the legislative declaration were illegal. By a 5 to 4 vote, the
Supreme Court upheld Lincolns right to act as he had. [43]

Lincoln believed the Presidents power broad and that of


Congress explicit and restricted, and sought some source of
executive power not failed by misuse or wrecked by sabotage. He
seized upon the Presidents designation by the Constitution as
Commander-in-Chief, coupled it to the executive power provision and
joined them as the war power which authorized him to do many
things beyond the competence of Congress.[39]

In the course of time, the U.S. Presidents power to call out


armed forces and suspend the privilege of the writ of habeas
corpus without prior legislative approval, in case of invasion,
insurrection, or rebellion came to be recognized and accepted. The
United States introduced the expanded presidential powers in the
Philippines through the Philippine Bill of 1902. [44] The use of the
power was put to judicial test and this Court held that the case raised
a political question and said that it is beyond its province to inquire
into the exercise of the power.[45] Later, the grant of the power was
incorporated in the 1935 Constitution.[46]

Lincoln embraced the Jackson concept of the Presidents


independent power and duty under his oath directly to represent and
protect the people. In his Message of July 4, 1861, Lincoln declared
that the Executive found the duty of employing the war power in
defense of the government forced upon him. He could not but
perform the duty or surrender the existence of the
Government . . . . This concept began as a transition device, to be
validated by Congress when it assembled. In less than two-years, it
grew into an independent power under which he felt authorized to
suspend the privilege of the writ of habeas corpus, issue the
Emancipation Proclamation, and restore reoccupied States. [40]

Elected in 1884, Grover Cleveland took his ascent to the


presidency to mean that it made him the trustee of all the
people. Guided by the maxim that Public office is a public trust,
which he practiced during his incumbency, Cleveland sent federal
troops to Illinois to quell striking railway workers who defied a court
injunction. The injunction banned all picketing and distribution of
handbills. For leading the strikes and violating the injunction, Debs,
who was the union president, was convicted of contempt of
court. Brought to the Supreme Court, the principal issue was by what
authority of the Constitution or statute had the President to send
troops without the request of the Governor of the State. [47]

Lincolns Proclamation of April 15, 1861, called for 75,000


troops. Their first service, according to the proclamation, would be to
recapture forts, places and property, taking care to avoid any
devastation, any destruction of or interference with property, or any
disturbance of peaceful citizens.[41]

In In Re: Eugene Debs, et al,[48] the Supreme Court upheld the


contempt conviction. It ruled that it is not the governments province
to mix in merely individual present controversies. Still, so it went on,
whenever wrongs complained of are such as affect the public at
large, and are in respect of matters which by the Constitution are
entrusted to the care of the Nation and concerning which the Nation
owes the duty to all citizens of securing to them their common rights,
then the mere fact that the Government has no pecuniary interest in
the controversy is not sufficient to exclude it from the Courts, or
prevent it from taking measures therein to fully discharge those

Early in 1863, the U.S. Supreme Court approved President


Lincolns report to use the war powers without the benefit of
Congress. The decision was handed in the celebratedPrize
Cases[42] which involved suits attacking the Presidents right to legally
institute a blockade. Although his Proclamation was subsequently
validated by Congress, the claimants contended that under

56

constitutional duties.[49] Thus, Clevelands course had the Courts


attest.
Taking off from President Cleveland, President Theodore
Roosevelt launched what political scientists dub the stewardship
theory. Calling himself the steward of the people, he felt that the
executive power was limited only by the specific restrictions and
prohibitions appearing in the Constitution, or impleaded by Congress
under its constitutional powers.[50]
The most far-reaching extension of presidential power T.R. ever
undertook to employ was his plan to occupy and operate
Pennsylvanias coal mines under his authority as Commander-inChief. In the issue, he found means other than force to end the 1902
hard-coal strike, but he had made detailed plans to use his power as
Commander-in-Chief to wrest the mines from the stubborn operators,
so that coal production would begin again.[51]
Eventually, the power of the State to intervene in and even take
over the operation of vital utilities in the public interest was
accepted. In the Philippines, this led to the incorporation of Section 6,
[52]
Article XIII of the 1935 Constitution, which was later carried over
with modifications in Section 7, [53] Article XIV of the 1973
Constitution, and thereafter in Section 18, [54] Article XII of the 1987
Constitution.
The lesson to be learned from the U.S. constitutional history is
that the Commander-in-Chief powers are broad enough as it is and
become more so when taken together with the provision on
executive power and the presidential oath of office. Thus, the
plenitude of the powers of the presidency equips the occupant with
the means to address exigencies or threats which undermine the
very existence of government or the integrity of the State.
In The Philippine Presidency A Study of Executive Power, the
late Mme. Justice Irene R. Cortes, proposed that the Philippine
President was vested with residual power and that this is even
greater than that of the U.S. President. She attributed this distinction
to the unitary and highly centralized nature of the Philippine
government. She noted that, There is no counterpart of the several
states of the American union which have reserved powers under the

United States constitution. Elaborating on the constitutional basis for


her argument, she wrote:
.The[1935]Philippine[C]onstitutionestablishesthethreedepartmentsof
thegovernmentinthismanner:Thelegislativepowershallbevestedina
CongressofthePhilippineswhichshallconsistofaSenateandaHouseof
Representatives.TheexecutivepowershallbevestedinaPresidentofthe
Philippines.ThejudicialpowersshallbevestedinoneSupremeCourtand
insuchinferiorcourtsasmaybeprovidedbylaw.Theseprovisionsnot
onlyestablishaseparationofpowersbyactualdivisionbutalsoconfer
plenarylegislative,executive,andjudicialpowers.ForastheSupreme
CourtofthePhilippinespointedoutinOcampov.Cabangis,agrantof
legislativepowermeansagrantofallthelegislativepower;andagrantof
thejudicialpowermeansagrantofallthejudicialpowerwhichmaybe
exercisedunderthegovernment.Ifthisistrueofthelegislativepower
whichisexercisedbytwochamberswithacombinedmembership[atthat
time]ofmorethan120andofthejudicialpowerwhichisvestedina
hierarchyofcourts,itcanequallyifnotmoreappropriatelyapplytothe
executivepowerwhichisvestedinoneofficialthepresident.Hepersonifies
theexecutivebranch.Thereisaunityintheexecutivebranchabsentfrom
thetwootherbranchesofgovernment.Thepresidentisnotthechiefof
manyexecutives.Heistheexecutive.Hisdirectionoftheexecutivebranch
canbemoreimmediateanddirectthantheUnitedStatespresidentbecause
heisgivenbyexpressprovisionoftheconstitutioncontroloverall
executivedepartments,bureausandoffices.[55]
The esteemed Justice conducted her study against the
backdrop of the 1935 Constitution, the framers of which, early on,
arrived at a general opinion in favor of a strong Executive in the
Philippines.[56] Since then, reeling from the aftermath of martial law,
our most recent Charter has restricted the Presidents powers as
Commander-in-Chief. The same, however, cannot be said of the
Presidents powers as Chief Executive.
In her ponencia in Marcos v. Manglapus, Justice Cortes put her
thesis into jurisprudence. There, the Court, by a slim 8-7 margin,
upheld the Presidents power to forbid the return of her exiled
predecessor. The rationale for the majoritys ruling rested on the
Presidents

57

unstatedresidualpowerswhichareimpliedfromthegrantofexecutive
powerandwhicharenecessaryforhertocomplywithherdutiesunderthe
Constitution.ThepowersofthePresidentarenotlimitedtowhatare
expresslyenumeratedinthearticleontheExecutiveDepartmentandin
scatteredprovisionsoftheConstitution.Thisisso,notwithstandingthe
avowedintentofthemembersoftheConstitutionalCommissionof1986to
limitthepowersofthePresidentasareactiontotheabusesunderthe
regimeofMr.Marcos,fortheresultwasalimitationofspecificpowersof
thePresident,particularlythoserelatingtothecommanderinchiefclause,
butnotadiminutionofthegeneralgrantofexecutivepower.
[57]
[Underscoringsupplied.Italicsintheoriginal.]
Thus, the Presidents authority to declare a state of rebellion
springs in the main from her powers as chief executive and, at the
same time, draws strength from her Commander-in-Chief
powers. Indeed, as the Solicitor General accurately points out,
statutory authority for such a declaration may be found in Section 4,
Chapter 2 (Ordinance Power), Book III (Office of the President) of the
Revised Administrative Code of 1987, which states:
SEC.4.Proclamations.ActsofthePresidentfixingadateordeclaringa
statusorconditionofpublicmomentorinterest,upontheexistenceof
whichtheoperationofaspecificlaworregulationismadetodepend,
shallbepromulgatedinproclamationswhichshallhavetheforceofan
executiveorder.[Emphasissupplied.]
The foregoing discussion notwithstanding, in calling out the
armed forces, a declaration of a state of rebellion is an utter
superfluity.[58] At most, it only gives notice to the nation that such a
state exists and that the armed forces may be called to prevent or
suppress it.[59] Perhaps the declaration may wreak emotional effects
upon the perceived enemies of the State, even on the entire
nation. But this Courts mandate is to probe only into the legal
consequences of the declaration. This Court finds that such a
declaration is devoid of any legal significance. For all legal intents,
the declaration is deemed not written.
Should there be any confusion generated by the issuance of
Proclamation No. 427 and General Order No. 4, we clarify that, as

the dissenters in Lacson correctly pointed out, the mere declaration


of a state of rebellion cannot diminish or violate constitutionally
protected rights.[60] Indeed, if a state of martial law does not suspend
the operation of the Constitution or automatically suspend the
privilege of the writ of habeas corpus,[61] then it is with more reason
that a simple declaration of a state of rebellion could not bring about
these conditions.[62] At any rate, the presidential issuances
themselves call for the suppression of the rebellion with due regard
to constitutional rights.
For the same reasons, apprehensions that the military and
police authorities may resort to warrantless arrests are likewise
unfounded. In Lacson vs. Perez, supra, majority of the Court held
that [i]n quelling or suppressing the rebellion, the authorities may
only resort to warrantless arrests of persons suspected of rebellion,
as provided under Section 5, Rule 113 of the Rules of Court, [63] if the
circumstances so warrant. The warrantless arrest feared by
petitioners is, thus, not based on the declaration of a state of
rebellion.[64] In other words, a person may be subjected to a
warrantless arrest for the crime of rebellion whether or not the
President has declared a state of rebellion, so long as the requisites
for a valid warrantless arrest are present.
It is not disputed that the President has full discretionary power
to call out the armed forces and to determine the necessity for the
exercise of such power. While the Court may examine whether the
power was exercised within constitutional limits or in a manner
constituting grave abuse of discretion, none of the petitioners here
have, by way of proof, supported their assertion that the President
acted without factual basis.[65]
The argument that the declaration of a state of rebellion
amounts to a declaration of martial law and, therefore, is a
circumvention of the report requirement, is a leap of logic.There is no
indication that military tribunals have replaced civil courts in the
theater of war or that military authorities have taken over the
functions of civil government. There is no allegation of curtailment of
civil or political rights. There is no indication that the President has
exercised judicial and legislative powers. In short, there is no
illustration that the President has attempted to exercise or has
exercised martial law powers.

58

Nor by any stretch of the imagination can the declaration


constitute an indirect exercise of emergency powers, which exercise
depends upon a grant of Congress pursuant to Section 23 (2), Article
VI of the Constitution:

Callejo, Sr., J., concurs in the separate opinion of J.


Panganiban.
Azcuna, J., on official leave.

Sec.23.(1).
(2)Intimesofwarorothernationalemergency,theCongressmay,bylaw,
authorizethePresident,foralimitedperiodandsubjecttosuchrestrictions
asitmayprescribe,toexercisepowersnecessaryandpropertocarryouta
declarednationalpolicy.Unlesssoonerwithdrawnbyresolutionofthe
Congress,suchpowersshallceaseuponthenextadjournmentthereof.
The petitions do not cite a specific instance where the President
has attempted to or has exercised powers beyond her powers as
Chief Executive or as Commander-in-Chief.The President, in
declaring a state of rebellion and in calling out the armed forces, was
merely exercising a wedding of her Chief Executive and
Commander-in-Chief powers.These are purely executive powers,
vested on the President by Sections 1 and 18, Article VII, as opposed
to the delegated legislative powers contemplated by Section 23 (2),
Article VI.
WHEREFORE, the petitions are hereby DISMISSED.
SO ORDERED.

Carpio, Corona, and Carpio-Morales, JJ., concur.


Davide, Jr., C.J., in the result.
Puno, J., in the result.
Vitug, J., see separate opinion.
Panganiban, J., see separate opinion.
Quisumbing, J., joins J. Panganibans Opinion.
Ynares-Santiago, J., see separate opinion.
Sandoval-Gutierrez, J., please see dissenting
opinion.
Austria-Martinez, J., concur in the result.

SEPARATE OPINION
VITUG, J.:
I am in complete agreement, eloquently expressed in
the ponencia, that a declaration of a state of rebellion is an utter
superfluity, which, at most, merely gives notice that such a state
exists and that the armed forces may be called to prevent or
suppress it. I also agree that the declaration of a state of rebellion
does not diminish constitutionally protected rights.
I find it necessary to emphasize, however, that while this Court
considers the proclamation of the state of rebellion as being
essentially devoid of any legal significance, it is not, however, to be
understood as countenancing the commission of acts ostensibly in
pursuance thereof but which may, in themselves, be violative of
fundamental rights.Indeed, the warrantless arrests and searches, to
which my colleague Mme. Justice Ynares-Santiago made reference
in her dissenting opinion, may not necessarily find justification in the
bare proclamation.
I vote for the dismissal of the petitions.

SEPARATE OPINION
PANGANIBAN, J.:
Petitioners challenge the constitutionality of the state of rebellion
declared by the President through Proclamation No. 427 and
General Order No. 4 in the wake of the so-called Oakwood Incident.

59

The questioned issuances, however, were subsequently lifted by her


on August 1, 2003, when she issued Proclamation No. 435. Hence,
as of today, there is no more extant proclamation or order that can be
declared valid or void.

adverse interests.[7] Neither do courts sit to adjudicate academic


questions no matter how intellectually challenging [8] because without
a justiciable controversy, an adjudication would be of no practical use
or value.[9]

For this reason, I believe that the Petitions should be dismissed


on the ground of mootness.

While the Petitions herein have previously embodied a live case


or controversy, they now have been rendered extinct by the lifting of
the questioned issuances. Thus, nothing is gained by breathing life
into a dead issue.

The judicial power to declare a law or an executive order


unconstitutional, according to Justice Jose P. Laurel, is limited to
actual cases and controversies to be exercised after full opportunity
of argument by the parties, and limited further to the constitutional
question raised or the very lis mota presented.[1] Following this longheld principle, the Court has thus always been guided by these
fourfold requisites in deciding constitutional law issues: 1) there must
be an actual case or controversy involving a conflict of rights
susceptible of judicial determination; 2) the constitutional question
must be raised by a proper party; 3) the constitutional question must
be raised at the earliest opportunity; and 4) adjudication of the
constitutional question must be indispensable to the resolution of the
case.[2]
Unquestionably, the first and the forth requirements are absent
in the present case.

Absence of Case and Controversy


The first requirement, the existence of a live case or
controversy, means that an existing litigation is ripe for resolution and
susceptible of judicial determination; as opposed to one that is
conjectural or anticipatory,[3] hypothetical or feigned.[4] A justiciable
controversy involves a definite and concrete dispute touching on the
legal relations of parties having adverse legal interests. [5] Hence, it
admits of specific relief through a decree that is conclusive in
character, in contrast to an opinion which only advises what the law
would be upon a hypothetical state of facts.[6]
As a rule, courts have no authority to pass upon issues through
advisory opinions or friendly suits between parties without real

Moreover, without a justiciable controversy, the Petitions [10] have


become pleas for declaratory relief, over which the Supreme Court
has no original jurisdiction. Be it remembered that they were filed
directly with this Court and thus invoked its original jurisdiction. [11]
On the theory that the state of rebellion issue is capable of
repetition yet evading review, I respectfully submit that the question
may indeed still be resolved even after the lifting of the Proclamation
and Order, provided the party raising it in a proper case has
been and/or continue to be prejudiced or damaged as a direct
result of their issuance.
In the present case, petitioners have not shown that they have
been or continue to be directly and pecuniarily prejudiced or
damaged by the Proclamation and Order. Neither have they shown
that this Court has original jurisdiction over petitions for declaratory
relief. I would venture to say that, perhaps, if this controversy had
emanated from anappealed judgment from a lower tribunal, then this
Court may still pass upon the issue on the theory that it is capable of
repetition yet evading review, and the case would not be
an original action for declaratory relief.
In short, the theory of capable of repetition yet evading
review may be invoked only when this Court has jurisdiction
over the subject matter. It cannot be used in the present
controversy for declaratory relief, over which the Court has
no original jurisdiction.

The Resolution of the Case on Other Grounds

60

The fourth requisite, which relates to the absolute necessity of


deciding the constitutional issue, means that the Court has no other
way of resolving the case except by tackling an unavoidable
constitutional question. It is a well-settled doctrine that courts will not
pass upon a constitutional question unless it is the lis mota of the
case, or if the case can be disposed on some other grounds. [12]
With due respect, I submit that the mootness of the Petitions
has swept aside the necessity of ruling on the validity of
Proclamation No. 427 and General order No. 4. In the wake of its
mootness, the constitutionality issue has ceased to be the lis mota of
the case or to be an unavoidable question in the resolution
thereof. Hence, the dismissal of the Petitions for mootness is
justified.[13]
WHEREFORE, I vote to DISMISS the Petitions. On the
constitutionality of a state of rebellion, I reserve my judgment at the
proper time and in the proper case.

[1]

Rollo, G.R. No. 159085, p. 7; Rollo, G.R. No. 159103, pp. 4-5; Rollo, G.R.
No. 159185, pp. 4-5; Rollo, G.R. No. 159186, p. 9.

[2]

The Court in a Resolution dated August 5, 2003 (Rollo, G.R. No. 159086,
p. 18) previously dismissed the Sanlakas petition for failure to
attach certified true copies of Proclamation No. 427 and General
Order No. 4, and for failure to explain why service of the petition on
respondents was not made personally. Petitioners subsequently
filed a motion for leave to admit the petition with compliance for
reconsideration, attaching therewith a certified copy of the
impugned Proclamation and General Order. The Court, in a
Resolution dated August 12, 2003 (Id., at 73) granted petitioners
motion for leave and reinstated the petition.

[6]

Id., at 6.

[7]

Id., at 8.

[8]

Id., at 7.

[9]

Ibid.

[10]

Rollo, G.R. No. 159185, p. 5.

[11]

Id., at 10.

[12]

Ibid.

[13]

Ibid.

[14]

Rollo, G.R. No. 159196, p. 7.

[15]

Id., at 17.

[16]

Rollo, G.R. No. 159085, p. 45; Rollo, G.R. No. 159103, p. 23; Rollo, G.R.
No. 159185, p. 22; Rollo, G.R. No. 159186, p. 41.

[17]

Rollo, G.R. No. 159085, pp. 44-45; Rollo, G.R. No. 159103, pp. 2223; Rollo, G.R. No. 159185, pp. 21-22; Rollo, G.R. No. 159186, pp.
40-41.

[18]

CONST., art. VIII, sec. 1; Dumlao v. COMELEC, G.R. No. L-52245,


January 22, 1980, 95 SCRA 392.

[19]

Alunan III v. Mirasol, G.R. No. 108399, July 31, 1997, 276 SCRA 501.

[20]

Lacson v. Perez, G.R. No. 147780, May 10, 2001, 357 SCRA 757, 762.

[21]

Supra.

[22]

G.R. No. 113105, August 19, 1994, 235 SCRA 506.

[23]

Integrated Bar of the Philippines v. Zamora, G.R. No. 141284, August 15,
2000, 338 SCRA 81.

[24]

Rollo, G.R. No. 159085, p. 6.

[25]

Lacson v. Perez, supra, at 766.

[3]

Id., at 10-12.

[26]

G.R. No. 118910, November 19, 1995, 250 SCRA 130.

[4]

Id., at 13-14.

[27]

Id., at 139.

Rollo, G.R. No. 159103, p. 4.

[28]

Bayan (Bagong Alyansang Makabayan) v. Zamora, G.R No. 138570,


October 10, 2000, 342 SCRA 449.

[5]

61

[29]

G.R. No. 132922, April 21, 1998, Telecommunications and Broadcast


Attorneys of the Philippines, Inc. v. Commission on Elections, 289
SCRA 337.

[30]

II Record of the Constitutional Commission 409.

[31]

Integrated Bar of the Philippines v. Zamora, supra at 110.

[32]

Ibid.

[33]

In the Philippines, the President is called the Chief Executive.

[34]

Milton, The Use of Presidential Power, 1789-1943, pp. 73, 86-90.

[35]

Id., at 91.

[36]

Id., at 92.

[37]

Ibid.

[38]

Milton, at 91-92.

[39]

Id., at 109.

[40]

Ibid.

[41]

Ibid.

[42]

2 Black 635, 17 L. 459 (1863).

[43]

Milton, at 110.

[44]

A paragraph of section 5 of the act of the U.S. Congress of July 1, 1902,


otherwise known as the Philippine Bill of 1902, provides: That the
privilege of the writ of habeas corpus shall not be suspended,
unless when in cases of rebellion, insurrection, or invasion the
public safety may require it, in either of which events the same may
be suspended by the President, or by the Governor-General with
the approval of the Philippine Commission, whenever during such
period the necessity for such suspension shall exist.

[45]

Barcelon v. Baker, 5 Phil. 87, 103 (1905).

[46]

Sec. 10, Art. VII, 1935 CONST.

[47]

Milton, 168-170; Peter Irons, A PEOPLES HISTORY OF THE SUPREME


COURT, Published by the Penguin Group: New York, N.Y. , 1999,
pp. 245-247.

[48]

158 U.S. 1092 (1894).

[49]

[50]

Id., at 1103.
Milton, at 110. In An Autobiography, Roosevelt wrote:

The most important factor in getting the right spirit in my Administration, next
to the insistence upon courage, honesty, and a genuine democracy
of desire to serve the plain people, was my insistence upon the
theory that the executive power was limited only by specific
restrictions and prohibitions appearing in the Constitution or
imposed by the Congress under its Constitutional powers. My view
was that every executive officer, and above all, executive officer in
high position was a steward of the people, and not to content
himself with the negative merit of keeping his talents undamaged in
a napkin. I declined to adopt the view that what was imperatively
necessary for the Nation could not be done by the President unless
he could find some specific authorization to do it. My belief was that
it was not only his right but his duty to do anything that the needs of
the Nation demanded unless such action was forbidden by the
Constitution or by the laws. Under this interpretation of the
executive power, I did and caused to be done many things not
previously done by the President and the heads of the
Departments. I did not usurp power, but I did greatly broaden the
use of executive power. In other words, I acted for the public
welfare, I acted for the common well-being of all our people,
whenever and in whatever manner was necessary, unless
prevented by direct constitutional or legislative prohibition. I did not
care a rap for the mere form and show of power; I cared immensely
for the use that could be made of the substance. [An
Autobiography, 389 (1913) New York.]
William Howard Taft took the opposite view. He opined that the President
can exercise no power which cannot be fairly and reasonably
traced to some specific grant of power or justly implied and included
within such express grant as proper and necessary to its
exercise. Such specific grant must be either in the Constitution or in
an act of Congress passed in pursuance thereof. There is no
undefined residuum of power which he can exercise because it
seems to be in the public interest. 50 (Our Chief Magistrate and His
Powers, 139-142 (1916) New York.) Later, however, Taft, as Chief
Justice, would change his view.See Myers v. United States, 272 US
52, 71 L Ed 160, 47 SC 21 (1926), holding that The words of 2,
following the general grant of executive power under 1 were either
an enumeration of specific functions of the Executive, not all
inclusive, or were limitations upon the general grant of the
executive power, and as such, being limitations, should not be
enlarged beyond the words used.

62

[51]

Milton, at 179.

[64]

Lacson v. Perez, supra, at 763.

[52]

The State may, in the interest of national welfare and defense, establish
and operate industries and means of transportation and
communication, and upon payment of just compensation, transfer
to public ownership utilities and other private enterprises to be
operated by the Government.

[65]

IBP v. Zamora, supra.

[53]

In times of national emergency when the public interest so requires, the


State may temporarily take over and direct the operation of any
privately owned public utility or business affected with public
interest.

[54]

In times of national emergency when the public interest so requires, the


State may, during the emergency and under reasonable terms
prescribed by it, temporarily take over or direct the operation of any
privately owned public utility or business affected with public
interest.

[55]

Cortes, THE PHILIPPINE PRESIDENCY, A STUDY OF EXECUTIVE


POWER, pp. 68-69.

[56]

[57]

Marcos v. Manglapus, G.R. No. 88211, October 27, 1989, 178 SCRA 760,
763-764.

[58]

See Lacson v. Perez, supra, Kapunan, J., dissenting, at 773, 776.

[59]

Ibid.

[60]

Ibid.

[61]

CONST., art. VII, sec. 18.

[62]

Lacson v. Perez, supra, Sandoval-Gutierrez dissenting, at 792-793.

[63]

SEC. 5. Arrests without warrant; when lawful. A police officer or a private


person may, without a warrant, arrest a person:

Arugeo, THE
FRAMING
OF
CONVENTION 397 (1949) Manila.

THE

CONSTITUTIONAL

EN BANC
G.R. No. 164978 October 13, 2005

(a) When, in his presence, the person to be arrested has committed, or is


actually committing, or is attempting to commit an offense;
(b) When an offense has just been committed and he has probable cause to
believe based on personal knowledge of facts or circumstances that
the person to be arrested has committed it;
.

AQUILINO Q. PIMENTEL, JR., EDGARDO J. ANGARA, JUAN


PONCE ENRILE, LUISA P. EJERCITO-ESTRADA, JINGGOY E.
ESTRADA, PANFILO M. LACSON, ALFREDO S. LIM, JAMBY A.S.
MADRIGAL, and SERGIO R. OSMEA III, Petitioners
vs.
EXEC. SECRETARY EDUARDO R. ERMITA, FLORENCIO B.
ABAD, AVELINO J. CRUZ, JR., MICHAEL T. DEFENSOR,
JOSEPH H. DURANO, RAUL M. GONZALEZ, ALBERTO G.
ROMULO, RENE C. VILLA, and ARTHUR C. YAP, Respondents.
DECISION

63

CARPIO, J.:
The Case
This is a petition for certiorari and prohibition1 with a prayer for the
issuance of a writ of preliminary injunction to declare unconstitutional
the appointments issued by President Gloria Macapagal-Arroyo
("President Arroyo") through Executive Secretary Eduardo R. Ermita
("Secretary Ermita") to Florencio B. Abad, Avelino J. Cruz, Jr.,
Michael T. Defensor, Joseph H. Durano, Raul M. Gonzalez, Alberto
G. Romulo, Rene C. Villa, and Arthur C. Yap ("respondents") as
acting secretaries of their respective departments. The petition also
seeks to prohibit respondents from performing the duties of
department secretaries.

Florencio B. Abad

Education

23 August 2004

Avelino J. Cruz, Jr.

National Defense

23 August 2004

Rene C. Villa

Agrarian Reform

23 August 2004

Antecedent Facts

Joseph H. Durano

Tourism

23 August 2004

The Senate and the House of Representatives ("Congress")


commenced their regular session on 26 July 2004. The Commission
on Appointments, composed of Senators and Representatives, was
constituted on 25 August 2004.
Meanwhile, President Arroyo issued appointments2 to respondents
as acting secretaries of their respective departments.

Michael T. Defensor Environment and Natural Resources

23 August 2004

The appointment papers are uniformly worded as follows:


Sir:

Appointee

Department

Date of
Appointment

Pursuant to the provisions of existing laws, you are hereby appointed


ACTING SECRETARY, DEPARTMENT OF (appropriate
department) vice (name of person replaced).

Arthur C. Yap

Agriculture

15 August 2004

By virtue hereof, you may qualify and enter upon the performance of
the duties and functions of the office, furnishing this Office and the
Civil Service Commission with copies of your Oath of Office.

Alberto G. Romulo

Foreign Affairs

23 August 2004

Raul M. Gonzalez

Justice

23 August 2004

(signed)
Gloria Arroyo

64

Respondents took their oath of office and assumed duties as acting


secretaries.

The Courts Ruling


The petition has no merit.

On 8 September 2004, Aquilino Q. Pimentel, Jr. ("Senator Pimentel"),


Edgardo J. Angara ("Senator Angara"), Juan Ponce Enrile ("Senator
Enrile"), Luisa P. Ejercito-Estrada ("Senator Ejercito-Estrada"),
Jinggoy E. Estrada ("Senator Estrada"), Panfilo M. Lacson ("Senator
Lacson"), Alfredo S. Lim ("Senator Lim"), Jamby A.S. Madrigal
("Senator Madrigal"), and Sergio R. Osmea, III ("Senator Osmea")
("petitioners") filed the present petition as Senators of the Republic of
the Philippines.
Congress adjourned on 22 September 2004. On 23 September
2004, President Arroyo issued ad interimappointments3 to
respondents as secretaries of the departments to which they were
previously appointed in an acting capacity. The appointment papers
are uniformly worded as follows:
Sir:
Pursuant to the provisions of existing laws, you are hereby appointed
SECRETARY [AD INTERIM], DEPARTMENT OF (appropriate
department).
By virtue hereof, you may qualify and enter upon the performance of
the duties and functions of the office, furnishing this Office and the
Civil Service Commission with copies of your oath of office.
(signed)
Gloria Arroyo
Issue
The petition questions the constitutionality of President Arroyos
appointment of respondents as acting secretaries without the
consent of the Commission on Appointments while Congress is in
session.

Preliminary Matters
On the Mootness of the Petition
The Solicitor General argues that the petition is moot because
President Arroyo had extended to respondents ad
interim appointments on 23 September 2004 immediately after the
recess of Congress.
As a rule, the writ of prohibition will not lie to enjoin acts already
done.4 However, as an exception to the rule on mootness, courts will
decide a question otherwise moot if it is capable of repetition yet
evading review.5
In the present case, the mootness of the petition does not bar its
resolution. The question of the constitutionality of the Presidents
appointment of department secretaries in an acting capacity while
Congress is in session will arise in every such appointment.
On the Nature of the Power to Appoint
The power to appoint is essentially executive in nature, and the
legislature may not interfere with the exercise of this executive power
except in those instances when the Constitution expressly allows it to
interfere.6 Limitations on the executive power to appoint are
construed strictly against the legislature.7 The scope of the
legislatures interference in the executives power to appoint is limited
to the power to prescribe the qualifications to an appointive office.
Congress cannot appoint a person to an office in the guise of
prescribing qualifications to that office. Neither may Congress
impose on the President the duty to appoint any particular person to
an office.8

65

However, even if the Commission on Appointments is composed of


members of Congress, the exercise of its powers is executive and
not legislative. The Commission on Appointments does not legislate
when it exercises its power to give or withhold consent to presidential
appointments. Thus:
xxx The Commission on Appointments is a creature of the
Constitution. Although its membership is confined to members of
Congress, said Commission is independent of Congress. The
powers of the Commission do not come from Congress, but emanate
directly from the Constitution. Hence, it is not an agent of Congress.
In fact, the functions of the Commissioner are purely executive in
nature. xxx9

An act of the Executive which injures the institution of Congress


causes a derivative but nonetheless substantial injury, which can be
questioned by a member of Congress. In such a case, any member
of Congress can have a resort to the courts.
Considering the independence of the Commission on Appointments
from Congress, it is error for petitioners to claim standing in the
present case as members of Congress. President Arroyos issuance
of acting appointments while Congress is in session impairs no
power of Congress. Among the petitioners, only the following are
members of the Commission on Appointments of the 13th Congress:
Senator Enrile as Minority Floor Leader, Senator Lacson as Assistant
Minority Floor Leader, and Senator Angara, Senator Ejercito-Estrada,
and Senator Osmea as members.

On Petitioners Standing
The Solicitor General states that the present petition is a quo
warranto proceeding because, with the exception of Secretary
Ermita, petitioners effectively seek to oust respondents for unlawfully
exercising the powers of department secretaries. The Solicitor
General further states that petitioners may not claim standing as
Senators because no power of the Commission on Appointments has
been "infringed upon or violated by the President. xxx If at all, the
Commission on Appointments as a body (rather than individual
members of the Congress) may possess standing in this case." 10

Thus, on the impairment of the prerogatives of members of the


Commission on Appointments, only Senators Enrile, Lacson, Angara,
Ejercito-Estrada, and Osmea have standing in the present petition.
This is in contrast to Senators Pimentel, Estrada, Lim, and Madrigal,
who, though vigilant in protecting their perceived prerogatives as
members of Congress, possess no standing in the present petition.
The Constitutionality of President Arroyos Issuance
of Appointments to Respondents as Acting Secretaries

Petitioners, on the other hand, state that the Court can exercise
its certiorari jurisdiction over unconstitutional acts of the
President.11 Petitioners further contend that they possess standing
because President Arroyos appointment of department secretaries in
an acting capacity while Congress is in session impairs the powers of
Congress. Petitioners cite Sanlakas v. Executive Secretary12 as
basis, thus:

Petitioners contend that President Arroyo should not have appointed


respondents as acting secretaries because "in case of a vacancy in
the Office of a Secretary, it is only an Undersecretary who can be
designated as Acting Secretary."13 Petitioners base their argument on
Section 10, Chapter 2, Book IV of Executive Order No. 292 ("EO
292"),14 which enumerates the powers and duties of the
undersecretary. Paragraph 5 of Section 10 reads:

To the extent that the powers of Congress are impaired, so is the


power of each member thereof, since his office confers a right to
participate in the exercise of the powers of that institution.

SEC. 10. Powers and Duties of the Undersecretary. - The


Undersecretary shall:
xxx

66

(5) Temporarily discharge the duties of the Secretary in the latters


absence or inability to discharge his duties for any cause or in case
of vacancy of the said office, unless otherwise provided by law.
Where there are more than one Undersecretary, the Secretary shall
allocate the foregoing powers and duties among them. The President
shall likewise make the temporary designation of Acting Secretary
from among them; and
xxx
Petitioners further assert that "while Congress is in session, there
can be no appointments, whether regular or acting, to a vacant
position of an office needing confirmation by the Commission on
Appointments, without first having obtained its consent." 15
In sharp contrast, respondents maintain that the President can issue
appointments in an acting capacity to department secretaries without
the consent of the Commission on Appointments even while
Congress is in session. Respondents point to Section 16, Article VII
of the 1987 Constitution. Section 16 reads:
SEC. 16. The President shall nominate and, with the consent of the
Commission on Appointments, appoint the heads of the executive
departments, ambassadors, other public ministers and consuls, or
officers of the armed forces from the rank of colonel or naval captain,
and other officers whose appointments are vested in him in this
Constitution. He shall also appoint all other officers of the
Government whose appointments are not otherwise provided for by
law, and those whom he may be authorized by law to appoint. The
Congress may, by law, vest the appointment of other officers lower in
rank in the President alone, in the courts, or in the heads of
departments, agencies, commissions, or boards.
The President shall have the power to make appointments during the
recess of the Congress, whether voluntary or compulsory, but such
appointments shall be effective only until disapproval by the
Commission on Appointments or until the next adjournment of the
Congress.

Respondents also rely on EO 292, which devotes a chapter to the


Presidents power of appointment. Sections 16 and 17, Chapter 5,
Title I, Book III of EO 292 read:
SEC. 16. Power of Appointment. The President shall exercise
the power to appoint such officials as provided for in the
Constitution and laws.
SEC. 17. Power to Issue Temporary Designation. (1) The
President may temporarily designate an officer already in the
government service or any other competent person to perform
the functions of an office in the executive branch, appointment
to which is vested in him by law, when: (a) the officer regularly
appointed to the office is unable to perform his duties by reason
of illness, absence or any other cause; or (b) there exists a
vacancy[.]
(2) The person designated shall receive the compensation attached
to the position, unless he is already in the government service in
which case he shall receive only such additional compensation as,
with his existing salary, shall not exceed the salary authorized by law
for the position filled. The compensation hereby authorized shall be
paid out of the funds appropriated for the office or agency concerned.
(3) In no case shall a temporary designation exceed one (1)
year. (Emphasis supplied)
Petitioners and respondents maintain two diametrically opposed lines
of thought. Petitioners assert that the President cannot issue
appointments in an acting capacity to department secretaries while
Congress is in session because the law does not give the President
such power. In contrast, respondents insist that the President can
issue such appointments because no law prohibits such
appointments.
The essence of an appointment in an acting capacity is its temporary
nature. It is a stop-gap measure intended to fill an office for a limited
time until the appointment of a permanent occupant to the office. 16 In
case of vacancy in an office occupied by an alter ego of the

67

President, such as the office of a department secretary, the President


must necessarily appoint an alter ego of her choice as acting
secretary before the permanent appointee of her choice could
assume office.
Congress, through a law, cannot impose on the President the
obligation to appoint automatically the undersecretary as her
temporary alter ego. An alter ego, whether temporary or permanent,
holds a position of great trust and confidence. Congress, in the guise
of prescribing qualifications to an office, cannot impose on the
President who heralter ego should be.
The office of a department secretary may become vacant while
Congress is in session. Since a department secretary is the alter
ego of the President, the acting appointee to the office must
necessarily have the Presidents confidence. Thus, by the very
nature of the office of a department secretary, the President must
appoint in an acting capacity a person of her choice even while
Congress is in session. That person may or may not be the
permanent appointee, but practical reasons may make it expedient
that the acting appointee will also be the permanent appointee.
The law expressly allows the President to make such acting
appointment. Section 17, Chapter 5, Title I, Book III of EO 292 states
that "[t]he President may temporarily designate an officer already in
the government service or any other competent person to perform
the functions of an office in the executive branch." Thus, the
President may even appoint in an acting capacity a person not yet in
the government service, as long as the President deems that person
competent.
Petitioners assert that Section 17 does not apply to appointments
vested in the President by the Constitution, because it only applies to
appointments vested in the President by law. Petitioners forget that
Congress is not the only source of law. "Law" refers to the
Constitution, statutes or acts of Congress, municipal ordinances,
implementing rules issued pursuant to law, and judicial decisions. 17

Finally, petitioners claim that the issuance of appointments in an


acting capacity is susceptible to abuse. Petitioners fail to consider
that acting appointments cannot exceed one year as expressly
provided in Section 17(3), Chapter 5, Title I, Book III of EO 292. The
law has incorporated this safeguard to prevent abuses, like the use
of acting appointments as a way to circumvent confirmation by the
Commission on Appointments.
In distinguishing ad interim appointments from appointments in an
acting capacity, a noted textbook writer on constitutional law has
observed:
Ad-interim appointments must be distinguished from appointments in
an acting capacity. Both of them are effective upon acceptance. But
ad-interim appointments are extended only during a recess of
Congress, whereas acting appointments may be extended any time
there is a vacancy. Moreover ad-interim appointments are submitted
to the Commission on Appointments for confirmation or rejection;
acting appointments are not submitted to the Commission on
Appointments. Acting appointments are a way of temporarily filling
important offices but, if abused, they can also be a way of
circumventing the need for confirmation by the Commission on
Appointments.18
However, we find no abuse in the present case. The absence of
abuse is readily apparent from President Arroyos issuance of ad
interim appointments to respondents immediately upon the recess of
Congress, way before the lapse of one year.
WHEREFORE, we DISMISS the present petition for certiorari and
prohibition.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice

68

WE CONCUR:
HILARIO G. DAVIDE, JR.
Chief Justice
REYNATO S. PUNO
ARTEMIO V. PANGANIBAN
Associate Justice
Associate Justice
LEONARDO A. QUISUMBING
CONSUELO YNARES-SANTIAGO
Associate Justice
Associate Justice
ANGELINA SANDOVAL-GUTIERREZ
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
Associate Justice
RENATO C. CORONA
CONCHITA CARPIO MORALES
Associate Justice
Associate Justice
ROMEO J. CALLEJO, SR.
ADOLFO S. AZCUNA
Associate Justice
Associate Justice
DANTE O. TINGA
MINITA V. CHICO-NAZARIO
Associate Justice
Associate Justice
CANCIO C. GARCIA
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion
of the Court.
HILARIO G. DAVIDE, JR.

Tolentino v. Commission on Elections, G.R. No. 148334, 21


January 2004, 420 SCRA 438 citing Gil v. Benipayo, G.R. No.
148179, 26 June 2001 (minute resolution).
5

Tolentino v. Commission on Elections, G.R. No. 148334, 21


January 2004, 420 SCRA 438 citing Chief Supt. Acop v. Secretary
Guingona, Jr., 433 Phil. 62 (2002); Viola v. Hon. Alunan III, 343 Phil.
184 (1997); Alunan III v. Mirasol, 342 Phil. 467 (1997).
6

See Joaquin G. Bernas, S.J., The 1987 Constitution of the


Republic of the Philippines: A Commentary 768 (1996).
7

See Sarmiento III v. Mison, No. L-79974, 17 December 1987, 156


SCRA 549.
8

See Manalang v. Quitoriano, et al., 94 Phil. 903 (1954); Flores v.


Drilon, G.R. No. 104732, 22 June 1993, 223 SCRA 568.
9

Cunanan v. Tan, Jr., G.R. No. L-19721, 10 May 1962, 5 SCRA


1. But see Justice Concepcions Concurring Opinion in Guevara v.
Inocentes, 123 Phil. 201, 211 (1966).
10

Rollo, p. 38.

11

Ibid., p. 65.

12

G.R. No. 159085, 3 February 2004, 421 SCRA


656 citing Philippine Constitution Association v. Enriquez, G.R. No.
113105, 19 August 1994, 235 SCRA 506.

Chief Justice

13

Rollo, p. 14.

Footnotes

14

Also known as the "Administrative Code of 1987."


Rollo, p. 12.

Under Rule 65 of the Rules of Court.

15

Rollo, pp. 21-28.

16

Rollo, pp. 45-60.

See Marohombsar v. Alonto, Jr., G.R. No. 93711, 25 February


1991, 194 SCRA 390.

69

17

Article 8, Civil Code. See National Amnesty Commission v.


Commission on Audit, G.R. No. 156982, 8 September 2004, 437
SCRA 655.

BELLOSILLO, J.:

18

Joaquin G. Bernas, S.J., The 1987 Constitution of the Republic of


the Philippines: A Commentary 772 (1996).

EN BANC

G.R. No. 96541 August 24, 1993


DEAN JOSE JOYA, CARMEN GUERRERO NAKPIL, ARMIDA
SIGUION REYNA, PROF. RICARTE M. PURUGANAN, IRMA
POTENCIANO, ADRIAN CRISTOBAL, INGRID SANTAMARIA,
CORAZON FIEL, AMBASSADOR E. AGUILAR CRUZ,
FLORENCIO R. JACELA, JR., MAURO MALANG, FEDERICO
AGUILAR ALCUAZ, LUCRECIA R. URTULA, SUSANO
GONZALES, STEVE SANTOS, EPHRAIM SAMSON, SOLER
SANTOS, ANG KIU KOK, KERIMA POLOTAN, LUCRECIA
KASILAG, LIGAYA DAVID PEREZ, VIRGILIO ALMARIO,
LIWAYWAY A. ARCEO, CHARITO PLANAS, HELENA BENITEZ,
ANNA MARIA L. HARPER, ROSALINDA OROSA, SUSAN CALO
MEDINA, PATRICIA RUIZ, BONNIE RUIZ, NELSON NAVARRO,
MANDY NAVASERO, ROMEO SALVADOR, JOSEPHINE
DARANG, and PAZ VETO PLANAS, petitioners,
vs.
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT
(PCGG), CATALINO MACARAIG, JR., in his official capacity,
and/or the Executive Secretary, and CHAIRMAN MATEO A.T.
CAPARAS, respondents.
M.M. Lazaro & Associates for petitioners.
The Solicitor General for respondents.

All thirty-five (35) petitioners in this Special Civil Action for Prohibition
and Mandamus with Prayer for Preliminary Injunction and/or
Restraining Order seek to enjoin the Presidential Commission on
Good Government (PCGG) from proceeding with the auction sale
scheduled on 11 January 1991 by Christie's of New York of the Old
Masters Paintings and 18th and 19th century silverware seized from
Malacaang and the Metropolitan Museum of Manila and placed in
the custody of the Central Bank.
The antecedents: On 9 August 1990, Mateo A.T. Caparas, then
Chairman of PCGG, wrote then President Corazon C. Aquino,
requesting her for authority to sign the proposed Consignment
Agreement between the Republic of the Philippines through PCGG
and Christie, Manson and Woods International, Inc. (Christie's of
New York, or CHRISTIE'S) concerning the scheduled sale on 11
January 1991 of eighty-two (82) Old Masters Paintings and antique
silverware seized from Malacaang and the Metropolitan Museum of
Manila alleged to be part of the ill-gotten wealth of the late President
Marcos, his relatives and cronies.
On 14 August 1990, then President Aquino, through former Executive
Secretary Catalino Macaraig, Jr., authorized Chairman Caparas to
sign the Consignment Agreement allowing Christie's of New York to
auction off the subject art pieces for and in behalf of the Republic of
the Philippines.
On 15 August 1990, PCGG, through Chairman Caparas,
representing the Government of the Republic of the Philippines,
signed the Consignment Agreement with Christie's of New York.
According to the agreement, PCGG shall consign to CHRISTIE'S for
sale at public auction the eighty-two (82) Old Masters Paintings then
found at the Metropolitan Museum of Manila as well as the silverware
contained in seventy-one (71) cartons in the custody of the Central
Bank of the Philippines, and such other property as may

70

subsequently be identified by PCGG and accepted by CHRISTIE'S


to be subject to the provisions of the agreement. 1
On 26 October 1990, the Commission on Audit (COA) through then
Chairman Eufemio C. Domingo submitted to President Aquino the
audit findings and observations of COA on the Consignment
Agreement of 15 August 1990 to the effect that: (a) the authority of
former PCGG Chairman Caparas to enter into the Consignment
Agreement was of doubtful legality; (b) the contract was highly
disadvantageous to the government; (c) PCGG had a poor track
record in asset disposal by auction in the U.S.; and, (d) the assets
subject of auction were historical relics and had cultural significance,
hence, their disposal was prohibited by law. 2
On 15 November 1990, PCGG through its new Chairman David M.
Castro, wrote President Aquino defending the Consignment
Agreement and refuting the allegations of COA Chairman
Domingo. 3 On the same date, Director of National Museum Gabriel
S. Casal issued a certification that the items subject of the
Consignment Agreement did not fall within the classification of
protected cultural properties and did not specifically qualify as part of
the Filipino cultural heritage.4 Hence, this petition originally filed on 7
January 1991 by Dean Jose Joya, Carmen Guerrero Nakpil, Armida
Siguion Reyna, Prof. Ricarte M. Puruganan, Irma Potenciano, Adrian
Cristobal, Ingrid Santamaria, Corazon Fiel, Ambassador E. Aguilar
Cruz, Florencio R. Jacela, Jr., Mauro Malang, Federico Aguilar
Alcuaz, Lucrecia R. Urtula, Susano Gonzales, Steve Santos,
Ephraim Samson, Soler Santos, Ang Kiu Kok, Kerima Polotan,
Lucrecia Kasilag, Ligaya David Perez, Virgilio Almario and Liwayway
A. Arceo.
After the oral arguments of the parties on 9 January 1991, we issued
immediately our resolution denying the application for preliminary
injunction to restrain the scheduled sale of the artworks on the
ground that petitioners had not presented a clear legal right to a
restraining order and that proper parties had not been impleaded.

On 11 January 1991, the sale at public auction proceeded as


scheduled and the proceeds of $13,302,604.86 were turned over to
the Bureau of Treasury. 5
On 5 February 1991, on motion of petitioners, the following were
joined as additional petitioners: Charito Planas, Helena Benitez, Ana
Maria L. Harper, Rosalinda Orosa, Susan Carlo Medina, Patricia
Ruiz, Bonnie Ruiz, Nelson Navarro, Mandy Navasero, Romeo
Salvador, Josephine Darang and Paz Veto Planas.
On the other hand, Catalino Macaraig, Jr., in his capacity as former
Executive Secretary, the incumbent Executive Secretary, and
Chairman Mateo A.T. Caparas were impleaded as additional
respondents.
Petitioners raise the following issues: (a) whether petitioners have
legal standing to file the instant petition; (b) whether the Old Masters
Paintings and antique silverware are embraced in the phrase
"cultural treasure of the nation" which is under the protection of the
state pursuant to the 1987 Constitution and/or "cultural properties"
contemplated under R.A. 4846, otherwise known as "The Cultural
Properties Preservation and Protection Act;" (c) whether the
paintings and silverware are properties of public dominion on which
can be disposed of through the joint concurrence of the President
and Congress;
(d) whether respondent, PCGG has the jurisdiction and authority to
enter into an agreement with Christie's of New York for the sale of
the artworks; (e) whether, PCGG has complied with the due process
clause and other statutory requirements for the exportation and sale
of the subject items; and, (f) whether the petition has become moot
and academic, and if so, whether the above issues warrant
resolution from this Court.
The issues being interrelated, they will be discussed jointly
hereunder. However, before proceeding, we wish to emphasize that
we admire and commend petitioners' zealous concern to keep and
preserve within the country great works of art by well-known old
masters. Indeed, the value of art cannot be gainsaid. For, by serving
as a creative medium through which man can express his innermost

71

thoughts and unbridled emotions while, at the same time, reflecting


his deep-seated ideals, art has become a true expression of beauty,
joy, and life itself. Such artistic creations give us insights into the
artists' cultural heritage the historic past of the nation and the era
to which they belong in their triumphant, glorious, as well as
troubled and turbulent years. It must be for this reason that the
framers of the 1987 Constitution mandated in Art. XIV, Sec. 14, that
is the solemn duty of the state to "foster the preservation,
enrichment, and dynamic evolution of a Filipino national culture
based on the principle of unity in diversity in a climate of free artistic
and intellectual expression." And, in urging this Court to grant their
petition, petitioners invoke this policy of the state on the protection of
the arts.
But, the altruistic and noble purpose of the petition notwithstanding,
there is that basic legal question which must first be resolved:
whether the instant petition complies with the legal requisites for this
Court to exercise its power of judicial review over this case.
The rule is settled that no question involving the constitutionality or
validity of a law or governmental act may be heard and decided by
the court unless there is compliance with the legal requisites for
judicial inquiry, namely: that the question must be raised by the
proper party; that there must be an actual case or controversy; that
the question must be raised at the earliest possible opportunity; and,
that the decision on the constitutional or legal question must be
necessary to the determination of the case itself. 6 But the most
important are the first two (2) requisites.
On the first requisite, we have held that one having no right or
interest to protect cannot invoke the jurisdiction of the court as partyplaintiff in an action. 7 This is premised on Sec. 2, Rule 3, of the
Rules of Court which provides that every action must be prosecuted
and defended in the name of the real party-in-interest, and that all
persons having interest in the subject of the action and in obtaining
the relief demanded shall be joined as plaintiffs. The Court will
exercise its power of judicial review only if the case is brought before
it by a party who has the legal standing to raise the constitutional or
legal question. "Legal standing" means a personal and substantial
interest in the case such that the party has sustained or will sustain

direct injury as a result of the governmental act that is being


challenged. The term "interest" is material interest, an interest in
issue and to be affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental
interest. 8 Moreover, the interest of the party plaintiff must be
personal and not one based on a desire to vindicate the
constitutional right of some third and related party. 9
There are certain instances however when this Court has allowed
exceptions to the rule on legal standing, as when a citizen brings a
case for mandamus to procure the enforcement of a public duty for
the fulfillment of a public right recognized by the Constitution, 10 and
when a taxpayer questions the validity of a governmental act
authorizing the disbursement of public funds. 11
Petitioners claim that as Filipino citizens, taxpayers and artists
deeply concerned with the preservation and protection of the
country's artistic wealth, they have the legal personality to restrain
respondents Executive Secretary and PCGG from acting contrary to
their public duty to conserve the artistic creations as mandated by
the 1987 Constitution, particularly Art. XIV, Secs. 14 to 18, on Arts
and Culture, and R.A. 4846 known as "The Cultural Properties
Preservation and Protection Act," governing the preservation and
disposition of national and important cultural properties. Petitioners
also anchor their case on the premise that the paintings and
silverware are public properties collectively owned by them and by
the people in general to view and enjoy as great works of art. They
allege that with the unauthorized act of PCGG in selling the art
pieces, petitioners have been deprived of their right to public property
without due process of law in violation of the Constitution. 12
Petitioners' arguments are devoid of merit. They lack basis in fact
and in law. They themselves allege that the paintings were donated
by private persons from different parts of the world to the
Metropolitan Museum of Manila Foundation, which is a non-profit and
non-stock corporations established to promote non-Philippine arts.
The foundation's chairman was former First Lady Imelda R. Marcos,
while its president was Bienvenido R. Tantoco. On this basis, the
ownership of these paintings legally belongs to the foundation or
corporation or the members thereof, although the public has been

72

given the opportunity to view and appreciate these paintings when


they were placed on exhibit.
Similarly, as alleged in the petition, the pieces of antique silverware
were given to the Marcos couple as gifts from friends and dignitaries
from foreign countries on their silver wedding and anniversary, an
occasion personal to them. When the Marcos administration was
toppled by the revolutionary government, these paintings and
silverware were taken from Malacaang and the Metropolitan
Museum of Manila and transferred to the Central Bank Museum. The
confiscation of these properties by the Aquino administration
however should not be understood to mean that the ownership of
these paintings has automatically passed on the government without
complying with constitutional and statutory requirements of due
process and just compensation. If these properties were already
acquired by the government, any constitutional or statutory defect in
their acquisition and their subsequent disposition must be raised only
by the proper parties the true owners thereof whose authority
to recover emanates from their proprietary rights which are protected
by statutes and the Constitution. Having failed to show that they are
the legal owners of the artworks or that the valued pieces have
become publicly owned, petitioners do not possess any clear legal
right whatsoever to question their alleged unauthorized disposition.
Further, although this action is also one of mandamus filed by
concerned citizens, it does not fulfill the criteria for a mandamus suit.
In Legaspi v. Civil Service Commission, 13 this Court laid down the
rule that a writ of mandamus may be issued to a citizen only when
the public right to be enforced and the concomitant duty of the state
are unequivocably set forth in the Constitution. In the case at bar,
petitioners are not after the fulfillment of a positive duty required of
respondent officials under the 1987 Constitution. What they seek is
the enjoining of an official act because it is constitutionally infirmed.
Moreover, petitioners' claim for the continued enjoyment and
appreciation by the public of the artworks is at most a privilege and is
unenforceable as a constitutional right in this action for mandamus.
Neither can this petition be allowed as a taxpayer's suit. Not every
action filed by a taxpayer can qualify to challenge the legality of
official acts done by the government. A taxpayer's suit can prosper

only if the governmental acts being questioned involve disbursement


of public funds upon the theory that the expenditure of public funds
by an officer of the state for the purpose of administering an
unconstitutional act constitutes a misapplication of such funds, which
may be enjoined at the request of a taxpayer. 14 Obviously,
petitioners are not challenging any expenditure involving public funds
but the disposition of what they allege to be public properties. It is
worthy to note that petitioners admit that the paintings and antique
silverware were acquired from private sources and not with public
money.
Anent the second requisite of actual controversy, petitioners argue
that this case should be resolved by this Court as an exception to the
rule on moot and academic cases; that although the sale of the
paintings and silver has long been consummated and the possibility
of retrieving the treasure trove is nil, yet the novelty and importance
of the issues raised by the petition deserve this Court's attention.
They submit that the resolution by the Court of the issues in this case
will establish future guiding principles and doctrines on the
preservation of the nation's priceless artistic and cultural possessions
for the benefit of the public as a whole. 15
For a court to exercise its power of adjudication, there must be an
actual case of controversy one which involves a conflict of legal
rights, an assertion of opposite legal claims susceptible of judicial
resolution; the case must not be moot or academic or based on
extra-legal or other similar considerations not cognizable by a court
of justice. 16 A case becomes moot and academic when its purpose
has become stale, 17 such as the case before us. Since the purpose
of this petition for prohibition is to enjoin respondent public officials
from holding the auction sale of the artworks on a particular date
11 January 1991 which is long past, the issues raised in the
petition have become moot and academic.
At this point, however, we need to emphasize that this Court has the
discretion to take cognizance of a suit which does not satisfy the
requirements of an actual case or legal standing when paramount
public interest is involved. 18We find however that there is no such
justification in the petition at bar to warrant the relaxation of the rule.

73

Section 2 of R.A. 4846, as amended by P.D. 374, declares it to be


the policy of the state to preserve and protect the important cultural
properties and national cultural treasures of the nation and to
safeguard their intrinsic value. As to what kind of artistic and cultural
properties are considered by the State as involving public interest
which should therefore be protected, the answer can be gleaned
from reading of the reasons behind the enactment of R.A. 4846:
WHEREAS, the National Museum has the difficult
task, under existing laws and regulations, of
preserving and protecting the cultural properties of
the nation;
WHEREAS, innumerable sites all over the country
have since been excavated for cultural relics, which
have passed on to private hands, representing
priceless cultural treasure that properly belongs to
the Filipino people as their heritage;
WHEREAS, it is perhaps impossible now to find an
area in the Philippines, whether government or
private property, which has not been disturbed by
commercially-minded diggers and collectors, literally
destroying part of our historic past;
WHEREAS, because of this the Philippines has
been charged as incapable of preserving and
protecting her cultural legacies;
WHEREAS, the commercialization of Philippine
relics from the contact period, the Neolithic Age, and
the Paleolithic Age, has reached a point perilously
placing beyond reach of savants the study and
reconstruction of Philippine prehistory; and
WHEREAS, it is believed that more stringent
regulation on movement and a limited form of
registration of important cultural properties and of
designated national cultural treasures is necessary,

and that regardless of the item, any cultural property


exported or sold locally must be registered with the
National Museum to control the deplorable situation
regarding our national cultural properties and to
implement the Cultural Properties Law (emphasis
supplied).
Clearly, the cultural properties of the nation which shall be under the
protection of the state are classified as the "important cultural
properties" and the "national cultural treasures." "Important cultural
properties" are cultural properties which have been singled out from
among the innumerable cultural properties as having exceptional
historical cultural significance to the Philippines but are not
sufficiently outstanding to merit the classification of national cultural
treasures. 19 On the other hand, a "national cultural treasures" is a
unique object found locally, possessing outstanding historical,
cultural, artistic and/or scientific value which is highly significant and
important to this country and nation. 20 This Court takes note of the
certification issued by the Director of the Museum that the Italian
paintings and silverware subject of this petition do not constitute
protected cultural properties and are not among those listed in the
Cultural Properties Register of the National Museum.
We agree with the certification of the Director of the Museum. Under
the law, it is the Director of the Museum who is authorized to
undertake the inventory, registration, designation or classification,
with the aid of competent experts, of important cultural properties
and national cultural treasures. 21 Findings of administrative officials
and agencies who have acquired expertise because their jurisdiction
is confined to specific matters are generally accorded not only
respect but at times even finality if such findings are supported by
substantial evidence and are controlling on the reviewing authorities
because of their acknowledged expertise in the fields of
specialization to which they are assigned. 22
In view of the foregoing, this Court finds no compelling reason to
grant the petition. Petitioners have failed to show that respondents
Executive Secretary and PCGG exercised their functions with grave
abuse of discretion or in excess of their jurisdiction.

74

WHEREFORE, for lack of merit, the petition for prohibition and


mandamus is DISMISSED.

Commission, G.R. No. L- 72119, 29 May 1987, 150


SCRA 530.

SO ORDERED.

11 Pascual v. Secretary of Public Works, 110 Phil


331 (1960).

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino,


Regalado, Davide, Jr., Romero, Nocon, Melo, Quiason, Puno and
Vitug, JJ., concur.

12 Rollo, pp. 156-157.


13 G.R. No. L-72119, 29 May 1987, 150 SCRA 530.

# Footnotes
1 Rollo, pp. 55-66.

14 Pascual v. Secretary of Public Works, 110 Phil


331 (1960).

2 Rollo, pp. 37-39.

15 Rollo, pp. 174-175.

3 Rollo, pp. 48-53.

16 See Note 6.

4 Rollo, p. 186.

17 Manila Jockey Club, Inc. v. Montano Jr., G.R. No.


L-24465, 28 February 1977, 75 SCRA 264.

5 Ibid.
6 Cruz, Isagani A., Philippine Political Law, 1991 ed.,
p. 235; Dumlao v. Commission on Elections, G.R.
No. L- 50245, 22 January 1980, 95 SCRA 392.
7 Sustiguer v. Tamayo, G.R. No. L-29341, 21 August
1989, 176 SCRA 579.

18 Dumlao v. Comelec, G.R. No. L- 50245, 22


January 1980, 95 SCRA 392.
19 Sec. 2, par. b, R.A. 4846, as amended.
20 Sec. 3, par. c, R.A. 4846, as amended.
21 Id., Secs. 5-7.

8 House International Building Tenants Association,


Inc. v. Intermediate Appellate Court, G.R. No. L75287, 30 June 1987, 151 SCRA 703.

22 Biak-na-Bato Mining Company v. Tanco, Jr., G.R.


Nos. L-34267-68, 25 January 1991, 193 SCRA 323.

9 Bernas, Joaquin B., The Constitution of the


Republic of the Philippines, Vol. II, 1988 Ed., p. 279.
10 Taada v. Tuvera, G.R. No. L- 63915, 24 April
1985, 136 SCRA 27; Legaspi v. Civil Service

75

EN BANC
G.R. No. 155001

January 21, 2004

DEMOSTHENES P. AGAN, JR., JOSEPH B. CATAHAN, JOSE


MARI B. REUNILLA, MANUEL ANTONIO B. BOE, MAMERTO S.
CLARA, REUEL E. DIMALANTA, MORY V. DOMALAON,
CONRADO G. DIMAANO, LOLITA R. HIZON, REMEDIOS P.
ADOLFO, BIENVENIDO C. HILARIO, MIASCOR WORKERS
UNION-NATIONAL LABOR UNION (MWU-NLU), and PHILIPPINE
AIRLINES EMPLOYEES ASSOCIATION (PALEA),petitioners,
vs.
PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.,
MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT
OF TRANSPORTATION AND COMMUNICATIONS and
SECRETARY LEANDRO M. MENDOZA, in his capacity as Head
of the Department of Transportation and
Communications, respondents,
MIASCOR GROUNDHANDLING CORPORATION, DNATA-WINGS
AVIATION SYSTEMS CORPORATION, MACROASIA-EUREST
SERVICES, INC., MACROASIA-MENZIES AIRPORT SERVICES
CORPORATION, MIASCOR CATERING SERVICES
CORPORATION, MIASCOR AIRCRAFT MAINTENANCE
CORPORATION, and MIASCOR LOGISTICS
CORPORATION, Petitioners-in-Intervention,

FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO,


ROSEMARIE ANG, EUGENE ARADA, NENETTE BARREIRO,
NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE DIVINE
BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA
CAILAO, ERWIN CALAR, MARIFEL CONSTANTINO, JANETTE
CORDERO, ARNOLD FELICITAS, MARISSA GAYAGOY, ALEX
GENERILLO, ELIZABETH GRAY, ZOILO HERICO, JACQUELINE
IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA
LINCHOCO, ROLLY LORICO, FRANCIS AUGUSTO MACATOL,
MICHAEL MALIGAT, DENNIS MANALO, RAUL MANGALIMAN,
JOEL MANLANGIT, CHARLIE MENDOZA, HAZNAH MENDOZA,
NICHOLS MORALES, ALLEN OLAO, CESAR ORTAL, MICHAEL
ORTEGA, WAYNE PLAZA, JOSELITO REYES, ROLANDO
REYES, AILEEN SAPINA, RAMIL TAMAYO, PHILLIPS TAN,
ANDREW UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI
YUPANO, MARY JANE ONG, RICHARD RAMIREZ, CHERYLE
MARIE ALFONSO, LYNDON BAUTISTA, MANUEL CABOCAN
AND NEDY LAZO, Respondents-in-Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION,
INC., Respondents-in-Intervention,
x-------------------------x
G.R. No. 155547 January 21, 2004
SALACNIB F. BATERINA, CLAVEL A. MARTINEZ and
CONSTANTINO G. JARAULA, petitioners,
vs.
PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.,
MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT
OF TRANSPORTATION AND COMMUNICATIONS, DEPARTMENT
OF PUBLIC WORKS AND HIGHWAYS, SECRETARY LEANDRO
M. MENDOZA, in his capacity as Head of the Department of
Transportation and Communications, and SECRETARY SIMEON
A. DATUMANONG, in his capacity as Head of the Department of
Public Works and Highways, respondents, JACINTO V. PARAS,
RAFAEL P. NANTES, EDUARDO C. ZIALCITA, WILLY BUYSON
VILLARAMA, PROSPERO C. NOGRALES, PROSPERO A.

76

PICHAY, JR., HARLIN CAST ABAYON, and BENASING O.


MACARANBON, Respondents-Intervenors,
FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO,
ROSEMARIE ANG, EUGENE ARADA, NENETTE BARREIRO,
NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE DIVINE
BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA
CAILAO, ERWIN CALAR, MARIFEL CONSTANTINO, JANETTE
CORDERO, ARNOLD FELICITAS, MARISSA GAYAGOY, ALEX
GENERILLO, ELIZABETH GRAY, ZOILO HERICO, JACQUELINE
IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA
LINCHOCO, ROLLY LORICO, FRANCIS AUGUSTO MACATOL,
MICHAEL MALIGAT, DENNIS MANALO, RAUL MANGALIMAN,
JOEL MANLANGIT, CHARLIE MENDOZA, HAZNAH MENDOZA,
NICHOLS MORALES, ALLEN OLAO, CESAR ORTAL, MICHAEL
ORTEGA, WAYNE PLAZA, JOSELITO REYES, ROLANDO
REYES, AILEEN SAPINA, RAMIL TAMAYO, PHILLIPS TAN,
ANDREW UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI
YUPANO, MARY JANE ONG, RICHARD RAMIREZ, CHERYLE
MARIE ALFONSO, LYNDON BAUTISTA, MANUEL CABOCAN
AND NEDY LAZO, Respondents-in-Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION,
INC., Respondents-in-Intervention,

LEANDRO M. MENDOZA, in his capacity as Head of the


Department of Transportation and
Communications, respondents,
FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO,
ROSEMARIE ANG, EUGENE ARADA, NENETTE BARREIRO,
NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE DIVINE
BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA
CAILAO, ERWIN CALAR, MARIFEL CONSTANTINO, JANETTE
CORDERO, ARNOLD FELICITAS, MARISSA GAYAGOY, ALEX
GENERILLO, ELIZABETH GRAY, ZOILO HERICO, JACQUELINE
IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA
LINCHOCO, ROLLY LORICO, FRANCIS AUGUSTO MACATOL,
MICHAEL MALIGAT, DENNIS MANALO, RAUL MANGALIMAN,
JOEL MANLANGIT, CHARLIE MENDOZA, HAZNAH MENDOZA,
NICHOLS MORALES, ALLEN OLAO, CESAR ORTAL, MICHAEL
ORTEGA, WAYNE PLAZA, JOSELITO REYES, ROLANDO
REYES, AILEEN SAPINA, RAMIL TAMAYO, PHILLIPS TAN,
ANDREW UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI
YUPANO, MARY JANE ONG, RICHARD RAMIREZ, CHERYLE
MARIE ALFONSO, LYNDON BAUTISTA, MANUEL CABOCAN
AND NEDY LAZO, Respondents-in-Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION,
INC., Respondents-in-Intervention.

x-------------------------x
RESOLUTION
G.R. No. 155661 January 21, 2004
PUNO, J.:
CEFERINO C. LOPEZ, RAMON M. SALES, ALFREDO B.
VALENCIA, MA. TERESA V. GAERLAN, LEONARDO DE LA
ROSA, DINA C. DE LEON, VIRGIE CATAMIN, RONALD
SCHLOBOM, ANGELITO SANTOS, MA. LUISA M. PALCON and
SAMAHANG MANGGAGAWA SA PALIPARAN NG PILIPINAS
(SMPP), petitioners,
vs.
PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.,
MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT
OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY

Before this Court are the separate Motions for Reconsideration filed
by respondent Philippine International Air Terminals Co., Inc.
(PIATCO), respondents-intervenors Jacinto V. Paras, Rafael P.
Nantes, Eduardo C. Zialcita, Willie Buyson Villarama, Prospero C.
Nograles, Prospero A. Pichay, Jr., Harlin Cast Abayon and Benasing
O. Macaranbon, all members of the House of Representatives
(Respondent Congressmen),1 respondents-intervenors who are
employees of PIATCO and other workers of the Ninoy Aquino
International Airport International Passenger Terminal III (NAIA IPT

77

III) (PIATCO Employees)2 and respondents-intervenors Nagkaisang


Maralita ng Taong Association, Inc., (NMTAI)3 of the Decision of this
Court dated May 5, 2003 declaring the contracts for the NAIA IPT III
project null and void.
Briefly, the proceedings. On October 5, 1994, Asias Emerging
Dragon Corp. (AEDC) submitted an unsolicited proposal to the
Philippine Government through the Department of Transportation
and Communication (DOTC) and Manila International Airport
Authority (MIAA) for the construction and development of the NAIA
IPT III under a build-operate-and-transfer arrangement pursuant to
R.A. No. 6957, as amended by R.A. No. 7718 (BOT Law). 4 In
accordance with the BOT Law and its Implementing Rules and
Regulations (Implementing Rules), the DOTC/MIAA invited the public
for submission of competitive and comparative proposals to the
unsolicited proposal of AEDC. On September 20, 1996 a consortium
composed of the Peoples Air Cargo and Warehousing Co., Inc.
(Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and
Security Bank Corp. (Security Bank) (collectively, Paircargo
Consortium), submitted their competitive proposal to the
Prequalification Bids and Awards Committee (PBAC).
After finding that the Paircargo Consortium submitted a bid superior
to the unsolicited proposal of AEDC and after failure by AEDC to
match the said bid, the DOTC issued the notice of award for the
NAIA IPT III project to the Paircargo Consortium, which later
organized into herein respondent PIATCO. Hence, on July 12, 1997,
the Government, through then DOTC Secretary Arturo T. Enrile, and
PIATCO, through its President, Henry T. Go, signed the "Concession
Agreement for the Build-Operate-and-Transfer Arrangement of the
Ninoy Aquino International Airport Passenger Terminal III" (1997
Concession Agreement). On November 26, 1998, the 1997
Concession Agreement was superseded by the Amended and
Restated Concession Agreement (ARCA) containing certain
revisions and modifications from the original contract. A series of
supplemental agreements was also entered into by the Government
and PIATCO. The First Supplement was signed on August 27, 1999,
the Second Supplement on September 4, 2000, and the Third
Supplement on June 22, 2001 (collectively, Supplements) (the 1997

Concession Agreement, ARCA and the Supplements collectively


referred to as the PIATCO Contracts).
On September 17, 2002, various petitions were filed before
this Court to annul the 1997 Concession Agreement, the ARCA
and the Supplements and to prohibit the public respondents DOTC
and MIAA from implementing them.
In a decision dated May 5, 2003, this Court granted the said petitions
and declared the 1997 Concession Agreement, the ARCA and the
Supplements null and void.
Respondent PIATCO, respondent-Congressmen and respondentsintervenors now seek the reversal of the May 5, 2003 decision and
pray that the petitions be dismissed. In the alternative, PIATCO prays
that the Court should not strike down the entire 1997 Concession
Agreement, the ARCA and its supplements in light of their
separability clause. Respondent-Congressmen and NMTAI also pray
that in the alternative, the cases at bar should be referred to
arbitration pursuant to the provisions of the ARCA. PIATCOEmployees pray that the petitions be dismissed and remanded to the
trial courts for trial on the merits or in the alternative that the 1997
Concession Agreement, the ARCA and the Supplements be declared
valid and binding.
I
Procedural Matters
a. Lack of Jurisdiction
Private respondents and respondents-intervenors reiterate a number
of procedural issues which they insist deprived this Court of
jurisdiction to hear and decide the instant cases on its merits. They
continue to claim that the cases at bar raise factual questions which
this Court is ill-equipped to resolve, hence, they must be remanded
to the trial court for reception of evidence. Further, they allege that
although designated as petitions for certiorari and prohibition, the
cases at bar are actually actions for nullity of contracts over which
the trial courts have exclusive jurisdiction. Even assuming that the

78

cases at bar are special civil actions for certiorari and prohibition,
they contend that the principle of hierarchy of courts precludes this
Court from taking primary jurisdiction over them.
We are not persuaded.
There is a question of fact when doubt or difference arises as to the
truth or falsity of the facts alleged.5 Even a cursory reading of the
cases at bar will show that the Court decided them by interpreting
and applying the Constitution, the BOT Law, its Implementing Rules
and other relevant legal principles on the basis of clearly
undisputed facts. All the operative facts were settled, hence, there
is no need for a trial type determination of their truth or falsity by a
trial court.
We reject the unyielding insistence of PIATCO Employees that the
following factual issues are critical and beyond the capability of this
Court to resolve, viz: (a) whether the National Economic
Development Authority- Investment Coordinating Committee (NEDAICC) approved the Supplements; (b) whether the First Supplement
created ten (10) new financial obligations on the part of the
government; and (c) whether the 1997 Concession Agreement
departed from the draft Concession Agreement contained in the Bid
Documents.6
The factual issue of whether the NEDA-ICC approved the
Supplements is hardly relevant. It is clear in our Decision that the
PIATCO contracts were invalidated on other and more substantial
grounds. It did not rely on the presence or absence of NEDA-ICC
approval of the Supplements. On the other hand, the last two issues
do not involve disputed facts. Rather, they involve contractual
provisions which are clear and categorical and need only to be
interpreted. The interpretation of contracts and the determination of
whether their provisions violate our laws or contravene any
public policy is a legal issue which this Court may properly pass
upon.
Respondents corollary contention that this Court violated
the hierarchy of courts when it entertained the cases at bar must

also fail. The rule on hierarchy of courts in cases falling within the
concurrent jurisdiction of the trial courts and appellate courts
generally applies to cases involving warring factual allegations. For
this reason, litigants are required to repair to the trial courts at the
first instance to determine the truth or falsity of these contending
allegations on the basis of the evidence of the parties. Cases which
depend on disputed facts for decision cannot be brought immediately
before appellate courts as they are not triers of facts.
It goes without saying that when cases brought before the appellate
courts do not involve factual but legal questions, a strict application
of the rule of hierarchy of courts is not necessary. As the cases at bar
merely concern the construction of the Constitution, the interpretation
of the BOT Law and its Implementing Rules and Regulations on
undisputed contractual provisions and government actions, and as
the cases concern public interest, this Court resolved to take primary
jurisdiction over them. This choice of action follows the consistent
stance of this Court to settle any controversy with a high public
interest component in a single proceeding and to leave no root or
branch that could bear the seeds of future litigation. The suggested
remand of the cases at bar to the trial court will stray away from this
policy.7
b. Legal Standing
Respondent PIATCO stands pat with its argument that petitioners
lack legal personality to file the cases at bar as they are not real
parties in interest who are bound principally or subsidiarily to the
PIATCO Contracts. Further, respondent PIATCO contends that
petitioners failed to show any legally demandable or enforceable
right to justify their standing to file the cases at bar.
These arguments are not difficult to deflect. The determination of
whether a person may institute an action or become a party to a suit
brings to fore the concepts of real party in interest, capacity to sue
and standing to sue. To the legally discerning, these three concepts
are different although commonly directed towards ensuring that only
certain parties can maintain an action.8 As defined in the Rules of
Court, a real party in interest is the party who stands to be benefited

79

or injured by the judgment in the suit or the party entitled to the avails
of the suit.9 Capacity to sue deals with a situation where a person
who may have a cause of action is disqualified from bringing a suit
under applicable law or is incompetent to bring a suit or is under
some legal disability that would prevent him from maintaining an
action unless represented by a guardian ad litem. Legal standing is
relevant in the realm of public law. In certain instances, courts have
allowed private parties to institute actions challenging the validity of
governmental action for violation of private rights or constitutional
principles.10 In these cases, courts apply the doctrine of legal
standing by determining whether the party has a direct and
personal interest in the controversy and whether such party has
sustained or is in imminent danger of sustaining an injury as a
result of the act complained of, a standard which is distinct from
the concept of real party in interest.11 Measured by this yardstick, the
application of the doctrine on legal standing necessarily involves a
preliminary consideration of the merits of the case and is not purely a
procedural issue.12
Considering the nature of the controversy and the issues raised in
the cases at bar, this Court affirms its ruling that the petitioners have
the requisite legal standing. The petitioners in G.R. Nos. 155001 and
155661 are employees of service providers operating at the existing
international airports and employees of MIAA while petitionersintervenors are service providers with existing contracts with MIAA
and they will all sustain direct injury upon the implementation of the
PIATCO Contracts. The 1997 Concession Agreement and the ARCA
both provide that upon the commencement of operations at the NAIA
IPT III, NAIA Passenger Terminals I and II will cease to be used as
international passenger terminals.13 Further, the ARCA provides:
(d) For the purpose of an orderly transition, MIAA shall not
renew any expired concession agreement relative to any
service or operation currently being undertaken at the Ninoy
Aquino International Airport Passenger Terminal I, or extend
any concession agreement which may expire subsequent
hereto, except to the extent that the continuation of the
existing services and operations shall lapse on or before the
In-Service Date.14

Beyond iota of doubt, the implementation of the PIATCO Contracts,


which the petitioners and petitioners-intervenors denounce as
unconstitutional and illegal, would deprive them of their sources of
livelihood. Under settled jurisprudence, one's employment,
profession, trade, or calling is a property right and is protected from
wrongful interference.15 It is also self evident that the petitioning
service providers stand in imminent danger of losing legitimate
business investments in the event the PIATCO Contracts are upheld.
Over and above all these, constitutional and other legal issues with
far-reaching economic and social implications are embedded in the
cases at bar, hence, this Court liberally granted legal standing to the
petitioning members of the House of Representatives. First, at stake
is the build-operate-andtransfer contract of the countrys premier
international airport with a projected capacity of 10 million
passengers a year. Second, the huge amount of investment to
complete the project is estimated to be P13,000,000,000.00. Third,
the primary issues posed in the cases at bar demand a discussion
and interpretation of the Constitution, the BOT Law and its
implementing rules which have not been passed upon by this Court
in previous cases. They can chart the future inflow of investment
under the BOT Law.
Before writing finis to the issue of legal standing, the Court notes the
bid of new parties to participate in the cases at bar as respondentsintervenors, namely, (1) the PIATCO Employees and (2) NMTAI
(collectively, the New Respondents-Intervenors). After the Courts
Decision, the New Respondents-Intervenors filed separate Motions
for Reconsideration-In-Intervention alleging prejudice and direct
injury. PIATCO employees claim that "they have a direct and
personal interest [in the controversy]... since they stand to lose their
jobs should the governments contract with PIATCO be declared null
and void."16 NMTAI, on the other hand, represents itself as a
corporation composed of responsible tax-paying Filipino citizens with
the objective of "protecting and sustaining the rights of its members
to civil liberties, decent livelihood, opportunities for social
advancement, and to a good, conscientious and honest
government."17

80

The Rules of Court govern the time of filing a Motion to Intervene.


Section 2, Rule 19 provides that a Motion to Intervene should be filed
"before rendition of judgment...." The New Respondents-Intervenors
filed their separate motions after a decision has been promulgated in
the present cases. They have not offered any worthy explanation to
justify their late intervention. Consequently, their Motions for
Reconsideration-In-Intervention are denied for the rules cannot be
relaxed to await litigants who sleep on their rights. In any event, a
sideglance at these late motions will show that they hoist no novel
arguments.
c. Failure to Implead an Indispensable Party
PIATCO next contends that petitioners should have impleaded the
Republic of the Philippines as an indispensable party. It alleges that
petitioners sued the DOTC, MIAA and the DPWH in their own
capacities or as implementors of the PIATCO Contracts and not as a
contract party or as representatives of the Government of the
Republic of the Philippines. It then leapfrogs to the conclusion that
the "absence of an indispensable party renders ineffectual all the
proceedings subsequent to the filing of the complaint including the
judgment."18
PIATCOs allegations are inaccurate. The petitions clearly bear out
that public respondents DOTC and MIAA were impleaded as parties
to the PIATCO Contracts and not merely as their implementors.
The separate petitions filed by the MIAA employees19 and members
of the House of Representatives20 alleged that "public respondents
are impleaded herein because they either executed the PIATCO
Contracts or are undertaking acts which are related to the PIATCO
Contracts. They are interested and indispensable parties to this
Petition."21 Thus, public respondents DOTC and MIAA were
impleaded as parties to the case for having executed the contracts.
More importantly, it is also too late in the day for PIATCO to raise this
issue. If PIATCO seriously views the non-inclusion of the Republic of
the Philippines as an indispensable party as fatal to the petitions at
bar, it should have raised the issue at the onset of the proceedings
as a ground to dismiss. PIATCO cannot litigate issues on a

piecemeal basis, otherwise, litigations shall be like a shore that


knows no end. In any event, the Solicitor General, the legal counsel
of the Republic, appeared in the cases at bar in representation of the
interest of the government.
II
Pre-qualification of PIATCO
The Implementing Rules provide for the unyielding standards the
PBAC should apply to determine the financial capability of a bidder
for pre-qualification purposes: (i) proof of the ability of the project
proponent and/or the consortium to provide a minimum amount of
equity to the project and (ii) a letter testimonial from reputable
banks attesting that the project proponent and/or members of the
consortium are banking with them, that they are in good
financial standing, and that they have adequate resources.22 The
evident intent of these standards is to protect the integrity and insure
the viability of the project by seeing to it that the proponent has the
financial capability to carry it out. As a further measure to achieve
this intent, it maintains a certain debt-to-equity ratio for the
project.
At the pre-qualification stage, it is most important for a bidder to
show that it has the financial capacity to undertake the project by
proving that it can fulfill the requirement on minimum amount of
equity. For this purpose, the Bid Documents require in no uncertain
terms:
The minimum amount of equity to which the proponents
financial capability will be based shall be thirty percent
(30%) of the project cost instead of the twenty percent
(20%) specified in Section 3.6.4 of the Bid Documents.
This is to correlate with the required debt-to-equity ratio of
70:30 in Section 2.01a of the draft concession agreement.
The debt portion of the project financing should not exceed
70% of the actual project cost.23
In relation thereto, section 2.01 (a) of the ARCA provides:

81

Section 2.01 Project Scope.

disparity cannot be dismissed as of de minimis importance


considering the high public interest at stake in the project.

The scope of the project shall include:


(a) Financing the project at an actual Project cost of not less
than Three Hundred Fifty Million United States Dollars
(US$350,000,000.00) while maintaining a debt-to-equity ratio
of 70:30, provided that if the actual Project costs should
exceed the aforesaid amount, Concessionaire shall ensure
that the debt-to-equity ratio is maintained;24
Under the debt-to-equity restriction, a bidder may only seek financing
of the NAIA IPT III Project up to 70% of the project cost. Thirty
percent (30%) of the cost must come in the form of equity or
investment by the bidder itself. It cannot be overly emphasized that
the rules require a minimum amount of equity to ensure that a bidder
is not merely an operator or implementor of the project but an
investor with a substantial interest in its success. The minimum
equity requirement also guarantees the Philippine government and
the general public, who are the ultimate beneficiaries of the project,
that a bidder will not be indifferent to the completion of the project.
The discontinuance of the project will irreparably damage public
interest more than private interest.
In the cases at bar, after applying the investment ceilings provided
under the General Banking Act and considering the maximum
amounts that each member of the consortium may validly invest in
the project, it is daylight clear that the Paircargo Consortium, at the
time of pre-qualification, had a net worth equivalent to only 6.08% of
the total estimated project cost.25 By any reckoning, a showing by
a bidder that at the time of pre-qualification its maximum funds
available for investment amount to only 6.08% of the project cost is
insufficient to satisfy the requirement prescribed by the Implementing
Rules that the project proponent must have the ability to provide at
least 30% of the total estimated project cost. In peso and centavo
terms, at the time of pre-qualification, the Paircargo Consortium had
maximum funds available for investment to the NAIA IPT III Project
only in the amount of P558,384,871.55, when it had to show that it
had the ability to provide at least P2,755,095,000.00. The huge

PIATCO nimbly tries to sidestep its failure by alleging that it


submitted not only audited financial statements but also testimonial
letters from reputable banks attesting to the good financial standing
of the Paircargo Consortium. It contends that in adjudging whether
the Paircargo Consortium is a pre-qualified bidder, the PBAC should
have considered not only its financial statements but other factors
showing its financial capability.
Anent this argument, the guidelines provided in the Bid Documents
are instructive:
3.3.4 FINANCING AND FINANCIAL PREQUALIFICATIONS
REQUIREMENTS
Minimum Amount of Equity
Each member of the proponent entity is to provide evidence
of networth in cash and assets representing the
proportionate share in the proponent entity. Audited
financial statements for the past five (5) years as a
company for each member are to be provided.
Project Loan Financing
Testimonial letters from reputable banks attesting that
each of the members of the ownership entity are banking
with them, in good financial standing and having adequate
resources are to be provided.26
It is beyond refutation that Paircargo Consortium failed to prove
its ability to provide the amount of at least P2,755,095,000.00, or
30% of the estimated project cost. Its submission of testimonial
letters attesting to its good financial standing will not cure this failure.
At best, the said letters merely establish its credit worthiness or its
ability to obtain loans to finance the project. They do not, however,

82

prove compliance with the aforesaid requirement of minimum amount


of equity in relation to the prescribed debt-to-equity ratio. This equity
cannot be satisfied through possible loans.
In sum, we again hold that given the glaring gap between the net
worth of Paircargo and PAGS combined with the amount of
maximum funds that Security Bank may invest by equity in a nonallied undertaking, Paircargo Consortium, at the time of prequalification, failed to show that it had the ability to provide 30% of
the project cost and necessarily, its financial capability for the project
cannot pass muster.

III
Concession Agreement
Again, we brightline the principle that in public bidding, bids are
submitted in accord with the prescribed terms, conditions and
parameters laid down by government and pursuant to the
requirements of the project bidded upon. In light of these parameters,
bidders formulate competing proposals which are evaluated to
determine the bid most favorable to the government. Once the
contract based on the bid most favorable to the government is
awarded, all that is left to be done by the parties is to execute the
necessary agreements and implement them. There can be no
substantial or material change to the parameters of the project,
including the essential terms and conditions of the contract bidded
upon, after the contract award. If there were changes and the
contracts end up unfavorable to government, the public bidding
becomes a mockery and the modified contracts must be struck
down.
Respondents insist that there were no substantial or material
amendments in the 1997 Concession Agreement as to the technical
aspects of the project, i.e., engineering design, technical soundness,
operational and maintenance methods and procedures of the project
or the technical proposal of PIATCO. Further, they maintain that
there was no modification of the financial features of the project, i.e.,

minimum project cost, debt-to-equity ratio, the operations and


maintenance budget, the schedule and amount of annual guaranteed
payments, or the financial proposal of PIATCO. A discussion of
some of these changes to determine whether they altered the terms
and conditions upon which the bids were made is again in order.
a. Modification on Fees and Charges to be collected by PIATCO
PIATCO clings to the contention that the removal of the
groundhandling fees, airline office rentals and porterage fees from
the category of fees subject to MIAA regulation in the 1997
Concession Agreement does not constitute a substantial amendment
as these fees are not really public utility fees. In other words,
PIATCO justifies the re-classification under the 1997 Concession
Agreement on the ground that these fees are non-public utility
revenues.
We disagree. The removal of groundhandling fees, airline office
rentals and porterage fees from the category of "Public Utility
Revenues" under the draft Concession Agreement and its reclassification to "Non-Public Utility Revenues" under the 1997
Concession Agreement is significant and has far reaching
consequence. The 1997 Concession Agreement provides that with
respect to Non-Public Utility Revenues, which include
groundhandling fees, airline office rentals and porterage
fees,27 "[PIATCO] may make any adjustments it deems
appropriatewithout need for the consent of GRP or any
government agency."28 In contrast, the draft Concession Agreement
specifies these fees as part of Public Utility Revenues and can be
adjusted "only once every two yearsand in accordance with the
Parametric Formula" and "the adjustments shall be made
effective only after the written express approval of the
MIAA."29 The Bid Documents themselves clearly provide:
4.2.3 Mechanism for Adjustment of Fees and Charges
4.2.3.1 Periodic Adjustment in Fees and Charges

83

Adjustments in the fees and charges enumerated


hereunder, whether or not falling within the
purview of public utility revenues, shall be
allowed only once every two years in accordance
with the parametric formula attached hereto as
Annex 4.2f. Provided that the adjustments shall be
made effective only after the written express
approval of MIAA. Provided, further, that MIAAs
approval, shall be contingent only on conformity of
the adjustments to the said parametric formula.
The fees and charges to be regulated in the above manner
shall consist of the following:
....
c) groundhandling fees;
d) rentals on airline offices;
....
(f) porterage fees;
. . . .30
The plain purpose in re-classifying groundhandling fees, airline office
rentals and porterage fees as non-public utility fees is to remove
them from regulation by the MIAA. In excluding these fees from
government regulation, the danger to public interest cannot be
downplayed.
We are not impressed by the effort of PIATCO to depress this
prejudice to public interest by its contention that in the 1997
Concession Agreement governing Non-Public Utility Revenues, it is
provided that "[PIATCO] shall at all times be judicious in fixing fees
and charges constituting Non-Public Utility Revenues in order to
ensure that End Users are not unreasonably deprived of

services."31 PIATCO then peddles the proposition that the said


provision confers upon MIAA "full regulatory powers to ensure that
PIATCO is charging non-public utility revenues
at judiciousrates."32 To the trained eye, the argument will not fly for it
is obviously non sequitur. Fairly read, it is PIATCO that wields the
power to determine the judiciousness of the said fees and charges.
In the draft Concession Agreement the power was expressly lodged
with the MIAA and any adjustment can only be done once every two
years. The changes are not insignificant specks as interpreted by
PIATCO.
PIATCO further argues that there is no substantial change in the
1997 Concession Agreement with respect to fees and charges
PIATCO is allowed to impose which are not covered by
Administrative Order No. 1, Series of 199333as the "relevant provision
of the 1997 Concession Agreement is practically identical with the
draft Concession Agreement."34
We are not persuaded. Under the draft Concession Agreement,
PIATCO may impose fees and charges other than those fees and
charges previously imposed or collected at the Ninoy Aquino
International Airport Passenger Terminal I, subject to the written
approval of MIAA.35 Further, the draft Concession Agreement
provides that MIAAreserves the right to regulate these new fees
and charges if in its judgment the users of the airport shall be
deprived of a free option for the services they cover.36 In contrast,
under the 1997 Concession Agreement, the MIAA merely retained
the right to approve any imposition of new fees and charges
which were not previously collected at the Ninoy Aquino International
Airport Passenger Terminal I. The agreement did not contain an
equivalent provision allowing MIAA to reserve the right to
regulate the adjustments of these new fees and charges.37 PIATCO
justifies the amendment by arguing that MIAA can establish terms
before approval of new fees and charges, inclusive of the mode for
their adjustment.
PIATCOs stance is again a strained one. There would have been no
need for an amendment if there were no change in the power to
regulate on the part of MIAA. The deletion of MIAAs reservation of its
right to regulate the price adjustments of new fees and charges can

84

have no other purpose but to dilute the extent of MIAAs regulation


in the collection of these fees. Again, the amendment diminished the
authority of MIAA to protect the public interest in case of abuse by
PIATCO.
b. Assumption by the Government of the liabilities of PIATCO in
the event of the latters default
PIATCO posits the thesis that the new provisions in the 1997
Concession Agreement in case of default by PIATCO on its loans
were merely meant to prescribe and limit the rights of PIATCOs
creditors with regard to the NAIA Terminal III. PIATCO alleges that
Section 4.04 of the 1997 Concession Agreement simply provides that
PIATCOs creditors have no right to foreclose the NAIA Terminal III.
We cannot concur. The pertinent provisions of the 1997 Concession
Agreement state:
Section 4.04 Assignment.
....
(b) In the event Concessionaire should default in the
payment of an Attendant Liability, and the default has
resulted in the acceleration of the payment due date of the
Attendant Liability prior to its stated date of maturity, the
Unpaid Creditors and Concessionaire shall immediately
inform GRP in writing of such default. GRP shall, within one
hundred eighty (180) Days from receipt of the joint written
notice of the Unpaid Creditors and Concessionaire, either (i)
take over the Development Facility and assume the
Attendant Liabilities, or (ii) allow the Unpaid Creditors, if
qualified, to be substituted as concessionaire and operator of
the Development Facility in accordance with the terms and
conditions hereof, or designate a qualified operator
acceptable to GRP to operate the Development Facility,
likewise under the terms and conditions of this Agreement;
Provided that if at the end of the 180-day period GRP shall
not have served the Unpaid Creditors and Concessionaire

written notice of its choice, GRP shall be deemed to have


elected to take over the Development Facility with the
concomitant assumption of Attendant Liabilities.
(c) If GRP should, by written notice, allow the Unpaid
Creditors to be substituted as concessionaire, the latter shall
form and organize a concession company qualified to take
over the operation of the Development Facility. If the
concession company should elect to designate an operator
for the Development Facility, the concession company shall
in good faith identify and designate a qualified operator
acceptable to GRP within one hundred eighty (180) days
from receipt of GRPs written notice. If the concession
company, acting in good faith and with due diligence, is
unable to designate a qualified operator within the aforesaid
period, then GRP shall at the end of the 180-day period take
over the Development Facility and assume Attendant
Liabilities.
A plain reading of the above provision shows that it spells out in
limpid language the obligation of government in case of default by
PIATCO on its loans. There can be no blinking from the fact that in
case of PIATCOs default, the government will assume PIATCOs
Attendant Liabilities as defined in the 1997 Concession
Agreement.38 This obligation is not found in the draft Concession
Agreement and the change runs roughshod to the spirit and policy of
the BOT Law which was crafted precisely to prevent government
from incurring financial risk.
In any event, PIATCO pleads that the entire agreement should not
be struck down as the 1997 Concession Agreement contains a
separability clause.
The plea is bereft of merit. The contracts at bar which made a
mockery of the bidding process cannot be upheld and must be
annulled in their entirety for violating law and public policy. As
demonstrated, the contracts were substantially amended after their
award to the successful bidder on terms more beneficial to PIATCO
and prejudicial to public interest. If this flawed process would be

85

allowed, public bidding will cease to be competitive and worse,


government would not be favored with the best bid. Bidders will no
longer bid on the basis of the prescribed terms and conditions in the
bid documents but will formulate their bid in anticipation of the
execution of a future contract containing new and better terms and
conditions that were not previously available at the time of the
bidding. Such a public bidding will not inure to the public good. The
resulting contracts cannot be given half a life but must be struck
down as totally lawless.
IV.
Direct Government Guarantee
The respondents further contend that the PIATCO Contracts do not
contain direct government guarantee provisions. They assert that
section 4.04 of the ARCA, which superseded sections 4.04(b) and
(c), Article IV of the 1997 Concession Agreement, is but a
"clarification and explanation"39 of the securities allowed in the bid
documents. They allege that these provisions merely provide for
"compensation to PIATCO"40 in case of a government buy-out or
takeover of NAIA IPT III. The respondents, particularly respondent
PIATCO, also maintain that the guarantee contained in the contracts,
if any, is an indirect guarantee allowed under the BOT Law, as
amended.41
We do not agree. Section 4.04(c), Article IV42 of the ARCA should be
read in conjunction with section 1.06, Article I,43 in the same manner
that sections 4.04(b) and (c), Article IV of the 1997 Concession
Agreement should be related to Article 1.06 of the same contract.
Section 1.06, Article I of the ARCA and its counterpart provision in
the 1997 Concession Agreement define in no uncertain terms the
meaning of "attendant liabilities." They tell us of the amounts that the
Government has to pay in the event respondent PIATCO defaults in
its loan payments to its Senior Lenders and no qualified transferee or
nominee is chosen by the Senior Lenders or is willing to take over
from respondent PIATCO.
A reasonable reading of all these relevant provisions would reveal
that the ARCA made the Government liable to pay "all amounts ...

from time to time owed or which may become owing by


Concessionaire [PIATCO] to Senior Lenders or any other
persons or entities who have provided, loaned, or advanced
funds or provided financial facilities to Concessionaire
[PIATCO] for the Project [NAIA Terminal 3]."44 These amounts
include "without limitation, all principal, interest, associated fees,
charges, reimbursements, and other related expenses... whether
payable at maturity, by acceleration or otherwise." 45 They further
include amounts owed by respondent PIATCO to its "professional
consultants and advisers, suppliers, contractors and sub-contractors"
as well as "fees, charges and expenses of any agents or trustees" of
the Senior Lenders or any other persons or entities who have
provided loans or financial facilities to respondent PIATCO in relation
to NAIA IPT III.46 The counterpart provision in the 1997 Concession
Agreement specifying the attendant liabilities that the Government
would be obligated to pay should PIATCO default in its loan
obligations is equally onerous to the Government as those contained
in the ARCA. According to the 1997 Concession Agreement, in the
event the Government is forced to prematurely take over NAIA IPT III
as a result of respondent PIATCOs default in the payment of its loan
obligations to its Senior Lenders, it would be liable to pay the
following amounts as "attendant liabilities":
Section 1.06. Attendant Liabilities
Attendant Liabilities refer to all amounts recorded and
from time to time outstanding in the books of the
Concessionaire as owing to Unpaid Creditors who have
provided, loaned or advanced funds actually used for the
Project, including all interests, penalties, associated
fees, charges, surcharges, indemnities, reimbursements
and other related expenses, and further including amounts
owed by Concessionaire to its suppliers, contractors and
sub-contractors.47
These provisions reject respondents contention that what the
Government is obligated to pay, in the event that respondent PIATCO
defaults in the payment of its loans, is merely termination payment or
just compensation for its takeover of NAIA IPT III. It is clear from said
section 1.06 that what the Government would pay is the sum total

86

of all the debts, including all interest, fees and charges, that
respondent PIATCO incurred in pursuance of the NAIA IPT III
Project. This reading is consistent with section 4.04 of the ARCA
itself which states that the Government "shall make a termination
payment to Concessionaire [PIATCO] equal to the Appraised Value
(as hereinafter defined) of the Development Facility [NAIA Terminal
III] or the sum of the Attendant Liabilities, if greater." For sure,
respondent PIATCO will not receive any amount less than
sufficient to cover its debts, regardless of whether or not the
value of NAIA IPT III, at the time of its turn over to the
Government, may actually be less than the amount of PIATCOs
debts. The scheme is a form of direct government guarantee for it is
undeniable that it leaves the government no option but to pay the
"attendant liabilities" in the event that the Senior Lenders are unable
or unwilling to appoint a qualified nominee or transferee as a result of
PIATCOs default in the payment of its Senior Loans. As we stressed
in our Decision, this Court cannot depart from the legal maxim that
"those that cannot be done directly cannot be done indirectly."
This is not to hold, however, that indirect government guarantee is
not allowed under the BOT Law, as amended. The intention to permit
indirect government guarantee is evident from the Senate
deliberations on the amendments to the BOT Law. The idea is to
allow for reasonable government undertakings, such as to authorize
the project proponent to undertake related ventures within the project
area, in order to encourage private sector participation in
development projects.48 An example cited by then Senator Gloria
Macapagal-Arroyo, one of the sponsors of R.A. No. 7718, is the
Mandaluyong public market which was built under the Build-andTransfer ("BT") scheme wherein instead of the government paying
for the transfer, the project proponent was allowed to operate the
upper floors of the structure as a commercial mall in order to recoup
their investments.49 It was repeatedly stressed in the deliberations
that in allowing indirect government guarantee, the law seeks to
encourage both the government and the private sector to formulate
reasonable and innovative government undertakings in pursuance of
BOT projects. In no way, however, can the government be made
liable for the debts of the project proponent as this would be
tantamount to a direct government guarantee which is prohibited by
the law. Such liability would defeat the very purpose of the BOT Law

which is to encourage the use of private sector resources in the


construction, maintenance and/or operation of development projects
with no, or at least minimal, capital outlay on the part of the
government.
The respondents again urge that should this Court affirm its ruling
that the PIATCO Contracts contain direct government guarantee
provisions, the whole contract should not be nullified. They rely on
the separability clause in the PIATCO Contracts.
We are not persuaded.
The BOT Law and its implementing rules provide that there are three
(3) essential requisites for an unsolicited proposal to be accepted: (1)
the project involves a new concept in technology and/or is not part of
the list of priority projects, (2) no direct government guarantee,
subsidy or equity is required, and (3) the government agency or
local government unit has invited by publication other interested
parties to a public bidding and conducted the same. 50 The failure to
fulfill any of the requisites will result in the denial of the proposal.
Indeed, it is further provided that a direct government guarantee,
subsidy or equity provision will "necessarily disqualify a proposal
from being treated and accepted as an unsolicited proposal." 51 In
fine, the mere inclusion of a direct government guarantee in an
unsolicited proposal is fatal to the proposal. There is more reason to
invalidate a contract if a direct government guarantee provision is
inserted later in the contract via a backdoor amendment. Such an
amendment constitutes a crass circumvention of the BOT Law and
renders the entire contract void.
Respondent PIATCO likewise claims that in view of the fact that
other BOT contracts such as the JANCOM contract, the Manila
Water contract and the MRT contract had been considered valid, the
PIATCO contracts should be held valid as well. 52 There is no parity in
the cited cases. For instance, a reading of Metropolitan Manila
Development Authority v. JANCOM Environmental
Corporation53 will show that its issue is different from the issues in
the cases at bar. In the JANCOM case, the main issue is whether
there is a perfected contract between JANCOM and the Government.

87

The resolution of the issue hinged on the following: (1) whether the
conditions precedent to the perfection of the contract were complied
with; (2) whether there is a valid notice of award; and (3) whether the
signature of the Secretary of the Department of Environment and
Natural Resources is sufficient to bind the Government. These issue
and sub-issues are clearly distinguishable and different. For one, the
issue of direct government guarantee was not considered by this
Court when it held the JANCOM contract valid, yet, it is a key reason
for invalidating the PIATCO Contracts. It is a basic principle in law
that cases with dissimilar facts cannot have similar disposition.
This Court, however, is not unmindful of the reality that the structures
comprising the NAIA IPT III facility are almost complete and that
funds have been spent by PIATCO in their construction. For the
government to take over the said facility, it has to compensate
respondent PIATCO as builder of the said structures. The
compensation must be just and in accordance with law and equity for
the government can not unjustly enrich itself at the expense of
PIATCO and its investors.
II.
Temporary takeover of business affected with public interest in
times of national emergency
Section 17, Article XII of the 1987 Constitution grants the State in
times of national emergency the right to temporarily take over the
operation of any business affected with public interest. This right is
an exercise of police power which is one of the inherent powers of
the State.
Police power has been defined as the "state authority to enact
legislation that may interfere with personal liberty or property in order
to promote the general welfare."54 It consists of two essential
elements. First, it is an imposition of restraint upon liberty or property.
Second, the power is exercised for the benefit of the common good.
Its definition in elastic terms underscores its all-encompassing and
comprehensive embrace.55 It is and still is the "most essential,
insistent, and illimitable"56 of the States powers. It is familiar
knowledge that unlike the power of eminent domain, police

power is exercised without provision for just compensation for


its paramount consideration is public welfare.57
It is also settled that public interest on the occasion of a national
emergency is the primary consideration when the government
decides to temporarily take over or direct the operation of a public
utility or a business affected with public interest. The nature and
extent of the emergency is the measure of the duration of the
takeover as well as the terms thereof. It is the State that prescribes
such reasonable terms which will guide the implementation of the
temporary takeover as dictated by the exigencies of the time. As we
ruled in our Decision, this power of the State can not be negated by
any party nor should its exercise be a source of obligation for the
State.
Section 5.10(c), Article V of the ARCA provides that respondent
PIATCO "shall be entitled to reasonable compensation for the
duration of the temporary takeover by GRP, which compensation
shall take into account the reasonable cost for the use of the
Terminal and/or Terminal Complex."58 It clearly obligates the
government in the exercise of its police power to compensate
respondent PIATCO and this obligation is offensive to the
Constitution. Police power can not be diminished, let alone defeated
by any contract for its paramount consideration is public welfare and
interest.59
Again, respondent PIATCOs reliance on the case of Heirs of
Suguitan v. City of Mandaluyong60 to justify its claim for reasonable
compensation for the Governments temporary takeover of NAIA IPT
III in times of national emergency is erroneous. What was involved
in Heirs of Suguitan is the exercise of the states power of eminent
domain and not of police power, hence, just compensation was
awarded. The cases at bar will not involve the exercise of the power
of eminent domain.
III.
Monopoly

88

Section 19, Article XII of the 1987 Constitution mandates that the
State prohibit or regulate monopolies when public interest so
requires. Monopolies are not per se prohibited. Given its
susceptibility to abuse, however, the State has the bounden duty to
regulate monopolies to protect public interest. Such regulation may
be called for, especially in sensitive areas such as the operation of
the countrys premier international airport, considering the public
interest at stake.
By virtue of the PIATCO contracts, NAIA IPT III would be the only
international passenger airport operating in the Island of Luzon, with
the exception of those already operating in Subic Bay Freeport
Special Economic Zone ("SBFSEZ"), Clark Special Economic Zone
("CSEZ") and in Laoag City. Undeniably, the contracts would create a
monopoly in the operation of an international commercial passenger
airport at the NAIA in favor of PIATCO.

congressional investigation is conducted in aid of legislation. 63 Its aim


is to assist and recommend to the legislature a possible action that
the body may take with regard to a particular issue, specifically as to
whether or not to enact a new law or amend an existing one.
Consequently, this Court cannot treat the findings in a congressional
committee report as binding because the facts elicited in
congressional hearings are not subject to the rigors of the Rules of
Court on admissibility of evidence. The Court in assuming jurisdiction
over the petitions at bar simply performed its constitutional duty as
the arbiter of legal disputes properly brought before it, especially in
this instance when public interest requires nothing less.
WHEREFORE, the motions for reconsideration filed by the
respondent PIATCO, respondent Congressmen and the
respondents-in-intervention are DENIED with finality.
SO ORDERED.

The grant to respondent PIATCO of the exclusive right to operate


NAIA IPT III should not exempt it from regulation by the government.
The government has the right, indeed the duty, to protect the interest
of the public. Part of this duty is to assure that respondent PIATCOs
exercise of its right does not violate the legal rights of third parties.
We reiterate our ruling that while the service providers presently
operating at NAIA Terminals I and II do not have the right to demand
for the renewal or extension of their contracts to continue their
services in NAIA IPT III, those who have subsisting contracts beyond
the In-Service Date of NAIA IPT III can not be arbitrarily or
unreasonably treated.
Finally, the Respondent Congressmen assert that at least two (2)
committee reports by the House of Representatives found the
PIATCO contracts valid and contend that this Court, by taking
cognizance of the cases at bar, reviewed an action of a co-equal
body.61 They insist that the Court must respect the findings of the
said committees of the House of Representatives.62 With due
respect, we cannot subscribe to their submission. There is a
fundamental difference between a case in court and an investigation
of a congressional committee. The purpose of a judicial proceeding
is to settle the dispute in controversy by adjudicating the legal rights
and obligations of the parties to the case. On the other hand, a

Davide, Jr., C.J., Austria-Martinez, Corona, and Carpio-Morales,


JJ., concur.
Vitug, J., maintains his separate opinion in the main ponencia,
promulgated on 05 May 2003.
Panganiban, J., reiterate his separate opinion in the main case,
promulgated on May 5, 2003.
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, and Azcuna,
JJ., joins J. Vitugs opinion.
Carpio, and Tinga, JJ., no part.
Callejo, Sr., J., joins J. Panganiban in his concurring opinion
Footnotes
1

G.R. No. 155547.

G.R. Nos. 155001, 155547, and 155661.

Id.

89

An Act Authorizing the Financing, Construction, Operation


and Maintenance of Infrastructure Projects by the Private
Sector.

17

Id. at p. 3098.

18

Id. at pp. 3270-3271.

19

G.R. No. 155661.

20

G.R. No. 155547.

Ignacio v. Court of Appeals, G.R. Nos. L-49541-52164,


March 28, 1980; 96 SCRA 648, 652-653.
6

Rollo, G.R. No. 155001, pp. 3102-3103.


21

Alger Electric, Inc. v. Court of Appeals, G.R. No. L-34298,


February 28, 1985, 135 SCRA 37, 43.

Rollo, G.R. No. 155661, p. 17; Rollo, G.R. No. 155547, p.


14.
22

J.H. Friedenthal, M. K. Kane, A. R. Miller, Civil Procedure


328 (1985).
9

Section 2, Rule 3.

10

c. Financial Capability: The project proponent must


have adequate capability to sustain the financing
requirements for the detailed engineering design,
construction and/or operation and maintenance
phases of the project, as the case may be. For
purposes of pre-qualification, this capability shall be
measured in terms of (i) proof of the ability of the
project proponent and/or the consortium to
provide a minimum amount of equity to the
project, and (ii) a letter testimonial from
reputable banks attesting that the project
proponent and/or members of the consortium
are banking with them, that they are in good
financial standing, and that they have adequate
resources. The government agency/LGU concerned
shall determine on a project-to-project basis and
before pre-qualification, the minimum amount of
equity needed. (emphasis supplied).

J. Cound, Civil Procedure: Cases & Materials, 523 (1980).

11

Bayan v. Zamora, G.R. No. 138570, October 10, 2000; 342


SCRA 449, 478; Kilosbayan, Inc. v. Morato, G.R. No.
118910, July 17, 1995, 246 SCRA 540, 562-563, citing Baker
v. Carr, 369 U.S. 186, 7 L. Ed. 633 (1962).
12

Supra note 11.

13

Section 3.02 (b), ARCA, November 26, 1998; Section


3.02(b) of the 1997 Concession Agreement, July 12, 1997.
14

Section 3.01 (d), ARCA. Equivalent provision is similarly


numbered in the 1997 Concession Agreement.
15

Ferrer, et al. v. NLRC, G.R. No. 100898, July 5, 1993, 224


SCRA 410, 421 citing Callanta vs. Carnation Philippines,
Inc., G.R. No. 70615. October 28, 1986, 145 SCRA 268.

Section 5.4 Pre-qualification Requirements.

23

Emphasis supplied.

24
16

Rollo, G.R. No. 15501, pp. 3096-3097.

The equivalent provision in the 1997 Concession


Agreement states:

90

Section 2.01 Project Scope.


The scope of the project shall include:
(a) Financing the project at an actual Project
cost of not less than Three Hundred Fifty
Million United States Dollars
(US$350,000,000.00) while maintaining a
debt-to-equity ratio of 70:30, or ensuring that
the debt portion of the project financing does
not exceed 70% of the actual Project cost;

33

Administrative Order No. 1, Series of 1993 enumerates the


fees and charges that may be imposed by MIAA pursuant to
its Charter.
34

Rollo, G. R. No. 155001, p. 3212.

35

Par. 2, Section 6.01, Draft Concession Agreement.

36

Par. 2, Section 6.03, Draft Concession Agreement. The


pertinent portions provide:
Section 6.03. Periodic Adjustment in Fees and
Charges. Adjustments in the aircraft parking fees,
aircraft tacking fees, groundhandling fees, rentals
and airline offices, check-in-counter rentals and
porterage fees shall be allowed only once every two
years and in accordance with the Parametric
Formula attached hereto as Annex F. Provided that
adjustments shall be made effective only after the
written express approval of the MIAA. Provided,
further, that such approval of the MIAA, shall be
contingent only on the conformity of the adjustments
with the above said parametric formula. The first
adjustment shall be made prior to the In-Service
Date of the Terminal.

...
25

Combined net worth of the Paircargo Consortium is


P558,384,871.55 out of an estimated project cost of
US$350,000,000.00 or approximately P9,183,650,000.00.
26

Rollo, G.R. No. 155547, p. 392. Emphasis supplied.

27

Under section 1.33 of the 1997 Concession Agreement,


fees classified as "Public Utility Revenues" are: (a) aircraft
parking fees; (b) aircraft tacking fees; (c) check-in counter
fees; and (d) Terminal Fees. Section 1.27 of the 1997
Concession Agreement provides that "Non-Public Utility
Revenues" refer to all other income not classified as Public
Utility Revenues derived within the Terminal and the Terminal
Complex "
28

Section 6.06, 1997 Concession Agreement.

29

Section 6.03, Draft Concession Agreement.

The MIAA reserves the right to regulate under


the foregoing terms and conditions the lobby and
vehicular parking fees and other new fees and
charges as contemplated in paragraph 2 of
Section 6.01 if in its judgment the users of the
airport shall be deprived of a free option for the
services they cover. Emphasis supplied.

30

Rollo, G.R. No. 155547, pp. 417-418. Emphasis supplied.

31

Section 6.03 (c), 1997 Concession Agreement.

32

Rollo, G.R. No. 155001, p. 3211. Emphasis supplied.

37

Section 6.01 (b), 1997 Concession Agreement.

91

38

The term "Attendant Liabilities" under the 1997


Concession Agreement is defined as:
Attendant Liabilities refer to all amounts recorded
and from time to time outstanding in the books of the
Concessionaire as owing to Unpaid Creditors who
have provided, loaned or advanced funds actually
used for the Project, including all interests, penalties,
associated fees, charges, surcharges, indemnities,
reimbursements and other related expenses, and
further including amounts owed by Concessionaire
to its suppliers, contractors and sub-contractors.
(Section 1.06)
39

Rollo, G.R. No. 15501, p. 3065.

40

Id. at p. 3071.

41

Id. at pp. 3069-3070.

42

Amended and Restated Concession Agreement dated


November 26, 1998.
Section 4.04 Security
.
(c) GRP agrees with Concessionaire (PIATCO)
that it shall negotiate in good faith and enter into
direct agreement with the Senior Lenders, or with
an agent of such Senior Lenders (which agreement
shall be subject to the approval of the Bangko
Sentral ng Pilipinas), in such form as may be
reasonably acceptable to both GRP and Senior
Lenders, wit regard, inter alia, to the following
parameters:
.

(iv) If the Concessionaire [PIATCO] is in


default under a payment obligation owed
to the Senior Lenders, and as a result
thereof the Senior Lenders have become
entitled to accelerate the Senior Loans, the
Senior Lenders shall have the right to notify
GRP of the same, and without prejudice to
any other rights of the Senior Lenders or any
Senior Lenders agent may have (including
without limitation under security interests
granted in favor of the Senior Lenders), to
either in good faith identify and designate a
nominee which is qualified under sub-clause
(viii)(y) below to operate the Development
Facility [NAIA Terminal 3] or transfer the
Concessionaires [PIATCO] rights and
obligations under this Agreement to a
transferee which is qualified under subclause (viii) below;
.
(vi) if the Senior Lenders, acting in good
faith and using reasonable efforts, are
unable to designate a nominee or effect a
transfer in terms and conditions satisfactory
to the Senior Lenders within one hundred
eighty (180) days after giving GRP notice as
referred to respectively in (iv) or (v) above,
then GRP and the Senior Lenders shall
endeavor in good faith to enter into any
other arrangement relating to the
Development Facility [NAIA Terminal 3]
( other than a turnover of the Development
Facility [NAIA Terminal 3] to GRP) within the
following one hundred eighty (180) days. If
no agreement relating to the Development
Facility [NAIA Terminal 3] is arrived at by
GRP and the Senior Lenders within the said
180-day period, then at the end thereof

92

the Development Facility [NAIA Terminal


3] shall be transferred by the
Concessionaire [PIATCO] to GRP or its
designee and GRP shall make a
termination payment to Concessionaire
[PIATCO] equal to the Appraised Value
(as hereinafter defined) of the
Development Facility [NAIA Terminal 3]
or the sum of the Attendant Liabilities, if
greater.Notwithstanding Section 8.01(c)
hereof, this Agreement shall be deemed
terminated upon the transfer of the
Development Facility [NAIA Terminal 3] to
GRP pursuant hereto;
.
43

Amended and Restated Concession Agreement ("ARCA")


dated November 26, 1998.

professional consultants and advisers,


suppliers, contractors and sub-contractors.
44

Section 1.06, Article I, Amended and Restated Concession


Agreement.
45

Id. Emphasis supplied.

46

Id. Emphasis supplied.

47

Emphasis supplied.

48

III Record of the Senate 598, 602.

49

Id. at 455-456.

50

Section 4-A, Republic Act No. 7718, as amended, May 5,


1994; Section 11.1, Rule 11, Implementing Rules and
Regulations.

Section 1.06. Attendant Liabilities


51

Attendant Liabilities refer to all amounts in


each case supported by verifiable evidence
from time to time owed or which may
become owing by Concessionaire [PIATCO]
to Senior Lenders or any other persons or
entities who have provided, loaned, or
advanced funds or provided financial
facilities to Concessionaire [PIATCO] for the
Project [NAIA Terminal 3], including, without
limitation, all principal, interest, associated
fees, charges, reimbursements, and other
related expenses (including the fees,
charges and expenses of any agents or
trustees of such persons or entities),
whether payable at maturity, by acceleration
or otherwise, and further including amounts
owed by Concessionaire [PIATCO] to its

Section 11.3, Rule 11, Implementing Rules and


Regulations.
52

Rollo, G.R. No. 15501, pp. 3073-3076.

53

G.R. No. 147465, January 20, 2002; 375 SCRA 320.

54

Philippine Association of Service Providers Co., Inc. v.


Franklin M. Drilon, et al., G.R. No. L-81958, June 30, 1988
citing Edu v. Ericta, G.R. No. L-32096, October 24, 1970, 35
SCRA 481, 487.
55

Id.

56

Bataan Shipyard and Engineering Co., Inc. v. Presidential


Commission on Good Government, G.R. No. 75885; May 27,
1987 citing Freund, The Police Power (Chicago, 1904), cited

93

by Cruz, I.A., Constitutional Law; 4th ed., p. 42, Smith, Bell &
Co. v. Natividad, 40 Phil. 136, U.S. v. Toribio, 15 Phil. 85,
Churchill and Tait v. Rafferty, 32 Phil. 580, and Rubi v.
Provincial Board of Mindoro, 39 Phil. 660; Florentian A.
Lozano v. Antonio M. Martinez, G.R. No. L-63419, December
18, 1986; Alejandro Melchor, Jr. v. Jose L. Moya, et al., G.R.
No. L-35256, March 17, 1983; 206 Phil 1; Ichong vs.
Hernandez, L-7995, May 31, 1957.
57

Jose D. Sangalang, et al., v. Intermediate Appellate Court,


et al., G.R. Nos. 71169, 74376, 76394, 78182, 82281 and
60727, August 25, 1989.
58

Section 5.10(c), Article V of the Amended and Restated


Concession Agreement, November 26, 1998.
59

Taxicabs of Metro Manila, Inc., et al. v. Board of


Transportation, et al., G.R. No. L-59234, September 30,
1982, 202 Phil. 925; Ynot v. Intermediate Appellate Court,
G.R. No. 74457, March 20, 1987; Presidential Commission
on Good Government v. Pena, G.R. No. L-77663. April 12,
1988.
60

328 SCRA 137.

61

Rollo

61

Arnault, G.R.No. 155547, pp. 3018-3020.

62

Id.

63

Arnault v. Nazareno, G.R. No. L-3820, July 18, 1950.

94

Before this Court is a petition for review filed by petitioner


Commission on Human Rights Employees' Association (CHREA)
challenging the Decision1 dated 29 November 2001 of the Court
of Appeals in CA-G.R. SP No. 59678 affirming the
Resolutions2 dated 16 December 1999 and 09 June 2000 of the
Civil Service Commission (CSC), which sustained the validity of
the upgrading and reclassification of certain personnel positions
in the Commission on Human Rights (CHR) despite the
disapproval thereof by the Department of Budget and
Management (DBM). Also assailed is the resolution dated 11
September 2002 of the Court of Appeals denying the motion for
reconsideration filed by petitioner.
The antecedent facts which spawned the present controversy are
as follows:
SECOND DIVISION
G.R. No. 155336

November 25, 2004

COMMISSION ON HUMAN RIGHTS EMPLOYEES'


ASSOCIATION (CHREA) Represented by its President,
MARCIAL A. SANCHEZ, JR., petitioner,
vs.
COMMISSION ON HUMAN RIGHTS, respondent.

DECISION
CHICO-NAZARIO, J.:
Can the Commission on Human Rights lawfully implement an
upgrading and reclassification of personnel positions without the
prior approval of the Department of Budget and Management?

On 14 February 1998, Congress passed Republic Act No. 8522,


otherwise known as the General Appropriations Act of 1998. It
provided for Special Provisions Applicable to All Constitutional
Offices Enjoying Fiscal Autonomy. The last portion of Article
XXXIII covers the appropriations of the CHR. These special
provisions state:
1. Organizational Structure. Any provision of law to the
contrary notwithstanding and within the limits of their
respective appropriations as authorized in this Act, the
Constitutional Commissions and Offices enjoying fiscal
autonomy are authorized to formulate and implement the
organizational structures of their respective offices, to fix
and determine the salaries, allowances, and other
benefits of their personnel, and whenever public interest
so requires, make adjustments in their personal services
itemization including, but not limited to, the transfer of
item or creation of new positions in their respective
offices: PROVIDED, That officers and employees whose
positions are affected by such reorganization or
adjustments shall be granted retirement gratuities and
separation pay in accordance with existing laws, which

95

shall be payable from any unexpended balance of, or


savings in the appropriations of their respective offices:
PROVIDED, FURTHER, That the implementation hereof
shall be in accordance with salary rates, allowances and
other benefits authorized under compensation
standardization laws.
2. Use of Savings. The Constitutional Commissions and
Offices enjoying fiscal autonomy are hereby authorized to
use savings in their respective appropriations for: (a)
printing and/or publication of decisions, resolutions, and
training information materials; (b) repair, maintenance and
improvement of central and regional offices, facilities and
equipment; (c) purchase of books, journals, periodicals
and equipment; (d) necessary expenses for the
employment of temporary, contractual and casual
employees; (e) payment of extraordinary and
miscellaneous expenses, commutable representation and
transportation allowances, and fringe benefits for their
officials and employees as may be authorized by law; and
(f) other official purposes, subject to accounting and
auditing rules and regulations. (Emphases supplied)
on the strength of these special provisions, the CHR, through its
then Chairperson Aurora P. Navarette-Recia and
Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras,
Vicente P. Sibulo, and Jorge R. Coquia, promulgated Resolution
No. A98-047 on 04 September 1998, adopting an upgrading and
reclassification scheme among selected positions in the
Commission, to wit:
WHEREAS, the General Appropriations Act, FY 1998,
R.A. No. 8522 has provided special provisions applicable
to all Constitutional Offices enjoying Fiscal Autonomy,
particularly on organizational structures and authorizes
the same to formulate and implement the organizational
structures of their respective offices to fix and determine
the salaries, allowances and other benefits of their

personnel and whenever public interest so requires, make


adjustments in the personnel services itemization
including, but not limited to, the transfer of item or creation
of new positions in their respective offices: PROVIDED,
That officers and employees whose positions are affected
by such reorganization or adjustments shall be granted
retirement gratuities and separation pay in accordance
with existing laws, which shall be payable from any
unexpanded balance of, or savings in the appropriations
of their respective offices;
Whereas, the Commission on Human Rights is a member
of the Constitutional Fiscal Autonomy Group (CFAG) and
on July 24, 1998, CFAG passed an approved Joint
Resolution No. 49 adopting internal rules implementing
the special provisions heretoforth mentioned;
NOW THEREFORE, the Commission by virtue of its fiscal
autonomy hereby approves and authorizes the upgrading
and augmentation of the commensurate amount
generated from savings under Personal Services to
support the implementation of this resolution effective
Calendar Year 1998;
Let the Human Resources Development Division (HRDD)
prepare the necessary Notice of Salary Adjustment and
other appropriate documents to implement this resolution;
. . . .3 (Emphasis supplied)
Annexed to said resolution is the proposed creation of ten
additional plantilla positions, namely: one Director IV position,
with Salary Grade 28 for the Caraga Regional Office, four
Security Officer II with Salary Grade 15, and five Process
Servers, with Salary Grade 5 under the Office of the
Commissioners. 4

96

On 19 October 1998, CHR issued Resolution No. A980555 providing for the upgrading or raising of salary grades of the
following positions in the Commission:

Number
of
Number
of
Positions

Position

Position Title
Title

Positions

Salary Grade

Salary
Grade

From
Security
Officer IITo
(Coterminous)

12

15

Total Salary
Requirements

Cashier III

Cashier V

18

24

51,756.00

Information
Officer V

Director IV

24

28

36,744.006

Total Salary
Requirements

From

To
684,780.00

28

It, likewise, provided for the creation and upgrading of the


following positions:

Attorney VI
Director IV
(In the
Regional
Field Offices)

26

Director III

Director IV

27

28

38,928.00

Financial &
Director IV
Management
Officer II

24

28

36,744.00

Budget
Officer III

18

24

51,756.00

Accountant III Chief


Accountant

18

24

51,756.00

Budget Officer
IV

P229,104.00

A. Creation
B. Upgrading

Number
of
Positions

Position Title

From

To

Salary
Grade

From

To

Total Salary
Requirements

Attorney V Director IV

25

28

P28,092.00

Security
Officer I

11

15

57,456.00

Security
Officer II

97

----------------

Total 3

P 85,548.007

To support the implementation of such scheme, the CHR, in the


same resolution, authorized the augmentation of a commensurate
amount generated from savings under Personnel Services.
By virtue of Resolution No. A98-062 dated 17 November 1998,
the CHR "collapsed" the vacant positions in the body to provide
additional source of funding for said staffing modification. Among
the positions collapsed were: one Attorney III, four Attorney IV,
one Chemist III, three Special Investigator I, one Clerk III, and
one Accounting Clerk II.8
The CHR forwarded said staffing modification and upgrading
scheme to the DBM with a request for its approval, but the then
DBM secretary Benjamin Diokno denied the request on the
following justification:
Based on the evaluations made the request was not favorably
considered as it effectively involved the elevation of the field units
from divisions to services.
The present proposal seeks further to upgrade the twelve (12)
positions of Attorney VI, SG-26 to Director IV, SG-28. This would
elevate the field units to a bureau or regional office, a level even
higher than the one previously denied.
The request to upgrade the three (3) positions of Director III, SG27 to Director IV, SG-28, in the Central Office in effect would
elevate the services to Office and change the context from
support to substantive without actual change in functions.

In the absence of a specific provision of law which may be used


as a legal basis to elevate the level of divisions to a bureau or
regional office, and the services to offices, we reiterate our
previous stand denying the upgrading of the twelve (12) positions
of Attorney VI, SG-26 to Director III, SG-27 or Director IV, SG-28,
in the Field Operations Office (FOO) and three (3) Director III,
SG-27 to Director IV, SG-28 in the Central Office.
As represented, President Ramos then issued a Memorandum to
the DBM Secretary dated 10 December 1997, directing the latter
to increase the number of Plantilla positions in the CHR both
Central and Regional Offices to implement the Philippine Decade
Plan on Human Rights Education, the Philippine Human Rights
Plan and Barangay Rights Actions Center in accordance with
existing laws. (Emphasis in the original)
Pursuant to Section 78 of the General Provisions of the General
Appropriations Act (GAA) FY 1998, no organizational unit or
changes in key positions shall be authorized unless provided by
law or directed by the President, thus, the creation of a Finance
Management Office and a Public Affairs Office cannot be given
favorable recommendation.
Moreover, as provided under Section 2 of RA No. 6758, otherwise
known as the Compensation Standardization Law, the
Department of Budget and Management is directed to establish
and administer a unified compensation and position classification
system in the government. The Supreme Court ruled in the case
of Victorina Cruz vs. Court of Appeals, G.R. No. 119155, dated
January 30, 1996, that this Department has the sole power and
discretion to administer the compensation and position
classification system of the National Government.
Being a member of the fiscal autonomy group does not vest the
agency with the authority to reclassify, upgrade, and create
positions without approval of the DBM. While the members of the
Group are authorized to formulate and implement the
organizational structures of their respective offices and determine

98

the compensation of their personnel, such authority is not


absolute and must be exercised within the parameters of the
Unified Position Classification and Compensation System
established under RA 6758 more popularly known as the
Compensation Standardization Law. We therefore reiterate our
previous stand on the matter.9 (Emphases supplied)
In light of the DBM's disapproval of the proposed personnel
modification scheme, the CSC-National Capital Region Office,
through a memorandum dated 29 March 1999, recommended to
the CSC-Central Office that the subject appointments be rejected
owing to the DBM's disapproval of the plantilla reclassification.
Meanwhile, the officers of petitioner CHREA, in representation of
the rank and file employees of the CHR, requested the CSCCentral Office to affirm the recommendation of the CSC-Regional
Office. CHREA stood its ground in saying that the DBM is the only
agency with appropriate authority mandated by law to evaluate
and approve matters of reclassification and upgrading, as well as
creation of positions.
The CSC-Central Office denied CHREA's request in a Resolution
dated 16 December 1999, and reversed the recommendation of
the CSC-Regional Office that the upgrading scheme be censured.
The decretal portion of which reads:
WHEREFORE, the request of Ronnie N. Rosero, Hubert
V. Ruiz, Flordeliza A. Briones, George Q. Dumlao [and],
Corazon A. Santos-Tiu, is hereby denied.10
CHREA filed a motion for reconsideration, but the CSCCentral Office denied the same on 09 June 2000.
Given the cacophony of judgments between the DBM and
the CSC, petitioner CHREA elevated the matter to the
Court of Appeals. The Court of Appeals affirmed the
pronouncement of the CSC-Central Office and upheld the

validity of the upgrading, retitling, and reclassification


scheme in the CHR on the justification that such action is
within the ambit of CHR's fiscal autonomy. The fallo of the
Court of Appeals decision provides:
IN VIEW OF ALL THE FOREGOING, the instant petition
is ordered DISMISSED and the questioned Civil Service
Commission Resolution No. 99-2800 dated December 16,
1999 as well as No. 001354 dated June 9, 2000, are
hereby AFFIRMED. No cost.11
Unperturbed, petitioner filed this petition in this Court contending
that:
A.
THE COURT OF APPEALS GRAVELY ERRED WHEN
IT HELD THAT UNDER THE 1987 CONSTITUTION, THE
COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL
AUTONOMY.
B.
THE COURT OF APPEALS SERIOUSLY ERRED IN
UPHOLDING THE CONSTRUCTION OF THE
COMMISSION ON HUMAN RIGHTS OF REPUBLIC ACT
NO. 8522 (THE GENERAL APPROPRIATIONS ACT FOR
THE FISCAL YEAR 1998) DESPITE ITS BEING IN
SHARP CONFLICT WITH THE 1987 CONSTITUTION
AND THE STATUTE ITSELF.
C.
THE COURT OF APPEALS SERIOUSLY AND
GRAVELY ERRED IN AFFIRMING THE VALIDITY OF
THE CIVIL SERVICE COMMISSION RESOLUTION NOS.
992800 AND 001354 AS WELL AS THAT OF THE

99

OPINION OF THE DEPARTMENT OF JUSTICE IN


STATING THAT THE COMMISSION ON HUMAN
RIGHTS ENJOYS FISCAL AUTONOMY UNDER THE
1987 CONSTITUTION AND THAT THIS FISCAL
AUTONOMY INCLUDES THE ACTION TAKEN BY IT IN
COLLAPSING, UPGRADING AND RECLASSIFICATION
OF POSITIONS THEREIN.12
The central question we must answer in order to resolve this case
is: Can the Commission on Human Rights validly implement an
upgrading, reclassification, creation, and collapsing of plantilla
positions in the Commission without the prior approval of the
Department of Budget and Management?
Petitioner CHREA grouses that the Court of Appeals and the
CSC-Central Office both erred in sanctioning the CHR's alleged
blanket authority to upgrade, reclassify, and create positions
inasmuch as the approval of the DBM relative to such scheme is
still indispensable. Petitioner bewails that the CSC and the Court
of Appeals erroneously assumed that CHR enjoys fiscal
autonomy insofar as financial matters are concerned, particularly
with regard to the upgrading and reclassification of positions
therein.
Respondent CHR sharply retorts that petitioner has no locus
standi considering that there exists no official written record in the
Commission recognizing petitioner as a bona fide organization of
its employees nor is there anything in the records to show that its
president, Marcial A. Sanchez, Jr., has the authority to sue the
CHR. The CHR contends that it has the authority to cause the
upgrading, reclassification, plantilla creation, and collapsing
scheme sans the approval of the DBM because it enjoys fiscal
autonomy.
After a thorough consideration of the arguments of both parties
and an assiduous scrutiny of the records in the case at bar, it is
the Court's opinion that the present petition is imbued with merit.

On petitioner's personality to bring this suit, we held in a multitude


of cases that a proper party is one who has sustained or is in
immediate danger of sustaining an injury as a result of the act
complained of.13 Here, petitioner, which consists of rank and file
employees of respondent CHR, protests that the upgrading and
collapsing of positions benefited only a select few in the upper
level positions in the Commission resulting to the demoralization
of the rank and file employees. This sufficiently meets the injury
test. Indeed, the CHR's upgrading scheme, if found to be valid,
potentially entails eating up the Commission's savings or that
portion of its budgetary pie otherwise allocated for Personnel
Services, from which the benefits of the employees, including
those in the rank and file, are derived.
Further, the personality of petitioner to file this case was
recognized by the CSC when it took cognizance of the CHREA's
request to affirm the recommendation of the CSC-National Capital
Region Office. CHREA's personality to bring the suit was a nonissue in the Court of Appeals when it passed upon the merits of
this case. Thus, neither should our hands be tied by this technical
concern. Indeed, it is settled jurisprudence that an issue that was
neither raised in the complaint nor in the court below cannot be
raised for the first time on appeal, as to do so would be offensive
to the basic rules of fair play, justice, and due process.14
We now delve into the main issue of whether or not the approval
by the DBM is a condition precedent to the enactment of an
upgrading, reclassification, creation and collapsing of plantilla
positions in the CHR.
Germane to our discussion is Rep. Act No. 6758, An Act
Prescribing a Revised Compensation and Position Classification
System in the Government and For Other Purposes, or the Salary
Standardization Law, dated 01 July 1989, which provides in
Sections 2 and 4 thereof that it is the DBM that shall establish
and administer a unified Compensation and Position
Classification System. Thus:

100

SEC. 2. Statement of Policy. -- It is hereby declared the


policy of the State to provide equal pay for substantially
equal work and to base differences in pay upon
substantive differences in duties and responsibilities, and
qualification requirements of the positions. In determining
rates of pay, due regard shall be given to, among others,
prevailing rates in the private sector for comparable work.
For this purpose, the Department of Budget and
Management (DBM) is hereby directed to establish and
administer a unified Compensation and Position
Classification System, hereinafter referred to as the
System as provided for in Presidential Decree No. 985, as
amended, that shall be applied for all government entities,
as mandated by the Constitution. (Emphasis supplied.)
SEC. 4. Coverage. The Compensation and Position
Classification System herein provided shall apply to all
positions, appointive or elective, on full or part-time basis,
now existing or hereafter created in the government,
including government-owned or controlled corporations
and government financial institutions.
The term "government" refers to the Executive, the Legislative
and the Judicial Branches and the Constitutional Commissions
and shall include all, but shall not be limited to, departments,
bureaus, offices, boards, commissions, courts, tribunals, councils,
authorities, administrations, centers, institutes, state colleges and
universities, local government units, and the armed forces. The
term "government-owned or controlled corporations and financial
institutions" shall include all corporations and financial institutions
owned or controlled by the National Government, whether such
corporations and financial institutions perform governmental or
proprietary functions. (Emphasis supplied.)
The disputation of the Court of Appeals that the CHR is exempt
from the long arm of the Salary Standardization Law is flawed
considering that the coverage thereof, as defined above,

encompasses the entire gamut of government offices, sans


qualification.
This power to "administer" is not purely ministerial in character as
erroneously held by the Court of Appeals. The word to administer
means to control or regulate in behalf of others; to direct or
superintend the execution, application or conduct of; and to
manage or conduct public affairs, as to administer the
government of the state.15
The regulatory power of the DBM on matters of compensation is
encrypted not only in law, but in jurisprudence as well. In the
recent case of Philippine Retirement Authority (PRA) v. Jesusito
L. Buag,16 this Court, speaking through Mr. Justice Reynato
Puno, ruled that compensation, allowances, and other benefits
received by PRA officials and employees without the requisite
approval or authority of the DBM are unauthorized and irregular.
In the words of the Court
Despite the power granted to the Board of Directors of PRA to
establish and fix a compensation and benefits scheme for its
employees, the same is subject to the review of the Department
of Budget and Management. However, in view of the express
powers granted to PRA under its charter, the extent of the review
authority of the Department of Budget and Management is
limited. As stated in Intia, the task of the Department of Budget
and Management is simply to review the compensation and
benefits plan of the government agency or entity concerned and
determine if the same complies with the prescribed policies and
guidelines issued in this regard. The role of the Department of
Budget and Management is supervisorial in nature, its main duty
being to ascertain that the proposed compensation, benefits and
other incentives to be given to PRA officials and employees
adhere to the policies and guidelines issued in accordance with
applicable laws.

101

In Victorina Cruz v. Court of Appeals,17 we held that the DBM has


the sole power and discretion to administer the compensation and
position classification system of the national government.
In Intia, Jr. v. Commission on Audit,18 the Court held that although
the charter19 of the Philippine Postal Corporation (PPC) grants it
the power to fix the compensation and benefits of its employees
and exempts PPC from the coverage of the rules and regulations
of the Compensation and Position Classification Office, by virtue
of Section 6 of P.D. No. 1597, the compensation system
established by the PPC is, nonetheless, subject to the review of
the DBM. This Court intoned:
It should be emphasized that the review by the DBM of any PPC
resolution affecting the compensation structure of its personnel
should not be interpreted to mean that the DBM can dictate upon
the PPC Board of Directors and deprive the latter of its discretion
on the matter. Rather, the DBM's function is merely to ensure that
the action taken by the Board of Directors complies with the
requirements of the law, specifically, that PPC's compensation
system "conforms as closely as possible with that provided for
under R.A. No. 6758." (Emphasis supplied.)
As measured by the foregoing legal and jurisprudential
yardsticks, the imprimatur of the DBM must first be sought prior to
implementation of any reclassification or upgrading of positions in
government. This is consonant to the mandate of the DBM under
the Revised Administrative Code of 1987, Section 3, Chapter 1,
Title XVII, to wit:
SEC. 3. Powers and Functions. The Department of
Budget and Management shall assist the President in the
preparation of a national resources and expenditures
budget, preparation, execution and control of the National
Budget, preparation and maintenance of accounting
systems essential to the budgetary process, achievement
of more economy and efficiency in the management of
government operations, administration of compensation

and position classification systems, assessment of


organizational effectiveness and review and evaluation of
legislative proposals having budgetary or organizational
implications. (Emphasis supplied.)
Irrefragably, it is within the turf of the DBM Secretary to disallow
the upgrading, reclassification, and creation of additional plantilla
positions in the CHR based on its finding that such scheme lacks
legal justification.
Notably, the CHR itself recognizes the authority of the DBM to
deny or approve the proposed reclassification of positions as
evidenced by its three letters to the DBM requesting approval
thereof. As such, it is now estopped from now claiming that the
nod of approval it has previously sought from the DBM is a
superfluity.
The Court of Appeals incorrectly relied on the pronouncement of
the CSC-Central Office that the CHR is a constitutional
commission, and as such enjoys fiscal autonomy.20
Palpably, the Court of Appeals' Decision was based on the
mistaken premise that the CHR belongs to the species of
constitutional commissions. But, Article IX of the Constitution
states in no uncertain terms that only the CSC, the Commission
on Elections, and the Commission on Audit shall be tagged as
Constitutional Commissions with the appurtenant right to fiscal
autonomy. Thus:
Sec. 1. The Constitutional Commissions, which shall be
independent, are the Civil Service Commission, the
Commission on Elections, and the Commission on Audit.
Sec. 5. The Commission shall enjoy fiscal autonomy.
Their approved annual appropriations shall be
automatically and regularly released.

102

Along the same vein, the Administrative Code, in Chapter 5,


Sections 24 and 26 of Book II on Distribution of Powers of
Government, the constitutional commissions shall include only
the Civil Service Commission, the Commission on Elections, and
the Commission on Audit, which are granted independence and
fiscal autonomy. In contrast, Chapter 5, Section 29 thereof, is
silent on the grant of similar powers to the other bodies including
the CHR. Thus:
SEC. 24. Constitutional Commissions. The
Constitutional Commissions, which shall be independent,
are the Civil Service Commission, the Commission on
Elections, and the Commission on Audit.
SEC. 26. Fiscal Autonomy. The Constitutional
Commissions shall enjoy fiscal autonomy. The approved
annual appropriations shall be automatically and regularly
released.
SEC. 29. Other Bodies. There shall be in accordance
with the Constitution, an Office of the Ombudsman, a
Commission on Human Rights, and independent central
monetary authority, and a national police commission.
Likewise, as provided in the Constitution, Congress may
establish an independent economic and planning agency.
(Emphasis ours.)
From the 1987 Constitution and the Administrative Code, it is
abundantly clear that the CHR is not among the class of
Constitutional Commissions. As expressed in the oft-repeated
maxim expressio unius est exclusio alterius, the express mention
of one person, thing, act or consequence excludes all others.
Stated otherwise, expressium facit cessare tacitum what is
expressed puts an end to what is implied.21
Nor is there any legal basis to support the contention that the
CHR enjoys fiscal autonomy. In essence, fiscal autonomy entails

freedom from outside control and limitations, other than those


provided by law. It is the freedom to allocate and utilize funds
granted by law, in accordance with law, and pursuant to the
wisdom and dispatch its needs may require from time to time.22 In
Blaquera v. Alcala and Bengzon v. Drilon,23 it is understood that it
is only the Judiciary, the Civil Service Commission, the
Commission on Audit, the Commission on Elections, and the
Office of the Ombudsman, which enjoy fiscal autonomy. Thus, in
Bengzon,24 we explained:
As envisioned in the Constitution, the fiscal autonomy
enjoyed by the Judiciary, the Civil Service Commission,
the Commission on Audit, the Commission on Elections,
and the Office of the Ombudsman contemplates a
guarantee of full flexibility to allocate and utilize their
resources with the wisdom and dispatch that their needs
require. It recognizes the power and authority to levy,
assess and collect fees, fix rates of compensation not
exceeding the highest rates authorized by law for
compensation and pay plans of the government and
allocate and disburse such sums as may be provided by
law or prescribed by them in the course of the discharge
of their functions.
...
The Judiciary, the Constitutional Commissions, and the
Ombudsman must have the independence and flexibility
needed in the discharge of their constitutional duties. The
imposition of restrictions and constraints on the manner
the independent constitutional offices allocate and utilize
the funds appropriated for their operations is anathema to
fiscal autonomy and violative not only of the express
mandate of the Constitution but especially as regards the
Supreme Court, of the independence and separation of
powers upon which the entire fabric of our constitutional
system is based. In the interest of comity and
cooperation, the Supreme Court, [the] Constitutional

103

Commissions, and the Ombudsman have so far limited


their objections to constant reminders. We now agree with
the petitioners that this grant of autonomy should cease to
be a meaningless provision. (Emphasis supplied.)
Neither does the fact that the CHR was admitted as a member by
the Constitutional Fiscal Autonomy Group (CFAG) ipso facto
clothed it with fiscal autonomy. Fiscal autonomy is a constitutional
grant, not a tag obtainable by membership.
We note with interest that the special provision under Rep. Act
No. 8522, while cited under the heading of the CHR, did not
specifically mention CHR as among those offices to which the
special provision to formulate and implement organizational
structures apply, but merely states its coverage to include
Constitutional Commissions and Offices enjoying fiscal autonomy.
In contrast, the Special Provision Applicable to the Judiciary
under Article XXVIII of the General Appropriations Act of 1998
specifically mentions that such special provision applies to the
judiciary and had categorically authorized the Chief Justice of the
Supreme Court to formulate and implement the organizational
structure of the Judiciary, to wit:
1. Organizational Structure. Any provision of law to the
contrary notwithstanding and within the limits of their
respective appropriations authorized in this Act, the Chief
Justice of the Supreme Court is authorized to formulate
and implement organizational structure of the Judiciary, to
fix and determine the salaries, allowances, and other
benefits of their personnel, and whenever public interest
so requires, make adjustments in the personal services
itemization including, but not limited to, the transfer of
item or creation of new positions in the Judiciary;
PROVIDED, That officers and employees whose positions
are affected by such reorganization or adjustments shall
be granted retirement gratuities and separation pay in
accordance with existing law, which shall be payable from
any unexpended balance of, or savings in the

appropriations of their respective offices: PROVIDED,


FURTHER, That the implementation hereof shall be in
accordance with salary rates, allowances and other
benefits authorized under compensation standardization
laws. (Emphasis supplied.)
All told, the CHR, although admittedly a constitutional creation is,
nonetheless, not included in the genus of offices accorded fiscal
autonomy by constitutional or legislative fiat.
Even assuming en arguendo that the CHR enjoys fiscal
autonomy, we share the stance of the DBM that the grant of fiscal
autonomy notwithstanding, all government offices must, all the
same, kowtow to the Salary Standardization Law. We are of the
same mind with the DBM on its standpoint, thusBeing a member of the fiscal autonomy group does not vest the
agency with the authority to reclassify, upgrade, and create
positions without approval of the DBM. While the members of the
Group are authorized to formulate and implement the
organizational structures of their respective offices and determine
the compensation of their personnel, such authority is not
absolute and must be exercised within the parameters of the
Unified Position Classification and Compensation System
established under RA 6758 more popularly known as the
Compensation Standardization Law.25 (Emphasis supplied.)
The most lucid argument against the stand of respondent,
however, is the provision of Rep. Act No. 8522 "that the
implementation hereof shall be in accordance with salary rates,
allowances and other benefits authorized under compensation
standardization laws."26
Indeed, the law upon which respondent heavily anchors its case
upon has expressly provided that any form of adjustment in the
organizational structure must be within the parameters of the
Salary Standardization Law.

104

The Salary Standardization Law has gained impetus in


addressing one of the basic causes of discontent of many civil
servants.27 For this purpose, Congress has delegated to the DBM
the power to administer the Salary Standardization Law and to
ensure that the spirit behind it is observed. This power is part of
the system of checks and balances or system of restraints in our
government. The DBM's exercise of such authority is not in itself
an arrogation inasmuch as it is pursuant to the paramount law of
the land, the Salary Standardization Law and the Administrative
Code.
In line with its role to breathe life into the policy behind the Salary
Standardization Law of "providing equal pay for substantially
equal work and to base differences in pay upon substantive
differences in duties and responsibilities, and qualification
requirements of the positions," the DBM, in the case under
review, made a determination, after a thorough evaluation, that
the reclassification and upgrading scheme proposed by the CHR
lacks legal rationalization.
The DBM expounded that Section 78 of the general provisions of
the General Appropriations Act FY 1998, which the CHR heavily
relies upon to justify its reclassification scheme, explicitly provides
that "no organizational unit or changes in key positions shall be
authorized unless provided by law or directed by the President."
Here, the DBM discerned that there is no law authorizing the
creation of a Finance Management Office and a Public Affairs
Office in the CHR. Anent CHR's proposal to upgrade twelve
positions of Attorney VI, SG-26 to Director IV, SG-28, and four
positions of Director III, SG-27 to Director IV, SG-28, in the
Central Office, the DBM denied the same as this would change
the context from support to substantive without actual change in
functions.
This view of the DBM, as the law's designated body to implement
and administer a unified compensation system, is beyond cavil.
The interpretation of an administrative government agency, which
is tasked to implement a statute is accorded great respect and

ordinarily controls the construction of the courts. In Energy


Regulatory Board v. Court of Appeals,28 we echoed the basic rule
that the courts will not interfere in matters which are addressed to
the sound discretion of government agencies entrusted with the
regulation of activities coming under the special technical
knowledge and training of such agencies.
To be sure, considering his expertise on matters affecting the
nation's coffers, the Secretary of the DBM, as the President's alter
ego, knows from where he speaks inasmuch as he has the front
seat view of the adverse effects of an unwarranted upgrading or
creation of positions in the CHR in particular and in the entire
government in general.
WHEREFORE, the petition is GRANTED, the Decision dated 29
November 2001 of the Court of Appeals in CA-G.R. SP No. 59678
and its Resolution dated 11 September 2002 are hereby
REVERSED and SET ASIDE. The ruling dated 29 March 1999 of
the Civil Service Commision-National Capital Region is
REINSTATED. The Commission on Human Rights Resolution No.
A98-047 dated 04 September 1998, Resolution No. A98-055
dated 19 October 1998 and Resolution No. A98-062 dated 17
November 1998 without the approval of the Department of
Budget and Management are disallowed. No pronouncement as
to costs.
SO ORDERED.
Puno, Acting C.J., Austria-Martinez, Callejo, Sr., and Tinga,
JJ., concur.

Footnotes
Rollo, pp. 36-50; Penned by Associate Justice Conrado M.
Vasquez, Jr., with Associate Justices Andres B. Reyes, Jr. and
Amelita G. Tolentino, concurring.
1

Id. at 37.

105

Id. at 51-52.

27

Id. at 53-56.

28

Id. at 54.

Id.

Id. at 55.

Id. at 57.

Id. at 62-63.

10

Id. at 37.

11

Id. at 47.

12

Id. at 19-20.

Cruz, Philippine Political Law, p. 243 (1996 Ed).

G.R. No. 113079, 20 April 2001, 357 SCRA 30, citing Nestle v.
Court of Appeals, G.R. No. 86738, 13 November 1991, 203 SCRA
504.

Cruz, Philippine Political Law 243 (1996 ed.), citing Ex Parte


Lewitt, 303 U.S. 633.
13

EASCO v. LTFRB, G.R. No. 149717, 07 October 2003, 413 SCRA


75.
14

Philippine Law Dictionary 21 (2nd ed.), citing Caw v. Benedicto,


63 OG 3393; 8 C.A.R. (2s) 814.

EN BANC

15

16

G.R. No. 143784, 05 February 2003, 397 SCRA 27, 35.

17

G.R. No. 119155, 30 January 1996, 252 SCRA599.

18

G.R. No. 131529, 30 April 1999, 306 SCRA 593, 609.

19

Rep. Act No. 7354 (1992).

20

Rollo, p. 46.

Canet v. Decena, G.R. No. 155344, 20 January 2004, 420 SCRA


388.
21

Blaquera v. Alcala, G.R. Nos. 109406, 110642, 111494, 112056


and 119597, 11 September 1998, 295 SCRA 366.
22

Id.; Bengzon v. Drilon, G.R. No. 103524, 15 April 1992, 208 SCRA
133.
23

24

Id.

25

Rollo, p. 63.

Article XXXIII, Rep. Act No. 8522, Special Provisions Applicable to


all Constitutional Offices Enjoying Fiscal Autonomy.
26

G.R. No. 157509

January 18, 2005

AUTOMOTIVE INDUSTRY WORKERS ALLIANCE (AIWA) and its


Affiliated Unions: Mitsubishi Motors Workers Phils. Union;
Mitsubishi Motors Phils. Supervisors Union, Nissan Motors
Phils., Inc. Workers Union, Toyota Motors Phils. Workers Union,
DURASTEEL WORKERS UNION, FILSHUTTERS EMPLOYEES &
WORKERS UNION, NATIONAL LABOR UNION, PEPSI-COLA
SUPERVISORS AND EMPLOYEES UNION, PSBA FACULTY
ASSOCIATION, PLDT SECURITY PERSONNEL UNION,
PUREFOODS UNIFIED LABOR ORGANIZATION, SAMAHANG
MANGGAGAWA NG BICUTAN CONTAINERS CORP.,
SAMAHANG MANGGAGAWA NG CINDERELLA, SAMAHANG
MANGGAGAWA NG LAURAS FOOD PRODUCTS, petitioners,
vs.
HON. ALBERTO ROMULO, in his capacity as Executive
Secretary, and HON. PATRICIA STO. TOMAS, in her capacity as
Secretary of Labor and Employment, respondents.
DECISION

106

CHICO-NAZARIO, J.:
Petitioners, composed of ten (10) labor unions, call upon this Court
to exercise its power of judicial review to declare as unconstitutional
an executive order assailed to be in derogation of the constitutional
doctrine of separation of powers.
In an original action for certiorari, petitioners invoke their status as
labor unions and as taxpayers whose rights and interests are
allegedly violated and prejudiced by Executive Order No. 185 dated
10 March 2003 whereby administrative supervision over the National
Labor Relations Commission (NLRC), its regional branches and all
its personnel including the executive labor arbiters and labor arbiters
was transferred from the NLRC Chairperson to the Secretary of
Labor and Employment. In support of their position, 1 petitioners
argue that the NLRC -- created by Presidential Decree No. 442,
otherwise known as the Labor Code, during Martial Law was an
integral part of the Department (then Ministry) of Labor and
Employment (DOLE) under the administrative supervision of the
Secretary of Justice. During the time of President Corazon C.
Aquino, and while she was endowed with legislative functions after
EDSA I, Executive Order No. 2922 was issued whereby the NLRC
became an agency attached to the DOLE for policy and program
coordination and for administrative supervision. On 02 March 1989,
Article 213 of the Labor Code was expressly amended by Republic
Act No. 6715 declaring that the NLRC was to be attached to the
DOLE for program and policy coordination only while the
administrative supervision over the NLRC, its regional branches and
personnel, was turned over to the NLRC Chairman. The subject E.O.
No. 185, in authorizing the Secretary of Labor to exercise
administrative supervision over the NLRC, its regional branches and
personnel, allegedly reverted to the pre-Rep. Act No. 6715 set-up,
amending the latter law which only Congress can do.
The respondents herein, as represented by the Office of the Solicitor
General, opposed the petition on procedural3and
substantive4 grounds. Procedurally, it is alleged that the petition does
not pose an actual case or controversy upon which judicial review
may be exercised as petitioners have not specifically cited how E.O.
No. 185 has prejudiced or threatened to prejudice their rights and

existence as labor unions and as taxpayers. Closely intertwined


therewith, respondents further argue that petitioners have no locus
standi to assail the validity of E.O. No. 185, not even in their capacity
as taxpayers, considering that labor unions are exempt from paying
taxes, citing Sec. 30 of the Tax Reform Act of 1997. Even assuming
that their individual members are taxpayers, respondents maintain
that a taxpayer suit will not prosper as E.O. No. 185 does not require
additional appropriation for its implementation. As the petition can be
decided without passing on the validity of the subject executive order,
respondents conclude that the same should be forthwith dismissed.
Even on the merits, respondents advance the view that the petition
must fail as the administrative supervision granted by the Labor
Code to the NLRC Chairman over the NLRC, its regional branches
and personnel, does not place them beyond the Presidents broader
power of control and supervision, a power conferred no less than by
the Constitution in Section 17, Article VII thereof. Thus, in the
exercise of the Presidents power of control and supervision, he can
generally oversee the operations of the NLRC, its regional branches
and personnel thru his alter ego, the Secretary of Labor, pursuant to
the doctrine of qualified political agency.
In their Reply,5 petitioners affirm their locus standi contending that
they are suing for and in behalf of their members estimated to be
more or less fifty thousand (50,000) workers who are the real
parties to be affected by the resolution of this Court. They likewise
maintain that they are suing in behalf of the employees of the NLRC
who have pending cases for dismissal. Thus, possessed of the
necessary standing, petitioners theorize that the issue before this
Court must necessarily be decided as it involves an act of the Chief
Executive amending a provision of law.
For clarity, E.O. No. 185 is hereby quoted:
EXECUTIVE ORDER NO. 185
AUTHORIZING THE SECRETARY OF LABOR AND EMPLOYMENT
TO EXERCISE ADMINISTRATIVE SUPERVISION OVER THE
NATIONAL LABOR RELATIONS COMMISSION

107

WHEREAS, Section 17, Article VII of the Constitution provides that


the President shall have control of all executive departments,
bureaus and offices and shall ensure that the laws be faithfully
executed;
WHEREAS, the National Labor Relations Commission (NLRC) which
was created by virtue of Presidential Decree No. 442, otherwise
known as the "Labor Code of the Philippines," is an agency under
the Executive Department and was originally envisaged as being an
integral part of the Department (then Ministry) of Labor and
Employment (DOLE) under the administrative supervision of the
Secretary of Labor and Employment ("Secretary of Labor");
WHEREAS, upon the issuance of Executive Order No. 292,
otherwise known as the "Revised Administrative Code of 1987" (the
"Administrative Code"), the NLRC, by virtue of Section 25, Chapter 6,
Title VII, Book IV thereof, became an agency attached to the DOLE
for policy and program coordination and administrative supervision;
WHEREAS, Article 213 of the Labor Code and Section 25, Chapter
6, Title VII, Book IV of the Administrative Code were amended by
Republic Act. No. 6715 approved on March 2, 1989, which provides
that the NLRC shall be attached to the DOLE for program and policy
coordination only and transferred administrative supervision over the
NLRC, all its regional branches and personnel to the NLRC
Chairman;
WHEREAS, Section 16, Article III of the Constitution guarantees the
right of all persons to a speedy disposition of their cases before all
judicial, quasi-judicial and administrative bodies;
WHEREAS, the Secretary of Labor, after evaluating the NLRCs
performance record in the last five (5) years, including the rate of
disposition of pending cases before it, has informed the President
that there is a need to expedite the disposition of labor cases
pending before the NLRC and all its regional and sub-regional
branches or provincial extension units and initiate potent measures
to prevent graft and corruption therein so as to reform its systems
and personnel, as well as infuse the organization with a sense of

public service in consonance with the imperative of change for the


greater interest of the people;
WHEREAS, after consultations with the relevant sectors, the
Secretary of Labor has recommended that the President, pursuant to
her powers under the Constitution and existing laws, authorize the
Secretary of Labor to exercise administrative supervision over the
NLRC and all its regional and sub-regional branches or provincial
extension units with the objective of improving the rate of disposition
of pending cases and institute adequate measures for the prevention
of graft and corruption within the said agency;
NOW, THEREFORE, I, GLORIA MACAPAGAL ARROYO, President
of the Republic of the Philippines, by virtue of the powers vested in
me by the Constitution and existing laws, do hereby order:
SECTION 1. Authority To Exercise Administrative Supervision. The
Secretary of Labor is hereby authorized to exercise administrative
supervision over the NLRC, its regional branches and all its
personnel, including the Executive Labor Arbiters and Labor Arbiters,
with the objective of improving the rate of disposition of cases
pending before it and its regional and sub-regional branches or
provincial extension units and to institute adequate measures for the
prevention of graft and corruption within the said agency.
For this purpose, the Secretary of Labor shall, among others:
a. Generally oversee the operations of the NLRC
and its regional and sub-regional branches or
provincial extension units for the purpose of ensuring
that cases pending before them are decided or
resolved expeditiously;
b. Require the submission of reports as the
Secretary of Labor may deem necessary;
c. Initiate measures within the agency to prevent
graft and corruption, including but not limited to, the
conduct of management audits, performance

108

evaluations and inspections to determine


compliance with established policies, standards and
guidelines;
d. To take such action as may be necessary for the
proper performance of official functions, including
rectification of violations, abuses and other forms of
mal-administration; and
e. Investigate, on its own or upon complaint, matters
involving disciplinary action against any of the
NLRCs personnel, including Presidential
appointees, in accordance with existing laws, rules
and regulations. After completing his/her
investigation, the Secretary of Labor shall submit a
report to the President on the investigation
conducted with a recommendation as to the penalty
to be imposed or other action to be taken, including
referral to the Presidential Anti-Graft Commission
(PAGC), the Office of the Ombudsman or any other
office, committee, commission, agency, department,
instrumentality or branch of the government for
appropriate action.
The authority conferred herein upon the Secretary of Labor shall not
extend to the power to review, reverse, revise, or modify the
decisions of the NLRC in the exercise of its quasi-judicial functions
(cf. Section 38(2) (b), Chapter 7, Book IV, Administrative Code).
SECTION 2. Report to the Secretary of Labor. The NLRC, through
its Chairman, shall submit a report to the Secretary of Labor within
thirty (30) days from issuance of this Executive Order, on the
following matters:
a. Performance Report/Audit for the last five (5)
years, including list of pending cases and cases
disposed of within the said period by the NLRC en
banc, by Division and by the Labor Arbiters in each

of its regional and sub-regional branches or


provincial extension units;
b. Detailed Master Plan on how to liquidate its
backlog of cases with clear timetables to clean up its
dockets within six (6) months from the issuance
hereof;
c. Complete inventory of its assets and list of
personnel indicating their present positions and
stations; and
d. Such other matters as may be required by the
Secretary of Labor.
SECTION 3. Rules and Regulations. The Secretary of Labor, in
consultation with the Chairman of the NLRC, is hereby authorized to
issue rules and regulations for the effective implementation of the
provisions of this Executive Order.
SECTION 4. Repealing Clause. All laws, executive issuances, rules
and regulations or parts thereof which are inconsistent with the
provisions of this Executive Order are hereby repealed, amended, or
modified accordingly.
SECTION 5. Effectivity. This Executive Order shall take effect
immediately upon the completion of its publication in the Official
Gazette or in a newspaper of general circulation in the country.
City of Manila, March 10, 2003.6
The constitutionality of a governmental act having been challenged, it
comes as no surprise that the first line of defense is to question the
standing of petitioners and the justiciability of herein case.
It is hornbook doctrine that the exercise of the power of judicial
review requires the concurrence of the following requisites, namely:
(1) the existence of an appropriate case; (2) an interest personal and

109

substantial by the party raising the constitutional question; (3) the


plea that the function be exercised at the earliest opportunity; and (4)
the necessity that the constitutional question be passed upon in
order to decide the case.7
1awphi1.nt

As correctly pointed out by respondents, judicial review cannot be


exercised in vacuo. The function of the courts is to determine
controversies between litigants and not to give advisory
opinions.8 The power of judicial review can only be exercised in
connection with a bona fide case or controversy which involves the
statute sought to be reviewed.9
Even with the presence of an actual case or controversy, the Court
may refuse to exercise judicial review unless the constitutional
question is brought before it by a party having the requisite standing
to challenge it.10 Legal standing or locus standi is defined as a
"personal and substantial interest in the case such that the party has
sustained or will sustain direct injury as a result of the governmental
act that is being challenged."11 For a citizen to have standing, he
must establish that he has suffered some actual or threatened injury
as a result of the allegedly illegal conduct of the government; the
injury is fairly traceable to the challenged action; and the injury is
likely to be redressed by a favorable action.12
Petitioners have not shown that they have sustained or are in danger
of sustaining any personal injury attributable to the enactment of E.O.
No. 185. As labor unions representing their members, it cannot be
said that E.O. No. 185 will prejudice their rights and interests
considering that the scope of the authority conferred upon the
Secretary of Labor does not extend to the power to review, reverse,
revise or modify the decisions of the NLRC in the exercise of its
quasi-judicial functions.13 Thus, only NLRC personnel who may find
themselves the subject of the Secretary of Labors disciplinary
authority, conferred by Section 1(d) of the subject executive order,
may be said to have a direct and specific interest in raising the
substantive issue herein. Moreover, and if at all, only Congress, and
not petitioners, can claim any injury14 from the alleged executive
encroachment of the legislative function to amend, modify and/or
repeal laws.

Neither can standing be conferred on petitioners as taxpayers since


petitioners have not established disbursement of public funds in
contravention of law or the Constitution.15 A taxpayers suit is properly
brought only when there is an exercise of the spending or taxing
power of Congress.16 As correctly pointed out by respondents, E.O.
No. 185 does not even require for its implementation additional
appropriation.
All told, if we were to follow the strict rule on locus standi, this petition
should be forthwith dismissed on that score. The rule on standing,
however, is a matter of procedure, hence, can be relaxed for
nontraditional plaintiffs like ordinary citizens, taxpayers and
legislators when the public interest so requires, such as when the
matter is of transcendental importance, of overarching significance to
society, or of paramount public interest.17
1awphi1.nt

The question is, does the issue posed in this petition meet the
exacting standard required for this Court to take the liberal approach
and recognize the standing of herein petitioners?
The instant petition fails to persuade us.
The subject matter of E.O. No. 185 is the grant of authority by the
President to the Secretary of Labor to exercise administrative
supervision over the NLRC, its regional branches and all its
personnel, including the Executive Labor Arbiters and Labor Arbiters.
Its impact, sans the challenge to its constitutionality, is thereby
limited to the departments to which it is addressed. Taking our cue
from the early case of Olsen v. Herstein and Rafferty,18 the subject
executive order can be considered as nothing more or less than a
command from a superior to an inferior. It creates no relation except
between the official who issued it and the officials who received it. It
has for its object simply the efficient and economical administration
of the affairs of the department to which it is issued in accordance
with the law governing the subject matter. Administrative in its nature,
the subject order does not pass beyond the limits of the departments
to which it is directed, hence, it has not created any rights in third
persons, not even in the fifty thousand or so union members being

110

represented by petitioners who may or may not have pending cases


before the labor arbiters or the NLRC.
In fine, considering that the governmental act being questioned has a
limited reach, its impact confined to corridors of the executive
department, this is not one of those exceptional occasions where the
Court is justified in sweeping aside a critical procedural requirement,
rooted as it is in the constitutionally enshrined principle of separation
of powers. As succinctly put by Mr. Justice Reynato S. Puno in his
dissenting opinion in the first Kilosbayan case:19
. . . [C]ourts are neither free to decide all kinds of cases dumped into
their laps nor are they free to open their doors to all parties or entities
claiming a grievance. The rationale for this constitutional requirement
of locus standi is by no means trifle. It is intended "to assure a
vigorous adversary presentation of the case, and, perhaps more
importantly to warrant the judiciarys overruling the determination of a
coordinate, democratically elected organ of government." 20 It thus
goes to the very essence of representative democracies.

Puno, (Acting C.J.), Panganiban, Quisumbing, Ynares-Santiago,


Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, CarpioMorales, Callejo, Sr., Azcuna, Tinga, and Garcia, JJ., concur.
Davide, Jr., C.J., on leave.

Footnotes
1

Rollo, pp. 7-8.

Otherwise known as the Administrative Code of 1987.


Signed into law on 25 July 1987.
2

Rollo, pp. 2-10.

Id. at 11-20.

Id. at 69-76.

Rollo, pp. 15-18.

...
A lesser but not insignificant reason for screening the standing of
persons who desire to litigate constitutional issues is economic in
character. Given the sparseness of our resources, the capacity of
courts to render efficient judicial service to our people is severely
limited. For courts to indiscriminately open their doors to all types of
suits and suitors is for them to unduly overburden their dockets, and
ultimately render themselves ineffective dispensers of justice. To be
sure, this is an evil that clearly confronts our judiciary today.

People v. Vera,65 Phil. 56 [1937], as cited in Dumlao v.


Comelec, G.R. No. L-52245, 22 January 1980, 95 SCRA
392, 400.
7

Allied Broadcasting Center, Inc. v. Republic,G.R. No.


91500, 18 October 1990, 190 SCRA 782.
8

All things considered, whether or not E.O. No. 185 is indeed


unconstitutional will have to await the proper party in a proper case
to assail its validity.
WHEREFORE, premises considered, the instant petition dated 27
March 2003 is hereby DISMISSED for lack of merit. No costs.

Ibid.

Bernas, SJ, The 1987 Constitution of the Republic of the


Philippines A Commentary, 2003 Edition, p. 939.
10

Integrated Bar of the Philippines, G.R. No. 141284 , 15


August 2000, 338 SCRA, 81, 100.
11

SO ORDERED.

111

Gonzales v. Narvasa, G.R. No. 140835 , 14 August 2000,


337 SCRA 733, 740 citing Telecommunications and
Broadcast Attorneys of the Philippines, Inc. v. Commission
on Elections, G.R. No. 132922 , 21 April 1998, 289 SCRA
337, 343.
12

13

demonstrates clearly the impossibility of any other person


enforcing [it] except the one who created [it]." (32 Phil. 520,
532).
Kilosbayan, Incorporated v. Guingona, Jr., G.R. No.
113375, 05 May 1994, 232 SCRA 110, 169-171.
19

Executive Order No. 185, Section 1 (last paragraph).


Citing Dorsen, Bender, Neuborne, Political and Civil Rights
in the United States, Vol. I, 4th ed., p. 1200.
20

Gonzales v. Narvasa, Aug. 14, 2000, G.R. No. 140835 , 14


August 2000, 337 SCRA 733, 741.
14

15

Ibid.

16

Ibid.

Araneta v. Dinglasan 84 Phil. 368 (1949); Dumlao v.


COMELEC, G.R. No. L-52245, 22 January 1980, 95 SCRA
392, 404; De Guia v. COMELEC, G.R. No. 104712, 06 May
1992, 208 SCRA 420,422; Tatad v. Secretary of the
Department of Energy, G.R. Nos. 124360 and 127867 , 05
November 1997, 281 SCRA 330, 349; Osmea v.
COMELEC, G.R. Nos. 100318, 100417 and 100420, 30 July
1991, 199 SCRA 750, 757; Basco v. Pagcor, G.R. No.
91649, 14 May 1991, 197 SCRA 52, 60; Kilosbayan v.
Guingona, Jr., G.R. No. 113375, 05 May 1994, 232 SCRA
110, 139; Agan, Jr. v. Philippine International Air Terminals
Co., Inc., G.R. Nos. 15001, 155547 & 155661 , 05 May
2003, 402 SCRA 612, 645-646; Farias, et al. v. Executive
Secretary, et al., G.R. Nos. 147387 & 152161 , 10 December
2003, 417 SCRA 503, 515-517.
17

G.R. No. 11138, 15 December 1915. This was a case


for mandamus filed by an exporter of cigars to compel the
Insular Collector of Customs or the Collector of Internal
Revenue ostensibly pursuant to E.O. No. 41 dated 7 May
1909 to issue a certificate of origin of cigars about to be
exported to the United States. The Court held that E.O. No.
41 conferred no legal right on anyone as its "very nature, as
determined by the relationship which produced [it],
18

EN BANC
G.R. No. L-5279

October 31, 1955

PHILIPPINE ASSOCIATION OF COLLEGES AND UNIVERSITIES,


ETC., petitioner,
vs.
SECRETARY OF EDUCATION and the BOARD OF
TEXTBOOKS, respondents.
Manuel C. Briones, Vicente G. Sinco, Manuel V. Gallego and
Enrique M. Fernando for petitioner.
Office of the Solicitor General Pompeyo Diaz and Assistant Solicitor
General Francisco Carreon for respondents.
BENGZON, J.:
The petitioning colleges and universities request that Act No. 2706 as
amended by Act No. 3075 and Commonwealth Act No. 180 be
declared unconstitutional, because: A. They deprive owners of
schools and colleges as well as teachers and parents of liberty and
property without due process of law; B. They deprive parents of their
natural rights and duty to rear their children for civic efficiency; and
C. Their provisions conferring on the Secretary of Education
unlimited power and discretion to prescribe rules and standards
constitute an unlawful delegation of legislative power.

112

A printed memorandum explaining their position in extenso is


attached to the record.
The Government's legal representative submitted a mimeographed
memorandum contending that, (1) the matter constitutes no
justiciable controversy exhibiting unavoidable necessity of deciding
the constitutional questions; (2) petitioners are in estoppel to
challenge the validity of the said acts; and (3) the Acts are
constitutionally valid.
Petitioners submitted a lengthy reply to the above arguments.
Act No. 2706 approved in 1917 is entitled, "An Act making the
inspection and recognition of private schools and colleges obligatory
for the Secretary of Public Instruction." Under its provisions, the
Department of Education has, for the past 37 years, supervised and
regulated all private schools in this country apparently without
audible protest, nay, with the general acquiescence of the general
public and the parties concerned.
It should be understandable, then, that this Court should be doubly
reluctant to consider petitioner's demand for avoidance of the law
aforesaid, specially where, as respondents assert, petitioners
suffered no wrongnor allege anyfrom the enforcement of the
criticized statute.
It must be evident to any one that the power to declare a
legislative enactment void is one which the judge, conscious
of the fallability of the human judgment, will shrink from
exercising in any case where he can conscientiously and
with due regard to duty and official oath decline the
responsibility. (Cooley Constitutional Limitations, 8th Ed.,
Vol. I, p. 332.)
When a law has been long treated as constitutional and
important rights have become dependent thereon, the Court
may refuse to consider an attack on its validity. (C. J. S. 16,
p. 204.)

As a general rule, the constitutionality of a statute will be


passed on only if, and to the extent that, it is directly and
necessarily involved in a justiciable controversy and is
essential to the protection of the rights of the parties
concerned. (16 C. J. S., p. 207.)
In support of their first proposition petitioners contend that the right of
a citizen to own and operate a school is guaranteed by the
Constitution, and any law requiring previous governmental approval
or permit before such person could exercise said right, amounts to
censorship of previous restraint, a practice abhorent to our system of
law and government. Petitioners obviously refer to section 3 of Act
No. 2706 as amended which provides that before a private school
may be opened to the public it must first obtain a permit from the
Secretary of Education. The Solicitor General on the other hand
points out that none of the petitioners has cause to present this
issue, because all of them have permits to operate and
are actually operating by virtue of their permits.1 And they do not
assert that the respondent Secretary of Education has threatened to
revoke their permits. They have suffered no wrong under the terms
of lawand, naturally need no relief in the form they now seek to
obtain.
It is an established principle that to entitle a private individual
immediately in danger of sustaining a direct injury as the
result of that action and it is not sufficient that he has merely
a general to invoke the judicial power to determine the
validity of executive or legislative action he must show that
he has sustained or is interest common to all members of the
public. (Ex parte Levitt, 302 U. S. 633 82 L. Ed. 493.)
Courts will not pass upon the constitutionality of a law upon
the complaint of one who fails to show that he is injured by
its operation. (Tyler vs. Judges, 179 U. S. 405;
Hendrick vs. Maryland, 235 U. S. 610; Coffman vs. Breeze
Corp., 323 U. S. 316-325.)
The power of courts to declare a law unconstitutional arises
only when the interests of litigant require the use of that

113

judicial authority for their protection against actual


interference, a hypothetical threat being insufficient. (United
Public Works vs. Mitchell, 330 U .S. 75; 91 L. Ed. 754.)
Bona fide suit.Judicial power is limited to the decision of
actual cases and controversies. The authority to pass on the
validity of statutes is incidental to the decision of such cases
where conflicting claims under the Constitution and under a
legislative act assailed as contrary to the Constitution are
raised. It is legitimate only in the last resort, and as necessity
in the determination of real, earnest, and vital controversy
between litigants. (Taada and Fernando, Constitution of the
Philippines, p. 1138.)

was not originally included in Act No. 2706. It was introduced by


Commonwealth Act No. 180 approved in 1936. Why?
In March 1924 the Philippine Legislature approved Act No. 3162
creating a Board of Educational Survey to make a study and survey
of education in the Philippines and of all educational institutions,
facilities and agencies thereof. A Board chairmaned by Dr. Paul
Munroe, Columbia University, assisted by a staff of carefully selected
technical members performed the task, made a five-month thorough
and impartial examination of the local educational system, and
submitted a report with recommendations, printed as a book of 671
pages. The following paragraphs are taken from such report:
PRIVATE-ADVENTURE SCHOOLS

Mere apprehension that the Secretary of Education might under the


law withdraw the permit of one of petitioners does not constitute a
justiciable controversy. (Cf. Com. ex rel Watkins vs. Winchester
Waterworks (Ky.) 197 S. W. 2d. 771.)
And action, like this, is brought for a positive purpose, nay, to obtain
actual and positive relief. (Salonga vs. Warner Barnes, L-2245,
January, 1951.) Courts do not sit to adjudicate mere academic
questions to satisfy scholarly interest therein, however intellectually
solid the problem may be. This is specially true where the issues
"reach constitutional dimensions, for then there comes into play
regard for the court's duty to avoid decision of constitutional issues
unless avoidance becomes evasion." (Rice vs. Sioux City, U. S. Sup.
Ct. Adv. Rep., May 23, 1995, Law Ed., Vol. 99, p. 511.)
The above notwithstanding, in view of the several decisions of the
United States Supreme Court quoted by petitioners, apparently
outlawing censorship of the kind objected to by them, we have
decided to look into the matter, lest they may allege we refuse to act
even in the face of clear violation of fundamental personal rights of
liberty and property.
Petitioners complain that before opening a school the owner must
secure a permit from the Secretary of Education. Such requirement

There is no law or regulation in the Philippine Islands today


to prevent a person, however disqualified by ignorance,
greed, or even immoral character, from opening a school to
teach the young. It it true that in order to post over the door
"Recognized by the Government," a private adventure
school must first be inspected by the proper Government
official, but a refusal to grant such recognition does not by
any means result in such a school ceasing to exist. As a
matter of fact, there are more such unrecognized private
schools than of the recognized variety. How many, no one
knows, as the Division of Private Schools keeps records only
of the recognized type.
Conclusion.An unprejudiced consideration of the fact
presented under the caption Private Adventure Schools
leads but to one conclusion, viz.: the great majority of them
from primary grade to university are money-making devices
for the profit of those who organize and administer them. The
people whose children and youth attend them are not getting
what they pay for. It is obvious that the system constitutes a
great evil. That it should be permitted to exist with almost no
supervision is indefensible. The suggestion has been made
with the reference to the private institutions of university
grade that some board of control be organized under

114

legislative control to supervise their administration. The


Commission believes that the recommendations it offers at
the end of this chapter are more likely to bring about the
needed reforms.
Recommendations.The Commission recommends that
legislation be enacted to prohibit the opening of any school
by an individual or organization without the permission of the
Secretary of Public Instruction. That before granting such
permission the Secretary assure himself that such school
measures up to proper standards in the following respects,
and that the continued existence of the school be dependent
upon its continuing to conform to these conditions:
(1) The location and construction of the buildings, the lighting
and ventilation of the rooms, the nature of the lavatories,
closets, water supply, school furniture and apparatus, and
methods of cleaning shall be such as to insure hygienic
conditions for both pupils and teachers.
(2) The library and laboratory facilities shall be adequate to
the needs of instruction in the subjects taught.
(3) The classes shall not show an excessive number of
pupils per teacher. The Commission recommends 40 as a
maximum.
(4) The teachers shall meet qualifications equal to those of
teachers in the public schools of the same grade.
xxx

xxx

xxx

In view of these findings and recommendations, can there be any


doubt that the Government in the exercise of its police power to
correct "a great evil" could validly establish the "previous permit"
system objected to by petitioners? This is what differentiates our law
from the other statutes declared invalid in other jurisdictions. And if
any doubt still exists, recourse may now be had to the provision of
our Constitution that "All educational institutions shall be under the

supervision and subject to regulation by the State." (Art. XIV, sec. 5.)
The power to regulate establishments or business occupations
implies the power to require a permit or license. (53 C. J. S. 4.)
What goes for the "previous permit" naturally goes for the power to
revoke such permit on account of violation of rules or regulations of
the Department.
II. This brings us to the petitioners' third proposition that the
questioned statutes "conferring on the Secretary of Education
unlimited power and discretion to prescribe rules and standards
constitute an unlawful delegation of legislative power."
This attack is specifically aimed at section 1 of Act No. 2706 which,
as amended, provides:
It shall be the duty of the Secretary of Public Instruction to
maintain a general standard of efficiency in all private
schools and colleges of the Philippines so that the same
shall furnish adequate instruction to the public, in
accordance with the class and grade of instruction given in
them, and for this purpose said Secretary or his duly
authorized representative shall have authority to advise,
inspect, and regulate said schools and colleges in order to
determine the efficiency of instruction given in the same,
"Nowhere in this Act" petitioners argue "can one find any description,
either general or specific, of what constitutes a 'general standard of
efficiency.' Nowhere in this Act is there any indication of any basis or
condition to ascertain what is 'adequate instruction to the public.'
Nowhere in this Act is there any statement of conditions, acts, or
factors, which the Secretary of Education must take into account to
determine the 'efficiency of instruction.'"
The attack on this score is also extended to section 6 which
provides:
The Department of Education shall from time to time prepare
and publish in pamphlet form the minimum standards

115

required of primary, intermediate, and high schools, and


colleges granting the degrees of Bachelor of Arts, Bachelor
of Science, or any other academic degree. It shall also from
time to time prepare and publish in pamphlet form the
minimum standards required of law, medical, dental,
pharmaceutical, engineering, agricultural and other medical
or vocational schools or colleges giving instruction of a
technical, vocational or professional character.
Petitioners reason out, "this section leaves everything to the
uncontrolled discretion of the Secretary of Education or his
department. The Secretary of Education is given the power to fix the
standard. In plain language, the statute turns over to the Secretary of
Education the exclusive authority of the legislature to formulate
standard. . . .."
It is quite clear the two sections empower and require the Secretary
of Education to prescribe rules fixing minimum standards of
adequate and efficient instruction to be observed by all such private
schools and colleges as may be permitted to operate. The petitioners
contend that as the legislature has not fixed the standards, "the
provision is extremely vague, indefinite and uncertain"and for that
reason constitutionality objectionable. The best answer is that
despite such alleged vagueness the Secretary of Education has
fixed standards to ensure adequate and efficient instruction, as
shown by the memoranda fixing or revising curricula, the school
calendars, entrance and final examinations, admission and
accreditation of students etc.; and the system of private education
has, in general, been satisfactorily in operation for 37 years. Which
only shows that the Legislature did and could, validly rely upon the
educational experience and training of those in charge of the
Department of Education to ascertain and formulate minimum
requirements of adequate instruction as the basis of government
recognition of any private school.
At any rate, petitioners do not show how these standards have
injured any of them or interfered with their operation. Wherefore, no
reason exists for them to assail the validity of the power nor the
exercise of the power by the Secretary of Education.

True, the petitioners assert that, the Secretary has issued rules and
regulations "whimsical and capricious" and that such discretionary
power has produced arrogant inspectors who "bully heads and
teachers of private schools." Nevertheless, their remedy is to
challenge those regulations specifically, and/or to ring those
inspectors to book, in proper administrative or judicial proceedings
not to invalidate the law. For it needs no argument, to show that
abuse by the officials entrusted with the execution of a statute does
not per se demonstrate the unconstitutionality of such statute.
Anyway, we find the defendants' position to be sufficiently sustained
by the decision in Alegra vs. Collector of Customs, 53 Phil., 394 upon
holding the statute that authorized the Director of Agriculture
to "designate standards for the commercial grades of abaca, maguey
and sisal" against vigorous attacks on the ground of invalid
delegation of legislative power.
Indeed "adequate and efficient instruction" should be considered
sufficient, in the same way as "public welfare" "necessary in the
interest of law and order" "public interest" and "justice and equity and
substantial merits of the case" have been held sufficient as legislative
standards justifying delegation of authority to regulate. (See Taada
and Fernando, Constitution of the Philippines, p. 793, citing
Philippine cases.)
On this phase of the litigation we conclude that there has been no
undue delegation of legislative power.
In this connection, and to support their position that the law and the
Secretary of Education have transcended the governmental power of
supervision and regulation, the petitioners appended a list of
circulars and memoranda issued by the said Department. However
they failed to indicate which of such official documents was
constitutionally objectionable for being "capricious," or pain
"nuisance"; and it is one of our decisional practices that unless a
constitutional point is specifically raised, insisted upon and
adequately argued, the court will not consider it. (Santiago vs. Far
Eastern, 73 Phil., 408.)

116

We are told that such list will give an idea of how the statute has
placed in the hands of the Secretary of Education complete control of
the various activities of private schools, and why the statute should
be struck down as unconstitutional. It is clear in our opinion that the
statute does not in express terms give the
Secretary completecontrol. It gives him powers to inspect private
schools, to regulate their activities, to give them official permits to
operate under certain conditions, and to revoke such permits for
cause. This does not amount to complete control. If any of such
Department circulars or memoranda issued by the Secretary go
beyond the bounds of regulation and seeks to
establish complete control, it would surely be invalid. Conceivably
some of them are of this nature, but besides not having before us the
text of such circulars, the petitioners have omitted to specify. In any
event with the recent approval of Republic Act No. 1124 creating the
National Board of Education, opportunity for administrative correction
of the supposed anomalies or encroachments is amply afforded
herein petitioners. A more expeditious and perhaps more technically
competent forum exists, wherein to discuss the necessity,
convenience or relevancy of the measures criticized by them. (See
also Republic Act No. 176.)
If however the statutes in question actually give the Secretary control
over private schools, the question arises whether the power of
supervision and regulation granted to the State by section 5 Article
XIV was meant to include control of private educational institutions. It
is enough to point out that local educators and writers think the
Constitution provides for control of Education by the State. (See
Tolentino, Government of the Philippine Constitution, Vol. II, p. 615;
Benitez, Philippine Social Life and Progress, p. 335.)
The Constitution (it) "provides for state control of all educational
institutions" even as it enumerates certain fundamental objectives of
all education to wit, the development of moral character, personal
discipline, civic conscience and vocational efficiency, and instruction
in the duties of citizenship. (Malcolm & Laurel, Philippine
Constitutional Law, 1936.)
The Solicitor General cities many authorities to show that the power
to regulate means power to control, and quotes from the proceedings

of the Constitutional Convention to prove that State control of private


education was intended by the organic law. It is significant to note
that the Constitution grants power to supervise and to regulate.
Which may mean greater power than mere regulation.
III. Another grievance of petitionersprobably the most significant
is the assessment of 1 per cent levied on gross receipts of all private
schools for additional Government expenses in connection with their
supervision and regulation. The statute is section 11-A of Act No.
2706 as amended by Republic Act No. 74 which reads as follows:
SEC. 11-A. The total annual expense of the Office of Private
Education shall be met by the regular amount appropriated
in the annual Appropriation Act: Provided, however, That for
additional expenses in the supervision and regulation of
private schools, colleges and universities and in the
purchase of textbook to be sold to student of said schools,
colleges and universities and President of the Philippines
may authorize the Secretary of Instruction to levy an
equitable assessment from each private educational
institution equivalent to one percent of the total amount
accruing from tuition and other fees: . . . and non-payment of
the assessment herein provided by any private school,
college or university shall be sufficient cause for the
cancellation by the Secretary of Instruction of the permit for
recognition granted to it.
Petitioners maintain that this is a tax on the exercise of a
constitutional rightthe right to open a school, the liberty to teach
etc. They claim this is unconstitutional, in the same way that taxes on
the privilege of selling religious literature or of publishing a
newspaperboth constitutional privilegeshave been held, in the
United States, to be invalid as taxes on the exercise of a
constitutional right.
The Solicitor General on the other hand argues that insofar as
petitioners' action attempts to restrain the further collection of the
assessment, courts have no jurisdiction to restrain the collection of
taxes by injunction, and in so far as they seek to recover fees already

117

paid the suit, it is one against the State without its consent. Anyway
he concludes, the action involving "the legality of any tax impost or
assessment" falls within the original jurisdiction of Courts of First
Instance.
There are good grounds in support of Government's position. If this
levy of 1 per cent is truly a mere feeand not a taxto finance the
cost of the Department's duty and power to regulate and supervise
private schools, the exaction may be upheld; but such point involves
investigation and examination of relevant data, which should best be
carried out in the lower courts. If on the other hand it is a tax,
petitioners' issue would still be within the original jurisdiction of the
Courts of First Instance.
The last grievance of petitioners relates to the validity of Republic Act
No. 139 which in its section 1 provides:
The textbooks to be used in the private schools recognized
or authorized by the government shall be submitted to the
Board (Board of Textbooks) which shall have the power to
prohibit the use of any of said textbooks which it may find to
be against the law or to offend the dignity and honor of the
government and people of the Philippines, or which it may
find to be against the general policies of the government, or
which it may deem pedagogically unsuitable.
This power of the Board, petitioners aver, is censorship in "its baldest
form". They cite two U. S. cases (Miss. and Minnesota) outlawing
statutes that impose previous restraints upon publication of
newspapers, or curtail the right of individuals to disseminate
teachings critical of government institutions or policies.
Herein lies another important issue submitted in the cause. The
question is really whether the law may be enacted in the exercise of
the State's constitutional power (Art. XIV, sec. 5) to supervise and
regulate private schools. If that power amounts to control of private
schools, as some think it is, maybe the law is valid. In this connection
we do not share the belief that section 5 has added new power to
what the State inherently possesses by virtue of the police power. An

express power is necessarily more extensive than a mere implied


power. For instance, if there is conflict between an express individual
right and the express power to control private education it cannot offhand be said that the latter must yield to the formerconflict of two
express powers. But if the power to control education ismerely
implied from the police power, it is feasible to uphold the express
individual right, as was probably the situation in the two decisions
brought to our attention, of Mississippi and Minnesota, states where
constitutional control of private schools is not expressly produced.
However, as herein previously noted, no justiciable controversy has
been presented to us. We are not informed that the Board on
Textbooks has prohibited this or that text, or that the petitioners
refused or intend to refuse to submit some textbooks, and are in
danger of losing substantial privileges or rights for so refusing.
The average lawyer who reads the above quoted section of Republic
Act 139 will fail to perceive anything objectionable. Why should not
the State prohibit the use of textbooks that are illegal, or offensive to
the Filipinos or adverse to governmental policies or educationally
improper? What's the power of regulation and supervision for? But
those trained to the investigation of constitutional issues are likely to
apprehend the danger to civil liberties, of possible educational
dictatorship or thought control, as petitioners' counsel foresee with
obvious alarm. Much depends, however, upon the execution and
implementation of the statute. Not that constitutionality depends
necessarily upon the law's effects. But if the Board on Textbooks in
its actuations strictly adheres to the letter of the section and wisely
steers a middle course between the Scylla of "dictatorship" and the
Charybdis of "thought control", no cause for complaint will arise and
no occasion for judicial review will develop. Anyway, and again,
petitioners now have a more expeditious remedy thru an
administrative appeal to the National Board of Education created by
Republic Act 1124.
Of course it is necessary to assure herein petitioners, that when and
if, the dangers they apprehend materialize and judicial intervention is
suitably invoked, after all administrative remedies are exhausted, the
courts will not shrink from their duty to delimit constitutional
boundaries and protect individual liberties.

118

IV. For all the foregoing considerations, reserving to the petitioners


the right to institute in the proper court, and at the proper time, such
actions as may call for decision of the issue herein presented by
them, this petition for prohibition will be denied. So ordered.
Paras, C. J., Padilla, Montemayor, Reyes, A., and Jugo, JJ., concur.

Footnotes
EN BANC
1

Court will not pass upon the validity of statute at the


instance of one who has availed itself of its benefits.
(Fahey vs. Mallonee, 322 U. S. 245; 91 L. Ed. 2030; Phil.
Scrappers Inc. vs. Auditor-General, 96 Phil., 449.)
2

Cf. Montenegro vs. Castaeda, 48 Off. Gaz (8) 3392.

G.R. No. 133250

July 9, 2002

FRANCISCO I. CHAVEZ, petitioner,


vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY
DEVELOPMENT CORPORATION, respondents.

It should be observed that petitioners may not assert


complete liberty to teach, in their schools, as or what they
please; because the Constitution says "All schools shall aim
to develop moral character, personal discipline, civil
conscience and vocational efficiency and to teach the duties
of citizenship." (Art. XIV, Sec. 5.) Would petitioners assert
that pursuant to their civil liberties under the Bill of Rights
they may refuse to teach in their schools the duties of
citizenship or that they may authorize the broadcast therein
of immoral doctrines?

CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of
preliminary injunction and a temporary restraining order. The petition
seeks to compel the Public Estates Authority ("PEA" for brevity) to
disclose all facts on PEA's then on-going renegotiations with Amari
Coastal Bay and Development Corporation ("AMARI" for brevity) to
reclaim portions of Manila Bay. The petition further seeks to enjoin
PEA from signing a new agreement with AMARI involving such
reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner
of Public Highways, signed a contract with the Construction and
Development Corporation of the Philippines ("CDCP" for brevity) to
reclaim certain foreshore and offshore areas of Manila Bay. The
contract also included the construction of Phases I and II of the

119

Manila-Cavite Coastal Road. CDCP obligated itself to carry out all


the works in consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued
Presidential Decree No. 1084 creating PEA. PD No. 1084 tasked
PEA "to reclaim land, including foreshore and submerged areas,"
and "to develop, improve, acquire, x x x lease and sell any and all
kinds of lands."1 On the same date, then President Marcos issued
Presidential Decree No. 1085 transferring to PEA the "lands
reclaimed in the foreshore and offshore of the Manila Bay" 2 under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a
memorandum directing PEA to amend its contract with CDCP, so that
"[A]ll future works in MCCRRP x x x shall be funded and owned by
PEA." Accordingly, PEA and CDCP executed a Memorandum of
Agreement dated December 29, 1981, which stated:
"(i) CDCP shall undertake all reclamation, construction, and
such other works in the MCCRRP as may be agreed upon
by the parties, to be paid according to progress of works on
a unit price/lump sum basis for items of work to be agreed
upon, subject to price escalation, retention and other terms
and conditions provided for in Presidential Decree No. 1594.
All the financing required for such works shall be provided by
PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and
hereby agrees to cede and transfer in favor of PEA, all of the
rights, title, interest and participation of CDCP in and to all
the areas of land reclaimed by CDCP in the MCCRRP as of
December 30, 1981 which have not yet been sold,
transferred or otherwise disposed of by CDCP as of said
date, which areas consist of approximately Ninety-Nine
Thousand Four Hundred Seventy Three (99,473) square
meters in the Financial Center Area covered by land pledge
No. 5 and approximately Three Million Three Hundred Eighty

Two Thousand Eight Hundred Eighty Eight (3,382,888)


square meters of reclaimed areas at varying elevations
above Mean Low Water Level located outside the Financial
Center Area and the First Neighborhood Unit."3
On January 19, 1988, then President Corazon C. Aquino issued
Special Patent No. 3517, granting and transferring to PEA "the
parcels of land so reclaimed under the Manila-Cavite Coastal Road
and Reclamation Project (MCCRRP) containing a total area of one
million nine hundred fifteen thousand eight hundred ninety four
(1,915,894) square meters." Subsequently, on April 9, 1988, the
Register of Deeds of the Municipality of Paraaque issued Transfer
Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA,
covering the three reclaimed islands known as the "Freedom Islands"
located at the southern portion of the Manila-Cavite Coastal Road,
Paraaque City. The Freedom Islands have a total land area of One
Million Five Hundred Seventy Eight Thousand Four Hundred and
Forty One (1,578,441) square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement
("JVA" for brevity) with AMARI, a private corporation, to develop the
Freedom Islands. The JVA also required the reclamation of an
additional 250 hectares of submerged areas surrounding these
islands to complete the configuration in the Master Development
Plan of the Southern Reclamation Project-MCCRRP. PEA and
AMARI entered into the JVA through negotiation without public
bidding.4 On April 28, 1995, the Board of Directors of PEA, in its
Resolution No. 1245, confirmed the JVA.5 On June 8, 1995, then
President Fidel V. Ramos, through then Executive Secretary Ruben
Torres, approved the JVA.6
On November 29, 1996, then Senate President Ernesto Maceda
delivered a privilege speech in the Senate and denounced the JVA
as the "grandmother of all scams." As a result, the Senate
Committee on Government Corporations and Public Enterprises, and
the Committee on Accountability of Public Officers and
Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate
Committee Report No. 560 dated September 16, 1997. 7 Among the
conclusions of their report are: (1) the reclaimed lands PEA seeks to

120

transfer to AMARI under the JVA are lands of the public domain
which the government has not classified as alienable lands and
therefore PEA cannot alienate these lands; (2) the certificates of title
covering the Freedom Islands are thus void, and (3) the JVA itself is
illegal.
On December 5, 1997, then President Fidel V. Ramos issued
Presidential Administrative Order No. 365 creating a Legal Task
Force to conduct a study on the legality of the JVA in view of Senate
Committee Report No. 560. The members of the Legal Task Force
were the Secretary of Justice,8 the Chief Presidential Legal
Counsel,9 and the Government Corporate Counsel.10 The Legal Task
Force upheld the legality of the JVA, contrary to the conclusions
reached by the Senate Committees.11
On April 4 and 5, 1998, the Philippine Daily
Inquirer and Today published reports that there were on-going
renegotiations between PEA and AMARI under an order issued by
then President Fidel V. Ramos. According to these reports, PEA
Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy
Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court
a Petition for Prohibition with Application for the Issuance of a
Temporary Restraining Order and Preliminary Injunction docketed as
G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the
petition "for unwarranted disregard of judicial hierarchy, without
prejudice to the refiling of the case before the proper court." 12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity)
as a taxpayer, filed the instant Petition for Mandamus with Prayer for
the Issuance of a Writ of Preliminary Injunction and Temporary
Restraining Order. Petitioner contends the government stands to
lose billions of pesos in the sale by PEA of the reclaimed lands to
AMARI. Petitioner prays that PEA publicly disclose the terms of any
renegotiation of the JVA, invoking Section 28, Article II, and Section
7, Article III, of the 1987 Constitution on the right of the people to
information on matters of public concern. Petitioner assails the sale
to AMARI of lands of the public domain as a blatant violation of

Section 3, Article XII of the 1987 Constitution prohibiting the sale of


alienable lands of the public domain to private corporations. Finally,
petitioner asserts that he seeks to enjoin the loss of billions of pesos
in properties of the State that are of public dominion.
After several motions for extension of time,13 PEA and AMARI filed
their Comments on October 19, 1998 and June 25, 1998,
respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the
renegotiated PEA-AMARI contract; (b) for issuance of a temporary
restraining order; and (c) to set the case for hearing on oral
argument. Petitioner filed a Reiterative Motion for Issuance of a TRO
dated May 26, 1999, which the Court denied in a Resolution dated
June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to
the petition and required the parties to file their respective
memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint
Venture Agreement ("Amended JVA," for brevity). On May 28, 1999,
the Office of the President under the administration of then President
Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the
President, petitioner now prays that on "constitutional and statutory
grounds the renegotiated contract be declared null and void." 14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN
THE PETITION ARE MOOT AND ACADEMIC BECAUSE OF
SUBSEQUENT EVENTS;

121

II. WHETHER THE PETITION MERITS DISMISSAL FOR


FAILING TO OBSERVE THE PRINCIPLE GOVERNING THE
HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR
NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO
BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO
INFORMATION INCLUDES OFFICIAL INFORMATION ON
ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED
JOINT VENTURE AGREEMENT FOR THE TRANSFER TO
AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO
BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION;
AND
VII. WHETHER THE COURT IS THE PROPER FORUM
FOR RAISING THE ISSUE OF WHETHER THE AMENDED
JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in the
petition are moot and academic because of subsequent events.
The petition prays that PEA publicly disclose the "terms and
conditions of the on-going negotiations for a new agreement." The
petition also prays that the Court enjoin PEA from "privately entering
into, perfecting and/or executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and academic
because AMARI furnished petitioner on June 21, 1999 a copy of the

signed Amended JVA containing the terms and conditions agreed


upon in the renegotiations. Thus, PEA has satisfied petitioner's
prayer for a public disclosure of the renegotiations. Likewise,
petitioner's prayer to enjoin the signing of the Amended JVA is now
moot because PEA and AMARI have already signed the Amended
JVA on March 30, 1999. Moreover, the Office of the President has
approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the
constitutional issue by simply fast-tracking the signing and approval
of the Amended JVA before the Court could act on the issue.
Presidential approval does not resolve the constitutional issue or
remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and
its approval by the President cannot operate to moot the petition and
divest the Court of its jurisdiction. PEA and AMARI have still to
implement the Amended JVA. The prayer to enjoin the signing of the
Amended JVA on constitutional grounds necessarily includes
preventing its implementation if in the meantime PEA and AMARI
have signed one in violation of the Constitution. Petitioner's principal
basis in assailing the renegotiation of the JVA is its violation of
Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private
corporations. If the Amended JVA indeed violates the Constitution, it
is the duty of the Court to enjoin its implementation, and if already
implemented, to annul the effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one
which seeks to transfer title and ownership to 367.5 hectares of
reclaimed lands and submerged areas of Manila Bay to a single
private corporation. It now becomes more compelling for the Court
to resolve the issue to insure the government itself does not violate a
provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental,
cannot prevent the Court from rendering a decision if there is a grave
violation of the Constitution. In the instant case, if the Amended JVA
runs counter to the Constitution, the Court can still prevent the
transfer of title and ownership of alienable lands of the public domain
in the name of AMARI. Even in cases where supervening events had

122

made the cases moot, the Court did not hesitate to resolve the legal
or constitutional issues raised to formulate controlling principles to
guide the bench, bar, and the public.17
Also, the instant petition is a case of first impression. All previous
decisions of the Court involving Section 3, Article XII of the 1987
Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural lands sold to private
corporations which acquired the lands from private parties. The
transferors of the private corporations claimed or could claim the
right to judicial confirmation of their imperfect titles19 under Title
II of Commonwealth Act. 141 ("CA No. 141" for brevity). In the instant
case, AMARI seeks to acquire from PEA, a public corporation,
reclaimed lands and submerged areas for nonagricultural purposes by purchase under PD No. 1084 (charter of
PEA) and Title III of CA No. 141. Certain undertakings by AMARI
under the Amended JVA constitute the consideration for the
purchase. Neither AMARI nor PEA can claim judicial confirmation of
their titles because the lands covered by the Amended JVA are newly
reclaimed or still to be reclaimed. Judicial confirmation of imperfect
title requires open, continuous, exclusive and notorious occupation of
agricultural lands of the public domain for at least thirty years since
June 12, 1945 or earlier. Besides, the deadline for filing applications
for judicial confirmation of imperfect title expired on December 31,
1987.20
Lastly, there is a need to resolve immediately the constitutional issue
raised in this petition because of the possible transfer at any time by
PEA to AMARI of title and ownership to portions of the reclaimed
lands. Under the Amended JVA, PEA is obligated to transfer to
AMARI the latter's seventy percent proportionate share in the
reclaimed areas as the reclamation progresses. The Amended JVA
even allows AMARI to mortgage at any time the entire reclaimed
area to raise financing for the reclamation project. 21
Second issue: whether the petition merits dismissal for failing
to observe the principle governing the hierarchy of courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by


seeking relief directly from the Court. The principle of hierarchy of
courts applies generally to cases involving factual questions. As it is
not a trier of facts, the Court cannot entertain cases involving factual
issues. The instant case, however, raises constitutional issues of
transcendental importance to the public.22 The Court can resolve this
case without determining any factual issue related to the case. Also,
the instant case is a petition for mandamus which falls under the
original jurisdiction of the Court under Section 5, Article VIII of the
Constitution. We resolve to exercise primary jurisdiction over the
instant case.
Third issue: whether the petition merits dismissal for nonexhaustion of administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling
PEA to disclose publicly certain information without first asking PEA
the needed information. PEA claims petitioner's direct resort to the
Court violates the principle of exhaustion of administrative remedies.
It also violates the rule that mandamus may issue only if there is no
other plain, speedy and adequate remedy in the ordinary course of
law.
PEA distinguishes the instant case from Taada v. Tuvera23 where
the Court granted the petition for mandamus even if the petitioners
there did not initially demand from the Office of the President the
publication of the presidential decrees. PEA points out that in
Taada, the Executive Department had an affirmative
statutory duty under Article 2 of the Civil Code24 and Section 1 of
Commonwealth Act No. 63825 to publish the presidential decrees.
There was, therefore, no need for the petitioners in Taada to make
an initial demand from the Office of the President. In the instant case,
PEA claims it has no affirmative statutory duty to disclose publicly
information about its renegotiation of the JVA. Thus, PEA asserts that
the Court must apply the principle of exhaustion of administrative
remedies to the instant case in view of the failure of petitioner here to
demand initially from PEA the needed information.

123

The original JVA sought to dispose to AMARI public lands held by


PEA, a government corporation. Under Section 79 of the
Government Auditing Code,26 the disposition of government lands to
private parties requires public bidding. PEA was under a positive
legal duty to disclose to the public the terms and conditions for
the sale of its lands. The law obligated PEA to make this public
disclosure even without demand from petitioner or from anyone. PEA
failed to make this public disclosure because the original JVA, like
the Amended JVA, was the result of a negotiated contract, not of a
public bidding. Considering that PEA had an affirmative statutory
duty to make the public disclosure, and was even in breach of this
legal duty, petitioner had the right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle
of exhaustion of administrative remedies does not apply when the
issue involved is a purely legal or constitutional question. 27 The
principal issue in the instant case is the capacity of AMARI to acquire
lands held by PEA in view of the constitutional ban prohibiting the
alienation of lands of the public domain to private corporations. We
rule that the principle of exhaustion of administrative remedies does
not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this
suit
PEA argues that petitioner has no standing to
institute mandamus proceedings to enforce his constitutional right to
information without a showing that PEA refused to perform an
affirmative duty imposed on PEA by the Constitution. PEA also
claims that petitioner has not shown that he will suffer any concrete
injury because of the signing or implementation of the Amended JVA.
Thus, there is no actual controversy requiring the exercise of the
power of judicial review.
The petitioner has standing to bring this taxpayer's suit because the
petition seeks to compel PEA to comply with its constitutional duties.
There are two constitutional issues involved here. First is the right of
citizens to information on matters of public concern. Second is the
application of a constitutional provision intended to insure the

equitable distribution of alienable lands of the public domain among


Filipino citizens. The thrust of the first issue is to compel PEA to
disclose publicly information on the sale of government lands worth
billions of pesos, information which the Constitution and statutory law
mandate PEA to disclose. The thrust of the second issue is to
prevent PEA from alienating hundreds of hectares of alienable lands
of the public domain in violation of the Constitution, compelling PEA
to comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to
the public. In Chavez v. PCGG,28 the Court upheld the right of a
citizen to bring a taxpayer's suit on matters of transcendental
importance to the public, thus "Besides, petitioner emphasizes, the matter of recovering the
ill-gotten wealth of the Marcoses is an issue of
'transcendental importance to the public.' He asserts that
ordinary taxpayers have a right to initiate and prosecute
actions questioning the validity of acts or orders of
government agencies or instrumentalities, if the issues
raised are of 'paramount public interest,' and if they
'immediately affect the social, economic and moral well being
of the people.'
Moreover, the mere fact that he is a citizen satisfies the
requirement of personal interest, when the proceeding
involves the assertion of a public right, such as in this case.
He invokes several decisions of this Court which have set
aside the procedural matter of locus standi, when the subject
of the case involved public interest.
xxx
In Taada v. Tuvera, the Court asserted that when the issue
concerns a public right and the object of mandamus is to
obtain the enforcement of a public duty, the people are
regarded as the real parties in interest; and because it is
sufficient that petitioner is a citizen and as such is interested
in the execution of the laws, he need not show that he has

124

any legal or special interest in the result of the action. In the


aforesaid case, the petitioners sought to enforce their right to
be informed on matters of public concern, a right then
recognized in Section 6, Article IV of the 1973 Constitution,
in connection with the rule that laws in order to be valid and
enforceable must be published in the Official Gazette or
otherwise effectively promulgated. In ruling for the
petitioners' legal standing, the Court declared that the right
they sought to be enforced 'is a public right recognized by no
less than the fundamental law of the land.'
Legaspi v. Civil Service Commission, while reiterating
Taada, further declared that 'when a mandamus proceeding
involves the assertion of a public right, the requirement of
personal interest is satisfied by the mere fact that petitioner
is a citizen and, therefore, part of the general 'public' which
possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure
of public funds may not have been involved under the
questioned contract for the development, management and
operation of the Manila International Container Terminal,
'public interest [was] definitely involved considering the
important role [of the subject contract] . . . in the economic
development of the country and the magnitude of the
financial consideration involved.' We concluded that, as a
consequence, the disclosure provision in the Constitution
would constitute sufficient authority for upholding the
petitioner's standing.
Similarly, the instant petition is anchored on the right of the
people to information and access to official records,
documents and papers a right guaranteed under Section
7, Article III of the 1987 Constitution. Petitioner, a former
solicitor general, is a Filipino citizen. Because of the
satisfaction of the two basic requisites laid down by
decisional law to sustain petitioner's legal standing, i.e. (1)
the enforcement of a public right (2) espoused by a Filipino
citizen, we rule that the petition at bar should be allowed."

We rule that since the instant petition, brought by a citizen, involves


the enforcement of constitutional rights - to information and to the
equitable diffusion of natural resources - matters of transcendental
public importance, the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information
includes official information on on-going negotiations before a
final agreement.
Section 7, Article III of the Constitution explains the people's right to
information on matters of public concern in this manner:
"Sec. 7. The right of the people to information on matters of
public concern shall be recognized. Access to official
records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to
government research data used as basis for policy
development, shall be afforded the citizen, subject to such
limitations as may be provided by law." (Emphasis supplied)
The State policy of full transparency in all transactions involving
public interest reinforces the people's right to information on matters
of public concern. This State policy is expressed in Section 28,
Article II of the Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law,
the State adopts and implements a policy of full public
disclosure of all its transactions involving public
interest." (Emphasis supplied)
These twin provisions of the Constitution seek to promote
transparency in policy-making and in the operations of the
government, as well as provide the people sufficient information to
exercise effectively other constitutional rights. These twin provisions
are essential to the exercise of freedom of expression. If the
government does not disclose its official acts, transactions and
decisions to citizens, whatever citizens say, even if expressed
without any restraint, will be speculative and amount to nothing.
These twin provisions are also essential to hold public officials "at all

125

times x x x accountable to the people,"29 for unless citizens have the


proper information, they cannot hold public officials accountable for
anything. Armed with the right information, citizens can participate in
public discussions leading to the formulation of government policies
and their effective implementation. An informed citizenry is essential
to the existence and proper functioning of any democracy. As
explained by the Court in Valmonte v. Belmonte, Jr.30
"An essential element of these freedoms is to keep open a
continuing dialogue or process of communication between
the government and the people. It is in the interest of the
State that the channels for free political discussion be
maintained to the end that the government may perceive and
be responsive to the people's will. Yet, this open dialogue
can be effective only to the extent that the citizenry is
informed and thus able to formulate its will intelligently. Only
when the participants in the discussion are aware of the
issues and have access to information relating thereto can
such bear fruit."
PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going
negotiations the right to information is limited to "definite propositions
of the government." PEA maintains the right does not include access
to "intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still
in the process of being formulated or are in the 'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the right at the
pre-decisional stage or before the closing of the transaction. To
support its contention, AMARI cites the following discussion in the
1986 Constitutional Commission:
"Mr. Suarez. And when we say 'transactions' which should
be distinguished from contracts, agreements, or treaties or
whatever, does the Gentleman refer to the steps leading to
the consummation of the contract, or does he refer to the
contract itself?

Mr. Ople: The 'transactions' used here, I suppose is


generic and therefore, it can cover both steps leading to
a contract and already a consummated contract, Mr.
Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations
leading to the consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on
the national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
AMARI argues there must first be a consummated contract before
petitioner can invoke the right. Requiring government officials to
reveal their deliberations at the pre-decisional stage will degrade the
quality of decision-making in government agencies. Government
officials will hesitate to express their real sentiments during
deliberations if there is immediate public dissemination of their
discussions, putting them under all kinds of pressure before they
decide.
We must first distinguish between information the law on public
bidding requires PEA to disclose publicly, and information the
constitutional right to information requires PEA to release to the
public. Before the consummation of the contract, PEA must, on its
own and without demand from anyone, disclose to the public matters
relating to the disposition of its property. These include the size,
location, technical description and nature of the property being
disposed of, the terms and conditions of the disposition, the parties
qualified to bid, the minimum price and similar information. PEA must
prepare all these data and disclose them to the public at the start of
the disposition process, long before the consummation of the
contract, because the Government Auditing Code requires public
bidding. If PEA fails to make this disclosure, any citizen can demand
from PEA this information at any time during the bidding process.
Information, however, on on-going evaluation or review of bids or
proposals being undertaken by the bidding or review committee is

126

not immediately accessible under the right to information. While the


evaluation or review is still on-going, there are no "official acts,
transactions, or decisions" on the bids or proposals. However, once
the committee makes its official recommendation, there arises
a "definite proposition" on the part of the government. From this
moment, the public's right to information attaches, and any citizen
can access all the non-proprietary information leading to such
definite proposition. In Chavez v. PCGG,33 the Court ruled as follows:
"Considering the intent of the framers of the Constitution, we
believe that it is incumbent upon the PCGG and its officers,
as well as other government representatives, to disclose
sufficient public information on any proposed settlement they
have decided to take up with the ostensible owners and
holders of ill-gotten wealth. Such information, though, must
pertain to definite propositions of the government, not
necessarily to intra-agency or inter-agency
recommendations or communications during the stage when
common assertions are still in the process of being
formulated or are in the "exploratory" stage. There is need, of
course, to observe the same restrictions on disclosure of
information in general, as discussed earlier such as on
matters involving national security, diplomatic or foreign
relations, intelligence and other classified information."
(Emphasis supplied)

intended. Such a requirement will prevent the citizenry from


participating in the public discussion of any proposed contract,
effectively truncating a basic right enshrined in the Bill of Rights. We
can allow neither an emasculation of a constitutional right, nor a
retreat by the State of its avowed "policy of full disclosure of all its
transactions involving public interest."
The right covers three categories of information which are "matters of
public concern," namely: (1) official records; (2) documents and
papers pertaining to official acts, transactions and decisions; and (3)
government research data used in formulating policies. The first
category refers to any document that is part of the public records in
the custody of government agencies or officials. The second
category refers to documents and papers recording, evidencing,
establishing, confirming, supporting, justifying or explaining official
acts, transactions or decisions of government agencies or officials.
The third category refers to research data, whether raw, collated or
processed, owned by the government and used in formulating
government policies.

Contrary to AMARI's contention, the commissioners of the 1986


Constitutional Commission understood that the right to
information "contemplates inclusion of negotiations leading to
the consummation of the transaction."Certainly, a consummated
contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no
contract is consummated, and if one is consummated, it may be too
late for the public to expose its defects.1wphi1.nt

The information that petitioner may access on the renegotiation of


the JVA includes evaluation reports, recommendations, legal and
expert opinions, minutes of meetings, terms of reference and other
documents attached to such reports or minutes, all relating to the
JVA. However, the right to information does not compel PEA to
prepare lists, abstracts, summaries and the like relating to the
renegotiation of the JVA.34 The right only affords access to records,
documents and papers, which means the opportunity to inspect and
copy them. One who exercises the right must copy the records,
documents and papers at his expense. The exercise of the right is
also subject to reasonable regulations to protect the integrity of the
public records and to minimize disruption to government operations,
like rules specifying when and how to conduct the inspection and
copying.35

Requiring a consummated contract will keep the public in the dark


until the contract, which may be grossly disadvantageous to the
government or even illegal, becomes a fait accompli. This negates
the State policy of full transparency on matters of public concern, a
situation which the framers of the Constitution could not have

The right to information, however, does not extend to matters


recognized as privileged information under the separation of
powers.36 The right does not also apply to information on military and
diplomatic secrets, information affecting national security, and
information on investigations of crimes by law enforcement agencies

127

before the prosecution of the accused, which courts have long


recognized as confidential.37 The right may also be subject to other
limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by
petitioner is privileged information rooted in the separation of powers.
The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet
meetings which, like internal deliberations of the Supreme Court and
other collegiate courts, or executive sessions of either house of
Congress,38 are recognized as confidential. This kind of information
cannot be pried open by a co-equal branch of government. A frank
exchange of exploratory ideas and assessments, free from the glare
of publicity and pressure by interested parties, is essential to protect
the independence of decision-making of those tasked to exercise
Presidential, Legislative and Judicial power.39 This is not the situation
in the instant case.
We rule, therefore, that the constitutional right to information includes
official information on on-going negotiationsbefore a final contract.
The information, however, must constitute definite propositions by
the government and should not cover recognized exceptions like
privileged information, military and diplomatic secrets and similar
matters affecting national security and public order.40 Congress has
also prescribed other limitations on the right to information in several
legislations.41
Sixth issue: whether stipulations in the Amended JVA for the
transfer to AMARI of lands, reclaimed or to be reclaimed, violate
the Constitution.

acquired and owned all lands and territories in the Philippines except
those he disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian
doctrine substituting, however, the State, in lieu of the King, as the
owner of all lands and waters of the public domain. The Regalian
doctrine is the foundation of the time-honored principle of land
ownership that "all lands that were not acquired from the
Government, either by purchase or by grant, belong to the public
domain."43 Article 339 of the Civil Code of 1889, which is now Article
420 of the Civil Code of 1950, incorporated the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law
governing the ownership and disposition of reclaimed lands in the
Philippines. On May 18, 1907, the Philippine Commission enacted
Act No. 1654 which provided for the lease, but not the sale, of
reclaimed lands of the government to corporations and
individuals. Later, on November 29, 1919, the Philippine Legislature
approved Act No. 2874, the Public Land Act, which authorized the
lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. On November 7, 1936, the National
Assembly passed Commonwealth Act No. 141, also known as the
Public Land Act, whichauthorized the lease, but not the sale, of
reclaimed lands of the government to corporations and
individuals. CA No. 141 continues to this day as the general law
governing the classification and disposition of lands of the public
domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889

The Regalian Doctrine


The ownership of lands reclaimed from foreshore and submerged
areas is rooted in the Regalian doctrine which holds that the State
owns all lands and waters of the public domain. Upon the Spanish
conquest of the Philippines, ownership of all "lands, territories and
possessions" in the Philippines passed to the Spanish Crown. 42 The
King, as the sovereign ruler and representative of the people,

Under the Spanish Law of Waters of 1866, the shores, bays, coves,
inlets and all waters within the maritime zone of the Spanish territory
belonged to the public domain for public use.44 The Spanish Law of
Waters of 1866 allowed the reclamation of the sea under Article 5,
which provided as follows:

128

"Article 5. Lands reclaimed from the sea in consequence of


works constructed by the State, or by the provinces, pueblos
or private persons, with proper permission, shall become the
property of the party constructing such works, unless
otherwise provided by the terms of the grant of authority."
Under the Spanish Law of Waters, land reclaimed from the sea
belonged to the party undertaking the reclamation, provided the
government issued the necessary permit and did not reserve
ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public
dominion as follows:
"Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State,
riverbanks, shores, roadsteads, and that of a similar
character;
2. That belonging exclusively to the State which, without
being of general public use, is employed in some public
service, or in the development of the national wealth, such
as walls, fortresses, and other works for the defense of the
territory, and mines, until granted to private individuals."
Property devoted to public use referred to property open for use by
the public. In contrast, property devoted to public service referred to
property used for some specific public service and open only to those
authorized to use the property.
Property of public dominion referred not only to property devoted to
public use, but also to property not so used but employed to
develop the national wealth. This class of property constituted
property of public dominion although employed for some economic or
commercial activity to increase the national wealth.

Article 341 of the Civil Code of 1889 governed the re-classification of


property of public dominion into private property, to wit:
"Art. 341. Property of public dominion, when no longer
devoted to public use or to the defense of the territory, shall
become a part of the private property of the State."
This provision, however, was not self-executing. The legislature, or
the executive department pursuant to law, must declare the property
no longer needed for public use or territorial defense before the
government could lease or alienate the property to private parties. 45
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654
which regulated the lease of reclaimed and foreshore lands. The
salient provisions of this law were as follows:
"Section 1. The control and disposition of the
foreshore as defined in existing law, and the title to all
Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise throughout
the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without
prejudice to rights conceded to the City of Manila in the
Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all
Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise to be divided
into lots or blocks, with the necessary streets and alleyways
located thereon, and shall cause plats and plans of such
surveys to be prepared and filed with the Bureau of Lands.
(b) Upon completion of such plats and plans the GovernorGeneral shall give notice to the public that such parts of
the lands so made or reclaimed as are not needed for
public purposes will be leased for commercial and
business purposes, x x x.

129

xxx

(c) Mineral lands, x x x.

(e) The leases above provided for shall be disposed of


to the highest and best bidder therefore, subject to such
regulations and safeguards as the Governor-General may by
executive order prescribe." (Emphasis supplied)

Sec. 7. For the purposes of the government and disposition


of alienable or disposable public lands, the GovernorGeneral, upon recommendation by the Secretary of
Agriculture and Natural Resources, shall from time to
time declare what lands are open to disposition or
concession under this Act."

Act No. 1654 mandated that the government should retain title to
all lands reclaimed by the government. The Act also vested in the
government control and disposition of foreshore lands. Private
parties could lease lands reclaimed by the government only if these
lands were no longer needed for public purpose. Act No. 1654
mandatedpublic bidding in the lease of government reclaimed
lands. Act No. 1654 made government reclaimed lands sui
generis in that unlike other public lands which the government could
sell to private parties, these reclaimed lands were available only for
lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law
of Waters of 1866. Act No. 1654 did not prohibit private parties from
reclaiming parts of the sea under Section 5 of the Spanish Law of
Waters. Lands reclaimed from the sea by private parties with
government permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No.
2874, the Public Land Act.46 The salient provisions of Act No. 2874,
on reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the
recommendation of the Secretary of Agriculture and
Natural Resources, shall from time to time classify the
lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and

Sec. 8. Only those lands shall be declared open to


disposition or concession which have been officially
delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being
neither timber nor mineral land, shall be classified
as suitable for residential purposes or for commercial,
industrial, or other productive purposes other than
agricultural purposes, and shall be open to disposition or
concession, shall be disposed of under the provisions of this
chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be
classified as follows:
(a) Lands reclaimed by the Government by
dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water
bordering upon the shores or banks of navigable
lakes or rivers;
(d) Lands not included in any of the foregoing
classes.

130

x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c)
of section fifty-six shall be disposed of to private parties
by lease only and not otherwise, as soon as the
Governor-General, upon recommendation by the
Secretary of Agriculture and Natural Resources, shall
declare that the same are not necessary for the public
service and are open to disposition under this
chapter. The lands included in class (d) may be disposed
of by sale or lease under the provisions of this Act."
(Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to
"classify lands of the public domain into x x x alienable or
disposable"47 lands. Section 7 of the Act empowered the GovernorGeneral to "declare what lands are open to disposition or
concession." Section 8 of the Act limited alienable or disposable
lands only to those lands which have been "officially delimited and
classified."
Section 56 of Act No. 2874 stated that lands "disposable under this
title48 shall be classified" as government reclaimed, foreshore and
marshy lands, as well as other lands. All these lands, however, must
be suitable for residential, commercial, industrial or other
productive non-agricultural purposes. These provisions vested
upon the Governor-General the power to classify inalienable lands of
the public domain into disposable lands of the public domain. These
provisions also empowered the Governor-General to classify further
such disposable lands of the public domain into government
reclaimed, foreshore or marshy lands of the public domain, as well
as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable
lands of the public domain classified as government reclaimed,
foreshore and marshy lands "shall be disposed of to private
parties by lease only and not otherwise." The Governor-General,
before allowing the lease of these lands to private parties, must
formally declare that the lands were "not necessary for the public

service." Act No. 2874 reiterated the State policy to lease and not to
sell government reclaimed, foreshore and marshy lands of the public
domain, a policy first enunciated in 1907 in Act No. 1654.
Government reclaimed, foreshore and marshy lands remained sui
generis, as the only alienable or disposable lands of the public
domain that the government could not sell to private parties.
The rationale behind this State policy is obvious. Government
reclaimed, foreshore and marshy public lands for non-agricultural
purposes retain their inherent potential as areas for public service.
This is the reason the government prohibited the sale, and only
allowed the lease, of these lands to private parties. The State always
reserved these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government
reclaimed, foreshore and marshy lands into other non-agricultural
lands under Section 56 (d). Lands falling under Section 56 (d) were
the only lands for non-agricultural purposes the government could
sell to private parties. Thus, under Act No. 2874, the government
could not sell government reclaimed, foreshore and marshy lands to
private parties, unless the legislature passed a law allowing their
sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of
the sea pursuant to Section 5 of the Spanish Law of Waters of 1866.
Lands reclaimed from the sea by private parties with government
permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its
ratification by the Filipino people. The 1935 Constitution, in adopting
the Regalian doctrine, declared in Section 1, Article XIII, that
"Section 1. All agricultural, timber, and mineral lands of the
public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy and other natural
resources of the Philippines belong to the State, and their
disposition, exploitation, development, or utilization shall be

131

limited to citizens of the Philippines or to corporations or


associations at least sixty per centum of the capital of which
is owned by such citizens, subject to any existing right, grant,
lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural
resources, with the exception of public agricultural land,
shall not be alienated, and no license, concession, or lease
for the exploitation, development, or utilization of any of the
natural resources shall be granted for a period exceeding
twenty-five years, renewable for another twenty-five years,
except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of
water power, in which cases beneficial use may be the
measure and limit of the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources
except public agricultural lands, which were the only natural
resources the State could alienate. Thus, foreshore lands,
considered part of the State's natural resources, became inalienable
by constitutional fiat, available only for lease for 25 years, renewable
for another 25 years. The government could alienate foreshore lands
only after these lands were reclaimed and classified as alienable
agricultural lands of the public domain. Government reclaimed and
marshy lands of the public domain, being neither timber nor mineral
lands, fell under the classification of public agricultural
lands.50 However, government reclaimed and marshy lands, although
subject to classification as disposable public agricultural lands, could
only be leased and not sold to private parties because of Act No.
2874.
The prohibition on private parties from acquiring ownership of
government reclaimed and marshy lands of the public domain was
only a statutory prohibition and the legislature could therefore
remove such prohibition. The 1935 Constitution did not prohibit
individuals and corporations from acquiring government reclaimed
and marshy lands of the public domain that were classified as
agricultural lands under existing public land laws. Section 2, Article
XIII of the 1935 Constitution provided as follows:

"Section 2. No private corporation or association may


acquire, lease, or hold public agricultural lands in
excess of one thousand and twenty four hectares, nor
may any individual acquire such lands by purchase in
excess of one hundred and forty hectares, or by lease in
excess of one thousand and twenty-four hectares, or by
homestead in excess of twenty-four hectares. Lands adapted
to grazing, not exceeding two thousand hectares, may be
leased to an individual, private corporation, or association."
(Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did
not repeal Section 58 of Act No. 2874 to open for sale to private
parties government reclaimed and marshy lands of the public
domain. On the contrary, the legislature continued the long
established State policy of retaining for the government title and
ownership of government reclaimed and marshy lands of the public
domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved
Commonwealth Act No. 141, also known as the Public Land Act,
which compiled the then existing laws on lands of the public domain.
CA No. 141, as amended, remains to this day the existing general
law governing the classification and disposition of lands of the public
domain other than timber and mineral lands.51
Section 6 of CA No. 141 empowers the President to classify lands of
the public domain into "alienable or disposable" 52 lands of the public
domain, which prior to such classification are inalienable and outside
the commerce of man. Section 7 of CA No. 141 authorizes the
President to "declare what lands are open to disposition or
concession." Section 8 of CA No. 141 states that the government can
declare open for disposition or concession only lands that are
"officially delimited and classified." Sections 6, 7 and 8 of CA No. 141
read as follows:

132

"Sec. 6. The President, upon the recommendation of the


Secretary of Agriculture and Commerce, shall from time
to time classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands
from one class to another,53 for the purpose of their
administration and disposition.
Sec. 7. For the purposes of the administration and
disposition of alienable or disposable public lands, the
President, upon recommendation by the Secretary of
Agriculture and Commerce, shall from time to time
declare what lands are open to disposition or
concession under this Act.
Sec. 8. Only those lands shall be declared open to
disposition or concession which have been officially
delimited and classified and, when practicable,
surveyed, and which have not been reserved for public
or quasi-public uses, nor appropriated by the Government,
nor in any manner become private property, nor those on
which a private right authorized and recognized by this Act or
any other valid law may be claimed, or which, having been
reserved or appropriated, have ceased to be so. x x x."
Thus, before the government could alienate or dispose of lands of
the public domain, the President must first officially classify these
lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these
lands for public or quasi-public uses.

The salient provisions of CA No. 141, on government reclaimed,


foreshore and marshy lands of the public domain, are as follows:
"Sec. 58. Any tract of land of the public domain which,
being neither timber nor mineral land, is intended to be
used for residential purposes or for commercial,
industrial, or other productive purposes other than
agricultural, and is open to disposition or concession,
shall be disposed of under the provisions of this
chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be
classified as follows:
(a) Lands reclaimed by the Government by
dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water
bordering upon the shores or banks of navigable
lakes or rivers;
(d) Lands not included in any of the foregoing
classes.
Sec. 60. Any tract of land comprised under this title may be
leased or sold, as the case may be, to any person,
corporation, or association authorized to purchase or lease
public lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c)
of section fifty-nine shall be disposed of to private
parties by lease only and not otherwise, as soon as the
President, upon recommendation by the Secretary of
Agriculture, shall declare that the same are not necessary
for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed

133

of by sale or lease under the provisions of this Act."


(Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935
Constitution, Section 58 of Act No. 2874 prohibiting the sale of
government reclaimed, foreshore and marshy disposable lands of
the public domain. All these lands are intended for residential,
commercial, industrial or other non-agricultural purposes. As before,
Section 61 allowed only the lease of such lands to private parties.
The government could sell to private parties only lands falling under
Section 59 (d) of CA No. 141, or those lands for non-agricultural
purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands,
however, became inalienable under the 1935 Constitution which only
allowed the lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of
the public domain intended for residential, commercial, industrial or
other productive purposes other than agricultural "shall be disposed
of under the provisions of this chapter and not otherwise."
Under Section 10 of CA No. 141, the term "disposition" includes
lease of the land. Any disposition of government reclaimed, foreshore
and marshy disposable lands for non-agricultural purposes must
comply with Chapter IX, Title III of CA No. 141,54 unless a
subsequent law amended or repealed these provisions.
In his concurring opinion in the landmark case of Republic Real
Estate Corporation v. Court of Appeals,55Justice Reynato S. Puno
summarized succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for
public use. So too are lands reclaimed by the government by
dredging, filling, or other means. Act 1654 mandated that the
control and disposition of the foreshore and lands under
water remained in the national government. Said law allowed
only the 'leasing' of reclaimed land. The Public Land Acts of
1919 and 1936 also declared that the foreshore and lands
reclaimed by the government were to be "disposed of to
private parties by lease only and not otherwise." Before

leasing, however, the Governor-General, upon


recommendation of the Secretary of Agriculture and Natural
Resources, had first to determine that the land reclaimed
was not necessary for the public service. This requisite must
have been met before the land could be disposed of. But
even then, the foreshore and lands under water were not
to be alienated and sold to private parties. The
disposition of the reclaimed land was only by lease. The
land remained property of the State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion,
"Commonwealth Act No. 141 has remained in effect at present."
The State policy prohibiting the sale to private parties of government
reclaimed, foreshore and marshy alienable lands of the public
domain, first implemented in 1907 was thus reaffirmed in CA No. 141
after the 1935 Constitution took effect. The prohibition on the sale of
foreshore lands, however, became a constitutional edict under the
1935 Constitution. Foreshore lands became inalienable as natural
resources of the State, unless reclaimed by the government and
classified as agricultural lands of the public domain, in which case
they would fall under the classification of government reclaimed
lands.
After the effectivity of the 1935 Constitution, government reclaimed
and marshy disposable lands of the public domain continued to be
only leased and not sold to private parties.56 These lands
remained sui generis, as the only alienable or disposable lands of
the public domain the government could not sell to private parties.
Since then and until now, the only way the government can sell to
private parties government reclaimed and marshy disposable lands
of the public domain is for the legislature to pass a law authorizing
such sale. CA No. 141 does not authorize the President to reclassify
government reclaimed and marshy lands into other non-agricultural
lands under Section 59 (d). Lands classified under Section 59 (d) are
the only alienable or disposable lands for non-agricultural purposes
that the government could sell to private parties.

134

Moreover, Section 60 of CA No. 141 expressly requires


congressional authority before lands under Section 59 that the
government previously transferred to government units or entities
could be sold to private parties. Section 60 of CA No. 141 declares
that
"Sec. 60. x x x The area so leased or sold shall be such as
shall, in the judgment of the Secretary of Agriculture and
Natural Resources, be reasonably necessary for the
purposes for which such sale or lease is requested, and shall
not exceed one hundred and forty-four hectares: Provided,
however, That this limitation shall not apply to grants,
donations, or transfers made to a province, municipality or
branch or subdivision of the Government for the purposes
deemed by said entities conducive to the public interest; but
the land so granted, donated, or transferred to a
province, municipality or branch or subdivision of the
Government shall not be alienated, encumbered, or
otherwise disposed of in a manner affecting its title,
except when authorized by Congress: x x x." (Emphasis
supplied)
The congressional authority required in Section 60 of CA No. 141
mirrors the legislative authority required in Section 56 of Act No.
2874.
One reason for the congressional authority is that Section 60 of CA
No. 141 exempted government units and entities from the maximum
area of public lands that could be acquired from the State. These
government units and entities should not just turn around and sell
these lands to private parties in violation of constitutional or statutory
limitations. Otherwise, the transfer of lands for non-agricultural
purposes to government units and entities could be used to
circumvent constitutional limitations on ownership of alienable or
disposable lands of the public domain. In the same manner, such
transfers could also be used to evade the statutory prohibition in CA
No. 141 on the sale of government reclaimed and marshy lands of
the public domain to private parties. Section 60 of CA No. 141
constitutes by operation of law a lien on these lands. 57

In case of sale or lease of disposable lands of the public domain


falling under Section 59 of CA No. 141, Sections 63 and 67 require a
public bidding. Sections 63 and 67 of CA No. 141 provide as follows:
"Sec. 63. Whenever it is decided that lands covered by this
chapter are not needed for public purposes, the Director of
Lands shall ask the Secretary of Agriculture and Commerce
(now the Secretary of Natural Resources) for authority to
dispose of the same. Upon receipt of such authority, the
Director of Lands shall give notice by public advertisement in
the same manner as in the case of leases or sales of
agricultural public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding;
and adjudication shall be made to the highest bidder. x x
x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction
all leases or sales of alienable or disposable lands of the public
domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not
repeal Section 5 of the Spanish Law of Waters of 1866. Private
parties could still reclaim portions of the sea with government
permission. However, the reclaimed land could become private
land only if classified as alienable agricultural land of the public
domain open to disposition under CA No. 141. The 1935
Constitution prohibited the alienation of all natural resources except
public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of
property of public dominion found in the Civil Code of 1889. Articles
420 and 422 of the Civil Code of 1950 state that
"Art. 420. The following things are property of public
dominion:

135

(1) Those intended for public use, such as roads, canals,


rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth.
x x x.
Art. 422. Property of public dominion, when no longer
intended for public use or for public service, shall form part of
the patrimonial property of the State."
Again, the government must formally declare that the property of
public dominion is no longer needed for public use or public service,
before the same could be classified as patrimonial property of the
State.59 In the case of government reclaimed and marshy lands of
the public domain, the declaration of their being disposable, as well
as the manner of their disposition, is governed by the applicable
provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as
property of public dominion those properties of the State which,
without being for public use, are intended for public service or the
"development of the national wealth." Thus, government reclaimed
and marshy lands of the State, even if not employed for public use or
public service, if developed to enhance the national wealth, are
classified as property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973,
likewise adopted the Regalian doctrine. Section 8, Article XIV of the
1973 Constitution stated that
"Sec. 8. All lands of the public domain, waters, minerals,
coal, petroleum and other mineral oils, all forces of potential

energy, fisheries, wildlife, and other natural resources of the


Philippines belong to the State. With the exception of
agricultural, industrial or commercial, residential, and
resettlement lands of the public domain, natural
resources shall not be alienated, and no license,
concession, or lease for the exploration, development,
exploitation, or utilization of any of the natural resources
shall be granted for a period exceeding twenty-five years,
renewable for not more than twenty-five years, except as to
water rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power, in which
cases, beneficial use may be the measure and the limit of
the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural
resources with the exception of "agricultural, industrial or
commercial, residential, and resettlement lands of the public
domain." In contrast, the 1935 Constitution barred the alienation of
all natural resources except "public agricultural lands." However, the
term "public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement
lands of the public domain.60 If the land of public domain were neither
timber nor mineral land, it would fall under the classification of
agricultural land of the public domain. Both the 1935 and 1973
Constitutions, therefore, prohibited the alienation of all natural
resources except agricultural lands of the public domain.
The 1973 Constitution, however, limited the alienation of lands of the
public domain to individuals who were citizens of the Philippines.
Private corporations, even if wholly owned by Philippine citizens,
were no longer allowed to acquire alienable lands of the public
domain unlike in the 1935 Constitution. Section 11, Article XIV of the
1973 Constitution declared that
"Sec. 11. The Batasang Pambansa, taking into account
conservation, ecological, and development requirements of
the natural resources, shall determine by law the size of land
of the public domain which may be developed, held or
acquired by, or leased to, any qualified individual,
corporation, or association, and the conditions therefor. No

136

private corporation or association may hold alienable


lands of the public domain except by lease not to exceed
one thousand hectares in area nor may any citizen hold such
lands by lease in excess of five hundred hectares or acquire
by purchase, homestead or grant, in excess of twenty-four
hectares. No private corporation or association may hold by
lease, concession, license or permit, timber or forest lands
and other timber or forest resources in excess of one
hundred thousand hectares. However, such area may be
increased by the Batasang Pambansa upon
recommendation of the National Economic and Development
Authority." (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold
alienable lands of the public domain only through lease. Only
individuals could now acquire alienable lands of the public domain,
and private corporations became absolutely barred from
acquiring any kind of alienable land of the public domain. The
constitutional ban extended to all kinds of alienable lands of the
public domain, while the statutory ban under CA No. 141 applied only
to government reclaimed, foreshore and marshy alienable lands of
the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued
Presidential Decree No. 1084 creating PEA, a wholly government
owned and controlled corporation with a special charter. Sections 4
and 8 of PD No. 1084, vests PEA with the following purposes and
powers:
"Sec. 4. Purpose. The Authority is hereby created for the
following purposes:
(a) To reclaim land, including foreshore and submerged
areas, by dredging, filling or other means, or to acquire
reclaimed land;

(b) To develop, improve, acquire, administer, deal in,


subdivide, dispose, lease and sell any and all kinds of
lands, buildings, estates and other forms of real property,
owned, managed, controlled and/or operated by the
government;
(c) To provide for, operate or administer such service as may
be necessary for the efficient, economical and beneficial
utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority
shall, in carrying out the purposes for which it is created,
have the following powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the
area permitted to private corporations by statute.
(j) To reclaim lands and to construct work across, or
otherwise, any stream, watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may
be necessary for the attainment of the purposes and
objectives herein specified." (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and
submerged areas of the public domain. Foreshore areas are those
covered and uncovered by the ebb and flow of the tide. 61 Submerged
areas are those permanently under water regardless of the ebb and
flow of the tide.62 Foreshore and submerged areas indisputably
belong to the public domain63 and are inalienable unless reclaimed,
classified as alienable lands open to disposition, and further declared
no longer needed for public service.

137

The ban in the 1973 Constitution on private corporations from


acquiring alienable lands of the public domain did not apply to PEA
since it was then, and until today, a fully owned government
corporation. The constitutional ban applied then, as it still applies
now, only to "private corporations and associations." PD No. 1084
expressly empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private corporations by
statute." Thus, PEA can hold title to private lands, as well as title
to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged
alienable lands of the public domain, there must be legislative
authority empowering PEA to sell these lands. This legislative
authority is necessary in view of Section 60 of CA No.141, which
states
"Sec. 60. x x x; but the land so granted, donated or
transferred to a province, municipality, or branch or
subdivision of the Government shall not be alienated,
encumbered or otherwise disposed of in a manner affecting
its title, except when authorized by Congress; x x x."
(Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease
its reclaimed foreshore and submerged alienable lands of the public
domain. Nevertheless, any legislative authority granted to PEA to sell
its reclaimed alienable lands of the public domain would be subject to
the constitutional ban on private corporations from acquiring
alienable lands of the public domain. Hence, such legislative
authority could only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before
it, has adopted the Regalian doctrine. The 1987 Constitution
declares that all natural resources are "owned by the State," and
except for alienable agricultural lands of the public domain, natural
resources cannot be alienated. Sections 2 and 3, Article XII of the
1987 Constitution state that

"Section 2. All lands of the public domain, waters, minerals,


coal, petroleum and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna,
and other natural resources are owned by the State. With
the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be
under the full control and supervision of the State. x x x.
Section 3. Lands of the public domain are classified into
agricultural, forest or timber, mineral lands, and national
parks. Agricultural lands of the public domain may be further
classified by law according to the uses which they may be
devoted. Alienable lands of the public domain shall be
limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of the
public domain except by lease, for a period not
exceeding twenty-five years, renewable for not more
than twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease not
more than five hundred hectares, or acquire not more than
twelve hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation,
ecology, and development, and subject to the requirements
of agrarian reform, the Congress shall determine, by law, the
size of lands of the public domain which may be acquired,
developed, held, or leased and the conditions therefor."
(Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973
Constitution banning private corporations fromacquiring any kind of
alienable land of the public domain. Like the 1973 Constitution,
the 1987 Constitution allows private corporations to hold alienable
lands of the public domain only through lease. As in the 1935 and
1973 Constitutions, the general law governing the lease to private
corporations of reclaimed, foreshore and marshy alienable lands of
the public domain is still CA No. 141.

138

The Rationale behind the Constitutional Ban


The rationale behind the constitutional ban on corporations from
acquiring, except through lease, alienable lands of the public domain
is not well understood. During the deliberations of the 1986
Constitutional Commission, the commissioners probed the rationale
behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions have
reference to page 3, line 5 which says:
`No private corporation or association may hold alienable
lands of the public domain except by lease, not to exceed
one thousand hectares in area.'
If we recall, this provision did not exist under the 1935
Constitution, but this was introduced in the 1973
Constitution. In effect, it prohibits private corporations from
acquiring alienable public lands. But it has not been very
clear in jurisprudence what the reason for this is. In
some of the cases decided in 1982 and 1983, it was
indicated that the purpose of this is to prevent large
landholdings. Is that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni
Cristo, there were instances where the Iglesia ni Cristo was
not allowed to acquire a mere 313-square meter land where
a chapel stood because the Supreme Court said it would be
in violation of this." (Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this
constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against
purchases of public agricultural lands by private corporations
is to equitably diffuse land ownership or to encourage

'owner-cultivatorship and the economic family-size farm' and


to prevent a recurrence of cases like the instant case. Huge
landholdings by corporations or private persons had
spawned social unrest."
However, if the constitutional intent is to prevent huge landholdings,
the Constitution could have simply limited the size of alienable lands
of the public domain that corporations could acquire. The
Constitution could have followed the limitations on individuals, who
could acquire not more than 24 hectares of alienable lands of the
public domain under the 1973 Constitution, and not more than 12
hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size
farms, placing the land in the name of a corporation would be more
effective in preventing the break-up of farmlands. If the farmland is
registered in the name of a corporation, upon the death of the owner,
his heirs would inherit shares in the corporation instead of subdivided
parcels of the farmland. This would prevent the continuing break-up
of farmlands into smaller and smaller plots from one generation to
the next.
In actual practice, the constitutional ban strengthens the
constitutional limitation on individuals from acquiring more than the
allowed area of alienable lands of the public domain. Without the
constitutional ban, individuals who already acquired the maximum
area of alienable lands of the public domain could easily set up
corporations to acquire more alienable public lands. An individual
could own as many corporations as his means would allow him. An
individual could even hide his ownership of a corporation by putting
his nominees as stockholders of the corporation. The corporation is a
convenient vehicle to circumvent the constitutional limitation on
acquisition by individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is
to transfer ownership of only a limited area of alienable land of the
public domain to a qualified individual. This constitutional intent is
safeguarded by the provision prohibiting corporations from acquiring
alienable lands of the public domain, since the vehicle to circumvent

139

the constitutional intent is removed. The available alienable public


lands are gradually decreasing in the face of an ever-growing
population. The most effective way to insure faithful adherence to
this constitutional intent is to grant or sell alienable lands of the public
domain only to individuals. This, it would seem, is the practical
benefit arising from the constitutional ban.

the reclamation costs of all the other areas, totaling 592.15 hectares,
still to be reclaimed. AMARI and PEA will share, in the proportion of
70 percent and 30 percent, respectively, the total net usable area
which is defined in the Amended JVA as the total reclaimed area less
30 percent earmarked for common areas. Title to AMARI's share in
the net usable area, totaling 367.5 hectares, will be issued in the
name of AMARI. Section 5.2 (c) of the Amended JVA provides that

The Amended Joint Venture Agreement


The subject matter of the Amended JVA, as stated in its second
Whereas clause, consists of three properties, namely:
1. "[T]hree partially reclaimed and substantially eroded
islands along Emilio Aguinaldo Boulevard in Paranaque and
Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to
the three islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional
350 hectares more or less to regularize the configuration of
the reclaimed area."65
PEA confirms that the Amended JVA involves "the development of
the Freedom Islands and further reclamation of about 250 hectares x
x x," plus an option "granted to AMARI to subsequently reclaim
another 350 hectares x x x."66
In short, the Amended JVA covers a reclamation area of 750
hectares. Only 157.84 hectares of the 750-hectare reclamation
project have been reclaimed, and the rest of the 592.15 hectares
are still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of
P1,894,129,200.00 for PEA's "actual cost" in partially reclaiming the
Freedom Islands. AMARI will also complete, at its own expense, the
reclamation of the Freedom Islands. AMARI will further shoulder all

"x x x, PEA shall have the duty to execute without delay the
necessary deed of transfer or conveyance of the title
pertaining to AMARI's Land share based on the Land
Allocation Plan. PEA, when requested in writing by
AMARI, shall then cause the issuance and delivery of
the proper certificates of title covering AMARI's Land
Share in the name of AMARI, x x x; provided, that if more
than seventy percent (70%) of the titled area at any given
time pertains to AMARI, PEA shall deliver to AMARI only
seventy percent (70%) of the titles pertaining to AMARI, until
such time when a corresponding proportionate area of
additional land pertaining to PEA has been titled." (Emphasis
supplied)
Indisputably, under the Amended JVA AMARI will acquire and
own a maximum of 367.5 hectares of reclaimed land which will
be titled in its name.
To implement the Amended JVA, PEA delegated to the
unincorporated PEA-AMARI joint venture PEA's statutory authority,
rights and privileges to reclaim foreshore and submerged areas in
Manila Bay. Section 3.2.a of the Amended JVA states that
"PEA hereby contributes to the joint venture its rights and
privileges to perform Rawland Reclamation and Horizontal
Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right,
authority and privilege to undertake the Project in
accordance with the Master Development Plan."

140

The Amended JVA is the product of a renegotiation of the original


JVA dated April 25, 1995 and its supplemental agreement dated
August 9, 1995.

(a) Lands reclaimed by the government by dredging,


filling, or other means;
x x x.'" (Emphasis supplied)

The Threshold Issue


The threshold issue is whether AMARI, a private corporation, can
acquire and own under the Amended JVA 367.5 hectares of
reclaimed foreshore and submerged areas in Manila Bay in view of
Sections 2 and 3, Article XII of the 1987 Constitution which state that:
"Section 2. All lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna,
and other natural resources are owned by the State. With
the exception of agricultural lands, all other natural
resources shall not be alienated. x x x.

Likewise, the Legal Task Force68 constituted under Presidential


Administrative Order No. 365 admitted in its Report and
Recommendation to then President Fidel V. Ramos, "[R]eclaimed
lands are classified as alienable and disposable lands of the
public domain."69 The Legal Task Force concluded that
"D. Conclusion

xxx

Reclaimed lands are lands of the public domain. However,


by statutory authority, the rights of ownership and disposition
over reclaimed lands have been transferred to PEA, by virtue
of which PEA, as owner, may validly convey the same to any
qualified person without violating the Constitution or any
statute.

Section 3. x x x Alienable lands of the public domain shall be


limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of the
public domain except by lease, x x x."(Emphasis supplied)

The constitutional provision prohibiting private corporations


from holding public land, except by lease (Sec. 3, Art.
XVII,70 1987 Constitution), does not apply to reclaimed lands
whose ownership has passed on to PEA by statutory grant."

Classification of Reclaimed Foreshore and Submerged Areas


PEA readily concedes that lands reclaimed from foreshore or
submerged areas of Manila Bay are alienable or disposable lands of
the public domain. In its Memorandum,67 PEA admits that
"Under the Public Land Act (CA 141, as
amended), reclaimed lands are classified as alienable
and disposable lands of the public domain:
'Sec. 59. The lands disposable under this title shall
be classified as follows:

Under Section 2, Article XII of the 1987 Constitution, the foreshore


and submerged areas of Manila Bay are part of the "lands of the
public domain, waters x x x and other natural resources" and
consequently "owned by the State." As such, foreshore and
submerged areas "shall not be alienated," unless they are classified
as "agricultural lands" of the public domain. The mere reclamation of
these areas by PEA does not convert these inalienable natural
resources of the State into alienable or disposable lands of the public
domain. There must be a law or presidential proclamation officially
classifying these reclaimed lands as alienable or disposable and
open to disposition or concession. Moreover, these reclaimed lands
cannot be classified as alienable or disposable if the law has
reserved them for some public or quasi-public use.71

141

Section 8 of CA No. 141 provides that "only those lands shall be


declared open to disposition or concession which have
been officially delimited and classified."72 The President has the
authority to classify inalienable lands of the public domain into
alienable or disposable lands of the public domain, pursuant to
Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive
Department attempted to sell the Roppongi property in Tokyo, Japan,
which was acquired by the Philippine Government for use as the
Chancery of the Philippine Embassy. Although the Chancery had
transferred to another location thirteen years earlier, the Court still
ruled that, under Article 42274 of the Civil Code, a property of public
dominion retains such character until formally declared otherwise.
The Court ruled that
"The fact that the Roppongi site has not been used for a long
time for actual Embassy service does not automatically
convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use
(Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481
[1975]. A property continues to be part of the public
domain, not available for private appropriation or
ownership 'until there is a formal declaration on the part
of the government to withdraw it from being
such' (Ignacio v. Director of Lands, 108 Phil. 335 [1960]."
(Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance
of special land patents for lands reclaimed by PEA from the
foreshore or submerged areas of Manila Bay. On January 19, 1988
then President Corazon C. Aquino issued Special Patent No. 3517 in
the name of PEA for the 157.84 hectares comprising the partially
reclaimed Freedom Islands. Subsequently, on April 9, 1999 the
Register of Deeds of the Municipality of Paranaque issued TCT Nos.
7309, 7311 and 7312 in the name of PEA pursuant to Section 103 of
PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title
are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of a
special patent covering the Freedom Islands, is equivalent to an

official proclamation classifying the Freedom Islands as alienable or


disposable lands of the public domain. PD No. 1085 and President
Aquino's issuance of a land patent also constitute a declaration that
the Freedom Islands are no longer needed for public service. The
Freedom Islands are thus alienable or disposable lands of the
public domain, open to disposition or concession to qualified
parties.
At the time then President Aquino issued Special Patent No. 3517,
PEA had already reclaimed the Freedom Islands although
subsequently there were partial erosions on some areas. The
government had also completed the necessary surveys on these
islands. Thus, the Freedom Islands were no longer part of Manila
Bay but part of the land mass. Section 3, Article XII of the 1987
Constitution classifies lands of the public domain into "agricultural,
forest or timber, mineral lands, and national parks." Being neither
timber, mineral, nor national park lands, the reclaimed Freedom
Islands necessarily fall under the classification of agricultural lands of
the public domain. Under the 1987 Constitution, agricultural lands of
the public domain are the only natural resources that the State may
alienate to qualified private parties. All other natural resources, such
as the seas or bays, are "waters x x x owned by the State" forming
part of the public domain, and are inalienable pursuant to Section 2,
Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because
CDCP, then a private corporation, reclaimed the islands under a
contract dated November 20, 1973 with the Commissioner of Public
Highways. AMARI, citing Article 5 of the Spanish Law of Waters of
1866, argues that "if the ownership of reclaimed lands may be given
to the party constructing the works, then it cannot be said that
reclaimed lands are lands of the public domain which the State may
not alienate."75 Article 5 of the Spanish Law of Waters reads as
follows:
"Article 5. Lands reclaimed from the sea in consequence of
works constructed by the State, or by the provinces, pueblos
or private persons, with proper permission, shall become the
property of the party constructing such works, unless

142

otherwise provided by the terms of the grant of


authority." (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties
could reclaim from the sea only with "proper permission" from the
State. Private parties could own the reclaimed land only if not
"otherwise provided by the terms of the grant of authority." This
clearly meant that no one could reclaim from the sea without
permission from the State because the sea is property of public
dominion. It also meant that the State could grant or withhold
ownership of the reclaimed land because any reclaimed land, like the
sea from which it emerged, belonged to the State. Thus, a private
person reclaiming from the sea without permission from the State
could not acquire ownership of the reclaimed land which would
remain property of public dominion like the sea it replaced. 76 Article 5
of the Spanish Law of Waters of 1866 adopted the time-honored
principle of land ownership that "all lands that were not acquired from
the government, either by purchase or by grant, belong to the public
domain."77
Article 5 of the Spanish Law of Waters must be read together with
laws subsequently enacted on the disposition of public lands. In
particular, CA No. 141 requires that lands of the public domain must
first be classified as alienable or disposable before the government
can alienate them. These lands must not be reserved for public or
quasi-public purposes.78 Moreover, the contract between CDCP and
the government was executed after the effectivity of the 1973
Constitution which barred private corporations from acquiring any
kind of alienable land of the public domain. This contract could not
have converted the Freedom Islands into private lands of a private
corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all
laws authorizing the reclamation of areas under water and revested
solely in the National Government the power to reclaim lands.
Section 1 of PD No. 3-A declared that
"The provisions of any law to the contrary
notwithstanding, the reclamation of areas under water,

whether foreshore or inland, shall be limited to the National


Government or any person authorized by it under a
proper contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866
because reclamation of areas under water could now be undertaken
only by the National Government or by a person contracted by the
National Government. Private parties may reclaim from the sea only
under a contract with the National Government, and no longer by
grant or permission as provided in Section 5 of the Spanish Law of
Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated
PEA as the National Government's implementing arm to undertake
"all reclamation projects of the government," which "shall be
undertaken by the PEA or through a proper contract executed
by it with any person or entity." Under such contract, a private
party receives compensation for reclamation services rendered to
PEA. Payment to the contractor may be in cash, or in kind consisting
of portions of the reclaimed land, subject to the constitutional ban on
private corporations from acquiring alienable lands of the public
domain. The reclaimed land can be used as payment in kind only if
the reclaimed land is first classified as alienable or disposable land
open to disposition, and then declared no longer needed for public
service.
The Amended JVA covers not only the Freedom Islands, but also an
additional 592.15 hectares which are still submerged and forming
part of Manila Bay. There is no legislative or Presidential act
classifying these submerged areas as alienable or disposable
lands of the public domain open to disposition. These
submerged areas are not covered by any patent or certificate of title.
There can be no dispute that these submerged areas form part of the
public domain, and in their present state are inalienable and
outside the commerce of man. Until reclaimed from the sea, these
submerged areas are, under the Constitution, "waters x x x owned by
the State," forming part of the public domain and consequently

143

inalienable. Only when actually reclaimed from the sea can these
submerged areas be classified as public agricultural lands, which
under the Constitution are the only natural resources that the State
may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially classify these
lands as alienable or disposable lands open to disposition.
Thereafter, the government may declare these lands no longer
needed for public service. Only then can these reclaimed lands be
considered alienable or disposable lands of the public domain and
within the commerce of man.
The classification of PEA's reclaimed foreshore and submerged
lands into alienable or disposable lands open to disposition is
necessary because PEA is tasked under its charter to undertake
public services that require the use of lands of the public domain.
Under Section 5 of PD No. 1084, the functions of PEA include the
following: "[T]o own or operate railroads, tramways and other kinds
of land transportation, x x x; [T]o construct, maintain and operate
such systems of sanitary sewers as may be necessary; [T]o
construct, maintain and operate such storm drains as may be
necessary." PEA is empowered to issue "rules and regulations as
may be necessary for the proper use by private parties of any or all
of the highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus,
part of the reclaimed foreshore and submerged lands held by the
PEA would actually be needed for public use or service since many
of the functions imposed on PEA by its charter constitute essential
public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA
"shall be primarily responsible for integrating, directing, and
coordinating all reclamation projects for and on behalf of the National
Government." The same section also states that "[A]ll reclamation
projects shall be approved by the President upon recommendation of
the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; x x x." Thus, under
EO No. 525, in relation to PD No. 3-A and PD No.1084, PEA became
the primary implementing agency of the National Government to
reclaim foreshore and submerged lands of the public domain. EO
No. 525 recognized PEA as the government entity "to undertake the

reclamation of lands and ensure their maximum utilization


inpromoting public welfare and interests."79 Since large portions
of these reclaimed lands would obviously be needed for public
service, there must be a formal declaration segregating reclaimed
lands no longer needed for public service from those still needed for
public service.1wphi1.nt
Section 3 of EO No. 525, by declaring that all lands reclaimed by
PEA "shall belong to or be owned by the PEA," could not
automatically operate to classify inalienable lands into alienable or
disposable lands of the public domain. Otherwise, reclaimed
foreshore and submerged lands of the public domain would
automatically become alienable once reclaimed by PEA, whether or
not classified as alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD
No. 1084 or EO No. 525, vests in the Department of Environment
and Natural Resources ("DENR" for brevity) the following powers
and functions:
"Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest
lands, alienable and disposable public lands, mineral
resources and, in the process of exercising such control,
impose appropriate taxes, fees, charges, rentals and any
such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such
resources;
xxx
(14) Promulgate rules, regulations and guidelines on the
issuance of licenses, permits, concessions, lease

144

agreements and such other privileges concerning the


development, exploration and utilization of the country's
marine, freshwater, and brackish water and over all
aquatic resources of the country and shall continue to
oversee, supervise and police our natural resources;
cancel or cause to cancel such privileges upon failure, noncompliance or violations of any regulation, order, and for all
other causes which are in furtherance of the conservation of
natural resources and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the management
and disposition of all lands of the public domain and
serve as the sole agency responsible for classification,
sub-classification, surveying and titling of lands in
consultation with appropriate agencies."80 (Emphasis
supplied)
As manager, conservator and overseer of the natural resources of
the State, DENR exercises "supervision and control over alienable
and disposable public lands." DENR also exercises "exclusive
jurisdiction on the management and disposition of all lands of the
public domain." Thus, DENR decides whether areas under water, like
foreshore or submerged areas of Manila Bay, should be reclaimed or
not. This means that PEA needs authorization from DENR before
PEA can undertake reclamation projects in Manila Bay, or in any part
of the country.

In short, DENR is vested with the power to authorize the reclamation


of areas under water, while PEA is vested with the power to
undertake the physical reclamation of areas under water, whether
directly or through private contractors. DENR is also empowered to
classify lands of the public domain into alienable or disposable lands
subject to the approval of the President. On the other hand, PEA is
tasked to develop, sell or lease the reclaimed alienable lands of the
public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or
submerged areas does not make the reclaimed lands alienable or
disposable lands of the public domain, much less patrimonial lands
of PEA. Likewise, the mere transfer by the National Government of
lands of the public domain to PEA does not make the lands alienable
or disposable lands of the public domain, much less patrimonial
lands of PEA.
Absent two official acts a classification that these lands are
alienable or disposable and open to disposition and a declaration
that these lands are not needed for public service, lands reclaimed
by PEA remain inalienable lands of the public domain. Only such an
official classification and formal declaration can convert reclaimed
lands into alienable or disposable lands of the public domain, open to
disposition under the Constitution, Title I and Title III 83 of CA No. 141
and other applicable laws.84
PEA's Authority to Sell Reclaimed Lands

DENR also exercises exclusive jurisdiction over the disposition of all


lands of the public domain. Hence, DENR decides whether reclaimed
lands of PEA should be classified as alienable under Sections
681 and 782 of CA No. 141. Once DENR decides that the reclaimed
lands should be so classified, it then recommends to the President
the issuance of a proclamation classifying the lands as alienable or
disposable lands of the public domain open to disposition. We note
that then DENR Secretary Fulgencio S. Factoran, Jr. countersigned
Special Patent No. 3517 in compliance with the Revised
Administrative Code and Sections 6 and 7 of CA No. 141.

PEA, like the Legal Task Force, argues that as alienable or


disposable lands of the public domain, the reclaimed lands shall be
disposed of in accordance with CA No. 141, the Public Land Act.
PEA, citing Section 60 of CA No. 141, admits that reclaimed lands
transferred to a branch or subdivision of the government "shall not be
alienated, encumbered, or otherwise disposed of in a manner
affecting its title, except when authorized by Congress: x x
x."85 (Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised
Administrative Code of 1987, which states that

145

"Sec. 48. Official Authorized to Convey Real Property.


Whenever real property of the Government is authorized by
law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: x x x."
Thus, the Court concluded that a law is needed to convey any real
property belonging to the Government. The Court declared that "It is not for the President to convey real property of the
government on his or her own sole will. Any such
conveyance must be authorized and approved by a law
enacted by the Congress. It requires executive and
legislative concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the
legislative authority allowing PEA to sell its reclaimed lands. PD No.
1085, issued on February 4, 1977, provides that
"The land reclaimed in the foreshore and offshore area
of Manila Bay pursuant to the contract for the reclamation
and construction of the Manila-Cavite Coastal Road Project
between the Republic of the Philippines and the Construction
and Development Corporation of the Philippines dated
November 20, 1973 and/or any other contract or reclamation
covering the same area is hereby transferred, conveyed
and assigned to the ownership and administration of the
Public Estates Authority established pursuant to PD No.
1084; Provided, however, That the rights and interests of the
Construction and Development Corporation of the
Philippines pursuant to the aforesaid contract shall be
recognized and respected.
Henceforth, the Public Estates Authority shall exercise the
rights and assume the obligations of the Republic of the
Philippines (Department of Public Highways) arising from, or
incident to, the aforesaid contract between the Republic of
the Philippines and the Construction and Development
Corporation of the Philippines.

In consideration of the foregoing transfer and assignment,


the Public Estates Authority shall issue in favor of the
Republic of the Philippines the corresponding shares of
stock in said entity with an issued value of said shares of
stock (which) shall be deemed fully paid and nonassessable.
The Secretary of Public Highways and the General Manager
of the Public Estates Authority shall execute such contracts
or agreements, including appropriate agreements with the
Construction and Development Corporation of the
Philippines, as may be necessary to implement the above.
Special land patent/patents shall be issued by the
Secretary of Natural Resources in favor of the Public
Estates Authority without prejudice to the subsequent
transfer to the contractor or his assignees of such
portion or portions of the land reclaimed or to be
reclaimed as provided for in the above-mentioned
contract. On the basis of such patents, the Land
Registration Commission shall issue the corresponding
certificate of title." (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14,
1979, provides that "Sec. 3. All lands reclaimed by PEA shall belong to or be
owned by the PEA which shall be responsible for its
administration, development, utilization or disposition in
accordance with the provisions of Presidential Decree No.
1084. Any and all income that the PEA may derive from the
sale, lease or use of reclaimed lands shall be used in
accordance with the provisions of Presidential Decree No.
1084."
There is no express authority under either PD No. 1085 or EO No.
525 for PEA to sell its reclaimed lands. PD No. 1085 merely
transferred "ownership and administration" of lands reclaimed from
Manila Bay to PEA, while EO No. 525 declared that lands reclaimed

146

by PEA "shall belong to or be owned by PEA." EO No. 525 expressly


states that PEA should dispose of its reclaimed lands "in accordance
with the provisions of Presidential Decree No. 1084," the charter of
PEA.
PEA's charter, however, expressly tasks PEA "to develop, improve,
acquire, administer, deal in, subdivide, dispose, lease and sell any
and all kinds of lands x x x owned, managed, controlled and/or
operated by the government."87(Emphasis supplied) There is,
therefore, legislative authority granted to PEA to sell its lands,
whether patrimonial or alienable lands of the public domain.
PEA may sell to private parties its patrimonial propertiesin
accordance with the PEA charter free from constitutional limitations.
The constitutional ban on private corporations from acquiring
alienable lands of the public domain does not apply to the sale of
PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the public
domain to private individuals since, with the legislative authority,
there is no longer any statutory prohibition against such sales and
the constitutional ban does not apply to individuals. PEA, however,
cannot sell any of its alienable or disposable lands of the public
domain to private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative authority
benefits only individuals. Private corporations remain barred from
acquiring any kind of alienable land of the public domain, including
government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed
lands could be transferred by PEA to the "contractor or his
assignees" (Emphasis supplied) would not apply to private
corporations but only to individuals because of the constitutional ban.
Otherwise, the provisions of PD No. 1085 would violate both the
1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or
disposable lands open to disposition, and further declared no longer

needed for public service, PEA would have to conduct a public


bidding in selling or leasing these lands. PEA must observe the
provisions of Sections 63 and 67 of CA No. 141 requiring public
auction, in the absence of a law exempting PEA from holding a public
auction.88 Special Patent No. 3517 expressly states that the patent is
issued by authority of the Constitution and PD No. 1084,
"supplemented by Commonwealth Act No. 141, as amended." This is
an acknowledgment that the provisions of CA No. 141 apply to the
disposition of reclaimed alienable lands of the public domain unless
otherwise provided by law. Executive Order No. 654,89 which
authorizes PEA "to determine the kind and manner of payment for
the transfer" of its assets and properties, does not exempt PEA from
the requirement of public auction. EO No. 654 merely authorizes
PEA to decide the mode of payment, whether in kind and in
installment, but does not authorize PEA to dispense with public
auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the
Government Auditing Code, the government is required to sell
valuable government property through public bidding. Section 79 of
PD No. 1445 mandates that
"Section 79. When government property has become
unserviceable for any cause, or is no longer needed, it shall,
upon application of the officer accountable therefor, be
inspected by the head of the agency or his duly authorized
representative in the presence of the auditor concerned and,
if found to be valueless or unsaleable, it may be destroyed in
their presence. If found to be valuable, it may be sold at
public auction to the highest bidder under the supervision
of the proper committee on award or similar body in the
presence of the auditor concerned or other authorized
representative of the Commission, after advertising by
printed notice in the Official Gazette, or for not less than
three consecutive days in any newspaper of general
circulation, or where the value of the property does not
warrant the expense of publication, by notices posted for a
like period in at least three public places in the locality where
the property is to be sold. In the event that the public
auction fails, the property may be sold at a private sale

147

at such price as may be fixed by the same committee or


body concerned and approved by the Commission."

Reclamation under the BOT Law and the Local Government


Code

It is only when the public auction fails that a negotiated sale is


allowed, in which case the Commission on Audit must approve the
selling price.90 The Commission on Audit implements Section 79 of
the Government Auditing Code through Circular No. 89-296 91 dated
January 27, 1989. This circular emphasizes that government assets
must be disposed of only through public auction, and a negotiated
sale can be resorted to only in case of "failure of public auction."

The constitutional prohibition in Section 3, Article XII of the 1987


Constitution is absolute and clear: "Private corporations or
associations may not hold such alienable lands of the public domain
except by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for
brevity), cited by PEA and AMARI as legislative authority to sell
reclaimed lands to private parties, recognizes the constitutional ban.
Section 6 of RA No. 6957 states

At the public auction sale, only Philippine citizens are qualified to bid
for PEA's reclaimed foreshore and submerged alienable lands of the
public domain. Private corporations are barred from bidding at the
auction sale of any kind of alienable land of the public domain.

"Sec. 6. Repayment Scheme. - For the financing,


construction, operation and maintenance of any
infrastructure projects undertaken through the build-operateand-transfer arrangement or any of its variations pursuant to
the provisions of this Act, the project proponent x x x may
likewise be repaid in the form of a share in the revenue of
the project or other non-monetary payments, such as, but
not limited to, the grant of a portion or percentage of the
reclaimed land, subject to the constitutional
requirements with respect to the ownership of the land:
x x x." (Emphasis supplied)

PEA originally scheduled a public bidding for the Freedom Islands on


December 10, 1991. PEA imposed a condition that the winning
bidder should reclaim another 250 hectares of submerged areas to
regularize the shape of the Freedom Islands, under a 60-40 sharing
of the additional reclaimed areas in favor of the winning bidder.92 No
one, however, submitted a bid. On December 23, 1994, the
Government Corporate Counsel advised PEA it could sell the
Freedom Islands through negotiation, without need of another public
bidding, because of the failure of the public bidding on December 10,
1991.93
However, the original JVA dated April 25, 1995 covered not only the
Freedom Islands and the additional 250 hectares still to be
reclaimed, it also granted an option to AMARI to reclaim another 350
hectares. The original JVA, a negotiated contract, enlarged the
reclamation area to 750 hectares.94 The failure of public bidding on
December 10, 1991, involving only 407.84 hectares, 95 is not a valid
justification for a negotiated sale of 750 hectares, almost double the
area publicly auctioned. Besides, the failure of public bidding
happened on December 10, 1991, more than three years before the
signing of the original JVA on April 25, 1995. The economic situation
in the country had greatly improved during the intervening period.

A private corporation, even one that undertakes the physical


reclamation of a government BOT project, cannot acquire reclaimed
alienable lands of the public domain in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA
and AMARI, authorizes local governments in land reclamation
projects to pay the contractor or developer in kind consisting of a
percentage of the reclaimed land, to wit:
"Section 302. Financing, Construction, Maintenance,
Operation, and Management of Infrastructure Projects by the
Private Sector. x x x
xxx

148

In case of land reclamation or construction of industrial


estates, the repayment plan may consist of the grant of a
portion or percentage of the reclaimed land or the industrial
estate constructed."
Although Section 302 of the Local Government Code does not
contain a proviso similar to that of the BOT Law, the constitutional
restrictions on land ownership automatically apply even though not
expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the
contractor or developer, if a corporate entity, can only be paid with
leaseholds on portions of the reclaimed land. If the contractor or
developer is an individual, portions of the reclaimed land, not
exceeding 12 hectares96 of non-agricultural lands, may be conveyed
to him in ownership in view of the legislative authority allowing such
conveyance. This is the only way these provisions of the BOT Law
and the Local Government Code can avoid a direct collision with
Section 3, Article XII of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of the
reclaimed lands to public respondent PEA transformed such lands of
the public domain to private lands." This theory is echoed by AMARI
which maintains that the "issuance of the special patent leading to
the eventual issuance of title takes the subject land away from the
land of public domain and converts the property into patrimonial or
private property." In short, PEA and AMARI contend that with the
issuance of Special Patent No. 3517 and the corresponding
certificates of titles, the 157.84 hectares comprising the Freedom
Islands have become private lands of PEA. In support of their theory,
PEA and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,97 where the Court
held
"Once the patent was granted and the corresponding
certificate of title was issued, the land ceased to be part of

the public domain and became private property over which


the Director of Lands has neither control nor jurisdiction."
2. Lee Hong Hok v. David,98 where the Court declared "After the registration and issuance of the certificate and
duplicate certificate of title based on a public land patent, the
land covered thereby automatically comes under the
operation of Republic Act 496 subject to all the safeguards
provided therein."3. Heirs of Gregorio Tengco v. Heirs of
Jose Aliwalas,99 where the Court ruled "While the Director of Lands has the power to review
homestead patents, he may do so only so long as the land
remains part of the public domain and continues to be under
his exclusive control; but once the patent is registered and a
certificate of title is issued, the land ceases to be part of the
public domain and becomes private property over which the
Director of Lands has neither control nor jurisdiction."
4. Manalo v. Intermediate Appellate Court,100 where the Court
held
"When the lots in dispute were certified as disposable on
May 19, 1971, and free patents were issued covering the
same in favor of the private respondents, the said lots
ceased to be part of the public domain and, therefore, the
Director of Lands lost jurisdiction over the same."
5.Republic v. Court of Appeals,101 where the Court stated
"Proclamation No. 350, dated October 9, 1956, of President
Magsaysay legally effected a land grant to the Mindanao
Medical Center, Bureau of Medical Services, Department of
Health, of the whole lot, validly sufficient for initial registration
under the Land Registration Act. Such land grant is
constitutive of a 'fee simple' title or absolute title in favor of
petitioner Mindanao Medical Center. Thus, Section 122 of
the Act, which governs the registration of grants or patents

149

involving public lands, provides that 'Whenever public lands


in the Philippine Islands belonging to the Government of the
United States or to the Government of the Philippines are
alienated, granted or conveyed to persons or to public or
private corporations, the same shall be brought forthwith
under the operation of this Act (Land Registration Act, Act
496) and shall become registered lands.'"
The first four cases cited involve petitions to cancel the land patents
and the corresponding certificates of titlesissued to private parties.
These four cases uniformly hold that the Director of Lands has no
jurisdiction over private lands or that upon issuance of the certificate
of title the land automatically comes under the Torrens System. The
fifth case cited involves the registration under the Torrens System of
a 12.8-hectare public land granted by the National Government to
Mindanao Medical Center, a government unit under the Department
of Health. The National Government transferred the 12.8-hectare
public land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a public
service. The Court affirmed the registration of the 12.8-hectare public
land in the name of Mindanao Medical Center under Section 122 of
Act No. 496. This fifth case is an example of a public land being
registered under Act No. 496 without the land losing its character as
a property of public dominion.
In the instant case, the only patent and certificates of title issued are
those in the name of PEA, a wholly government owned corporation
performing public as well as proprietary functions. No patent or
certificate of title has been issued to any private party. No one is
asking the Director of Lands to cancel PEA's patent or certificates of
title. In fact, the thrust of the instant petition is that PEA's certificates
of title should remain with PEA, and the land covered by these
certificates, being alienable lands of the public domain, should not be
sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest
in the registrant private or public ownership of the land. Registration
is not a mode of acquiring ownership but is merely evidence of
ownership previously conferred by any of the recognized modes of
acquiring ownership. Registration does not give the registrant a

better right than what the registrant had prior to the


registration.102 The registration of lands of the public domain under
the Torrens system, by itself, cannot convert public lands into private
lands.103
Jurisprudence holding that upon the grant of the patent or issuance
of the certificate of title the alienable land of the public domain
automatically becomes private land cannot apply to government units
and entities like PEA. The transfer of the Freedom Islands to PEA
was made subject to the provisions of CA No. 141 as expressly
stated in Special Patent No. 3517 issued by then President Aquino,
to wit:
"NOW, THEREFORE, KNOW YE, that by authority of the
Constitution of the Philippines and in conformity with the
provisions of Presidential Decree No. 1084, supplemented
by Commonwealth Act No. 141, as amended, there are
hereby granted and conveyed unto the Public Estates
Authority the aforesaid tracts of land containing a total area
of one million nine hundred fifteen thousand eight hundred
ninety four (1,915,894) square meters; the technical
description of which are hereto attached and made an
integral part hereof." (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on
matters not covered by PD No. 1084. Section 60 of CA No. 141
prohibits, "except when authorized by Congress," the sale of
alienable lands of the public domain that are transferred to
government units or entities. Section 60 of CA No. 141 constitutes,
under Section 44 of PD No. 1529, a "statutory lien affecting title" of
the registered land even if not annotated on the certificate of
title.104Alienable lands of the public domain held by government
entities under Section 60 of CA No. 141 remain public lands because
they cannot be alienated or encumbered unless Congress passes a
law authorizing their disposition. Congress, however, cannot
authorize the sale to private corporations of reclaimed alienable
lands of the public domain because of the constitutional ban. Only
individuals can benefit from such law.

150

The grant of legislative authority to sell public lands in accordance


with Section 60 of CA No. 141 does not automatically convert
alienable lands of the public domain into private or patrimonial lands.
The alienable lands of the public domain must be transferred to
qualified private parties, or to government entities not tasked to
dispose of public lands, before these lands can become private or
patrimonial lands. Otherwise, the constitutional ban will become
illusory if Congress can declare lands of the public domain as private
or patrimonial lands in the hands of a government agency tasked to
dispose of public lands. This will allow private corporations to acquire
directly from government agencies limitless areas of lands which,
prior to such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing
agency of the National Government to reclaim foreshore and
submerged areas of the public domain. Thus, EO No. 525 declares
that
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency
Primarily Responsible for all Reclamation Projects
Whereas, there are several reclamation projects which are
ongoing or being proposed to be undertaken in various parts
of the country which need to be evaluated for consistency
with national programs;
Whereas, there is a need to give further institutional support
to the Government's declared policy to provide for a
coordinated, economical and efficient reclamation of lands;

coordinated and integrated approach in the reclamation


of lands;
Whereas, Presidential Decree No. 1084 creates the
Public Estates Authority as a government corporation to
undertake reclamation of lands and ensure their
maximum utilization in promoting public welfare and
interests; and
Whereas, Presidential Decree No. 1416 provides the
President with continuing authority to reorganize the national
government including the transfer, abolition, or merger of
functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President
of the Philippines, by virtue of the powers vested in me by
the Constitution and pursuant to Presidential Decree No.
1416, do hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be
primarily responsible for integrating, directing, and
coordinating all reclamation projects for and on behalf
of the National Government. All reclamation projects shall
be approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a
proper contract executed by it with any person or entity;
Provided, that, reclamation projects of any national
government agency or entity authorized under its charter
shall be undertaken in consultation with the PEA upon
approval of the President.
x x x ."

Whereas, Presidential Decree No. 3-A requires that all


reclamation of areas shall be limited to the National
Government or any person authorized by it under proper
contract;
Whereas, a central authority is needed to act on behalf
of the National Government which shall ensure a

As the central implementing agency tasked to undertake reclamation


projects nationwide, with authority to sell reclaimed lands, PEA took
the place of DENR as the government agency charged with leasing
or selling reclaimed lands of the public domain. The reclaimed lands
being leased or sold by PEA are not private lands, in the same
manner that DENR, when it disposes of other alienable lands, does

151

not dispose of private lands but alienable lands of the public domain.
Only when qualified private parties acquire these lands will the lands
become private lands. In the hands of the government agency
tasked and authorized to dispose of alienable of disposable
lands of the public domain, these lands are still public, not
private lands.
Furthermore, PEA's charter expressly states that PEA "shall hold
lands of the public domain" as well as "any and all kinds of lands."
PEA can hold both lands of the public domain and private lands.
Thus, the mere fact that alienable lands of the public domain like the
Freedom Islands are transferred to PEA and issued land patents or
certificates of title in PEA's name does not automatically make such
lands private.
To allow vast areas of reclaimed lands of the public domain to be
transferred to PEA as private lands will sanction a gross violation of
the constitutional ban on private corporations from acquiring any kind
of alienable land of the public domain. PEA will simply turn
around, as PEA has now done under the Amended JVA, and
transfer several hundreds of hectares of these reclaimed and still to
be reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the constitutional ban
in Section 3, Article XII of the 1987 Constitution which was intended
to diffuse equitably the ownership of alienable lands of the public
domain among Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural
lands of the public domain since PEA can "acquire x x x any and all
kinds of lands." This will open the floodgates to corporations and
even individuals acquiring hundreds of hectares of alienable lands of
the public domain under the guise that in the hands of PEA these
lands are private lands. This will result in corporations amassing
huge landholdings never before seen in this country - creating the
very evil that the constitutional ban was designed to prevent. This will
completely reverse the clear direction of constitutional development
in this country. The 1935 Constitution allowed private corporations to
acquire not more than 1,024 hectares of public lands. 105 The 1973
Constitution prohibited private corporations from acquiring any kind

of public land, and the 1987 Constitution has unequivocally reiterated


this prohibition.
The contention of PEA and AMARI that public lands, once registered
under Act No. 496 or PD No. 1529, automatically become private
lands is contrary to existing laws. Several laws authorize lands of the
public domain to be registered under the Torrens System or Act No.
496, now PD No. 1529, without losing their character as public lands.
Section 122 of Act No. 496, and Section 103 of PD No. 1529,
respectively, provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands
belonging to the x x x Government of the Philippine Islands
are alienated, granted, or conveyed to persons or the public
or private corporations, the same shall be brought
forthwith under the operation of this Act and shall become
registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public
land is by the Government alienated, granted or conveyed
to any person, the same shall be brought forthwith under
the operation of this Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any person"
in Section 103 of PD No. 1529 includes conveyances of public lands
to public corporations.
Alienable lands of the public domain "granted, donated, or
transferred to a province, municipality, or branch or subdivision of the
Government," as provided in Section 60 of CA No. 141, may be
registered under the Torrens System pursuant to Section 103 of PD
No. 1529. Such registration, however, is expressly subject to the
condition in Section 60 of CA No. 141 that the land "shall not be
alienated, encumbered or otherwise disposed of in a manner
affecting its title, except when authorized by Congress." This

152

provision refers to government reclaimed, foreshore and marshy


lands of the public domain that have been titled but still cannot be
alienated or encumbered unless expressly authorized by Congress.
The need for legislative authority prevents the registered land of the
public domain from becoming private land that can be disposed of to
qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands
of the public domain may be registered under the Torrens System.
Section 48, Chapter 12, Book I of the Code states
"Sec. 48. Official Authorized to Convey Real Property.
Whenever real property of the Government is authorized by
law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the
Philippines, but titled in the name of any political
subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or
instrumentality." (Emphasis supplied)
Thus, private property purchased by the National Government for
expansion of a public wharf may be titled in the name of a
government corporation regulating port operations in the country.
Private property purchased by the National Government for
expansion of an airport may also be titled in the name of the
government agency tasked to administer the airport. Private property
donated to a municipality for use as a town plaza or public school
site may likewise be titled in the name of the municipality.106 All these
properties become properties of the public domain, and if already
registered under Act No. 496 or PD No. 1529, remain registered
land. There is no requirement or provision in any existing law for the
de-registration of land from the Torrens System.
Private lands taken by the Government for public use under its power
of eminent domain become unquestionably part of the public domain.

Nevertheless, Section 85 of PD No. 1529 authorizes the Register of


Deeds to issue in the name of the National Government new
certificates of title covering such expropriated lands. Section 85 of
PD No. 1529 states
"Sec. 85. Land taken by eminent domain. Whenever any
registered land, or interest therein, is expropriated or taken
by eminent domain, the National Government, province, city
or municipality, or any other agency or instrumentality
exercising such right shall file for registration in the proper
Registry a certified copy of the judgment which shall state
definitely by an adequate description, the particular property
or interest expropriated, the number of the certificate of title,
and the nature of the public use. A memorandum of the right
or interest taken shall be made on each certificate of title by
the Register of Deeds, and where the fee simple is taken, a
new certificate shall be issued in favor of the National
Government, province, city, municipality, or any other
agency or instrumentality exercising such right for the land
so taken. The legal expenses incident to the memorandum
of registration or issuance of a new certificate of title shall be
for the account of the authority taking the land or interest
therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529
are not exclusively private or patrimonial lands. Lands of the public
domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to
AMARI of the Freedom Islands or of the lands to be reclaimed from
submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA "is not a sale but a joint venture with a stipulation for
reimbursement of the original cost incurred by PEA for the earlier
reclamation and construction works performed by the CDCP under
its 1973 contract with the Republic." Whether the Amended JVA is a
sale or a joint venture, the fact remains that the Amended JVA
requires PEA to "cause the issuance and delivery of the certificates
of title conveying AMARI's Land Share in the name of AMARI." 107

153

This stipulation still contravenes Section 3, Article XII of the 1987


Constitution which provides that private corporations "shall not hold
such alienable lands of the public domain except by lease." The
transfer of title and ownership to AMARI clearly means that AMARI
will "hold" the reclaimed lands other than by lease. The transfer of
title and ownership is a "disposition" of the reclaimed lands, a
transaction considered a sale or alienation under CA No. 141, 108 the
Government Auditing Code,109 and Section 3, Article XII of the 1987
Constitution.
The Regalian doctrine is deeply implanted in our legal system.
Foreshore and submerged areas form part of the public domain and
are inalienable. Lands reclaimed from foreshore and submerged
areas also form part of the public domain and are also inalienable,
unless converted pursuant to law into alienable or disposable lands
of the public domain. Historically, lands reclaimed by the government
are sui generis, not available for sale to private parties unlike other
alienable public lands. Reclaimed lands retain their inherent potential
as areas for public use or public service. Alienable lands of the public
domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure
such equitable distribution, the 1973 and 1987 Constitutions have
barred private corporations from acquiring any kind of alienable land
of the public domain. Those who attempt to dispose of inalienable
natural resources of the State, or seek to circumvent the
constitutional ban on alienation of lands of the public domain to
private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the
Freedom Islands, now covered by certificates of title in the
name of PEA, are alienable lands of the public domain.
PEA may lease these lands to private corporations but may
not sell or transfer ownership of these lands to private
corporations. PEA may only sell these lands to Philippine
citizens, subject to the ownership limitations in the 1987
Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay


remain inalienable natural resources of the public domain
until classified as alienable or disposable lands open to
disposition and declared no longer needed for public service.
The government can make such classification and
declaration only after PEA has reclaimed these submerged
areas. Only then can these lands qualify as agricultural lands
of the public domain, which are the only natural resources
the government can alienate. In their present state, the
592.15 hectares of submerged areas are inalienable and
outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a
private corporation, ownership of 77.34 hectares110of the
Freedom Islands, such transfer is void for being contrary to
Section 3, Article XII of the 1987 Constitution which prohibits
private corporations from acquiring any kind of alienable land
of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI
ownership of 290.156 hectares111 of still submerged areas of
Manila Bay, such transfer is void for being contrary to
Section 2, Article XII of the 1987 Constitution which prohibits
the alienation of natural resources other than agricultural
lands of the public domain. PEA may reclaim these
submerged areas. Thereafter, the government can classify
the reclaimed lands as alienable or disposable, and further
declare them no longer needed for public service. Still, the
transfer of such reclaimed alienable lands of the public
domain to AMARI will be void in view of Section 3, Article XII
of the 1987 Constitution which prohibits private corporations
from acquiring any kind of alienable land of the public
domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article
XII of the 1987 Constitution. Under Article 1409 112 of the Civil Code,
contracts whose "object or purpose is contrary to law," or whose
"object is outside the commerce of men," are "inexistent and void
from the beginning." The Court must perform its duty to defend and

154

uphold the Constitution, and therefore declares the Amended JVA


null and void ab initio.
Seventh issue: whether the Court is the proper forum to raise
the issue of whether the Amended JVA is grossly
disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is
no necessity to rule on this last issue. Besides, the Court is not a trier
of facts, and this last issue involves a determination of factual
matters.

Ibid.

The existence of this report is a matter of judicial notice pursuant


to Section 1, Rule 129 of the Rules of Court which provides, "A
court shall take judicial notice, without the introduction of evidence,
of x x x the official acts of the legislature x x x."
8

Teofisto Guingona, Jr.

Renato Cayetano.

10

Report and Recommendation of the Legal Task Force, Annex "C",


AMARI's Memorandum dated June 19, 1999.
12

WHEREFORE, the petition is GRANTED. The Public Estates


Authority and Amari Coastal Bay Development Corporation
are PERMANENTLY ENJOINED from implementing the Amended
Joint Venture Agreement which is hereby
declared NULL and VOID ab initio.

Virgilio C. Abejo.

11

AMARI's Comment dated June 24, 1998, p. 3; Rollo, p. 68.

13

AMARI filed three motions for extension of time to file comment


(Rollo, pp. 32, 38, 48), while PEA filed nine motions for extension of
time (Rollo, pp. 127, 139).
14

Petitioner's Memorandum dated July 6, 1999, p. 42.

15

SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza,
Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Austria-Martinez, and Corona, JJ., concur.

Represented by the Office of the Solicitor General, with Solicitor


General Ricardo P. Galvez, Assistant Solicitor General Azucena R.
Balanon-Corpuz, and Associate Solicitor Raymund I. Rigodon
signing PEA's Memorandum.
16

Represented by Azcuna Yorac Arroyo & Chua Law Offices, and


Romulo Mabanta Sayoc & De los Angeles Law Offices.
17

Footnote
1

Section 4 of PD No. 1084.

PEA's Memorandum dated August 4, 1999, p. 3.

PEA's Memorandum, supra note 2 at 7. PEA's Memorandum


quoted extensively, in its Statement of Facts and the Case, the
Statement of Facts in Senate Committee Report No. 560 dated
September 16, 1997.
4

In Opinion No. 330 dated December 23, 1994, the Government


Corporate Counsel, citing COA Audit Circular No. 89-296, advised
PEA that PEA could negotiate the sale of the 157.84-hectare
Freedom Islands in view of the failure of the public bidding held on
December 10, 1991 where there was not a single bidder. See also
Senate Committee Report No. 560, p. 12.
5

PEA's Memorandum, supra note 2 at 9.

Salonga v. Pao, 134 SCRA 438 (1985); Gonzales v. Marcos, 65


SCRA 624 (1975 ); Aquino v. Enrile, 59 SCRA 183 (1974 ); Dela
Camara v. Enage, 41 SCRA 1 (1971 ).
18

Section 11, Article XIV.

19

Manila Electric Co. v. Judge F. Castro-Bartolome, 114 SCRA 799


(1982); Republic v. CA and Iglesia, and Republic v. Cendana and
Iglesia ni Cristo, 119 SCRA 449 (1982); Republic v. Villanueva and
Iglesia ni Cristo, 114 SCRA 875 (1982); Director of Lands v. Lood,
124 SCRA 460 (1983); Republic v. Iglesia ni Cristo, 128 SCRA 44
(1984); Director of Lands v. Hermanos y Hermanas de Sta. Cruz de
Mayo, Inc., 141 SCRA 21 (1986); Director of Lands v. IAC and
Acme Plywood & Veneer Co., 146 SCRA 509 (1986); Republic v.
IAC and Roman Catholic Bishop of Lucena, 168 SCRA 165 (1988);
Natividad v. CA, 202 SCRA 493 (1991); Villaflor v. CA and Nasipit
Lumber Co., 280 SCRA 297 (1997). In Ayog v. Cusi, 118 SCRA 492
(1982), the Court did not apply the constitutional ban in the 1973

155

Constitution because the applicant corporation, Bian Development


Co., Inc., had fully complied with all its obligations and even paid
the full purchase price before the effectivity of the 1973
Constitution, although the sales patent was issued after the 1973
Constitution took effect.
20

PD No. 1073.

21

Annex "B", AMARI's Memorandum dated June 19, 1999, Section


5.2 (c) and (e) of the Amended JVA, pp. 16-17.
22

Chavez v. PCGG, 299 SCRA 744 (1998).

23

136 SCRA 27 (1985).

27

Paat v. Court of Appeals, 266 SCRA 167 (1997); Quisumbing v.


Judge Gumban, 193 SCRA 520 (1991); Valmonte v. Belmonte, Jr.,
170 SCRA 256 (1989).
28

Section 1, Article XI of the 1987 Constitution states as follows:


"Public office is a public trust. Public officers and employees must
at all times be accountable to the people, serve them with utmost
responsibility, integrity, loyalty, and efficiency, act with patriotism
and justice, and lead modest lives."
30

170 SCRA 256 (1989).

31

See note 22.

24

Article 2 of the Civil Code (prior to its amendment by EO No. 200)


provided as follows: "Laws shall take effect after fifteen days
following the completion of their publication in the Official Gazette,
unless it is provided otherwise, x x x."

See note 22.

29

32

Record of the Constitutional Commission, Vol. V, pp. 24-25,


(1986).
33

Supra, Note 22.

34

Ibid.

35

Legaspi v. Civil Service Commission, 150 SCRA 530 (1987).

36

Almonte v. Vasquez, 244 SCRA 286 (1995).

37

See Note 22.

25

Section 1 of CA No. 638 provides as follows: "There shall be


published in the Official Gazette all important legislative acts and
resolutions of the Congress of the Philippines; all executive and
administrative orders and proclamations, except such as have no
general applicability; x x x."
26

Section 79 of the Government Auditing Codes provides as


follows: "When government property has become unserviceable
for any cause, or is no longer needed, it shall, upon application of
the officer accountable therefor, be inspected by the head of the
agency or his duly authorized representative in the presence of the
auditor concerned and, if found to be valueless or unsaleable, it
may be destroyed in their presence. If found to be valuable, it
may be sold at public auction to the highest bidder under the
supervision of the proper committee on award or similar body in the
presence of the auditor concerned or other authorized
representative of the Commission, after advertising by printed
notice in the Official Gazette, or for not less than three
consecutive days in any newspaper of general circulation, or
where the value of the property does not warrant the expense of
publication, by notices posted for a like period in at least three
public places in the locality where the property is to be sold. In the
event that the public auction fails, the property may be sold at
a private sale at such price as may be fixed by the same
committee or body concerned and approved by the
Commission."

38

Chavez v. PCGG, see note 22; Aquino-Sarmiento v. Morato, 203


SCRA 515 (1991).
39

Almonte v. Vasquez, see note 36.

40

People's Movement for Press Freedom, et al. v. Hon. Raul


Manglapus, G.R. No. 84642, En Banc Resolution dated April 13,
1988; Chavez v. PCGG, see note 22.
41

Section 270 of the National Internal Revenue Code punishes any


officer or employee of the Bureau of Internal Revenue who divulges
to any person, except as allowed by law, information regarding the
business, income, or estate of any taxpayer, the secrets, operation,
style of work, or apparatus of any manufacturer or producer, or
confidential information regarding the business of any taxpayer,
knowledge of which was acquired by him in the discharge of his
official duties. Section 14 of R.A. No. 8800 (Safeguard Measures
Act) prohibits the release to the public of confidential information
submitted in evidence to the Tariff Commission. Section 3 (n) of
R.A. No. 8504 (Philippine AIDS Prevention and Control Act)
classifies as confidential the medical records of HIV patients.
Section 6 (j) of R.A. No. 8043 (Inter-Country Adoption Act) classifies

156

as confidential the records of the adopted child, adopting parents,


and natural parents. Section 94 (f) of R.A. No. 7942 (Philippine
Mining Act) requires the Department of Environment and Natural
Resources to maintain the confidentiality of confidential information
supplied by contractors who are parties to mineral agreements or
financial and technical assistance agreements.
42

The Recopilacion de Leyes de las Indias declared that: "We,


having acquired full sovereignty over the Indies, and all lands,
territories, and possessions not heretofore ceded away by our royal
predecessors, or by us, or in our name, still pertaining to the royal
crown and patrimony, it is our will that all lands which are held
without proper and true deeds of grant be restored to us according
as they belong to us, in order that after reserving before all what to
us or to our viceroys, audiencias, and governors may seem
necessary for public squares, ways, pastures, and commons in
those places which are peopled, taking into consideration not only
their present condition, but also their future and their probable
increase, and after distributing to the natives what may be
necessary for tillage and pasturage, confirming them in what they
now have and giving them more if necessary, all the rest of said
lands may remain free and unencumbered for us to dispose of as
we may wish." See concurring opinion of Justice Reynato S. Puno
in Republic Real Estate Corporation v. Court of Appeals, 299 SCRA
199 (1998).
43

Cario v. Insular Government, 41 Phil. 935 (1909). The exception


mentioned in Cario, referring to lands in the possession of an
occupant and of his predecessors-in-interest, since time
immemorial, is actually a species of a grant by the State. The
United States Supreme Court, speaking through Justice Oliver
Wendell Holmes, Jr., declared in Cario: "Prescription is mentioned
again in the royal cedula of October 15, 1754, cited in 3 Philippine,
546; 'Where such possessors shall not be able to produce title
deeds, it shall be sufficient if they shall show that ancient
possession, as a valid title by prescription.' It may be that this
means possession from before 1700; but, at all events, the principle
is admitted. As prescription, even against the Crown lands, was
recognized by the laws of Spain, we see no sufficient reason for
hesitating to admit that it was recognized in the Philippines in
regard to lands over which Spain had only a paper
sovereignty." See also Republic v. Lee, 197 SCRA 13 (1991).
44

Article 1 of the Spanish Law of Waters of 1866.

45

Ignacio v. Director of Lands, 108 Phil. 335 (1960); Joven v.


Director of Lands, 93 Phil. 134 (1953); Laurel v. Garcia, 187 SCRA
797 (1990). See concurring opinion of Justice Reynato S. Puno in
Republic Real Estate Corporation v. Court of Appeals, 299 SCRA
199 (1998).
46

Act No. 926, enacted on October 7, 1903, was also titled the
Public Land Act. This Act, however, did not cover reclaimed lands.
Nevertheless, Section 23 of this Act provided as follows: "x x x In no
case may lands leased under the provisions of this chapter be
taken so as to gain control of adjacent land, water, stream, shore
line, way, roadstead, or other valuable right which in the opinion of
the Chief of the Bureau of Public Lands would be prejudicial to the
interests of the public."
47

Section 10 of Act No. 2874 provided as follows: "The words


"alienation," "disposition," or "concession" as used in this Act, shall
mean any of the methods authorized by this Act for the acquisition,
lease, use, or benefit of the lands of the public domain other than
timber or mineral lands."
48

Title II of Act No. 2874 governed alienable lands of the public


domain for agricultural purposes, while Title III of the same Act
governed alienable lands of the public domain for non-agricultural
purposes.
49

Section 57 of Act No. 2874 provided as follows: "x x x; but the


land so granted, donated, or transferred to a province, municipality,
or branch or subdivision of the Government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title,
except when authorized by the legislature; x x x."
50

Krivenko v. Register of Deeds, 79 Phil. 461 (1947).

51

Section 2 of CA No. 141 states as follows: "The provisions of this


Act shall apply to the lands of the public domain; but timber and
mineral lands shall be governed by special laws and nothing in this
Act provided shall be understood or construed to change or modify
the administration and disposition of the lands commonly called
"friar lands" and those which, being privately owned, have reverted
to or become the property of the Commonwealth of the Philippines,
which administration and disposition shall be governed by the laws
at present in force or which may hereafter be enacted."
52

Like Act No. 2874, Section 10 of CA No. 141 defined the terms
"alienation" and "disposition" as follows: "The words "alienation,"
"disposition," or "concession" as used in this Act, shall mean any of
the methods authorized by this Act for the acquisition, lease, use, or

157

benefit of the lands of the public domain other than timber or


mineral lands."
53

R.A. No. 6657 has suspended the authority of the President to


reclassify forest or mineral lands into agricultural lands. Section 4
(a) of RA No. 6657 (Comprehensive Agrarian Reform Law of 1988)
states, "No reclassification of forest or mineral lands to agricultural
lands shall be undertaken after the approval of this Act until
Congress, taking into account ecological, developmental and equity
considerations, shall have delimited by law, the specific limits of the
public domain."
54
55

Covering Sections 58 to 68 of CA No. 141.


299 SCRA 199 (1998).

56

Section 1, Article XIII of the 1935 Constitution limited the


disposition and utilization of public agricultural lands to Philippine
citizens or to corporations at least sixty percent owned by Philippine
citizens. This was, however, subject to the original Ordinance
appended to the 1935 Constitution stating, among others, that until
the withdrawal of United States sovereignty in the Philippines,
"Citizens and corporations of the United States shall enjoy in the
Commonwealth of the Philippines all the civil rights of the citizens
and corporations, respectively, thereof."

private sale of marshy alienable or disposable lands of the public


domain to lessees who have improved and utilized the same as
farms, fishponds or other similar purposes for at least five years
from the date of the lease contract with the government. R.A. No.
293, however, did not apply to marshy lands under Section 56 (c),
Title III of CA No. 141 which refers to marshy lands leased for
residential, commercial, industrial or other non-agricultural
purposes.
59

See note 49.

60

See note 60.

61

Republic Real Estate Corporation v. Court of Appeals, see note


56.
62

Insular Government v. Aldecoa, 19 Phil. 505 (1911); Government


v. Cabangis, 53 Phil. 112 (1929).
64

118 SCRA 492 (1982).

65

Annex "B", AMARI's Memorandum, see note 2 at 1 & 2.

66

PEA's Memorandum, see note 6.

67

Ibid., p. 44.

68

See notes 9, 10 & 11.

69

Annex "C", p. 3, AMARI's Memorandum, see note 12 at 3.

70

This should read Article XII.

71

Section 8 of CA No. 141.

72

Emphasis supplied.

73

187 SCRA 797 (1990).

57

Section 44 of PD No. 1529 (previously Section 39 of Act No. 496)


provides that "liens, claims or rights arising or existing under the
laws and the Constitution of the Philippines which are not by law
required to appear of record in the Registry of Deeds in order to be
valid against subsequent purchasers or encumbrancers of record"
constitute statutory liens affecting the title.1wphi1.nt
58

RA No. 730, which took effect on June 18, 1952, authorized


the private sale of home lots to actual occupants of public lands
not needed for public service. Section 1 of RA No. 730 provided as
follows: "Notwithstanding the provisions of Sections 61 and 67 of
Commonwealth Act No. 141, as amended by RA No. 293, any
Filipino citizen of legal age who is not the owner of a home lot in the
municipality or city in which he resides and who had in good faith
established his residence on a parcel of land of the Republic of the
Philippines which is not needed for public service, shall be given
preference to purchase at a private sale of which reasonable notice
shall be given to him, not more than one thousand square meters at
a price to be fixed by the Director of Lands with the approval of the
Secretary of Agriculture and Natural Resources. x x x." In addition,
on June 16, 1948, Congress enacted R.A. No. 293 allowing the

Ibid.

63

74

Article 422 of the Civil Code states as follows: "Property of public


dominion, when no longer needed for public use or public service,
shall form part of the patrimonial property of the State."
75

AMARI's Comment dated June 24, 1998, p. 20; Rollo, p. 85.

76

Dizon v. Rodriguez, 13 SCRA 705 (1965); Republic v. Lat Vda. de


Castillo, 163 SCRA 286 (1988).
77

Cario v. Insular Government, 41 Phil. 935 (1909).

158

78

Proclamation No. 41, issued by President Ramon Magsaysay on


July 5, 1954, reserved for "National Park purposes" 464.66
hectares of the public domain in Manila Bay "situated in the cities of
Manila and Pasay andthe municipality of Paranaque, Province of
Rizal, Island of Luzon," which area, as described in detail in the
Proclamation, is "B]ounded on the North, by Manila Bay; on the
East, by Dewey Boulevard; and on the south and west, by Manila
Bay." See concurring opinion of Justice Reynato S. Puno in
Republic Real Estate Corporation v. Court of Appeals, 299 SCRA
1999 (1998). Under Sections 2 and 3, Article XII of the 1987
Constitution, "national parks" are inalienable natural resources of
the State.
79

Fifth Whereas clause of EO No. 525.

80

Section 4, Chapter I, Title XIV, Book IV.

81

Section 6 of CA No 141 provides as follows: "The


President, upon the recommendation of the Secretary of
Agriculture and Commerce, shall from time to time classify the
lands of the public domain into (a) Alienable or disposable, x x x."
82

Section 7 of CA No. 141 provides as follows: "For purposes of the


administration and disposition of alienable or disposable public
lands, the President, upon recommendation by the Secretary of
Agriculture and Commerce, shall from time to time declare what
lands are open to disposition or concession under this Act."
83

On "Lands for Residential, Commercial, or Industrial and other


Similar Purposes."
84

RA No. 293, enacted on June 16, 1948, authorized the sale of


marshy lands under certain conditions. Section 1 of RA No. 293
provided as follows: "The provisions of section sixty-one of
Commonwealth Act Numbered One hundred and forty-one to the
contrary notwithstanding, marshy lands and lands under water
bordering on shores or banks or navigable lakes or rivers which are
covered by subsisting leases or leases which may hereafter be duly
granted under the provisions of the said Act and are already
improved and have been utilized for farming, fishpond, or similar
purposes for at least five years from the date of the contract of
lease, may be sold to the lessees thereof under the provisions of
Chapter Five of the said Act as soon as the President, upon
recommendation of the Secretary of Agriculture and Natural
Resources, shall declare that the same are not necessary for the
public service."
85

86

See note 73.

87

Section 4 (b) of PD No. 1084

88

R.A. No. 730 allows the private sale of home lots to actual
occupants of public lands. See note 63.
89

Issued on February 26, 1981.

90

While PEA claims there was a failure of public bidding on


December 10, 1991, there is no showing that the Commission on
Audit approved the price or consideration stipulated in the
negotiated Amended JVA as required by Section 79 of the
Government Auditing Code. Senate Committee Report No. 560 did
not discuss this issue.
91

Paragraph 2 (a) of COA Circular No. 89-296, on "Sale Thru


Negotiation," states that disposal through negotiated sale may be
resorted to if "[T]here was a failure of public auction."
92

Senate Committee Report No. 560, Statement of Facts, p. 7,


citing PEA Board Resolution No. 835, as appearing in the Minutes
of the PEA Board of Directors Meeting held on May 30, 1991, per
Certification of Jaime T. De Veyra, Corporate Secretary, dated June
11, 1991.
93

Opinion No. 330, citing COA Audit Circular No. 89-296. See note

5.
94

PEA's Memorandum, see note 2.

95

Senate Committee Report No. 560, pp. 7-8, citing the Minutes of
Meeting of the PEA Board of Directors held on December 19, 1991.
96

Section 3, Article XII of the 1987 Constitution provides as follows:


"x x x Citizens of the Philippines may x x x acquire not more than
twelve hectares thereof by purchase, homestead or grant."
However, Section 6 of R.A. No. 6657 (Comprehensive Agrarian
Reform Law) limits the ownership of "public or private agricultural
land" to a maximum of five hectares per person.
97

96 Phil. 946 (1955).

98

48 SCRA 372 (1977).

99

168 SCRA 198 (1988).

100

172 SCRA 795 (1989).

101

73 SCRA 146 (1976).

PEA's Memorandum, see note 2 at 45.

159

102

Avila v. Tapucar, 201 SCRA 148 (1991).

103

Republic v. Ayala Cia, et al., 14 SCRA 259 (1965); Dizon v.


Rodriguez, 13 SCRA 705 (1965).
104

Section 44 of PD No. 1529 states as follows: "Every registered


owner receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land
taking a certificate of title for value and in good faith, shall hold the
same free from all encumbrances except those noted on said
certificate and any of the following encumbrances which may be
subsisting, namely: First. Liens, claims or rights arising or
existing under the laws and Constitution of the Philippines
which are not by law required to appear of record in the
Registry of Deeds in order to be valid against subsequent
purchasers or encumbrancers of record. x x x." Under Section
103 of PD No. 1529, Section 44 applies to certificates of title issued
pursuant to a land patent granted by the government.
105

Section 2, Article XIII of the 1935 Constitution.

106

Harty v. Municipality of Victoria, 13 Phil. 152 (1909).

107

Annex "B", AMARI's Memorandum, see note 21 at 16, Section


5.2 (c) of the Amended JVA.
108

Section 10 of CA No. 141 provides as follows: "Sec. 10. The


words "alienation," "disposition," or "concession" as used in this Act,
shall mean any of the methods authorized by this Act for
the acquisition, lease, use, or benefit of the lands of the public
domain other than timber or mineral lands."
109

Section 79 of the Government Auditing Code, which requires


public auction in the sale of government assets, includes all kinds of
disposal or divestment of government assets. Thus, COA Audit
Circular No. 86-264 dated October 16, 1986 speaks of "guidelines
(which) shall govern the general procedures on thedivestment or
disposal of assets of government-owned and/or controlled
corporations and their subsidiaries." Likewise, COA Audit Circular
No. 89-296 dated January 27, speaks of "guidelines (which) shall
be observed and adhered to in the divestment or disposal of
property and other assets of all government
entities/instrumentalities" and that "divestment shall refer to the
manner or scheme of taking away, depriving, withdrawing of an
authority, power or title." These COA Circulars implement Section
79 of the Government Auditing Code.

110

The share of AMARI in the Freedom Islands is 77.34 hectares,


which is 70 percent of the net usable area of 110.49 hectares. The
net usable area is the total land area of the Freedom Islands less
30 percent allocated for common areas.
111

The share of AMARI in the submerged areas for reclamation is


290.129 hectares, which is 70 percent of the net usable area of
414.47 hectares.
112

Article 1409 of the Civil Code provides as follows: "The following


contracts are inexistent and void from the beginning: (1) Those
whose cause, object or purpose is contrary to law; x x x; (4) Those
whose object is outside the commerce of men; x x x."

FIRST DIVISION

G.R. No. 115381 December 23, 1994


KILUSANG MAYO UNO LABOR CENTER, petitioner,
vs.
HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION
FRANCHISING AND REGULATORY BOARD, and the
PROVINCIAL BUS OPERATORS ASSOCIATION OF THE
PHILIPPINES, respondents.
Potenciano A. Flores for petitioner.
Robert Anthony C. Sison, Cesar B. Brillantes and Jose Z. Galsim for
private respondent.
Jose F. Miravite for movants.

KAPUNAN, J.:

160

Public utilities are privately owned and operated businesses whose


service are essential to the general public. They are enterprises
which specially cater to the needs of the public and conduce to their
comfort and convenience. As such, public utility services are
impressed with public interest and concern. The same is true with
respect to the business of common carrier which holds such a
peculiar relation to the public interest that there is superinduced upon
it the right of public regulation when private properties are affected
with public interest, hence, they cease to be juris privati only. When,
therefore, one devotes his property to a use in which the public has
an interest, he, in effect grants to the public an interest in that use,
and must submit to the control by the public for the common good, to
the extent of the interest he has thus created. 1
An abdication of the licensing and regulatory government agencies of
their functions as the instant petition seeks to show, is indeed
lamentable. Not only is it an unsound administrative policy but it is
inimical to public trust and public interest as well.

thoroughfares thousands of old and smoke-belching buses, many of


which are right-hand driven, and have exposed our consumers to the
burden of spiraling costs of public transportation without hearing and
due process.
The following memoranda, circulars and/or orders are sought to be
nullified by the instant petition, viz: (a) DOTC Memorandum Order
90-395, dated June 26, 1990 relative to the implementation of a fare
range scheme for provincial bus services in the country; (b) DOTC
Department Order No.
92-587, dated March 30, 1992, defining the policy framework on the
regulation of transport services; (c) DOTC Memorandum dated
October 8, 1992, laying down rules and procedures to implement
Department Order No. 92-587; (d) LTFRB Memorandum Circular No.
92-009, providing implementing guidelines on the DOTC Department
Order No. 92-587; and (e) LTFRB Order dated March 24, 1994 in
Case No. 94-3112.
The relevant antecedents are as follows:

The instant petition for certiorari assails the constitutionality and


validity of certain memoranda, circulars and/or orders of the
Department of Transportation and Communications (DOTC) and the
Land Transportation Franchising and Regulatory Board
LTFRB) 2 which, among others, (a) authorize provincial bus and
jeepney operators to increase or decrease the prescribed
transportation fares without application therefor with the LTFRB and
without hearing and approval thereof by said agency in violation of
Sec. 16(c) of Commonwealth Act No. 146, as amended, otherwise
known as the Public Service Act, and in derogation of LTFRB's duty
to fix and determine just and reasonable fares by delegating that
function to bus operators, and (b) establish a presumption of public
need in favor of applicants for certificates of public convenience
(CPC) and place on the oppositor the burden of proving that there is
no need for the proposed service, in patent violation not only of Sec.
16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act
mandating that fares should be "just and reasonable." It is, likewise,
violative of the Rules of Court which places upon each party the
burden to prove his own affirmative allegations. 3 The offending
provisions contained in the questioned issuances pointed out by
petitioner, have resulted in the introduction into our highways and

On June 26, 1990; then Secretary of DOTC, Oscar M. Orbos, issued


Memorandum Circular No. 90-395 to then LTFRB Chairman,
Remedios A.S. Fernando allowing provincial bus operators to charge
passengers rates within a range of 15% above and 15% below the
LTFRB official rate for a period of one (1) year. The text of the
memorandum order reads in full:
One of the policy reforms and measures that is in
line with the thrusts and the priorities set out in the
Medium-Term Philippine Development Plan
(MTPDP) 1987 1992) is the liberalization of
regulations in the transport sector. Along this line,
the Government intends to move away gradually
from regulatory policies and make progress towards
greater reliance on free market forces.
Based on several surveys and observations, bus
companies are already charging passenger rates
above and below the official fare declared by LTFRB

161

on many provincial routes. It is in this context that


some form of liberalization on public transport fares
is to be tested on a pilot basis.
In view thereof, the LTFRB is hereby directed to
immediately publicize a fare range scheme for all
provincial bus routes in country (except those
operating within Metro Manila). Transport Operators
shall be allowed to charge passengers within a
range of fifteen percent (15%) above and fifteen
percent (15%) below the LTFRB official rate for a
period of one year.
Guidelines and procedures for the said scheme shall
be prepared by LTFRB in coordination with the
DOTC Planning Service.
The implementation of the said fare range scheme
shall start on 6 August 1990.
For compliance. (Emphasis ours.)
Finding the implementation of the fare range scheme "not legally
feasible," Remedios A.S. Fernando submitted the following
memorandum to Oscar M. Orbos on July 24, 1990, to wit:
With reference to DOTC Memorandum Order No.
90-395 dated 26 June 1990 which the LTFRB
received on 19 July 1990, directing the Board "to
immediately publicize a fare range scheme for all
provincial bus routes in the country (except those
operating within Metro Manila)" that will allow
operators "to charge passengers within a range of
fifteen percent (15%) above and fifteen percent
(15%) below the LTFRB official rate for a period of
one year" the undersigned is respectfully adverting
the Secretary's attention to the following for his
consideration:

1. Section 16(c) of the Public


Service Act prescribes the following
for the fixing and determination of
rates (a) the rates to be approved
should be proposed by public
service operators; (b) there should
be a publication and notice to
concerned or affected parties in the
territory affected; (c) a public
hearing should be held for the fixing
of the rates; hence, implementation
of the proposed fare range scheme
on August 6 without complying with
the requirements of the Public
Service Act may not be legally
feasible.
2. To allow bus operators in the
country to charge fares fifteen (15%)
above the present LTFRB fares in
the wake of the devastation, death
and suffering caused by the July 16
earthquake will not be socially
warranted and will be politically
unsound; most likely public criticism
against the DOTC and the LTFRB
will be triggered by the
untimely motu propioimplementation
of the proposal by the mere
expedient of publicizing the fare
range scheme without calling a
public hearing, which scheme many
as early as during the Secretary's
predecessor know through
newspaper reports and columnists'
comments to be Asian Development
Bank and World Bank inspired.
3. More than inducing a reduction in
bus fares by fifteen percent (15%)

162

the implementation of the proposal


will instead trigger an upward
adjustment in bus fares by fifteen
percent (15%) at a time when
hundreds of thousands of people in
Central and Northern Luzon,
particularly in Central Pangasinan,
La Union, Baguio City, Nueva Ecija,
and the Cagayan Valley are
suffering from the devastation and
havoc caused by the recent
earthquake.
4. In lieu of the said proposal, the
DOTC with its agencies involved in
public transportation can consider
measures and reforms in the
industry that will be socially uplifting,
especially for the people in the
areas devastated by the recent
earthquake.
In view of the foregoing considerations, the
undersigned respectfully suggests that the
implementation of the proposed fare range scheme
this year be further studied and evaluated.
On December 5, 1990, private respondent Provincial Bus Operators
Association of the Philippines, Inc. (PBOAP) filed an application for
fare rate increase. An across-the-board increase of eight and a half
centavos (P0.085) per kilometer for all types of provincial buses with
a minimum-maximum fare range of fifteen (15%) percent over and
below the proposed basic per kilometer fare rate, with the said
minimum-maximum fare range applying only to ordinary, first class
and premium class buses and a fifty-centavo (P0.50) minimum per
kilometer fare for aircon buses, was sought.
On December 6, 1990, private respondent PBOAP reduced its
applied proposed fare to an across-the-board increase of six and a

half (P0.065) centavos per kilometer for ordinary buses. The


decrease was due to the drop in the expected price of diesel.
The application was opposed by the Philippine Consumers
Foundation, Inc. and Perla C. Bautista alleging that the proposed
rates were exorbitant and unreasonable and that the application
contained no allegation on the rate of return of the proposed increase
in rates.
On December 14, 1990, public respondent LTFRB rendered a
decision granting the fare rate increase in accordance with the
following schedule of fares on a straight computation method, viz:
AUTHORIZED FARES
LUZON
MIN. OF 5 KMS. SUCCEEDING KM.
REGULAR P1.50 P0.37
STUDENT P1.15 P0.28
VISAYAS/MINDANAO
REGULAR P1.60 P0.375
STUDENT P1.20 P0.285
FIRST CLASS (PER KM.)
LUZON P0.385
VISAYAS/
MINDANAO P0.395
PREMIERE CLASS (PER KM.)
LUZON P0.395
VISAYAS/
MINDANAO P0.405
AIRCON (PER KM.) P0.415. 4
On March 30, 1992, then Secretary of the Department of
Transportation and Communications Pete Nicomedes Prado issued

163

Department Order No.


92-587 defining the policy framework on the regulation of transport
services. The full text of the said order is reproduced below in view of
the importance of the provisions contained therein:
WHEREAS, Executive Order No. 125 as amended,
designates the Department of Transportation and
Communications (DOTC) as the primary policy,
planning, regulating and implementing agency on
transportation;
WHEREAS, to achieve the objective of a viable,
efficient, and dependable transportation system, the
transportation regulatory agencies under or attached
to the DOTC have to harmonize their decisions and
adopt a common philosophy and direction;
WHEREAS, the government proposes to build on
the successful liberalization measures pursued over
the last five years and bring the transport sector
nearer to a balanced longer term regulatory
framework;
NOW, THEREFORE, pursuant to the powers
granted by laws to the DOTC, the following policies
and principles in the economic regulation of land, air,
and water transportation services are hereby
adopted:
1. Entry into and exit out of the industry. Following
the Constitutional dictum against monopoly, no
franchise holder shall be permitted to maintain a
monopoly on any route. A minimum of two franchise
holders shall be permitted to operate on any route.
The requirements to grant a certificate to operate, or
certificate of public convenience, shall be: proof of
Filipino citizenship, financial capability, public need,

and sufficient insurance cover to protect the riding


public.
In determining public need, the presumption of need
for a service shall be deemed in favor of the
applicant. The burden of proving that there is no
need for a proposed service shall be with the
oppositor(s).
In the interest of providing efficient public transport
services, the use of the "prior operator" and the
"priority of filing" rules shall be discontinued. The
route measured capacity test or other similar tests of
demand for vehicle/vessel fleet on any route shall be
used only as a guide in weighing the merits of each
franchise application and not as a limit to the
services offered.
Where there are limitations in facilities, such as
congested road space in urban areas, or at airports
and ports, the use of demand management
measures in conformity with market principles may
be considered.
The right of an operator to leave the industry is
recognized as a business decision, subject only to
the filing of appropriate notice and following a phaseout period, to inform the public and to minimize
disruption of services.
2. Rate and Fare Setting. Freight rates shall be freed
gradually from government controls. Passenger
fares shall also be deregulated, except for the
lowest class of passenger service (normally third
class passenger transport) for which the government
will fix indicative or reference fares. Operators of
particular services may fix their own fares within a
range 15% above and below the indicative or
reference rate.

164

Where there is lack of effective competition for


services, or on specific routes, or for the transport of
particular commodities, maximum mandatory freight
rates or passenger fares shall be set temporarily by
the government pending actions to increase the level
of competition.
For unserved or single operator routes, the
government shall contract such services in the most
advantageous terms to the public and the
government, following public bids for the services.
The advisability of bidding out the services or using
other kinds of incentives on such routes shall be
studied by the government.
3. Special Incentives and Financing for Fleet
Acquisition. As a matter of policy, the government
shall not engage in special financing and incentive
programs, including direct subsidies for fleet
acquisition and expansion. Only when the market
situation warrants government intervention shall
programs of this type be considered. Existing
programs shall be phased out gradually.
The Land Transportation Franchising and Regulatory
Board, the Civil Aeronautics Board, the Maritime
Industry Authority are hereby directed to submit to
the Office of the Secretary, within forty-five (45) days
of this Order, the detailed rules and procedures for
the Implementation of the policies herein set forth. In
the formulation of such rules, the concerned
agencies shall be guided by the most recent studies
on the subjects, such as the Provincial Road
Passenger Transport Study, the Civil Aviation Master
Plan, the Presidential Task Force on the Inter-island
Shipping Industry, and the Inter-island Liner
Shipping Rate Rationalization Study.

For the compliance of all concerned. (Emphasis


ours)
On October 8, 1992, public respondent Secretary of the Department
of Transportation and Communications Jesus B. Garcia, Jr. issued a
memorandum to the Acting Chairman of the LTFRB suggesting swift
action on the adoption of rules and procedures to implement abovequoted Department Order No. 92-587 that laid down deregulation
and other liberalization policies for the transport sector. Attached to
the said memorandum was a revised draft of the required rules and
procedures covering (i) Entry Into and Exit Out of the Industry and (ii)
Rate and Fare Setting, with comments and suggestions from the
World Bank incorporated therein. Likewise, resplendent from the said
memorandum is the statement of the DOTC Secretary that the
adoption of the rules and procedures is a pre-requisite to the
approval of the Economic Integration Loan from the World Bank. 5
On February 17, 1993, the LTFRB issued Memorandum Circular
No. 92-009 promulgating the guidelines for the implementation of
DOTC Department Order No. 92-587. The Circular provides, among
others, the following challenged portions:
xxx xxx xxx
IV. Policy Guidelines on the Issuance of Certificate of
Public Convenience.
The issuance of a Certificate of Public Convenience
is determined by public need. The presumption of
public need for a service shall be deemed in favor of
the applicant, while burden of proving that there is
no need for the proposed service shall be the
oppositor'(s).
xxx xxx xxx
V. Rate and Fare Setting

165

The control in pricing shall be liberalized to introduce


price competition complementary with the quality of
service, subject to prior notice and public hearing.
Fares shall not be provisionally authorized without
public hearing.

DISMISSES FOR LACK OF MERIT the petition filed


in the above-entitled case. This petition in this case
was resolved with dispatch at the request of
petitioner to enable it to immediately avail of the
legal remedies or options it is entitled under existing
laws.

A. On the General Structure of Rates


SO ORDERED. 6
1. The existing authorized fare range system of plus
or minus 15 per cent for provincial buses and
jeepneys shall be widened to 20% and -25% limit in
1994 with the authorized fare to be replaced by an
indicative or reference rate as the basis for the
expanded fare range.
2. Fare systems for aircon buses are liberalized to
cover first class and premier services.
xxx xxx xxx
(Emphasis ours).
Sometime in March, 1994, private respondent PBOAP, availing itself
of the deregulation policy of the DOTC allowing provincial bus
operators to collect plus 20% and minus 25% of the prescribed fare
without first having filed a petition for the purpose and without the
benefit of a public hearing, announced a fare increase of twenty
(20%) percent of the existing fares. Said increased fares were to be
made effective on March 16, 1994.
On March 16, 1994, petitioner KMU filed a petition before the LTFRB
opposing the upward adjustment of bus fares.
On March 24, 1994, the LTFRB issued one of the assailed orders
dismissing the petition for lack of merit. The dispositive portion reads:
PREMISES CONSIDERED, this Board after
considering the arguments of the parties, hereby

Hence, the instant petition for certiorari with an urgent prayer for
issuance of a temporary restraining order.
The Court, on June 20, 1994, issued a temporary restraining order
enjoining, prohibiting and preventing respondents from implementing
the bus fare rate increase as well as the questioned orders and
memorandum circulars. This meant that provincial bus fares were
rolled back to the levels duly authorized by the LTFRB prior to March
16, 1994. A moratorium was likewise enforced on the issuance of
franchises for the operation of buses, jeepneys, and taxicabs.
Petitioner KMU anchors its claim on two (2) grounds. First, the
authority given by respondent LTFRB to provincial bus operators to
set a fare range of plus or minus fifteen (15%) percent, later
increased to plus twenty (20%) and minus twenty-five (-25%)
percent, over and above the existing authorized fare without having
to file a petition for the purpose, is unconstitutional, invalid and
illegal. Second, the establishment of a presumption of public need in
favor of an applicant for a proposed transport service without having
to prove public necessity, is illegal for being violative of the Public
Service Act and the Rules of Court.
In its Comment, private respondent PBOAP, while not actually
touching upon the issues raised by the petitioner, questions the
wisdom and the manner by which the instant petition was filed. It
asserts that the petitioner has no legal standing to sue or has no real
interest in the case at bench and in obtaining the reliefs prayed for.
In their Comment filed by the Office of the Solicitor General, public
respondents DOTC Secretary Jesus B. Garcia, Jr. and the LTFRB

166

asseverate that the petitioner does not have the standing to maintain
the instant suit. They further claim that it is within DOTC and
LTFRB's authority to set a fare range scheme and establish a
presumption of public need in applications for certificates of public
convenience.

continues to be violated with the enforcement of the challenged


memoranda, circulars and/or orders. KMU members, who avail of the
use of buses, trains and jeepneys everyday, are directly affected by
the burdensome cost of arbitrary increase in passenger fares. They
are part of the millions of commuters who comprise the riding public.
Certainly, their rights must be protected, not neglected nor ignored.

We find the instant petition impressed with merit.


At the outset, the threshold issue of locus standi must be struck.
Petitioner KMU has the standing to sue.
The requirement of locus standi inheres from the definition of judicial
power. Section 1 of Article VIII of the Constitution provides:
xxx xxx xxx
Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights
which are legally demandable and enforceable, and
to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government.
In Lamb v. Phipps, 7 we ruled that judicial power is the power to hear
and decide causes pending between parties who have the right to
sue in the courts of law and equity. Corollary to this provision is the
principle of locus standi of a party litigant. One who is directly
affected by and whose interest is immediate and substantial in the
controversy has the standing to sue. The rule therefore requires that
a party must show a personal stake in the outcome of the case or an
injury to himself that can be redressed by a favorable decision so as
to warrant an invocation of the court's jurisdiction and to justify the
exercise of the court's remedial powers in his behalf. 8
In the case at bench, petitioner, whose members had suffered and
continue to suffer grave and irreparable injury and damage from the
implementation of the questioned memoranda, circulars and/or
orders, has shown that it has a clear legal right that was violated and

Assuming arguendo that petitioner is not possessed of the standing


to sue, this court is ready to brush aside this barren procedural
infirmity and recognize the legal standing of the petitioner in view of
the transcendental importance of the issues raised. And this act of
liberality is not without judicial precedent. As early as the Emergency
Powers Cases, this Court had exercised its discretion and waived the
requirement of proper party. In the recent case of Kilosbayan, Inc., et
al. v. Teofisto Guingona, Jr., et al., 9 we ruled in the same lines and
enumerated some of the cases where the same policy was
adopted, viz:
. . . A party's standing before this Court is a
procedural technicality which it may, in the exercise
of its discretion, set aside in view of the importance
of the issues raised. In the landmark Emergency
Powers Cases, [G.R. No. L-2044 (Araneta v.
Dinglasan); G.R. No. L-2756 (Araneta
v. Angeles); G.R. No. L-3054 (Rodriguez v. Tesorero
de Filipinas); G.R. No. L-3055 (Guerrero v.
Commissioner of Customs); and G.R. No. L-3056
(Barredo v. Commission on Elections), 84 Phil. 368
(1949)], this Court brushed aside this technicality
because "the transcendental importance to the
public of these cases demands that they be settled
promptly and definitely, brushing aside, if we must,
technicalities of procedure. (Avelino vs. Cuenco,
G.R. No. L-2621)." Insofar as taxpayers' suits are
concerned, this Court had declared that it "is not
devoid of discretion as to whether or not it should be
entertained," (Tan v. Macapagal, 43 SCRA 677, 680
[1972]) or that it "enjoys an open discretion to
entertain the same or not." [Sanidad v. COMELEC,
73 SCRA 333 (1976)].

167

xxx xxx xxx


In line with the liberal policy of this Court on locus
standi, ordinary taxpayers, members of Congress,
and even association of planters, and
non-profit civic organizations were allowed to initiate
and prosecute actions before this court to question
the constitutionality or validity of laws, acts,
decisions, rulings, or orders of various government
agencies or instrumentalities. Among such cases
were those assailing the constitutionality of (a) R.A.
No. 3836 insofar as it allows retirement gratuity and
commutation of vacation and sick leave to Senators
and Representatives and to elective officials of both
Houses of Congress (Philippine Constitution
Association, Inc. v. Gimenez, 15 SCRA 479 [1965]);
(b) Executive Order No. 284, issued by President
Corazon C. Aquino on 25 July 1987, which allowed
members of the cabinet, their undersecretaries, and
assistant secretaries to hold other government
offices or positions (Civil Liberties Union v. Executive
Secretary, 194 SCRA 317 [1991]); (c) the automatic
appropriation for debt service in the General
Appropriations Act (Guingona v. Carague, 196 SCRA
221 [1991]; (d) R.A. No. 7056 on the holding of
desynchronized elections (Osmea v. Commission
on Elections, 199 SCRA 750 [1991]); (e) P.D. No.
1869 (the charter of the Philippine Amusement and
Gaming Corporation) on the ground that it is contrary
to morals, public policy, and order (Basco v.
Philippine Amusement and Gaming Corp., 197
SCRA 52 [1991]); and (f) R.A. No. 6975, establishing
the Philippine National Police. (Carpio v. Executive
Secretary, 206 SCRA 290 [1992]).
Other cases where we have followed a liberal policy
regarding locus standi include those attacking the
validity or legality of (a) an order allowing the
importation of rice in the light of the prohibition
imposed by R.A. No. 3452 (Iloilo Palay and Corn

Planters Association, Inc. v. Feliciano, 13 SCRA 377


[1965]; (b) P.D. Nos. 991 and 1033 insofar as they
proposed amendments to the Constitution and P.D.
No. 1031 insofar as it directed the COMELEC to
supervise, control, hold, and conduct the
referendum-plebiscite on 16 October 1976 (Sanidad
v. Commission on Elections, supra); (c) the bidding
for the sale of the 3,179 square meters of land at
Roppongi, Minato-ku, Tokyo, Japan (Laurel v.
Garcia, 187 SCRA 797 [1990]); (d) the approval
without hearing by the Board of Investments of the
amended application of the Bataan Petrochemical
Corporation to transfer the site of its plant from
Bataan to Batangas and the validity of such transfer
and the shift of feedstock from naphtha only to
naphtha and/or liquefied petroleum gas (Garcia v.
Board of Investments, 177 SCRA 374 [1989]; Garcia
v. Board of Investments, 191 SCRA 288 [1990]); (e)
the decisions, orders, rulings, and resolutions of the
Executive Secretary, Secretary of Finance,
Commissioner of Internal Revenue, Commissioner
of Customs, and the Fiscal Incentives Review Board
exempting the National Power Corporation from
indirect tax and duties (Maceda v. Macaraig, 197
SCRA 771 [1991]); (f) the orders of the Energy
Regulatory Board of 5 and 6 December 1990 on the
ground that the hearings conducted on the second
provisional increase in oil prices did not allow the
petitioner substantial cross-examination; (Maceda v.
Energy Regulatory Board, 199 SCRA 454 [1991]);
(g) Executive Order No. 478 which levied a special
duty of P0.95 per liter of imported oil products
(Garcia v. Executive Secretary, 211 SCRA 219
[1992]); (h) resolutions of the Commission on
Elections concerning the apportionment, by district,
of the number of elective members of Sanggunians
(De Guia vs. Commission on Elections, 208 SCRA
420 [1992]); and (i) memorandum orders issued by a
Mayor affecting the Chief of Police of Pasay City

168

(Pasay Law and Conscience Union, Inc. v. Cuneta,


101 SCRA 662 [1980]).
In the 1975 case of Aquino v. Commission on
Elections (62 SCRA 275 [1975]), this Court, despite
its unequivocal ruling that the petitioners therein had
no personality to file the petition, resolved
nevertheless to pass upon the issues raised
because of the far-reaching implications of the
petition. We did no less in De Guia v. COMELEC
(Supra) where, although we declared that De Guia
"does not appear to have locus standi, a standing in
law, a personal or substantial interest," we brushed
aside the procedural infirmity "considering the
importance of the issue involved, concerning as it
does the political exercise of qualified voters affected
by the apportionment, and petitioner alleging abuse
of discretion and violation of the Constitution by
respondent."
Now on the merits of the case.
On the fare range scheme.
Section 16(c) of the Public Service Act, as amended, reads:
Sec. 16. Proceedings of the Commission, upon
notice and hearing. The Commission shall have
power, upon proper notice and hearing in
accordance with the rules and provisions of this Act,
subject to the limitations and exceptions mentioned
and saving provisions to the contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, tolls,
charges, classifications, or schedules thereof, as
well as commutation, mileage kilometrage, and other
special rates which shall be imposed, observed, and

followed thereafter by any public service: Provided,


That the Commission may, in its discretion, approve
rates proposed by public services provisionally and
without necessity of any hearing; but it shall call a
hearing thereon within thirty days thereafter, upon
publication and notice to the concerns operating in
the territory affected: Provided, further, That in case
the public service equipment of an operator is used
principally or secondarily for the promotion of a
private business, the net profits of said private
business shall be considered in relation with the
public service of such operator for the purpose of
fixing the rates. (Emphasis ours).
xxx xxx xxx
Under the foregoing provision, the Legislature delegated to
the defunct Public Service Commission the power of fixing
the rates of public services. Respondent LTFRB, the existing
regulatory body today, is likewise vested with the same
under Executive Order No. 202 dated June 19, 1987.
Section 5(c) of the said executive order authorizes LTFRB
"to determine, prescribe, approve and periodically review
and adjust, reasonable fares, rates and other related
charges, relative to the operation of public land
transportation services provided by motorized vehicles."
Such delegation of legislative power to an administrative agency is
permitted in order to adapt to the increasing complexity of modern
life. As subjects for governmental regulation multiply, so does the
difficulty of administering the laws. Hence, specialization even in
legislation has become necessary. Given the task of determining
sensitive and delicate matters as
route-fixing and rate-making for the transport sector, the responsible
regulatory body is entrusted with the power of subordinate
legislation. With this authority, an administrative body and in this
case, the LTFRB, may implement broad policies laid down in a
statute by "filling in" the details which the Legislature may neither
have time or competence to provide. However, nowhere under the
aforesaid provisions of law are the regulatory bodies, the PSC and

169

LTFRB alike, authorized to delegate that power to a common carrier,


a transport operator, or other public service.
In the case at bench, the authority given by the LTFRB to the
provincial bus operators to set a fare range over and above the
authorized existing fare, is illegal and invalid as it is tantamount to an
undue delegation of legislative authority. Potestas delegata non
delegari potest. What has been delegated cannot be delegated. This
doctrine is based on the ethical principle that such a delegated power
constitutes not only a right but a duty to be performed by the
delegate through the instrumentality of his own judgment and not
through the intervening mind of another. 10 A further delegation of
such power would indeed constitute a negation of the duty in
violation of the trust reposed in the delegate mandated to discharge it
directly. 11 The policy of allowing the provincial bus operators to
change and increase their fares at will would result not only to a
chaotic situation but to an anarchic state of affairs. This would leave
the riding public at the mercy of transport operators who may
increase fares every hour, every day, every month or every year,
whenever it pleases them or whenever they deem it "necessary" to
do so. In Panay Autobus Co. v. Philippine Railway Co., 12 where
respondent Philippine Railway Co. was granted by the Public Service
Commission the authority to change its freight rates at will, this Court
categorically declared that:
In our opinion, the Public Service Commission was
not authorized by law to delegate to the Philippine
Railway Co. the power of altering its freight rates
whenever it should find it necessary to do so in
order to meet the competition of road trucks and
autobuses, or to change its freight rates at will, or to
regard its present rates as maximum rates, and to
fix lower rates whenever in the opinion of the
Philippine Railway Co. it would be to its advantage
to do so.
The mere recital of the language of the application of
the Philippine Railway Co. is enough to show that it
is untenable. The Legislature has delegated to the
Public Service Commission the power of fixing the

rates of public services, but it has not authorized the


Public Service Commission to delegate that power
to a common carrier or other public service. The
rates of public services like the Philippine Railway
Co. have been approved or fixed by the Public
Service Commission, and any change in such rates
must be authorized or approved by the Public
Service Commission after they have been shown to
be just and reasonable. The public service may, of
course, propose new rates, as the Philippine
Railway Co. did in case No. 31827, but it cannot
lawfully make said new rates effective without the
approval of the Public Service Commission, and the
Public Service Commission itself cannot authorize a
public service to enforce new rates without the prior
approval of said rates by the commission. The
commission must approve new rates when they are
submitted to it, if the evidence shows them to be just
and reasonable, otherwise it must disapprove them.
Clearly, the commission cannot determine in
advance whether or not the new rates of the
Philippine Railway Co. will be just and reasonable,
because it does not know what those rates will be.
In the present case the Philippine Railway Co. in
effect asked for permission to change its freight rates
at will. It may change them every day or every hour,
whenever it deems it necessary to do so in order to
meet competition or whenever in its opinion it would
be to its advantage. Such a procedure would create
a most unsatisfactory state of affairs and largely
defeat the purposes of the public service
law. 13(Emphasis ours).
One veritable consequence of the deregulation of transport fares is
a compounded fare. If transport operators will be authorized to
impose and collect an additional amount equivalent to 20% over and
above the authorized fare over a period of time, this will unduly
prejudice a commuter who will be made to pay a fare that has been

170

computed in a manner similar to those of compounded bank interest


rates.
Picture this situation. On December 14, 1990, the LTFRB authorized
provincial bus operators to collect a thirty-seven (P0.37) centavo per
kilometer fare for ordinary buses. At the same time, they were
allowed to impose and collect a fare range of plus or minus 15% over
the authorized rate. Thus P0.37 centavo per kilometer authorized
fare plus P0.05 centavos (which is 15% of P0.37 centavos) is
equivalent to P0.42 centavos, the allowed rate in 1990. Supposing
the LTFRB grants another five (P0.05) centavo increase per
kilometer in 1994, then, the base or reference for computation would
have to be P0.47 centavos (which is P0.42 + P0.05 centavos). If bus
operators will exercise their authority to impose an additional 20%
over and above the authorized fare, then the fare to be collected
shall amount to P0.56 (that is, P0.47 authorized LTFRB rate plus
20% of P0.47 which is P0.29). In effect, commuters will be
continuously subjected, not only to a double fare adjustment but to a
compounding fare as well. On their part, transport operators shall
enjoy a bigger chunk of the pie. Aside from fare increase applied for,
they can still collect an additional amount by virtue of the authorized
fare range. Mathematically, the situation translates into the following:
Year** LTFRB authorized Fare Range Fare to be
rate*** collected per
kilometer
1990 P0.37 15% (P0.05) P0.42
1994 P0.42 + 0.05 = 0.47 20% (P0.09) P0.56
1998 P0.56 + 0.05 = 0.61 20% (P0.12) P0.73
2002 P0.73 + 0.05 = 0.78 20% (P0.16) P0.94
Moreover, rate making or rate fixing is not an easy task. It is a
delicate and sensitive government function that requires dexterity of
judgment and sound discretion with the settled goal of arriving at a
just and reasonable rate acceptable to both the public utility and the
public. Several factors, in fact, have to be taken into consideration
before a balance could be achieved. A rate should not be
confiscatory as would place an operator in a situation where he will

continue to operate at a loss. Hence, the rate should enable public


utilities to generate revenues sufficient to cover operational costs and
provide reasonable return on the investments. On the other hand, a
rate which is too high becomes discriminatory. It is contrary to public
interest. A rate, therefore, must be reasonable and fair and must
be affordable to the end user who will utilize the services.
Given the complexity of the nature of the function of rate-fixing and
its far-reaching effects on millions of commuters, government must
not relinquish this important function in favor of those who would
benefit and profit from the industry. Neither should the requisite
notice and hearing be done away with. The people, represented by
reputable oppositors, deserve to be given full opportunity to be heard
in their opposition to any fare increase.
The present administrative procedure, 14 to our mind, already mirrors
an orderly and satisfactory arrangement for all parties involved. To do
away with such a procedure and allow just one party, an interested
party at that, to determine what the rate should be, will undermine
the right of the other parties to due process. The purpose of a
hearing is precisely to determine what a just and reasonable rate
is. 15 Discarding such procedural and constitutional right is certainly
inimical to our fundamental law and to public interest.
On the presumption of public need.
A certificate of public convenience (CPC) is an authorization granted
by the LTFRB for the operation of land transportation services for
public use as required by law. Pursuant to Section 16(a) of the Public
Service Act, as amended, the following requirements must be met
before a CPC may be granted, to wit: (i) the applicant must be a
citizen of the Philippines, or a corporation or co-partnership,
association or joint-stock company constituted and organized under
the laws of the Philippines, at least 60 per centum of its stock or
paid-up capital must belong entirely to citizens of the Philippines; (ii)
the applicant must be financially capable of undertaking the
proposed service and meeting the responsibilities incident to its
operation; and (iii) the applicant must prove that the operation of the
public service proposed and the authorization to do business will

171

promote the public interest in a proper and suitable manner. It is


understood that there must be proper notice and hearing before the
PSC can exercise its power to issue a CPC.
While adopting in toto the foregoing requisites for the issuance of a
CPC, LTFRB Memorandum Circular No. 92-009, Part IV, provides for
yet incongruous and contradictory policy guideline on the issuance of
a CPC. The guidelines states:
The issuance of a Certificate of Public Convenience
is determined by public need. The presumption of
public need for a service shall be deemed in favor of
the applicant, while the burden of proving that there
is no need for the proposed service shall be the
oppositor's. (Emphasis ours).
The above-quoted provision is entirely incompatible and inconsistent
with Section 16(c)(iii) of the Public Service Act which requires that
before a CPC will be issued, the applicant must prove by proper
notice and hearing that the operation of the public service proposed
will promote public interest in a proper and suitable manner. On the
contrary, the policy guideline states that the presumption of public
need for a public service shall be deemed in favor of the applicant. In
case of conflict between a statute and an administrative order, the
former must prevail.
By its terms, public convenience or necessity generally means
something fitting or suited to the public need. 16 As one of the basic
requirements for the grant of a CPC, public convenience and
necessity exists when the proposed facility or service meets a
reasonable want of the public and supply a need which the existing
facilities do not adequately supply. The existence or
non-existence of public convenience and necessity is therefore a
question of fact that must be established by evidence, real and/or
testimonial; empirical data; statistics and such other means
necessary, in a public hearing conducted for that purpose. The object
and purpose of such procedure, among other things, is to look out
for, and protect, the interests of both the public and the existing
transport operators.

Verily, the power of a regulatory body to issue a CPC is founded on


the condition that after full-dress hearing and investigation, it shall
find, as a fact, that the proposed operation is for the convenience of
the public. 17 Basic convenience is the primary consideration for
which a CPC is issued, and that fact alone must be consistently
borne in mind. Also, existing operators in subject routes must be
given an opportunity to offer proof and oppose the application.
Therefore, an applicant must, at all times, be required to prove his
capacity and capability to furnish the service which he has
undertaken to
render. 18 And all this will be possible only if a public hearing were
conducted for that purpose.
Otherwise stated, the establishment of public need in favor of an
applicant reverses well-settled and institutionalized judicial, quasijudicial and administrative procedures. It allows the party who
initiates the proceedings to prove, by mere application, his affirmative
allegations. Moreover, the offending provisions of the LTFRB
memorandum circular in question would in effect amend the Rules of
Court by adding another disputable presumption in the enumeration
of 37 presumptions under Rule 131, Section 5 of the Rules of Court.
Such usurpation of this Court's authority cannot be countenanced as
only this Court is mandated by law to promulgate rules concerning
pleading, practice and procedure. 19
Deregulation, while it may be ideal in certain situations, may not be
ideal at all in our country given the present circumstances. Advocacy
of liberalized franchising and regulatory process is tantamount to an
abdication by the government of its inherent right to exercise police
power, that is, the right of government to regulate public utilities for
protection of the public and the utilities themselves.
While we recognize the authority of the DOTC and the LTFRB to
issue administrative orders to regulate the transport sector, we find
that they committed grave abuse of discretion in issuing DOTC
Department Order
No. 92-587 defining the policy framework on the regulation of
transport services and LTFRB Memorandum Circular No. 92-009
promulgating the implementing guidelines on DOTC Department
Order No. 92-587, the said administrative issuances being

172

amendatory and violative of the Public Service Act and the Rules of
Court. Consequently, we rule that the twenty (20%) per centum fare
increase imposed by respondent PBOAP on March 16, 1994 without
the benefit of a petition and a public hearing is null and void and of
no force and effect. No grave abuse of discretion however was
committed in the issuance of DOTC Memorandum Order No. 90-395
and DOTC Memorandum dated October 8, 1992, the same being
merely internal communications between administrative officers.
WHEREFORE, in view of the foregoing, the instant petition is hereby
GRANTED and the challenged administrative issuances and orders,
namely: DOTC Department Order No. 92-587, LTFRB Memorandum
Circular
No. 92-009, and the order dated March 24, 1994 issued by
respondent LTFRB are hereby DECLARED contrary to law and
invalid insofar as they affect provisions therein (a) delegating to
provincial bus and jeepney operators the authority to increase or
decrease the duly prescribed transportation fares; and (b) creating a
presumption of public need for a service in favor of the applicant for a
certificate of public convenience and placing the burden of proving
that there is no need for the proposed service to the oppositor.
The Temporary Restraining Order issued on June 20, 1994 is hereby
MADE PERMANENT insofar as it enjoined the bus fare rate increase
granted under the provisions of the aforementioned administrative
circulars, memoranda and/or orders declared invalid.
No pronouncement as to costs.
SO ORDERED.
Padilla, Davide, Jr., Bellosillo and Quiason, JJ., concur.
#Footnotes
1 Pantranco v. Public Service Commission, 70 Phil.
221.

2 The 20th century ushered in the birth and growth


of public utility regulation in the country. After the
Americans introduced public utility regulation at the
turn of the century, various regulatory bodies were
created. They were the Coastwise Rate Commission
under Act No. 520 passed by the Philippine
Commission on November 17, 1902; the Board of
Rate Regulation under Act No. 1779 dated October
12, 1907; the Board of Public Utility Commission
under Act No. 2307 dated December 19, 1913; and
the Public Utility Commission under Act No. 3108
dated March 19, 1923.
During the Commonwealth period, the National
Assembly passed a more comprehensive public
utility law. This was Commonwealth Act No. 146, as
amended or the Public Service Act, as amended.
Said law created a regulatory and franchising body
known as the Public Service Commission (PSC).
The Commission (PSC) existed for thirty-six (36)
years from 1936 up to 1972.
On September 24, 1972, Presidential Decree No. 1
was issued and declared "part of the law of the
land." The same effected a major revamp of the
executive department. Under Article III, Part X of
P.D. No. 1, the Public Service Commission (PSC)
was abolished and replaced by three (3) specialized
regulatory boards. These were the Board of
Transportation, the Board of Communications, and
the Board of Power and Waterworks.
The Board of Transportation (BOT) lasted for
thirteen (13) years. On March 20, 1985, Executive
Order No. 1011 was issued abolishing the Board of
Transportation and the Bureau of Land
Transportation. Their powers and functions were
merged into the Land Transportation Commission
(LTC).

173

Two (2) years later, LTC was abolished by Executive


Order Nos. 125 dated January 30, 1987 and 125-A
dated April 13, 1987 which reorganized the
Department of Transportation and Communications.
On June 19, 1987, the Land Transportation
Franchising and Regulatory Board (LTFRB) was
created by Executive Order No. 202. The LTFRB,
successor of LTC, is the existing franchising and
regulatory body for overland transportation today.
3 Sec. 1, Rule 131, Rules of Court.
4 Decision of LTFRB in Case No. 90-4794, p.
4; Rollo, p. 59.
5 Rollo, p. 42.
6 Order of LTFRB, p. 4; Rollo, p. 55.
7 22 Phil. 456 [1912].
8 Warth v. Seldin, 422 U.S. 490, 498-499, 45 L. Ed.
2d 343, 95 S. Ct. 2197 [1975]; Guzman v. Marrero,
180 U.S. 81, 45 L. Ed. 436, 21 S.Ct. 293 [1901];
McMicken v. United States, 97 U.S. 204, 24 L. Ed.
947 [1978]; Silver Star Citizens' Committee v.
Orlando Fla. 194 So. 2d 681 [1967]; In Re Kenison's
Guardianship, 72 S.D. 180, 31 N.W. 2d 326 [1948].
9 G.R. No. 113375, May 5, 1994.
10 United States v. Barrias, 11 Phil. 327, 330 [1908];
People v. Vera, 65 Phil. 56, 113 [1937].
11 Cruz, Philippine Political Law, 1991 Edition, p. 84.
12 57 Phil. 872 [1933].

13 Id., at pp. 878-879.


** Assume a four-year interval in fare adjustment as
a constant.
*** Assume further a constant P0.05 centavo
increase in fare every four (4) years.
14 Steps in the Filing of Petition for Rate Increase:
A Petition For Adjustment of Rate (either for increase
or reduction) may be filed only by a grantee of a
CPC. Therefore, when franchise/CPC grantees or
existing public utility operators foresee that the new
oil price increase, wage hikes or similar factors
would threaten the survival and viability of their
operations, they may then institute a petition for
increase of rates. Thus in the case of public utilities
engaged in transportation, telecommunications,
energy supply (electricity) and others, the following
steps are usually undertaken in seeking, particularly
upwards adjustments of rates:
1. Filing of formal Petition for Rate Increase. This
petition alleges therein among others, the present
schedule of rates, the reasons why the same is no
longer economically viable and the revised schedule
of rates it proposes to charge. Attached to said
Petition for financial statements, projections/studies
showing possible losses from oil price or wage hikes
under the old or existing rates and possible margin
of profit (which should be within the 12% allowable
limit) under the new or revised rates;
2. After the petition is docketed, a date is set for
hearing for which Notice of Hearing is issued, the
same to be published in a newspaper of general
circulation in the area;

174

3. The parties affected by the application are


required to be furnished copies of the petition and
the Notice of Hearing usually by registered mail with
return card. The Solicitor General is also separately
notified since he is the counsel for the Government;
4. The Technical Staff of the regulatory body
concerned evaluates the documentary evidence
attached to the petition to determine whether there is
warrant to the request for rate revision;
5. Then the Commission on Audit (COA) is
requested by the regulatory body to conduct an audit
and examination of the books of accounts and other
pertinent financial records of the public utility
operator seeking the rate revision; if the
applicants/petitioners are numerous, a
representative number for examination purposes
would do, and the period of operation covered
usually ranges from six (6) months to one (1) year;

16 Black's Law Dictionary, 5th Edition, p. 1105.


17 Batangas Transportation Co. v. Orlanes, 52 Phil.
455 [1928].
18 Manila Electric Co. v. Pasay Transportation Co.,
57 Phil. 825 [1933]; Please see also Raymundo
Transportation v. Perez, 56 Phil. 274 [1931];
Pampanga Bus
Co. v. Enriquez, 38 O.G. 374; Dela Rosa v. Corpus,
38 O.G. 2069.
19 Article VIII, Section 6, 1987 Constitution.

COA audit report is compared with that of the


regulatory body. Copies of these audit reports are
furnished the petitioners and oppositors may submit
their exceptions or objections thereto.
6. Then hearings are conducted. The petitioners may
present accountants or such rate experts to explain
their plea for rate revision. Oppositors are also
allowed to rebut such evidence-in-chief with their
own witnesses and documents. After the hearings,
the corresponding resolution is issued.
To obviate protracted hearings, the parties may
agree to submit their respective Position Papers in
lieu of oral testimonies.
15 Ynchausti Steamship Co. v. Public Utility
Commissioner, 42 Phil. 621, 631 [1922].

SECOND DIVISION
G.R. No. 131719

May 25, 2004

175

THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE,


THE SECRETARY OF LABOR AND EMPLOYMENT, AND THE
SECRETARY OF FOREIGN AFFAIRS, OWWA PUNO,
ADMINISTRATOR, and POEA ADMINISTRATOR, petitioners,
vs.
THE HON. COURT OF APPEALS and ASIAN RECRUITMENT
COUNCIL PHILIPPINE CHAPTER (ARCO-PHIL.), INC.,
representing its members: Worldcare Services Internationale,
Inc., Steadfast
International Recruitment Corporation, Dragon International
Manpower Services Corporation, Verdant Manpower
Mobilization Corporation, Brent Overseas Personnel, Inc., ARL
Manpower Services, Inc., Dahlzhen International Services, Inc.,
Interworld Placement Center, Inc., Lakas Tao Contract Services,
Ltd. Co., and SSC Multiservices, respondents.
DECISION
CALLEJO, SR., J.:
In this petition for review on certiorari, the Executive Secretary of the
President of the Philippines, the Secretary of Justice, the Secretary
of Foreign Affairs, the Secretary of Labor and Employment, the
POEA Administrator and the OWWA Administrator, through the Office
of the Solicitor General, assail the Decision1 of the Court of Appeals
in CA-G.R. SP No. 38815 affirming the Order2 of the Regional Trial
Court of Quezon City dated August 21, 1995 in Civil Case No. Q-9524401, granting the plea of the petitioners therein for a writ of
preliminary injunction and of the writ of preliminary injunction issued
by the trial court on August 24, 1995.
The Antecedents
Republic Act No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, took effect on July 15, 1995. The
Omnibus Rules and Regulations Implementing the Migrant Workers
and Overseas Filipino Act of 1995 was, thereafter, published in the
April 7, 1996 issue of the Manila Bulletin. However, even before the
law took effect, the Asian Recruitment Council Philippine Chapter,

Inc. (ARCO-Phil.) filed, on July 17, 1995, a petition for declaratory


relief under Rule 63 of the Rules of Court with the Regional Trial
Court of Quezon City to declare as unconstitutional Section 2,
paragraph (g), Section 6, paragraphs (a) to (j), (l) and (m), Section 7,
paragraphs (a) and (b), and Sections 9 and 10 of the law, with a plea
for the issuance of a temporary restraining order and/or writ of
preliminary injunction enjoining the respondents therein from
enforcing the assailed provisions of the law.
In a supplement to its petition, the ARCO-Phil. alleged that Rep. Act
No. 8042 was self-executory and that no implementing rules were
needed. It prayed that the court issue a temporary restraining order
to enjoin the enforcement of Section 6, paragraphs (a) to (m) on
illegal recruitment, Section 7 on penalties for illegal recruitment, and
Section 9 on venue of criminal actions for illegal recruitments, viz:
Viewed in the light of the foregoing discussions, there
appears to be urgent an imperative need for this Honorable
Court to maintain the status quo by enjoining the
implementation or effectivity of the questioned provisions of
RA 8042, by way of a restraining order otherwise, the
member recruitment agencies of the petitioner will suffer
grave or irreparable damage or injury. With the effectivity of
RA 8042, a great majority of the duly licensed recruitment
agencies have stopped or suspended their operations for
fear of being prosecuted under the provisions of a law that
are unjust and unconstitutional. This Honorable Court may
take judicial notice of the fact that processing of deployment
papers of overseas workers for the past weeks have come to
a standstill at the POEA and this has affected thousands of
workers everyday just because of the enactment of RA 8042.
Indeed, this has far reaching effects not only to survival of
the overseas manpower supply industry and the active
participating recruitment agencies, the countrys economy
which has survived mainly due to the dollar remittances of
the overseas workers but more importantly, to the poor and
the needy who are in dire need of income-generating jobs
which can only be obtained from abroad. The loss or injury
that the recruitment agencies will suffer will then be
immeasurable and irreparable. As of now, even foreign

176

employers have already reduced their manpower


requirements from the Philippines due to their knowledge
that RA 8042 prejudiced and adversely affected the local
recruitment agencies.3
On August 1, 1995, the trial court issued a temporary restraining
order effective for a period of only twenty (20) days therefrom.
After the petitioners filed their comment on the petition, the ARCOPhil. filed an amended petition, the amendments consisting in the
inclusion in the caption thereof eleven (11) other corporations which
it alleged were its members and which it represented in the suit, and
a plea for a temporary restraining order enjoining the respondents
from enforcing Section 6 subsection (i), Section 6 subsection (k) and
paragraphs 15 and 16 thereof, Section 8, Section 10, paragraphs 1
and 2, and Sections 11 and 40 of Rep. Act No. 8042.
The respondent ARCO-Phil. assailed Section 2(g) and (i), Section 6
subsection (a) to (m), Section 7(a) to (b), and Section 10 paragraphs
(1) and (2), quoted as follows:
(g) THE STATE RECOGNIZES THAT THE ULTIMATE
PROTECTION TO ALL MIGRANT WORKERS IS THE
POSSESSION OF SKILLS. PURSUANT TO THIS AND AS
SOON AS PRACTICABLE, THE GOVERNMENT SHALL
DEPLOY AND/OR ALLOW THE DEPLOYMENT ONLY OF
SKILLED FILIPINO WORKERS.4
Sec. 2 subsection (i, 2nd par.)
Nonetheless, the deployment of Filipino overseas workers,
whether land-based or sea-based, by local service
contractors and manning agents employing them shall be
encourages (sic). Appropriate incentives may be extended to
them.

II. ILLEGAL RECRUITMENT


SEC. 6. Definition. For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring
workers and includes referring, contract services, promising
or advertising for employment abroad, whether for profit or
not, when undertaken by a non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential
Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines: Provided, That any such nonlicensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more
persons shall be deemed so engaged. It shall, likewise,
include the following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of
authority:
(a) To charge or accept directly or indirectly any
amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor
and Employment, or to make a worker pay any
amount greater than that actually received by him as
a loan or advance;
(b) To furnish or publish any false notice or
information or document in relation to recruitment or
employment;
(c) To give any false notice, testimony, information or
document or commit any act of misrepresentation for
the purpose of securing a license or authority under
the Labor Code;
(d) To induce or attempt to induce a worker already
employed to quit his employment in order to offer
him another unless the transfer is designed to
liberate a worker from oppressive terms and
conditions of employment;

177

(e) To influence or attempt to influence any person or


entity not to employ any worker who has not applied
for employment through his agency;

(l) Failure to actually deploy without valid reason as


determined by the Department of Labor and
Employment; and

(f) To engage in the recruitment or placement of


workers in jobs harmful to public health or morality or
to the dignity of the Republic of the Philippines;

(m) Failure to reimburse expenses incurred by the


worker in connection with his documentation and
processing for purposes of deployment, in cases
where the deployment does not actually take place
without the workers fault. Illegal recruitment when
committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage.

(g) To obstruct or attempt to obstruct inspection by


the Secretary of Labor and Employment or by his
duly authorized representative;
(h) To fail to submit reports on the status of
employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs,
departures and such other matters or information as
may be required by the Secretary of Labor and
Employment;
(i) To substitute or alter to the prejudice of the
worker, employment contracts approved and verified
by the Department of Labor and Employment from
the time of actual signing thereof by the parties up to
and including the period of the expiration of the
same without the approval of the Department of
Labor and Employment;

Illegal recruitment is deemed committed by a syndicate if


carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or
more persons individually or as a group.
The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical
persons, the officers having control, management or
direction of their business shall be liable.

SEC. 7. Penalties.

(j) For an officer or agent of a recruitment or


placement agency to become an officer or member
of the Board of any corporation engaged in travel
agency or to be engaged directly or indirectly in the
management of a travel agency;

(a) Any person found guilty of illegal recruitment shall suffer


the penalty of imprisonment of not less than six (6) years and
one (1) day but not more than twelve (12) years and a fine of
not less than two hundred thousand pesos (P200,000.00)
nor more than five hundred thousand pesos (P500,000.00).

(k) To withhold or deny travel documents from


applicant workers before departure for monetary or
financial considerations other than those authorized
under the Labor Code and its implementing rules
and regulations;

(b) The penalty of life imprisonment and a fine of not less


than five hundred thousand pesos (P500,000.00) nor more
than one million pesos (P1,000,000.00) shall be imposed if
illegal recruitment constitutes economic sabotage as defined
herein.

178

Provided, however, That the maximum penalty shall be


imposed if the person illegally recruited is less than eighteen
(18) years of age or committed by a non-licensee or nonholder of authority.
Sec. 8.
Prohibition on Officials and Employees. It shall be unlawful
for any official or employee of the Department of Labor and
Employment, the Philippine Overseas Employment
Administration (POEA), or the Overseas Workers Welfare
Administration (OWWA), or the Department of Foreign
Affairs, or other government agencies involved in the
implementation of this Act, or their relatives within the fourth
civil degree of consanguinity or affinity, to engage, directly or
indirectly, in the business of recruiting migrant workers as
defined in this Act. The penalties provided in the immediate
preceding paragraph shall be imposed upon them.
(underscoring supplied)

Sec. 10, pars. 1 & 2.


Money Claims. Notwithstanding any provision of law to the
contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims arising out of
an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms
of damages.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims under
this section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and
shall be a condition precedent for its approval. The

performance bond to be filed by the recruitment/placement


agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the
workers. If the recruitment/placement agency is a juridical
being, the corporate officers and directors and partners as
the case may be, shall themselves be jointly and solidarily
liable with the corporation or partnership for the aforesaid
claims and damages.

SEC. 11. Mandatory Periods for Resolution of Illegal


Recruitment Cases. The preliminary investigations of
cases under this Act shall be terminated within a period of
thirty (30) calendar days from the date of their filing. Where
the preliminary investigation is conducted by a prosecution
officer and a prima facie case is established, the
corresponding information shall be filed in court within
twenty-four (24) hours from the termination of the
investigation. If the preliminary investigation is conducted by
a judge and a prima facie case is found to exist, the
corresponding information shall be filed by the proper
prosecution officer within forty-eight (48) hours from the date
of receipt of the records of the case.
The respondent averred that the aforequoted provisions of Rep. Act
No. 8042 violate Section 1, Article III of the Constitution. 5 According
to the respondent, Section 6(g) and (i) discriminated against
unskilled workers and their families and, as such, violated the equal
protection clause, as well as Article II, Section 126 and Article XV,
Sections 17 and 3(3) of the Constitution.8 As the law encouraged the
deployment of skilled Filipino workers, only overseas skilled workers
are granted rights. The respondent stressed that unskilled workers
also have the right to seek employment abroad. According to the
respondent, the right of unskilled workers to due process is violated
because they are prevented from finding employment and earning a
living abroad. It cannot be argued that skilled workers are immune
from abuses by employers, while unskilled workers are merely prone
to such abuses. It was pointed out that both skilled and unskilled
workers are subjected to abuses by foreign employers. Furthermore,

179

the prohibition of the deployment of unskilled workers abroad would


only encourage fly-by-night illegal recruiters.
According to the respondent, the grant of incentives to service
contractors and manning agencies to the exclusion of all other
licensed and authorized recruiters is an invalid classification.
Licensed and authorized recruiters are thus deprived of their right to
property and due process and to the "equality of the person." It is
understandable for the law to prohibit illegal recruiters, but to
discriminate against licensed and registered recruiters is
unconstitutional.
The respondent, likewise, alleged that Section 6, subsections (a) to
(m) is unconstitutional because licensed and authorized recruitment
agencies are placed on equal footing with illegal recruiters. It
contended that while the Labor Code distinguished between
recruiters who are holders of licenses and non-holders thereof in the
imposition of penalties, Rep. Act No. 8042 does not make any
distinction. The penalties in Section 7(a) and (b) being based on an
invalid classification are, therefore, repugnant to the equal protection
clause, besides being excessive; hence, such penalties are violative
of Section 19(1), Article III of the Constitution.9 It was also pointed out
that the penalty for officers/officials/employees of recruitment
agencies who are found guilty of economic sabotage or large-scale
illegal recruitment under Rep. Act No. 8042 is life imprisonment.
Since recruitment agencies usually operate with a manpower of more
than three persons, such agencies are forced to shut down, lest their
officers and/or employees be charged with large scale illegal
recruitment or economic sabotage and sentenced to life
imprisonment. Thus, the penalty imposed by law, being
disproportionate to the prohibited acts, discourages the business of
licensed and registered recruitment agencies.
The respondent also posited that Section 6(m) and paragraphs (15)
and (16), Sections 8, 9 and 10, paragraph 2 of the law violate
Section 22, Article III of the Constitution10 prohibiting ex-post facto
laws and bills of attainder. This is because the provisions presume
that a licensed and registered recruitment agency is guilty of illegal
recruitment involving economic sabotage, upon a finding that it
committed any of the prohibited acts under the law. Furthermore,

officials, employees and their relatives are presumed guilty of illegal


recruitment involving economic sabotage upon such finding that they
committed any of the said prohibited acts.
The respondent further argued that the 90-day period in Section 10,
paragraph (1) within which a labor arbiter should decide a money
claim is relatively short, and could deprive licensed and registered
recruiters of their right to due process. The period within which the
summons and the complaint would be served on foreign employees
and, thereafter, the filing of the answer to the complaint would take
more than 90 days. This would thereby shift on local licensed and
authorized recruiters the burden of proving the defense of foreign
employers. Furthermore, the respondent asserted, Section 10,
paragraph 2 of the law, which provides for the joint and several
liability of the officers and employees, is a bill of attainder and a
violation of the right of the said corporate officers and employees to
due process. Considering that such corporate officers and
employees act with prior approval of the board of directors of such
corporation, they should not be liable, jointly and severally, for such
corporate acts.
The respondent asserted that the following provisions of the law are
unconstitutional:
SEC. 9. Venue. A criminal action arising from illegal
recruitment as defined herein shall be filed with the Regional
Trial Court of the province or city where the offense was
committed or where the offended party actually resides at
the time of the commission of the offense: Provided, That the
court where the criminal action is first filed shall acquire
jurisdiction to the exclusion of other courts: Provided,
however, That the aforestated provisions shall also apply to
those criminal actions that have already been filed in court at
the time of the effectivity of this Act.

SEC. 10. Money Claims. Notwithstanding any provision of


law to the contrary, the Labor Arbiters of the National Labor

180

Relations Commission (NLRC) shall have the original and


exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the complaint, the claims
arising out of an employer-employee relationship or by virtue
of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary
and other forms of damages.
Sec. 40.
The departments and agencies charged with carrying out the
provisions of this Act shall, within ninety (90) days after the
effectiviy of this Act, formulate the necessary rules and
regulations for its effective implementation.
According to the respondent, the said provisions violate Section 5(5),
Article VIII of the Constitution11 because they impair the power of the
Supreme Court to promulgate rules of procedure.
In their answer to the petition, the petitioners alleged, inter alia, that
(a) the respondent has no cause of action for a declaratory relief; (b)
the petition was premature as the rules implementing Rep. Act No.
8042 not having been released as yet; (c) the assailed provisions do
not violate any provisions of the Constitution; and, (d) the law was
approved by Congress in the exercise of the police power of the
State. In opposition to the respondents plea for injunctive relief, the
petitioners averred that:
As earlier shown, the amended petition for declaratory relief is devoid
of merit for failure of petitioner to demonstrate convincingly that the
assailed law is unconstitutional, apart from the defect and impropriety
of the petition. One who attacks a statute, alleging unconstitutionality
must prove its invalidity beyond reasonable doubt (Caleon v. Agus
Development Corporation, 207 SCRA 748). All reasonable doubts
should be resolved in favor of the constitutionality of a statute
(People v. Vera, 65 Phil. 56). This presumption of constitutionality is
based on the doctrine of separation of powers which enjoin upon
each department a becoming respect for the acts of the other
departments (Garcia vs. Executive Secretary, 204 SCRA 516

[1991]). Necessarily, the ancillary remedy of a temporary restraining


order and/or a writ of preliminary injunction prayed for must fall.
Besides, an act of legislature approved by the executive is presumed
to be within constitutional bounds (National Press Club v.
Commission on Elections, 207 SCRA 1).12
After the respective counsels of the parties were heard on oral
arguments, the trial court issued on August 21, 1995, an order
granting the petitioners plea for a writ of preliminary injunction upon
a bond of P50,000. The petitioner posted the requisite bond and on
August 24, 1995, the trial court issued a writ of preliminary injunction
enjoining the enforcement of the following provisions of Rep. Act No.
8042 pending the termination of the proceedings:
Section 2, subsections (g) and (i, 2nd par.); Section 6,
subsections (a) to (m), and pars. 15 & 16; Section 7,
subsections (a) & (b); Section 8; Section 9; Section 10; pars.
1 & 2; Section 11; and Section 40 of Republic Act No. 8042,
otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995. 13
The petitioners filed a petition for certiorari with the Court of Appeals
assailing the order and the writ of preliminary injunction issued by the
trial court on the following grounds:
1. Respondent ARCO-PHIL. had utterly failed to show its
clear right/s or that of its member-agencies to be protected
by the injunctive relief and/or violation of said rights by the
enforcement of the assailed sections of R.A. 8042;
2. Respondent Judge fixed a P50,000 injunction bond which
is grossly inadequate to answer for the damage which
petitioner-officials may sustain, should respondent ARCOPHIL. be finally adjudged as not being entitled thereto. 14
The petitioners asserted that the respondent is not the real party-ininterest as petitioner in the trial court. It is inconceivable how the
respondent, a non-stock and non-profit corporation, could sustain
direct injury as a result of the enforcement of the law. They argued

181

that if, at all, any damage would result in the implementation of the
law, it is the licensed and registered recruitment agencies and/or the
unskilled Filipino migrant workers discriminated against who would
sustain the said injury or damage, not the respondent. The
respondent, as petitioner in the trial court, was burdened to adduce
preponderant evidence of such irreparable injury, but failed to do so.
The petitioners further insisted that the petition a quo was premature
since the rules and regulations implementing the law had yet to be
promulgated when such petition was filed. Finally, the petitioners
averred that the respondent failed to establish the requisites for the
issuance of a writ of preliminary injunction against the enforcement of
the law and the rules and regulations issued implementing the same.
On December 5, 1997, the appellate court came out with a four-page
decision dismissing the petition and affirming the assailed order and
writ of preliminary injunction issued by the trial court. The appellate
court, likewise, denied the petitioners motion for reconsideration of
the said decision.
The petitioners now come to this Court in a petition for review on
certiorari on the following grounds:
1. Private respondent ARCO-PHIL. had utterly failed to show
its clear right/s or that of its member-agencies to be
protected by the injunctive relief and/or violation of said
rights by the enforcement of the assailed sections of R.A.
8042;
2. The P50,000 injunction bond fixed by the court a quo and
sustained by the Court of Appeals is grossly inadequate to
answer for the damage which petitioners-officials may
sustain, should private respondent ARCO-PHIL. be finally
adjudged as not being entitled thereto.15
On February 16, 1998, this Court issued a temporary restraining
order enjoining the respondents from enforcing the assailed order
and writ of preliminary injunction.
The Issues

The core issue in this case is whether or not the trial court committed
grave abuse of its discretion amounting to excess or lack of
jurisdiction in issuing the assailed order and the writ of preliminary
injunction on a bond of onlyP50,000 and whether or not the appellate
court erred in affirming the trial courts order and the writ of
preliminary injunction issued by it.
The petitioners contend that the respondent has no locus standi. It is
a non-stock, non-profit organization; hence, not the real party-ininterest as petitioner in the action. Although the respondent filed the
petition in the Regional Trial Court in behalf of licensed and
registered recruitment agencies, it failed to adduce in evidence a
certified copy of its Articles of Incorporation and the resolutions of the
said members authorizing it to represent the said agencies in the
proceedings. Neither is the suit of the respondent a class suit so as
to vest in it a personality to assail Rep. Act No. 8042; the respondent
is service-oriented while the recruitment agencies it purports to
represent are profit-oriented. The petitioners assert that the law is
presumed constitutional and, as such, the respondent was burdened
to make a case strong enough to overcome such presumption and
establish a clear right to injunctive relief.
The petitioners bewail the P50,000 bond fixed by the trial court for
the issuance of a writ of preliminary injunction and affirmed by the
appellate court. They assert that the amount is grossly inadequate to
answer for any damages that the general public may suffer by
reason of the non-enforcement of the assailed provisions of the law.
The trial court committed a grave abuse of its discretion in granting
the respondents plea for injunctive relief, and the appellate court
erred in affirming the order and the writ of preliminary injunction
issued by the trial court.
The respondent, for its part, asserts that it has duly established its
locus standi and its right to injunctive relief as gleaned from its
pleadings and the appendages thereto. Under Section 5, Rule 58 of
the Rules of Court, it was incumbent on the petitioners, as
respondents in the RTC, to show cause why no injunction should
issue. It avers that the injunction bond posted by the respondent was
more than adequate to answer for any injury or damage the
petitioners may suffer, if any, by reason of the writ of preliminary

182

injunction issued by the RTC. In any event, the assailed provisions of


Rep. Act No. 8042 exposed its members to the immediate and
irreparable damage of being deprived of their right to a livelihood
without due process, a property right protected under the
Constitution.
The respondent contends that the commendable purpose of the law
to eradicate illegal recruiters should not be done at the expense and
to the prejudice of licensed and authorized recruitment agencies. The
writ of preliminary injunction was necessitated by the great number of
duly licensed recruitment agencies that had stopped or suspended
their business operations for fear that their officers and employees
would be indicted and prosecuted under the assailed oppressive
penal provisions of the law, and meted excessive penalties. The
respondent, likewise, urges that the Court should take judicial notice
that the processing of deployment papers of overseas workers have
come to a virtual standstill at the POEA.
The Courts Ruling
The petition is meritorious.
The Respondent Has Locus Standi
To File the Petition in the RTC in Representation of the Eleven
Licensed and Registered Recruitment Agencies Impleaded in the
Amended Petition
The modern view is that an association has standing to complain of
injuries to its members. This view fuses the legal identity of an
association with that of its members.16 An association has standing to
file suit for its workers despite its lack of direct interest if its members
are affected by the action. An organization has standing to assert the
concerns of its constituents.17
In Telecommunications and Broadcast Attorneys of the Philippines v.
Commission on Elections,18 we held that standing jus tertii would be
recognized only if it can be shown that the party suing has some
substantial relation to the third party, or that the right of the third party

would be diluted unless the party in court is allowed to espouse the


third partys constitutional claims.
In this case, the respondent filed the petition for declaratory relief
under Rule 64 of the Rules of Court for and in behalf of its eleven
(11) licensed and registered recruitment agencies which are its
members, and which approved separate resolutions expressly
authorizing the respondent to file the said suit for and in their behalf.
We note that, under its Articles of Incorporation, the respondent was
organized for the purposes inter alia of promoting and supporting the
growth and development of the manpower recruitment industry, both
in the local and international levels; providing, creating and exploring
employment opportunities for the exclusive benefit of its general
membership; enhancing and promoting the general welfare and
protection of Filipino workers; and, to act as the representative of any
individual, company, entity or association on matters related to the
manpower recruitment industry, and to perform other acts and
activities necessary to accomplish the purposes embodied therein.
The respondent is, thus, the appropriate party to assert the rights of
its members, because it and its members are in every practical
sense identical. The respondent asserts that the assailed provisions
violate the constitutional rights of its members and the officers and
employees thereof. The respondent is but the medium through which
its individual members seek to make more effective the expression of
their voices and the redress of their grievances.19
However, the respondent has no locus standi to file the petition for
and in behalf of unskilled workers. We note that it even failed to
implead any unskilled workers in its petition. Furthermore, in failing to
implead, as parties-petitioners, the eleven licensed and registered
recruitment agencies it claimed to represent, the respondent failed to
comply with Section 2 of Rule 6320 of the Rules of Court.
Nevertheless, since the eleven licensed and registered recruitment
agencies for which the respondent filed the suit are specifically
named in the petition, the amended petition is deemed amended to
avoid multiplicity of suits.21
The Assailed Order and Writ of

183

Preliminary Injunction Is Mooted


By Case Law
The respondent justified its plea for injunctive relief on the allegation
in its amended petition that its members are exposed to the
immediate and irreparable danger of being deprived of their right to a
livelihood and other constitutional rights without due process, on its
claim that a great number of duly licensed recruitment agencies have
stopped or suspended their operations for fear that (a) their officers
and employees would be prosecuted under the unjust and
unconstitutional penal provisions of Rep. Act No. 8042 and meted
equally unjust and excessive penalties, including life imprisonment,
for illegal recruitment and large scale illegal recruitment without
regard to whether the recruitment agencies involved are licensed
and/or authorized; and, (b) if the members of the respondent, which
are licensed and authorized, decide to continue with their
businesses, they face the stigma and the curse of being labeled
"illegal recruiters." In granting the respondents plea for a writ of
preliminary injunction, the trial court held, without stating the factual
and legal basis therefor, that the enforcement of Rep. Act No. 8042,
pendente lite, would cause grave and irreparable injury to the
respondent until the case is decided on its merits.
We note, however, that since Rep. Act No. 8042 took effect on July
15, 1995, the Court had, in a catena of cases, applied the penal
provisions in Section 6, including paragraph (m) thereof, and the last
two paragraphs therein defining large scale illegal recruitment
committed by officers and/or employees of recruitment agencies by
themselves and in connivance with private individuals, and imposed
the penalties provided in Section 7 thereof, including the penalty of
life imprisonment.22 The Informations therein were filed after
preliminary investigations as provided for in Section 11 of Rep. Act
No. 8042 and in venues as provided for in Section 9 of the said act.
In People v. Chowdury,23 we held that illegal recruitment is a crime of
economic sabotage and must be enforced.
In People v. Diaz,24 we held that Rep. Act No. 8042 is but an
amendment of the Labor Code of the Philippines and is not an ex-

post facto law because it is not applied retroactively. In JMM


Promotion and Management, Inc. v. Court of Appeals,25 the issue of
the extent of the police power of the State to regulate a business,
profession or calling vis--vis the equal protection clause and the
non-impairment clause of the Constitution were raised and we held,
thus:
A profession, trade or calling is a property right within the
meaning of our constitutional guarantees. One cannot be
deprived of the right to work and the right to make a living
because these rights are property rights, the arbitrary and
unwarranted deprivation of which normally constitutes an
actionable wrong.
Nevertheless, no right is absolute, and the proper regulation
of a profession, calling, business or trade has always been
upheld as a legitimate subject of a valid exercise of the
police power by the state particularly when their conduct
affects either the execution of legitimate governmental
functions, the preservation of the State, the public health and
welfare and public morals. According to the maxim, sic utere
tuo ut alienum non laedas, it must of course be within the
legitimate range of legislative action to define the mode and
manner in which every one may so use his own property so
as not to pose injury to himself or others.
In any case, where the liberty curtailed affects at most the
rights of property, the permissible scope of regulatory
measures is certainly much wider. To pretend that licensing
or accreditation requirements violates the due process
clause is to ignore the settled practice, under the mantle of
the police power, of regulating entry to the practice of various
trades or professions. Professionals leaving for abroad are
required to pass rigid written and practical exams before they
are deemed fit to practice their trade. Seamen are required
to take tests determining their seamanship. Locally, the
Professional Regulation Commission has begun to require
previously licensed doctors and other professionals to
furnish documentary proof that they had either re-trained or
had undertaken continuing education courses as a

184

requirement for renewal of their licenses. It is not claimed


that these requirements pose an unwarranted deprivation of
a property right under the due process clause. So long as
professionals and other workers meet reasonable regulatory
standards no such deprivation exists.
Finally, it is a futile gesture on the part of petitioners to
invoke the non-impairment clause of the Constitution to
support their argument that the government cannot enact the
assailed regulatory measures because they abridge the
freedom to contract. In Philippine Association of Service
Exporters, Inc. vs. Drilon, we held that "[t]he non-impairment
clause of the Constitution must yield to the loftier
purposes targeted by the government." Equally important,
into every contract is read provisions of existing law, and
always, a reservation of the police power for so long as the
agreement deals with a subject impressed with the public
welfare.
A last point. Petitioners suggest that the singling out of
entertainers and performing artists under the assailed
department orders constitutes class legislation which violates
the equal protection clause of the Constitution. We do not
agree.
The equal protection clause is directed principally against
undue favor and individual or class privilege. It is not
intended to prohibit legislation which is limited to the object
to which it is directed or by the territory in which it is to
operate. It does not require absolute equality, but merely that
all persons be treated alike under like conditions both as to
privileges conferred and liabilities imposed. We have held,
time and again, that the equal protection clause of the
Constitution does not forbid classification for so long as such
classification is based on real and substantial differences
having a reasonable relation to the subject of the particular
legislation. If classification is germane to the purpose of the
law, concerns all members of the class, and applies equally
to present and future conditions, the classification does not
violate the equal protection guarantee.26

The validity of Section 6 of R.A. No. 8042 which provides that


employees of recruitment agencies may be criminally liable for illegal
recruitment has been upheld in People v. Chowdury:27
As stated in the first sentence of Section 6 of RA 8042, the
persons who may be held liable for illegal recruitment are the
principals, accomplices and accessories. An employee of a
company or corporation engaged in illegal recruitment may
be held liable as principal, together with his employer, if it is
shown that he actively and consciously participated in illegal
recruitment. It has been held that the existence of the
corporate entity does not shield from prosecution the
corporate agent who knowingly and intentionally causes the
corporation to commit a crime. The corporation obviously
acts, and can act, only by and through its human agents, and
it is their conduct which the law must deter. The employee or
agent of a corporation engaged in unlawful business
naturally aids and abets in the carrying on of such business
and will be prosecuted as principal if, with knowledge of the
business, its purpose and effect, he consciously contributes
his efforts to its conduct and promotion, however slight his
contribution may be. 28
By its rulings, the Court thereby affirmed the validity of the assailed
penal and procedural provisions of Rep. Act No. 8042, including the
imposable penalties therefor. Until the Court, by final judgment,
declares that the said provisions are unconstitutional, the
enforcement of the said provisions cannot be enjoined.
The RTC Committed Grave Abuse of Its Discretion Amounting to
Excess or Lack of Jurisdiction in Issuing the Assailed Order and the
Writ of Preliminary Injunction
The matter of whether to issue a writ of preliminary injunction or not
is addressed to the sound discretion of the trial court. However, if the
court commits grave abuse of its discretion in issuing the said writ
amounting to excess or lack of jurisdiction, the same may be nullified
via a writ of certiorari and prohibition.

185

In Social Security Commission v. Judge Bayona,29 we ruled that a


law is presumed constitutional until otherwise declared by judicial
interpretation. The suspension of the operation of the law is a matter
of extreme delicacy because it is an interference with the official acts
not only of the duly elected representatives of the people but also of
the highest magistrate of the land.
In Younger v. Harris, Jr.,30 the Supreme Court of the United States
emphasized, thus:
Federal injunctions against state criminal statutes, either in
their entirety or with respect to their separate and distinct
prohibitions, are not to be granted as a matter of course,
even if such statutes are unconstitutional. No citizen or
member of the community is immune from prosecution, in
good faith, for his alleged criminal acts. The imminence of
such a prosecution even though alleged to be unauthorized
and, hence, unlawful is not alone ground for relief in equity
which exerts its extraordinary powers only to prevent
irreparable injury to the plaintiff who seeks its aid. 752 Beal
v. Missouri Pacific Railroad Corp., 312 U.S. 45, 49, 61 S.Ct.
418, 420, 85 L.Ed. 577.
And similarly, in Douglas, supra, we made clear, after reaffirming this
rule, that:
"It does not appear from the record that petitioners have
been threatened with any injury other than that incidental to
every criminal proceeding brought lawfully and in good faith
" 319 U.S., at 164, 63 S.Ct., at 881.31
The possible unconstitutionality of a statute, on its face, does not of
itself justify an injunction against good faith attempts to enforce it,
unless there is a showing of bad faith, harassment, or any other
unusual circumstance that would call for equitable relief. 32 The "on its
face" invalidation of statutes has been described as "manifestly
strong medicine," to be employed "sparingly and only as a last
resort," and is generally disfavored.33

To be entitled to a preliminary injunction to enjoin the enforcement of


a law assailed to be unconstitutional, the party must establish that it
will suffer irreparable harm in the absence of injunctive relief and
must demonstrate that it is likely to succeed on the merits, or that
there are sufficiently serious questions going to the merits and the
balance of hardships tips decidedly in its favor.34 The higher standard
reflects judicial deference toward "legislation or regulations
developed through presumptively reasoned democratic processes."
Moreover, an injunction will alter, rather than maintain, the status
quo, or will provide the movant with substantially all the relief sought
and that relief cannot be undone even if the defendant prevails at a
trial on the merits.35 Considering that injunction is an exercise of
equitable relief and authority, in assessing whether to issue a
preliminary injunction, the courts must sensitively assess all the
equities of the situation, including the public interest. 36 In litigations
between governmental and private parties, courts go much further
both to give and withhold relief in furtherance of public interest than
they are accustomed to go when only private interests are
involved.37 Before the plaintiff may be entitled to injunction against
future enforcement, he is burdened to show some substantial
hardship.38
The fear or chilling-effect of the assailed penal provisions of the law
on the members of the respondent does not by itself justify
prohibiting the State from enforcing them against those whom the
State believes in good faith to be punishable under the laws:
Just as the incidental "chilling effect" of such statutes
does not automatically render them unconstitutional, so the
chilling effect that admittedly can result from the very
existence of certain laws on the statute books does not in
itself justify prohibiting the State from carrying out the
important and necessary task of enforcing these laws
against socially harmful conduct that the State believes in
good faith to be punishable under its laws and the
Constitution.39
It must be borne in mind that subject to constitutional limitations,
Congress is empowered to define what acts or omissions shall
constitute a crime and to prescribe punishments therefor.40 The

186

power is inherent in Congress and is part of the sovereign power of


the State to maintain peace and order. Whatever views may be
entertained regarding the severity of punishment, whether one
believes in its efficiency or its futility, these are peculiarly questions of
legislative policy.41 The comparative gravity of crimes and whether
their consequences are more or less injurious are matters for the
State and Congress itself to determine.42 Specification of penalties
involves questions of legislative policy.43
Due process prohibits criminal stability from shifting the burden of
proof to the accused, punishing wholly passive conduct, defining
crimes in vague or overbroad language and failing to grant fair
warning of illegal conduct.44 Class legislation is such legislation which
denies rights to one which are accorded to others, or inflicts upon
one individual a more severe penalty than is imposed upon another
in like case offending.45 Bills of attainder are legislative acts which
inflict punishment on individuals or members of a particular group
without a judicial trial. Essential to a bill of attainder are a
specification of certain individuals or a group of individuals, the
imposition of a punishment, penal or otherwise, and the lack of
judicial trial.46
Penalizing unlicensed and licensed recruitment agencies and their
officers and employees and their relatives employed in government
agencies charged with the enforcement of the law for illegal
recruitment and imposing life imprisonment for those who commit
large scale illegal recruitment is not offensive to the Constitution. The
accused may be convicted of illegal recruitment and large scale
illegal recruitment only if, after trial, the prosecution is able to prove
all the elements of the crime charged.47
The possibility that the officers and employees of the recruitment
agencies, which are members of the respondent, and their relatives
who are employed in the government agencies charged in the
enforcement of the law, would be indicted for illegal recruitment and,
if convicted sentenced to life imprisonment for large scale illegal
recruitment, absent proof of irreparable injury, is not sufficient on
which to base the issuance of a writ of preliminary injunction to
suspend the enforcement of the penal provisions of Rep. Act No.
8042 and avert any indictments under the law.48The normal course of

criminal prosecutions cannot be blocked on the basis of allegations


which amount to speculations about the future. 49
There is no allegation in the amended petition or evidence adduced
by the respondent that the officers and/or employees of its members
had been threatened with any indictments for violations of the penal
provisions of Rep. Act No. 8042. Neither is there any allegation
therein that any of its members and/or their officers and employees
committed any of the acts enumerated in Section 6(a) to (m) of the
law for which they could be indicted. Neither did the respondent
adduce any evidence in the RTC that any or all of its members or a
great number of other duly licensed and registered recruitment
agencies had to stop their business operations because of fear of
indictments under Sections 6 and 7 of Rep. Act No. 8042. The
respondent merely speculated and surmised that licensed and
registered recruitment agencies would close shop and stop business
operations because of the assailed penal provisions of the law. A writ
of preliminary injunction to enjoin the enforcement of penal laws
cannot be based on such conjectures or speculations. The Court
cannot take judicial notice that the processing of deployment papers
of overseas workers have come to a virtual standstill at the POEA
because of the assailed provisions of Rep. Act No. 8042. The
respondent must adduce evidence to prove its allegation, and the
petitioners accorded a chance to adduce controverting evidence.
The respondent even failed to adduce any evidence to prove
irreparable injury because of the enforcement of Section 10(1)(2) of
Rep. Act No. 8042. Its fear or apprehension that, because of time
constraints, its members would have to defend foreign employees in
cases before the Labor Arbiter is based on speculations. Even if true,
such inconvenience or difficulty is hardly irreparable injury.
The trial court even ignored the public interest involved in
suspending the enforcement of Rep. Act No. 8042 vis--vis the
eleven licensed and registered recruitment agencies represented by
the respondent. In People v. Gamboa,50we emphasized the primary
aim of Rep. Act No. 8042:

187

Preliminarily, the proliferation of illegal job recruiters and


syndicates preying on innocent people anxious to obtain
employment abroad is one of the primary considerations that
led to the enactment of The Migrant Workers and Overseas
Filipinos Act of 1995. Aimed at affording greater protection to
overseas Filipino workers, it is a significant improvement on
existing laws in the recruitment and placement of workers for
overseas employment. Otherwise known as the Magna
Carta of OFWs, it broadened the concept of illegal
recruitment under the Labor Code and provided stiffer
penalties thereto, especially those that constitute economic
sabotage, i.e., Illegal Recruitment in Large Scale and Illegal
Recruitment Committed by a Syndicate.51

Injunction issued by it in the said case on August 24, 1995


are NULLIFIED. No costs.
SO ORDERED.
Puno*, Quisumbing**, Austria-Martinez, and Tinga, JJ., concur.
Footnotes
*

**

By issuing the writ of preliminary injunction against the


petitioners sans any evidence, the trial court frustrated, albeit
temporarily, the prosecution of illegal recruiters and allowed them to
continue victimizing hapless and innocent people desiring to obtain
employment abroad as overseas workers, and blocked the
attainment of the salutary policies52 embedded in Rep. Act No. 8042.
It bears stressing that overseas workers, land-based and sea-based,
had been remitting to the Philippines billions of dollars which over the
years had propped the economy.

In issuing the writ of preliminary injunction, the trial court considered


paramount the interests of the eleven licensed and registered
recruitment agencies represented by the respondent, and
capriciously overturned the presumption of the constitutionality of the
assailed provisions on the barefaced claim of the respondent that the
assailed provisions of Rep. Act No. 8042 are unconstitutional. The
trial court committed a grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed order and writ of
preliminary injunction. It is for this reason that the Court issued a
temporary restraining order enjoining the enforcement of the writ of
preliminary injunction issued by the trial court.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED.


The assailed decision of the appellate court is REVERSED AND
SET ASIDE. The Order of the Regional Trial Court dated August 21,
1995 in Civil Case No. Q-95-24401 and the Writ of Preliminary

On official leave.
Acting Chairman.

Penned by Associate Justice Jesus M. Elbinias with Associate


Justices Hector L. Hofilea and Omar U. Amin concurring.
2

Penned by Judge Teodoro P. Regino, who was later promoted


Associate Justice of the Court of Appeals.
3

Records, Vol. I, pp. 86-87.

Section 2, paragraph (g).

Section 1. No person shall be deprived of life, liberty or property


without due process of law, nor shall any person be denied the
equal protection of the laws.
6

Sec. 12. The State recognizes the sanctity of family life and shall
protect and strengthen the family as a basic autonomous social
institution. It shall equally protect the life of the mother and the life
of the unborn from conception.
The natural and primary right and duty of parents in the
rearing of the youth for civic efficiency and the
development of moral character shall receive the support
of the Government.
7

Section 1. The State recognizes the Filipino family as the


foundation of the nation. Accordingly, it shall strengthen its solidarity
and actively promote its total development.

188

Sec. 3. The State shall defend the following:

(3) The right of the family to a family living wage and


income.

17

Maite v. Chicago Board of Education, 415 NE2d 1034 (1980),


cited in DeWitt County Taxpayers Association v. The County Board
of Deliot County, 445 NE2d 509 (1983).
18

289 SCRA 337 (1998).

19
9

Sec. 19. (1) Excessive fines shall not be imposed, nor cruel,
degrading or inhuman punishment inflicted. Neither shall death
penalty be imposed, unless, for compelling reasons involving
heinous crimes, the Congress hereafter provides for it. Any death
penalty already imposed shall be reduced to reclusion perpetua.
(Section 19, Article III of the Constitution.)
10

Sec. 22. No ex-post facto law or bill of attainder shall be enacted.


11

(5) Promulgate rules concerning the protection and


enforcement of constitutional rights, pleading, practice,
and procedure in all courts, the admission to the practice
of law, the Integrated Bar, and legal assistance to the
underprivileged. Such rules shall provide a simplified and
inexpensive procedure for the speedy disposition of cases,
shall be uniform for all courts of the same grade, and shall
not diminish, increase, or modify substantive rights. Rules
of procedure of special courts and quasi-judicial bodies
shall remain effective unless disapproved by the Supreme
Court.
12

Records, Vol. I, p. 223.

13

Id. at 235.

14

CA Rollo, p. 10.

15

Rollo, p. 19.

16

W.C.M. Winston Co., Inc. v. Bernardi, 730 F2d 486 (1984),


citing NACCP v. Alabama, 2 L.ed.2d 1488 (1958).

National Associates for the Advancement of Colored People v.


State of Alabama, 2 L.Ed.2d 1488 (1958).
20

SEC. 2. Parties. All persons who have or claim any interest


which would be affected by the declaration shall be made parties;
and no declaration shall, except as otherwise provided in these
Rules, prejudice the rights of persons not parties to the action.
21

SEC. 11. Misjoinder and non-joinder of parties. Neither


misjoinder nor non-joinder of parties is ground for dismissal of an
action. Parties may be dropped or added by order of the court on
motion of any party or on its own initiative at any stage of the action
and on such terms as are just. Any claim against a misjoined party
may be severed and proceeded with separately.
22

People v. Navarra, 352 SCRA 84 (2001); People v. Fajardo, 345


SCRA 395 (2000); People v. Saulo, 344 SCRA 605 (2000); People
v. Gamboa, 341 SCRA 451 (2000); People v. Banzales, 336 SCRA
64 (2000);People v. Ordoo, 335 SCRA 331 (2000); People v.
Mercado de Arabia, 332 SCRA 49 (2000); People v. Moreno, 314
SCRA 556 (1999); People v. Castillon, 306 SCRA 271
(1999); People v. Mercado, 304 SCRA 504 (1999); People v.
Peralta, 283 SCRA 81 (1997); People v. Ortiz-Miyake, 279 SCRA
180 (1997); People v. Villas, 277 SCRA 391 (1997); People v.
Santos, 276 SCRA 329 (1997); People v. Tan Tiong Meng, 271
SCRA 125 (1997); People v. Maozca, 269 SCRA 513
(1997); People v. Seoron, 267 SCRA 278 (1997);People v. De
Leon, 267 SCRA 644 (1997); People v. Benemerito, 264 SCRA 677
(1996); People v. Pabalan, 262 SCRA 574 (1996); People v.
Calonzo, 262 SCRA 534 (1996).
23

325 SCRA 572 (2000).

24

259 SCRA 441 (1996).

25

260 SCRA 319 (1996).

189

26

Id. at 330-332.

44

U.S. v. Schnell, supra.

27

Supra at note 23.

45

State v. Murray, 175 NE 666 (1919).

28

Supra.

46

Misolas v. Panga, 181 SCRA 648 (1990).

29

5 SCRA 126 (1962).

47

The essential elements for illegal recruitment are:

30

27 L.Ed.2d 669 (1971).

31

Ibid.

32

Id.; Fieger v. Thomas, 74 F.3d 740 (1996).

33

Broaderick v. Oklahoma, 37 L.Ed.2d 841.

34

Latino Officers Association v. Safir, 170 F.3d 167 (1999).

(1) the offender undertakes either any activity


within the meaning of "recruitment and
placement" defined under Art. 13(b), or any of the
prohibited practices enumerated under Article 34
of the Labor Code; and
(2) he has no valid license or authority required
by law to enable one to lawfully engage in
recruitment and placement of workers. [People v.
Pascua, 366 SCRA 505 (2001)].
The essential elements for large scale illegal recruitment
are:

35

Forest City Daly Housing, Inc. v. Town of North Hempstead, 175


F.3d 144 (1999).
36

(1) the accused engages in the recruitment and


placement of workers, as defined under Article
13(b) or in any prohibited activities under Article
34 of the Labor Code;

Beal v. Stern, 184 F.3d 117 (1999).

37

Maryland Commission on Human Relations v. Downey


Communications, Inc., 110 Md.App. 493, 678 A.2d 55 (1996).
38

Croselto v. State Bar of Wisconsin, 12 F.3d 396 (1993).

39

Younger v. Harris, Jr., supra.

(2) accused has not complied with the guidelines


issued by the Secretary of Labor and
Employment, particularly with respect to the
securing of a license or an authority to recruit and
deploy workers, whether locally or overseas; and

40

U.S. v. Schnell, 982 F.2d 216 (1992); United States v. Bogle, 689
F.Supp. 1121 (1988).
41

United States v. Bogle, supra.

42

Collins v. Joluston, 59 L.Ed. 1071 (1915).

43

Gore v. United States, 62 L.Ed.2d 1405 (1958).

(3) accused commits the same against three (3)


or more persons, individually or as a group.
[People v. Saulo, 344 SCRA 605 (2000)].
48

See Beal v. Pacific Railroad Corporation, 85 L.Ed. 577, cited


in Younger v. Harris, Jr., supra.
49

Boyle v. Landry, 27 L.Ed.2d 696 (1971).

190

50

341 SCRA 451 (2000).

51

Id. at 456-458.

52

(a) In the pursuit of an independent foreign policy and while


considering national sovereignty, territorial integrity, national interest
and the right to self-determination paramount in its relations with
other states, the State shall, at all times, uphold the dignity of its
citizens whether in country or overseas, in general, and Filipino
migrant workers, in particular.
(b) The State shall afford full protection to labor,
local and overseas, organized and unorganized,
and promote full employment and equality of
employment opportunities for all. Towards this
end, the State shall provide adequate and timely
social, economic and legal services to Filipino
migrant workers.
(c) While recognizing the significant contribution
of Filipino migrant workers to the national
economy through their foreign exchange
remittances, the State does not promote
overseas employment as a means to sustain
economic growth and achieve national
development. The existence of the overseas
employment program rests solely on the
assurance that the dignity and fundamental
human rights and freedoms of the Filipino citizen
shall not, at any time, be compromised or
violated. The State, therefore, shall continuously
create local employment opportunities and
promote the equitable distribution of wealth and
the benefits of development.
(d) The State affirms the fundamental equality
before the law of women and men and the
significant role of women in nation-building.
Recognizing the contribution of overseas migrant
women workers and their particular
vulnerabilities, the State shall apply gender
sensitive criteria in the formulation and
implementation of policies and programs affecting

migrant workers and the composition of bodies


tasked for the welfare of migrant workers.
(e) Free access to the courts and quasi-judicial
bodies and adequate legal assistance shall not
be denied to any person by reason of poverty. In
this regard, it is imperative that an effective
mechanism be instituted to ensure that the rights
and interest of distressed overseas Filipinos, in
general, and Filipino migrant workers, in
particular, documented or undocumented, are
adequately protected and safeguarded.
(f) The right of Filipino migrant workers and all
overseas Filipinos to participate in the democratic
decision-making processes of the State and to be
represented in institutions relevant to overseas
employment is recognized and guaranteed.
(g) The State recognizes that the ultimate
protection to all migrant workers is the
possession of skills. Pursuant to this and as soon
as practicable, the government shall deploy
and/or allow the deployment only of skilled
Filipino workers.
(h) Non-governmental organizations, duly
recognized as legitimate, are partners of the
State in the protection of Filipino migrant workers
and in the promotion of their welfare. The State
shall cooperate with them in a spirit of trust and
mutual respect.
(i) Government fees and other administrative
costs of recruitment, introduction, placement and
assistance to migrant workers shall be rendered
free without prejudice to the provision of Section
36 hereof.
Nonetheless, the deployment of Filipino overseas workers,
whether land-based or sea-based, by local service
contractors and manning agencies employing them shall

191

be encouraged. Appropriate incentives may be extended


to them. (Records, Vol. I, p. 35.)

INTEGRATED BAR OF THE PHILIPPINES, petitioner,


vs.
HON. RONALDO B. ZAMORA, GEN. PANFILO M. LACSON, GEN.
EDGAR B. AGLIPAY, and GEN. ANGELO REYES, respondents.
DECISION
KAPUNAN, J.:
At bar is a special civil action for certiorari and prohibition with
prayer for issuance of a temporary restraining order seeking to nullify
on constitutional grounds the order of President Joseph Ejercito
Estrada commanding the deployment of the Philippine Marines (the
Marines) to join the Philippine National Police (the PNP) in visibility
patrols around the metropolis.
In view of the alarming increase in violent crimes in Metro
Manila, like robberies, kidnappings and carnappings, the President,
in a verbal directive, ordered the PNP and the Marines to conduct
joint visibility patrols for the purpose of crime prevention and
suppression. The Secretary of National Defense, the Chief of Staff of
the Armed Forces of the Philippines (the AFP), the Chief of the PNP
and the Secretary of the Interior and Local Government were tasked
to execute and implement the said order. In compliance with the
presidential mandate, the PNP Chief, through Police Chief
Superintendent Edgar B. Aglipay, formulated Letter of Instruction
02/2000[1] (the LOI) which detailed the manner by which the joint
visibility patrols, called Task Force Tulungan, would be conducted.
[2]
Task Force Tulungan was placed under the leadership of the
Police Chief of Metro Manila.

EN BANC

[G.R. No. 141284. August 15, 2000]

Subsequently, the President confirmed his previous directive on


the deployment of the Marines in a Memorandum, dated 24 January
2000, addressed to the Chief of Staff of the AFP and the PNP Chief.
[3]
In the Memorandum, the President expressed his desire to
improve the peace and order situation in Metro Manila through a
more effective crime prevention program including increased police
patrols.[4] The President further stated that to heighten police visibility
in the metropolis, augmentation from the AFP is necessary.
[5]
Invoking his powers as Commander-in-Chief under Section 18,

192

Article VII of the Constitution, the President directed the AFP Chief of
Staff and PNP Chief to coordinate with each other for the proper
deployment and utilization of the Marines to assist the PNP in
preventing or suppressing criminal or lawless violence. [6] Finally, the
President declared that the services of the Marines in the anti-crime
campaign are merely temporary in nature and for a reasonable
period only, until such time when the situation shall have improved. [7]
The LOI explains the concept of the PNP-Philippine Marines
joint visibility patrols as follows:
xxx
2. PURPOSE:
The Joint Implementing Police Visibility Patrols between the PNP
NCRPO and the Philippine Marines partnership in the conduct of
visibility patrols in Metro Manila for the suppression of crime
prevention and other serious threats to national security.
3. SITUATION:
Criminal incidents in Metro Manila have been perpetrated not only by
ordinary criminals but also by organized syndicates whose members
include active and former police/military personnel whose training,
skill, discipline and firepower prove well-above the present capability
of the local police alone to handle. The deployment of a joint PNP
NCRPO-Philippine Marines in the conduct of police visibility patrol in
urban areas will reduce the incidence of crimes specially those
perpetrated by active or former police/military personnel.
4. MISSION:
The PNP NCRPO will organize a provisional Task Force to conduct
joint NCRPO-PM visibility patrols to keep Metro Manila streets crimefree, through a sustained street patrolling to minimize or eradicate all
forms of high-profile crimes especially those perpetrated by
organized crime syndicates whose members include those that are
well-trained, disciplined and well-armed active or former PNP/Military
personnel.

5. CONCEPT IN JOINT VISIBILITY PATROL OPERATIONS:


a. The visibility patrols shall be conducted jointly by the NCRPO
[National Capital Regional Police Office] and the Philippine Marines
to curb criminality in Metro Manila and to preserve the internal
security of the state against insurgents and other serious threat to
national security, although the primary responsibility over Internal
Security Operations still rests upon the AFP.
b. The principle of integration of efforts shall be applied to eradicate
all forms of high-profile crimes perpetrated by organized crime
syndicates operating in Metro Manila. This concept requires the
military and police to work cohesively and unify efforts to ensure a
focused, effective and holistic approach in addressing crime
prevention. Along this line, the role of the military and police aside
from neutralizing crime syndicates is to bring a wholesome
atmosphere wherein delivery of basic services to the people and
development is achieved. Hand-in-hand with this joint NCRPOPhilippine Marines visibility patrols, local Police Units are responsible
for the maintenance of peace and order in their locality.
c. To ensure the effective implementation of this project, a
provisional Task Force TULUNGAN shall be organized to provide the
mechanism, structure, and procedures for the integrated planning,
coordinating, monitoring and assessing the security situation.
xxx.[8]
The selected areas of deployment under the LOI are:
Monumento Circle, North Edsa (SM City), Araneta Shopping Center,
Greenhills, SM Megamall, Makati Commercial Center, LRT/MRT
Stations and the NAIA and Domestic Airport.[9]
On 17 January 2000, the Integrated Bar of the Philippines (the
IBP) filed the instant petition to annul LOI 02/2000 and to declare the
deployment of the Philippine Marines, null and void and
unconstitutional, arguing that:
I

193

THE DEPLOYMENT OF THE PHILIPPINE MARINES IN METRO


MANILA IS VIOLATIVE OF THE CONSTITUTION, IN THAT:

of police visibility patrols, which feature the team-up of one police


officer and one Philippine Marine soldier, does not violate the civilian
supremacy clause in the Constitution.

A) NO EMERGENCY SITUATION OBTAINS IN METRO MANILA AS


WOULD JUSTIFY, EVEN ONLY REMOTELY, THE DEPLOYMENT
OF SOLDIERS FOR LAW ENFORCEMENT WORK; HENCE, SAID
DEPLOYMENT IS IN DEROGATION OF ARTICLE II, SECTION 3
OF THE CONSTITUTION;

The issues raised in the present petition are: (1) Whether or not
petitioner has legal standing; (2) Whether or not the Presidents
factual determination of the necessity of calling the armed forces is
subject to judicial review; and, (3) Whether or not the calling of the
armed forces to assist the PNP in joint visibility patrols violates the
constitutionalprovisions on civilian supremacy over the military and
the civilian character of the PNP.

B) SAID DEPLOYMENT CONSTITUTES AN INSIDIOUS


INCURSION BY THE MILITARY IN A CIVILIAN FUNCTION OF
GOVERNMENT (LAW ENFORCEMENT) IN DEROGATION OF
ARTICLE XVI, SECTION 5 (4), OF THE CONSTITUTION;
C) SAID DEPLOYMENT CREATES A DANGEROUS TENDENCY
TO RELY ON THE MILITARY TO PERFORM THE CIVILIAN
FUNCTIONS OF THE GOVERNMENT.
II
IN MILITARIZING LAW ENFORCEMENT IN METRO MANILA, THE
ADMINISTRATION IS UNWITTINGLY MAKING THE MILITARY
MORE POWERFUL THAN WHAT IT SHOULD REALLY BE UNDER
THE CONSTITUTION.[10]
Asserting itself as the official organization of Filipino lawyers
tasked with the bounden duty to uphold the rule of law and the
Constitution, the IBP questions the validity of the deployment and
utilization of the Marines to assist the PNP in law enforcement.
Without granting due course to the petition, the Court in a
Resolution,[11] dated 25 January 2000, required the Solicitor General
to file his Comment on the petition. On 8 February 2000, the Solicitor
General submitted his Comment.
The Solicitor General vigorously defends the constitutionality of
the act of the President in deploying the Marines, contending, among
others, that petitioner has no legal standing; that the question of
deployment of the Marines is not proper for judicial scrutiny since the
same involves a political question; that the organization and conduct

The petition has no merit.


First, petitioner failed to sufficiently show that it is in possession
of the requisites of standing to raise the issues in the
petition. Second, the President did not commit grave abuse of
discretion amounting to lack or excess of jurisdiction nor did he
commit a violation of the civilian supremacy clause of the
Constitution.
The power of judicial review is set forth in Section 1, Article VIII
of the Constitution, to wit:
Section 1. The judicial power shall be vested in one Supreme Court
and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable
and enforceable, and to determine whether or not there has been
grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of any branch or instrumentality of the Government.
When questions of constitutional significance are raised, the
Court can exercise its power of judicial review only if the following
requisites are complied with, namely: (1) the existence of an actual
and appropriate case; (2) a personal and substantial interest of the
party raising the constitutional question; (3) the exercise of judicial
review is pleaded at the earliest opportunity; and (4) the
constitutional question is the lis mota of the case.[12]

194

The IBP has not sufficiently complied with the requisites of


standing in this case.
Legal standing or locus standi has been defined as a personal
and substantial interest in the case such that the party has sustained
or will sustain direct injury as a result of the governmental act that is
being challenged.[13] The term interest means a material interest, an
interest in issue affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental interest. [14] The
gist of the question of standing is whether a party alleges such
personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues
upon which the court depends for illumination of difficult
constitutional questions.[15]
In the case at bar, the IBP primarily anchors its standing on its
alleged responsibility to uphold the rule of law and the
Constitution. Apart from this declaration, however, the IBP asserts no
other basis in support of its locus standi. The mere invocation by the
IBP of its duty to preserve the rule of law and nothing more, while
undoubtedly true, is not sufficient to clothe it with standing in this
case. This is too general an interest which is shared by other groups
and the whole citizenry. Based on the standards above-stated, the
IBP has failed to present a specific and substantial interest in the
resolution of the case. Its fundamental purpose which, under Section
2, Rule 139-A of the Rules of Court, is to elevate the standards of the
law profession and to improve the administration of justice is alien to,
and cannot be affected by the deployment of the Marines. It should
also be noted that the interest of the National President of the IBP
who signed the petition, is his alone, absent a formal board
resolution authorizing him to file the present action. To be sure,
members of the BAR, those in the judiciary included, have varying
opinions on the issue. Moreover, the IBP, assuming that it has duly
authorized the National President to file the petition, has not shown
any specific injury which it has suffered or may suffer by virtue of the
questioned governmental act. Indeed, none of its members, whom
the IBP purportedly represents, has sustained any form of injury as a
result of the operation of the joint visibility patrols. Neither is it alleged
that any of its members has been arrested or that their civil liberties
have been violated by the deployment of the Marines. What the IBP

projects as injurious is the supposed militarization of law


enforcement which might threaten Philippine democratic institutions
and may cause more harm than good in the long run. Not only is the
presumed injury not personal in character, it is likewise too vague,
highly speculative and uncertain to satisfy the requirement of
standing. Since petitioner has not successfully established a direct
and personal injury as a consequence of the questioned act, it does
not possess the personality to assail the validity of the deployment of
the Marines. This Court, however, does not categorically rule that the
IBP has absolutely no standing to raise constitutional issues now or
in the future. The IBP must, by way of allegations and proof, satisfy
this Court that it has sufficient stake to obtain judicial resolution of the
controversy.
Having stated the foregoing, it must be emphasized that this
Court has the discretion to take cognizance of a suit which does not
satisfy the requirement of legal standing when paramount interest is
involved.[16] In not a few cases, the Court has adopted a liberal
attitude on the locus standi of a petitioner where the petitioner is able
to craft an issue of transcendental significance to the people. [17] Thus,
when the issues raised are of paramount importance to the public,
the Court may brush aside technicalities of procedure. [18] In this case,
a reading of the petition shows that the IBP has advanced
constitutional issues which deserve the attention of this Court in view
of their seriousness, novelty and weight as precedents. Moreover,
because peace and order are under constant threat and lawless
violence occurs in increasing tempo, undoubtedly aggravated by the
Mindanao insurgency problem, the legal controversy raised in the
petition almost certainly will not go away. It will stare us in the face
again. It, therefore, behooves the Court to relax the rules on standing
and to resolve the issue now, rather than later.

The President did not commit grave abuse of discretion in calling out the Marines.

In the case at bar, the bone of contention concerns the factual


determination of the President of the necessity of calling the armed
forces, particularly the Marines, to aid the PNP in visibility patrols. In
this regard, the IBP admits that the deployment of the military

195

personnel falls under the Commander-in-Chief powers of the


President as stated in Section 18, Article VII of the Constitution,
specifically, the power to call out the armed forces to prevent or
suppress lawless violence, invasion or rebellion. What the IBP
questions, however, is the basis for the calling of the Marines under
the aforestated provision. According to the IBP, no emergency exists
that would justify the need for the calling of the military to assist the
police force. It contends that no lawless violence, invasion or
rebellion exist to warrant the calling of the Marines. Thus, the IBP
prays that this Court review the sufficiency of the factual basis for
said troop [Marine] deployment.[19]

and ensuring domestic tranquility in times when no foreign foe


appears on the horizon. Wide discretion, within the bounds of law, in
fulfilling presidential duties in times of peace is not in any way
diminished by the relative want of an emergency specified in the
commander-in-chief provision. For in making the President
commander-in-chief the enumeration of powers that follow cannot be
said to exclude the Presidents exercising as Commander-in-Chief
powers short of the calling of the armed forces, or suspending the
privilege of the writ of habeas corpus or declaring martial law, in
order to keep the peace, and maintain public order and security.

The Solicitor General, on the other hand, contends that the


issue pertaining to the necessity of calling the armed forces is not
proper for judicial scrutiny since it involves a political question and
the resolution of factual issues which are beyond the review powers
of this Court.

xxx[21]

As framed by the parties, the underlying issues are the scope of


presidential powers and limits, and the extent of judicial review. But,
while this Court gives considerable weight to the parties formulation
of the issues, the resolution of the controversy may warrant a
creative approach that goes beyond the narrow confines of the
issues raised. Thus, while the parties are in agreement that the
power exercised by the President is the power to call out the armed
forces, the Court is of the view that the power involved may be no
more than the maintenance of peace and order and promotion of the
general welfare.[20] For one, the realities on the ground do not show
that there exist a state of warfare, widespread civil unrest or
anarchy. Secondly, the full brunt of the military is not brought upon
the citizenry, a point discussed in the latter part of this decision. In
the words of the late Justice Irene Cortes in Marcos v. Manglapus:
More particularly, this case calls for the exercise of the Presidents
powers as protector of the peace. [Rossiter, The American
Presidency]. The power of the President to keep the peace is not
limited merely to exercising the commander-in-chief powers in times
of emergency or to leading the State against external and internal
threats to its existence. The President is not only clothed with
extraordinary powers in times of emergency, but is also tasked with
attending to the day-to-day problems of maintaining peace and order

Nonetheless, even if it is conceded that the power involved is


the Presidents power to call out the armed forces to prevent or
suppress lawless violence, invasion or rebellion, the resolution of the
controversy will reach a similar result.
We now address the Solicitor Generals argument that the issue
involved is not susceptible to review by the judiciary because it
involves a political question, and thus, notjusticiable.
As a general proposition, a controversy is justiciable if it refers
to a matter which is appropriate for court review.[22] It pertains to
issues which are inherently susceptible of being decided on grounds
recognized by law. Nevertheless, the Court does not automatically
assume jurisdiction over actual constitutional cases brought before it
even in instances that are ripe for resolution. One class of cases
wherein the Court hesitates to rule on are political questions. The
reason is that political questions are concerned with issues
dependent upon the wisdom, not the legality, of a particular act or
measure being assailed. Moreover, the political question being a
function of the separation of powers, the courts will not normally
interfere with the workings of another co-equal branch unless the
case shows a clear need for the courts to step in to uphold the law
and the Constitution.
As Taada v. Cuenco[23] puts it, political questions refer to those
questions which, under the Constitution, are to be decided by the
people in their sovereign capacity, or in regard to which full
discretionary authority has been delegated to the legislative or

196

executive branch of government. Thus, if an issue is clearly identified


by the text of the Constitution as matters for discretionary action by a
particular branch of government or to the people themselves then it
is held to be a political question. In the classic formulation of Justice
Brennan in Baker v. Carr,[24] [p]rominent on the surface of any case
held to involve a political question is found a textually demonstrable
constitutional commitment of the issue to a coordinate political
department; or a lack of judicially discoverable and manageable
standards for resolving it; or the impossibility of deciding without an
initial policy determination of a kind clearly for nonjudicial discretion;
or the impossibility of a courts undertaking independent resolution
without expressing lack of the respect due coordinate branches of
government; or an unusual need for unquestioning adherence to a
political decision already made; or the potentiality of embarassment
from multifarious pronouncements by various departments on the
one question.
The 1987 Constitution expands the concept of judicial review by
providing that (T)he Judicial power shall be vested in one Supreme
Court and in such lower courts as may be established by
law. Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable
and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of any branch or instrumentality of the Government.
[25]
Under this definition, the Court cannot agree with the Solicitor
General that the issue involved is a political question beyond the
jurisdiction of this Court to review. When the grant of power is
qualified, conditional or subject to limitations, the issue of whether
the prescribed qualifications or conditions have been met or the
limitations respected, is justiciable - the problem being one of legality
or validity, not its wisdom.[26] Moreover, the jurisdiction to delimit
constitutional boundaries has been given to this Court. [27] When
political questions are involved, the Constitution limits the
determination as to whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of
the official whose action is being questioned.[28]
By grave abuse of discretion is meant simply capricious or
whimsical exercise of judgment that is patent and gross as to amount
to an evasion of positive duty or a virtual refusal to perform a duty

enjoined by law, or to act at all in contemplation of law, as where the


power is exercised in an arbitrary and despotic manner by reason of
passion or hostility.[29] Under this definition, a court is without power
to directly decide matters over which full discretionary authority has
been delegated. But while this Court has no power to substitute its
judgment for that of Congress or of the President, it may look into the
question of whether such exercise has been made in grave abuse of
discretion.[30] A showing that plenary power is granted either
department of government, may not be an obstacle to judicial inquiry,
for the improvident exercise or abuse thereof may give rise to
justiciable controversy.[31]
When the President calls the armed forces to prevent or
suppress lawless violence, invasion or rebellion, he necessarily
exercises a discretionary power solely vested in his wisdom. This is
clear from the intent of the framers and from the text of the
Constitution itself. The Court, thus, cannot be called upon to overrule
the Presidents wisdom or substitute its own. However, this does not
prevent an examination of whether such power was exercised within
permissible constitutional limits or whether it was exercised in a
manner constituting grave abuse of discretion. In view of the
constitutional intent to give the President full discretionary power to
determine the necessity of calling out the armed forces, it is
incumbent upon the petitioner to show that the Presidents decision is
totally bereft of factual basis. The present petition fails to discharge
such heavy burden as there is no evidence to support the assertion
that there exist no justification for calling out the armed forces. There
is, likewise, no evidence to support the proposition that grave abuse
was committed because the power to call was exercised in such a
manner as to violate the constitutional provision on civilian
supremacy over the military. In the performance of this Courts duty of
purposeful hesitation[32] before declaring an act of another branch as
unconstitutional, only where such grave abuse of discretion is clearly
shown shall the Court interfere with the Presidents judgment. To
doubt is to sustain.
There is a clear textual commitment under the Constitution to
bestow on the President full discretionary power to call out the armed
forces and to determine the necessity for the exercise of such
power. Section 18, Article VII of the Constitution, which embodies the
powers of the President as Commander-in-Chief, provides in part:

197

The President shall be the Commander-in-Chief of all armed forces


of the Philippines and whenever it becomes necessary, he may call
out such armed forces to prevent or suppress lawless violence,
invasion or rebellion. In case of invasion or rebellion, when the public
safety requires it, he may, for a period not exceeding sixty days,
suspend the privilege of the writ of habeas corpus, or place the
Philippines or any part thereof under martial law.
xxx
The full discretionary power of the President to determine the
factual basis for the exercise of the calling out power is also implied
and further reinforced in the rest of Section 18, Article VII which
reads, thus:
xxx
Within forty-eight hours from the proclamation of martial law or the
suspension of the privilege of the writ of habeas corpus, the
President shall submit a report in person or in writing to the
Congress. The Congress, voting jointly, by a vote of at least a
majority of all its Members in regular or special session, may revoke
such proclamation or suspension, which revocation shall not be set
aside by the President. Upon the initiative of the President, the
Congress may, in the same manner, extend such proclamation or
suspension for a period to be determined by the Congress, if the
invasion or rebellion shall persist and public safety requires it.
The Congress, if not in session, shall within twenty-four hours
following such proclamation or suspension, convene in accordance
with its rules without need of a call.
The Supreme Court may review, in an appropriate proceeding filed
by any citizen, the sufficiency of the factual basis of the proclamation
of martial law or the suspension of the privilege of the writ or the
extension thereof, and must promulgate its decision thereon within
thirty days from its filing.
A state of martial law does not suspend the operation of the
Constitution, nor supplant the functioning of the civil courts or

legislative assemblies, nor authorize the conferment of jurisdiction on


military courts and agencies over civilians where civil courts are able
to function, nor automatically suspend the privilege of the writ.
The suspension of the privilege of the writ shall apply only to persons
judicially charged for rebellion or offenses inherent in or directly
connected with invasion.
During the suspension of the privilege of the writ, any person thus
arrested or detained shall be judicially charged within three days,
otherwise he shall be released.
Under the foregoing provisions, Congress may revoke such
proclamation or suspension and the Court may review the sufficiency
of the factual basis thereof. However, there is no such equivalent
provision dealing with the revocation or review of the Presidents
action to call out the armed forces. The distinction places the calling
out power in a different category from the power to declare martial
law and the power to suspend the privilege of the writ of habeas
corpus, otherwise, the framers of the Constitution would have simply
lumped together the three powers and provided for their revocation
and review without any qualification. Expressio unius est exclusio
alterius. Where the terms are expressly limited to certain matters, it
may not, by interpretation or construction, be extended to other
matters.[33] That the intent of the Constitution is exactly what its letter
says, i.e., that the power to call is fully discretionary to the President,
is extant in the deliberation of the Constitutional Commission, to wit:
FR. BERNAS. It will not make any difference. I may add that there is
a graduated power of the President as Commander-in-Chief. First,
he can call out such Armed Forces as may be necessary to suppress
lawless violence; then he can suspend the privilege of the writ
of habeas corpus, then he can impose martial law. This is a
graduated sequence.
When he judges that it is necessary to impose martial law or
suspend the privilege of the writ of habeas corpus, his judgment is
subject to review. We are making it subject to review by the Supreme
Court and subject to concurrence by the National Assembly. But

198

when he exercises this lesser power of calling on the Armed Forces,


when he says it is necessary, it is my opinion that his judgment
cannot be reviewed by anybody.
xxx
FR. BERNAS. Let me just add that when we only have imminent
danger, the matter can be handled by the first sentence: The
President may call out such armed forces to prevent or suppress
lawless violence, invasion or rebellion. So we feel that that is
sufficient for handling imminent danger.
MR. DE LOS REYES. So actually, if a President feels that there is
imminent danger, the matter can be handled by the First Sentence:
The President....may call out such Armed Forces to prevent or
suppress lawless violence, invasion or rebellion. So we feel that that
is sufficient for handling imminent danger, of invasion or rebellion,
instead of imposing martial law or suspending the writ of habeas
corpus, he must necessarily have to call the Armed Forces of the
Philippines as their Commander-in-Chief. Is that the idea?
MR. REGALADO. That does not require any concurrence by the
legislature nor is it subject to judicial review.[34]
The reason for the difference in the treatment of the
aforementioned powers highlights the intent to grant the President
the widest leeway and broadest discretion in using the power to call
out because it is considered as the lesser and more benign power
compared to the power to suspend the privilege of the writ of habeas
corpus and the power to impose martial law, both of which involve
the curtailment and suppression of certain basic civil rights and
individual freedoms, and thus necessitating safeguards by Congress
and review by this Court.
Moreover, under Section 18, Article VII of the Constitution, in the
exercise of the power to suspend the privilege of the writ of habeas
corpus or to impose martial law, two conditions must concur: (1)
there must be an actual invasion or rebellion and, (2) public safety
must require it. These conditions are not required in the case of the

power to call out the armed forces. The only criterion is that
whenever it becomes necessary, the President may call the armed
forces to prevent or suppress lawless violence, invasion or rebellion."
The implication is that the President is given full discretion and wide
latitude in the exercise of the power to call as compared to the two
other powers.
If the petitioner fails, by way of proof, to support the assertion
that the President acted without factual basis, then this Court cannot
undertake an independent investigation beyond the pleadings. The
factual necessity of calling out the armed forces is not easily
quantifiable and cannot be objectively established since matters
considered for satisfying the same is a combination of several factors
which are not always accessible to the courts. Besides the absence
of textual standards that the court may use to judge necessity,
information necessary to arrive at such judgment might also prove
unmanageable for the courts. Certain pertinent information might be
difficult to verify, or wholly unavailable to the courts. In many
instances, the evidence upon which the President might decide that
there is a need to call out the armed forces may be of a nature not
constituting technical proof.
On the other hand, the President as Commander-in-Chief has a
vast intelligence network to gather information, some of which may
be classified as highly confidential or affecting the security of the
state. In the exercise of the power to call, on-the-spot decisions may
be imperatively necessary in emergency situations to avert great loss
of human lives and mass destruction of property. Indeed, the
decision to call out the military to prevent or suppress lawless
violence must be done swiftly and decisively if it were to have any
effect at all. Such a scenario is not farfetched when we consider the
present situation in Mindanao, where the insurgency problem could
spill over the other parts of the country. The determination of the
necessity for the calling out power if subjected to unfettered judicial
scrutiny could be a veritable prescription for disaster, as such power
may be unduly straitjacketed by an injunction or a temporary
restraining order every time it is exercised.
Thus, it is the unclouded intent of the Constitution to vest upon
the President, as Commander-in-Chief of the Armed Forces, full
discretion to call forth the military when in his judgment it is

199

necessary to do so in order to prevent or suppress lawless violence,


invasion or rebellion. Unless the petitioner can show that the
exercise of such discretion was gravely abused, the Presidents
exercise of judgment deserves to be accorded respect from this
Court.
The President has already determined the necessity and factual
basis for calling the armed forces. In his Memorandum, he
categorically asserted that, [V]iolent crimes like bank/store robberies,
holdups, kidnappings and carnappings continue to occur in Metro
Manila...[35] We do not doubt the veracity of the Presidents
assessment of the situation, especially in the light of present
developments. The Court takes judicial notice of the recent bombings
perpetrated by lawless elements in the shopping malls, public
utilities, and other public places. These are among the areas of
deployment described in the LOI 2000. Considering all these facts,
we hold that the President has sufficient factual basis to call for
military aid in law enforcement and in the exercise of this
constitutional power.

The deployment of the Marines does not violate the civilian


supremacy clause nor does it infringe the civilian character of
the police force.
Prescinding from its argument that no emergency situation
exists to justify the calling of the Marines, the IBP asserts that by the
deployment of the Marines, the civilian task of law enforcement is
militarized in violation of Section 3, Article II[36] of the Constitution.
We disagree. The deployment of the Marines does not
constitute a breach of the civilian supremacy clause. The calling of
the Marines in this case constitutes permissible use of military assets
for civilian law enforcement. The participation of the Marines in the
conduct of joint visibility patrols is appropriately circumscribed. The
limited participation of the Marines is evident in the provisions of the
LOI itself, which sufficiently provides the metes and bounds of the
Marines authority. It is noteworthy that the local police forces are the
ones in charge of the visibility patrols at all times, the real authority
belonging to the PNP. In fact, the Metro Manila Police Chief is the

overall leader of the PNP-Philippine Marines joint visibility patrols.


[37]
Under the LOI, the police forces are tasked to brief or orient the
soldiers on police patrol procedures. [38] It is their responsibility to
direct and manage the deployment of the Marines. [39] It is, likewise,
their duty to provide the necessary equipment to the Marines and
render logistical support to these soldiers.[40] In view of the foregoing,
it cannot be properly argued that military authority is supreme over
civilian authority. Moreover, the deployment of the Marines to assist
the PNP does not unmake the civilian character of the police
force. Neither does it amount to an insidious incursion of the military
in the task of law enforcement in violation of Section 5(4), Article XVI
of the Constitution.[41]
In this regard, it is not correct to say that General Angelo Reyes,
Chief of Staff of the AFP, by his alleged involvement in civilian law
enforcement, has been virtually appointed to a civilian post in
derogation of the aforecited provision. The real authority in these
operations, as stated in the LOI, is lodged with the head of a civilian
institution, the PNP, and not with the military. Such being the case, it
does not matter whether the AFP Chief actually participates in the
Task Force Tulungan since he does not exercise any authority or
control over the same. Since none of the Marines was incorporated
or enlisted as members of the PNP, there can be no appointment to
civilian position to speak of. Hence, the deployment of the Marines in
the joint visibility patrols does not destroy the civilian character of the
PNP.
Considering the above circumstances, the Marines render
nothing more than assistance required in conducting the patrols. As
such, there can be no insidious incursion of the military in civilian
affairs nor can there be a violation of the civilian supremacy clause in
the Constitution.
It is worth mentioning that military assistance to civilian
authorities in various forms persists in Philippine jurisdiction. The
Philippine experience reveals that it is not averse to requesting the
assistance of the military in the implementation and execution of
certain traditionally civil functions. As correctly pointed out by the
Solicitor General, some of the multifarious activities wherein military
aid has been rendered, exemplifying the activities that bring both the
civilian and the military together in a relationship of cooperation, are:

200

1. Elections;[42]
2. Administration of the Philippine National Red Cross; [43]
3. Relief and rescue operations during calamities and
disasters;[44]
4. Amateur sports promotion and development;[45]
5. Development of the culture and the arts;[46]
6. Conservation of natural resources;[47]
7. Implementation of the agrarian reform program; [48]
8. Enforcement of customs laws;[49]
9. Composite civilian-military law enforcement activities; [50]

persisted,[60] and whose Constitution, unlike ours, does not expressly


provide for the power to call, the use of military personnel by civilian
law enforcement officers is allowed under circumstances similar to
those surrounding the present deployment of the Philippine
Marines. Under the Posse Comitatus Act[61] of the US, the use of the
military in civilian law enforcement is generally prohibited, except in
certain allowable circumstances. A provision of the Act states:
1385. Use of Army and Air Force as posse comitatus
Whoever, except in cases and under circumstances expressly
authorized by the Constitution or Act of Congress, willfully uses any
part of the Army or the Air Force as posse comitatus or otherwise to
execute the laws shall be fined not more than $10,000 or imprisoned
not more than two years, or both.[62]

10. Conduct of licensure examinations;[51]


11. Conduct of nationwide tests for elementary and high
school students;[52]

To determine whether there is a violation of the Posse


Comitatus Act in the use of military personnel, the US courts [63] apply
the following standards, to wit:

12. Anti-drug enforcement activities;[53]


13. Sanitary inspections;[54]
14. Conduct of census work;[55]
15. Administration of the Civil Aeronautics Board;[56]
16. Assistance in installation of weather forecasting
devices;[57]
17. Peace and order policy formulation in local government
units.[58]
This unquestionably constitutes a gloss on executive power
resulting from a systematic, unbroken, executive practice, long
pursued to the knowledge of Congress and, yet, never before
questioned.[59] What we have here is mutual support and cooperation
between the military and civilian authorities, not derogation of civilian
supremacy.
In the United States, where a long tradition of suspicion and
hostility towards the use of military force for domestic purposes has

Were Army or Air Force personnel used by the civilian law


enforcement officers at Wounded Knee in such a manner that the
military personnel subjected the citizens to the exercise of military
power which was regulatory, proscriptive, or compulsory[64] George
Washington Law Review, pp. 404-433 (1986), which discusses the
four divergent standards for assessing acceptable involvement of
military personnel in civil law enforcement. See likewise HONORED
IN THE BREECH: PRESIDENTIAL AUTHORITY TO EXECUTE THE
LAWS WITH MILITARY FORCE, 83 Yale Law Journal, pp. 130-152,
1973. 64 in nature, either presently or prospectively?
xxx
When this concept is transplanted into the present legal context, we
take it to mean that military involvement, even when not expressly
authorized by the Constitution or a statute,does not violate the Posse
Comitatus Act unless it actually regulates, forbids or compels some
conduct on the part of those claiming relief. A mere threat of some
future injury would be insufficient. (emphasis supplied)

201

Even if the Court were to apply the above rigid standards to the
present case to determine whether there is permissible use of the
military in civilian law enforcement, the conclusion is inevitable that
no violation of the civilian supremacy clause in the Constitution is
committed. On this point, the Court agrees with the observation of
the Solicitor General:

people feel secure in their homes and in the streets, not when the
shadows of violence and anarchy constantly lurk in their midst.

3. The designation of tasks in Annex A[65] does not constitute the


exercise of regulatory, proscriptive, or compulsory military
power. First, the soldiers do not control or direct the operation.
This is evident from Nos. 6,[66] 8(k)[67] and 9(a)[68] of Annex
A. These soldiers, second, also have no power to prohibit or
condemn. In No. 9(d)[69] of Annex A, all arrested persons are
brought to the nearest police stations for proper disposition. And
last, these soldiers apply no coercive force. The materials or
equipment issued to them, as shown in No. 8(c) [70] of Annex A,
are all low impact and defensive in character.The conclusion is
that there being no exercise of regulatory, proscriptive or
compulsory military power, the deployment of a handful of
Philippine Marines constitutes no impermissible use of military
power for civilian law enforcement.[71]

Davide, Jr., C.J., Melo, Purisima, Pardo, Buena, GonzagaReyes, Ynares-Santiago, and De Leon, Jr., JJ., concur.
Bellosillo, J., on official leave.
Puno, J., see separate opinion.
Vitug, J., see separate opinion.
Mendoza, J., see concurring and dissenting opinion.
Panganiban, J., in the result.
Quisumbing, J., joins the opinion of J. Mendoza.

It appears that the present petition is anchored on fear that once


the armed forces are deployed, the military will gain ascendancy, and
thus place in peril our cherished liberties. Such apprehensions,
however, are unfounded. The power to call the armed forces is just
that - calling out the armed forces. Unless, petitioner IBP can show,
which it has not, that in the deployment of the Marines, the President
has violated the fundamental law, exceeded his authority or
jeopardized the civil liberties of the people, this Court is not inclined
to overrule the Presidents determination of the factual basis for the
calling of the Marines to prevent or suppress lawless violence.

If the case at bar is significant, it is because of the government


attempt to foist the political question doctrine to shield an
executive act done in the exercise of the commander-in-chief powers
from judicial scrutiny. If the attempt succeeded, it would have
diminished the power of judicial review and weakened the
checking authority of this Court over the Chief Executive when
he exercises his commander-in-chief powers. The attempt
should remind us of the tragedy that befell the country when
this Court sought refuge in the political question doctrine and
forfeited its most important role as protector of the civil and
political rights of our people. The ongoing conflict in Mindanao
may worsen and can force the Chief Executive to resort to the
use of his greater commander-in-chief powers, hence, this
Court should be extra cautious in assaying similar attempts. A
laid back posture may not sit well with our people considering
that the 1987 Constitution strengthened the checking powers of
this Court and expanded its jurisdiction precisely to stop any

One last point. Since the institution of the joint visibility patrol in
January, 2000, not a single citizen has complained that his political or
civil rights have been violated as a result of the deployment of the
Marines. It was precisely to safeguard peace, tranquility and the civil
liberties of the people that the joint visibility patrol was
conceived. Freedom and democracy will be in full bloom only when

WHEREFORE, premises considered, the petition is hereby


DISMISSED.
SO ORDERED.

SEPARATE OPINION
PUNO, J.:

202

act constituting xxx grave abuse of jurisdiction xxx on the part


of any branch or instrumentality of the Government.1
The importance of the issue at bar includes this humble
separate opinion. We can best perceive the different intersecting
dimensions of the political question doctrine by viewing them from
the broader canvass of history. Political questions are defined as
those questions which under the Constitution, are to be decided by
the people in their sovereign capacity, or in regard to which full
discretionary authority has been delegated to the legislative or
executive branch of government.2 They have two aspects: (1) those
matters that are to be exercised by the people in their primary
political capacity and (2) matters which have been specifically
delegated to some other department or particular office of the
government, with discretionary power to act. 3 The exercise of the
discretionary power of the legislative or executive branch of
government was often the area where the Court had to wrestle with
the political question doctrine.4
A brief review of some of our case law will thus give us a
sharper perspective of the political question doctrine. This question
confronted the Court as early as 1905 in the case of Barcelon v.
Baker.5 The Governor-General of the Philippine Islands, pursuant to
a resolution of the Philippine Commission, suspended the privilege of
the writ of habeas corpus in Cavite and Batangas based on a finding
of open insurrection in said provinces. Felix Barcelon, who was
detained by constabulary officers in Batangas, filed a petition for the
issuance of a writ of habeas corpus alleging that there was no open
insurrection in Batangas. The issue to resolve was whether or not the
judicial department may investigate the facts upon which the
legislative (the Philippine Commission) and executive (the GovernorGeneral) branches of government acted in suspending the privilege
of the writ.
The Court ruled that under our form of government, one
department has no authority to inquire into the acts of another, which
acts are performed within the discretion of the other
department.6 Surveying American law and jurisprudence, it held that
whenever a statute gives discretionary power to any person, to be
exercised by him upon his own opinion of certain facts, the statute
constitutes him the sole judge of the existence of those facts. 7 Since

the Philippine Bill of 1902 empowered the Philippine Commission


and the Governor-General to suspend the privilege of the writ of
habeas corpus, this power is exclusively within the discretion of the
legislative and executive branches of government. The exercise of
this discretion is conclusive upon the courts.8
The Court further held that once a determination is made by the
executive and legislative departments that the conditions justifying
the assailed acts exists, it will presume that the conditions continue
until the same authority decide that they no longer exist. 9 It adopted
the rationale that the executive branch, thru its civil and military
branches, arebetter situated to obtain information about peace and
order from every corner of the nation, in contrast with the judicial
department, with its very limited machinery.10 The seed of the
political question doctrine was thus planted in Philippine soil.
The doctrine barring judicial review because of the political
question doctrine was next applied to the internal affairs of the
legislature. The Court refused to interfere in the legislative exercise
of disciplinary power over its own members. In the 1924 case
of Alejandrino v. Quezon,11 Alejandrino, who was appointed
Senator by the Governor-General, was declared by Senate
Resolution as guilty of disorderly conduct for assaulting another
Senator in the course of a debate, and was suspended from office for
one year. Senator Alejandrino filed a petition for mandamus and
injunction to compel the Senate to reinstate him. The Court held that
under the Jones Law, the power of the Senate to punish its members
for disorderly behavior does not authorize it to suspend an appointive
member from the exercise of his office. While the Court found that
the suspension was illegal, it refused to issue the writ of mandamus
on the ground that "the Supreme Court does not possess the power
of coercion to make the Philippine Senate take any particular
action. [T]he Philippine Legislature or any branch thereof cannot be
directly controlled in the exercise of their legislative powers by any
judicial process."12
The issue revisited the Court twenty-two (22) years later. In
1946, in Vera v. Avelino,13 three senators-elect who had been
prevented from taking their oaths of office by a Senate resolution
repaired to this Court to compel their colleagues to allow them to
occupy their seats contending that only the Electoral Tribunal had

203

jurisdiction over contests relating to their election, returns and


qualifications. Again,
the
Court
refused
to
intervene
citing Alejandrino and affirmed the inherent right of the legislature to
determine who shall be admitted to its membership.
In the 1947 case of Mabanag v. Lopez-Vito,14 three Senators
and eight representatives who were proclaimed elected by Comelec
were not allowed by Congress to take part in the voting for the
passage of the Parity amendment to the Constitution. If their votes
had been counted, the affirmative votes in favor of the proposed
amendment would have been short of the necessary three-fourths
vote in either House of Congress to pass the amendment. The
amendment was eventually submitted to the people for
ratification. The Court declined to intervene and held that a proposal
to amend the Constitution is a highly political function performed by
Congress in its sovereign legislative capacity.15
In the 1955 case of Arnault v. Balagtas,16 petitioner, a private
citizen, assailed the legality of his detention ordered by the Senate
for his refusal to answer questions put to him by members of one of
its investigating committees. This Court refused to order his release
holding that the process by which a contumacious witness is dealt
with by the legislature is a necessary concomitant of the legislative
process and the legislature's exercise of its discretionary authority is
not subject to judicial interference.
In the 1960 case of Osmena v. Pendatun,17 the Court followed
the traditional line. Congressman Sergio Osmena, Jr. was
suspended by the House of Representatives for serious disorderly
behavior for making a privilege speech imputing "malicious charges"
against the President of the Philippines. Osmena, Jr. invoked the
power of review of this Court but the Court once more did not
interfere with Congress' power to discipline its members.
The contours of the political question doctrine have always been
tricky. To be sure, the Court did not always stay its hand whenever
the doctrine is invoked. In the 1949 case of Avelino v.
Cuenco,18 Senate President Jose Avelino, who was deposed and
replaced, questioned his successor's title claiming that the latter had
been elected without a quorum. The petition was initially dismissed
on the ground that the selection of Senate President was an internal
matter and not subject to judicial review.19 On reconsideration,

however, the Court ruled that it could assume jurisdiction over the
controversy in light of subsequent events justifying intervention
among which was the existence of a quorum. 20Though the petition
was ultimately dismissed, the Court declared respondent Cuenco as
the legally elected Senate President.
In the 1957 case of Tanada v. Cuenco,21 the Court assumed
jurisdiction over a dispute involving the formation and composition of
the Senate Electoral Tribunal. It rejected the Solicitor General's claim
that the dispute involved a political question. Instead, it declared that
the Senate is not clothed with "full discretionary authority" in the
choice of members of the Senate Electoral Tribunal and the exercise
of its power thereon is subject to constitutional limitations which are
mandatory in nature.22 It held that under the Constitution, the
membership of the Senate Electoral Tribunal was designed to insure
the exercise of judicial impartiality in the disposition of election
contests affecting members of the lawmaking body.23 The Court then
nullified the election to the Senate Electoral Tribunal made by
Senators belonging to the party having the largest number of votes of
two of their party members but purporting to act on behalf of the
party having the second highest number of votes.
In the 1962 case of Cunanan v. Tan, Jr.,24 the Court passed
judgment on whether Congress had formed the Commission on
Appointments in accordance with the Constitution and found that it
did not. It declared that the Commission on Appointments is a
creature of the Constitution and its power does not come from
Congress but from the Constitution.
The 1967 case of Gonzales v. Comelec25 and the 1971 case
of Tolentino v. Comelec26 abandoned Mabanag v. Lopez-Vito. The
question of whether or not Congress, acting as a constituent
assembly in proposing amendments to the Constitution violates the
Constitution was held to be a justiciable and not a political
issue. In Gonzales, the Court ruled:
"It is true that in Mabanag v. Lopez-Vito, this Court characterizing the
issue submitted thereto as a political one, declined to pass upon the
question whether or not a given number of votes cast in Congress in
favor of a proposed amendment to the Constitution-which was being
submitted to the people for ratification-satisfied the three-fourths vote

204

requirement of the fundamental law. The force of this precedent has


been weakened, however, by Suanes v. Chief Accountant of the
Senate, Avelino v. Cuenco, Tanada v. Cuenco, and Macias v.
Commission on Elections. In the first, we held that the officers and
employees of the Senate Electoral Tribunal are under its supervision
and control, not of that of the Senate President, as claimed by the
latter; in the second, this Court proceeded to determine the number
of Senators necessary for a quorum in the Senate; in the third, we
nullified the election, by Senators belonging to the party having the
largest number of votes in said chamber, purporting to act on behalf
of the party having the second largest number of votes therein, of
two (2) Senators belonging to the first party, as members, for the
second party, of the Senate Electoral Tribunal; and in the fourth, we
declared unconstitutional an act of Congress purporting to apportion
the representative districts for the House of Representatives upon
the ground that the apportionment had not been made as may be
possible according to the number of inhabitants of each
province. Thus, we rejected the theory, advanced in these four
cases, that the issues therein raised were political questions the
determination of which is beyond judicial review.27
The Court explained that the power to amend the Constitution or
to propose amendments thereto is not included in the general grant
of legislative powers to Congress. As a constituent assembly, the
members of Congress derive their authority from the fundamental
law and they do not have the final say on whether their acts are
within or beyond constitutional limits.28 This ruling was reiterated
in Tolentino which held that acts of a constitutional convention called
for the purpose of proposing amendments to the Constitution are at
par with acts of Congress acting as a constituent assembly.29
In sum, this Court brushed aside the political question
doctrine and assumed jurisdiction whenever it found
constitutionally-imposed limits on the exercise of powers
conferred upon the Legislature.30
The Court hewed to the same line as regards the exercise
of Executive power. Thus, the respect accorded executive
discretion was observed in Severino v. Governor-General,31 where
it was held that the Governor-General, as head of the executive
department, could not be compelled by mandamus to call a special

election in the town of Silay for the purpose of electing a municipal


president. Mandamus and injunction could not lie to enforce or
restrain a duty which is discretionary. It was held that when the
Legislature conferred upon the Governor-General powers and duties,
it did so for the reason that he was in a better position to know the
needs of the country than any other member of the executive
department, and with full confidence that he will perform such duties
as his best judgment dictates.32
Similarly, in Abueva v. Wood,33 the Court held that the
Governor-General could not be compelled by mandamus to produce
certain vouchers showing the various expenditures of the
Independence Commission. Under the principle of separation of
powers, it ruled that it was not intended by the Constitution that one
branch of government could encroach upon the field of duty of the
other. Each department has an exclusive field within which it can
perform its part within certain discretionary limits. 34 It observed that
"the executive and legislative departments of government are
frequently called upon to deal with what are known as political
questions, with which the judicial department of government has no
intervention. In all such questions, the courts uniformly refused to
intervene for the purpose of directing or controlling the actions of the
other department; such questions being many times reserved to
those departments in the organic law of the state." 35
In Forties v. Tiaco,36 the Court also refused to take cognizance
of a case enjoining the Chief Executive from deporting an obnoxious
alien whose continued presence in the Philippines was found by him
to be injurious to the public interest. It noted that sudden and
unexpected conditions may arise, growing out of the presence of
untrustworthy aliens, which demand immediate action. The
President's inherent power to deport undesirable aliens is universally
denominated as political, and this power continues to exist for the
preservation of the peace and domestic tranquility of the nation. 37
In Manalang v. Quitoriano,38 the Court also declined to
interfere in the exercise of the President's appointing power. It held
that the appointing power is the exclusive prerogative of the
President, upon which no limitations may be imposed by Congress,
except those resulting from the need of securing concurrence of the
Commission on Appointments and from the exercise of the limited

205

legislative power to prescribe qualifications to a given appointive


office.

suspension shall exist. The extent of the power which may be


inquired into by courts is defined by these limitations. 43

We now come to the exercise by the President of his


powers as Commander-in-Chief vis-a-vis the political question
doctrine. In the 1940's, this Court has held that as Commander-inChief of the Armed Forces, the President has the power to determine
whether war, in the legal sense, still continues or has terminated. It
ruled that it is within the province of the political department and not
of the judicial department of government to determine when war is at
end.39

On the vital issue of how the Court may inquire into the
President's exercise of power, it ruled that the function of the Court is
not to supplant but merely to check the Executive; to ascertain
whether the President has gone beyond the constitutional limits of
his jurisdiction, not to exercise the power vested in him or to
determine the wisdom of his act. Judicial inquiry is confined to the
question of whether the President did not act arbitrarily.44 Using this
yardstick, the Court found that the President did not.

In 1952, the Court decided the landmark case of Montenegro v.


Castaneda.40 President Quirino suspended the privilege of the writ of
habeas corpus for persons detained or to be detained for crimes of
sedition,
insurrection
or
rebellion. The
Court,
citing Barcelon, declared that the authority to decide whether the
exigency has arisen requiring the suspension of the privilege belongs
to the President and his decision is final and conclusive on the
courts.41

The emergency period of the 1970's flooded the Court with


cases which raised the political question defense. The issue divided
the
Court
down
the
middle. Javellana
v.
Executive
Secretary45 showed that while a majority of the Court held that the
issue of whether or not the 1973 Constitution had been ratified in
accordance with the 1935 Constitution was justiciable, a majority
also ruled that the decisive issue of whether the 1973 Constitution
had come into force and effect, with or without constitutional
ratification, was a political question.46

Barcelon was the ruling case law until the 1971 case
of Lansang v. Garcia came.42 Lansang reversed the previous
cases and held that the suspension of the privilege of the writ of
habeas corpus was not a political question. According to the Court,
the weight of Barcelon was diluted by two factors: (1) it relied heavily
on Martin v. Mott, which involved the U.S. President's power to call
out the militia which is a much broader power than suspension of the
privilege of the writ; and (2) the privilege was suspended by the
American Governor-General whose act, as representative of the
sovereign affecting the freedom of its subjects, could not be equated
with that of the President of the Philippines dealing with the freedom
of the sovereign Filipino people.
The Court declared that the power to suspend the privilege
of the writ of habeas corpus is neither absolute nor unqualified
because the Constitution sets limits on the exercise of
executive discretion on the matter. These limits are: (1) that the
privilege must not be suspended except only in cases of invasion,
insurrection or rebellion or imminent danger thereof; and (2) when
the public safety requires it, in any of which events the same may be
suspended wherever during such period the necessity for the

The validity of the declaration of martial law by then President


Marcos was next litigated before the Court. In Aquino, Jr. v.
Enrile,47 it upheld the President's declaration of martial law. On
whether the validity of the imposition of martial law was a political or
justiciable question, the Court was almost evenly divided. One-half
embraced the political question position and the other half
subscribed to the justiciable position in Lansang. Those adhering to
the political question doctrine used different methods of approach to
it.48
In 1983, the Lansang ruling was weakened by the Court
in Garcia-Padilla v. Enrile.49 The petitioners therein were arrested
and detained by the Philippine Constabulary by virtue of a
Presidential Commitment Order (PCO). Petitioners sought the
issuance of a writ of habeas corpus. The Court found that the PCO
had the function of validating a person's detention for any of the
offenses covered in Proclamation No. 2045 which continued in force
the suspension of the privilege of the writ of habeas corpus. It held
that the issuance of the PCO by the President was not subject to
judicial inquiry.50 It went further by declaring that there was a need to

206

re-examine Lansang with a view to reverting to Barcelon and


Montenegro. It observed that in times of war or national emergency,
the President must be given absolute control for the very life of the
nation and government is in great peril. The President, it intoned, is
answerable only to his conscience, the people, and God. 51
But barely six (6) days after Garcia-Padilla, the Court
promulgated Morales, Jr. v. Enrile52 reiterating Lansang. It held that
by the power of judicial review, the Court must inquire into every
phase and aspect of a person's detention from the moment he was
taken into custody up to the moment the court passes upon the
merits of the petition. Only after such a scrutiny can the court satisfy
itself that the due process clause of the Constitution has been met. 53
It is now history that the improper reliance by the Court on
the political question doctrine eroded the people's faith in its
capacity to check abuses committed by the then Executive in
the exercise of his commander-in-chief powers, particularly
violations against human rights. The refusal of courts to be proactive in the exercise of its checking power drove the people to
the streets to resort to extralegal remedies. They gave birth to
EDSA.
Two lessons were not lost to the members of the Constitutional
Commission that drafted the 1987 Constitution. The first was the
need to grant this Court the express power to review the exercise of
the powers as commander-in-chief by the President and deny it of
any discretion to decline its exercise. The second was the need
to compel theCourt to be pro-active by expanding its jurisdiction
and, thus, reject its laid back stance against acts constituting grave
abuse of discretion on the part of any branch or instrumentality of
government. Then Chief Justice Roberto Concepcion, a member of
the Constitutional Commission, worked for the insertion of the
second paragraph of Section 1, Article VIII in the draft
Constitution,54 which reads:
"Sec. 1. x x x.
Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable
and enforceable, and to determine whether or not there has been

a grave abuse of discretion amounting to lack or excess of


jurisdiction on the part of any branch or instrumentality of the
Government."
The language of the provision clearly gives the Court the power to
strike down acts amounting to grave abuse of discretion of both the
legislative and executive branches of government.
We should interpret Section 18, Article VII of the 1987
Constitution in light of our constitutional history. The provision states:
"Sec. 18. The President shall be the Commander-in-Chief of all
armed forces of the Philippines and whenever it becomes
necessary, he may call out such armed forces to prevent or
suppress lawless violence, invasion or rebellion. In case of
invasion or rebellion, when the public safety requires it, he may,
for a period not exceeding sixty days, suspend the privilege of
the writ of habeas corpus or place the Philippines or any part
thereof under martial law. Within forty-eight hours from the
proclamation of martial law or the suspension of the privilege of the
writ of habeas corpus, the President shall submit a report in person
or in writing to Congress. The Congress, voting jointly, by a vote of at
least a majority of all its Members in regular or special session, may
revoke such proclamation or suspension, which revocation shall not
be set aside by the President. Upon the initiative of the President, the
Congress may, in the same manner, extend such proclamation or
suspension for a period to be determined by Congress, if the
invasion or rebellion shall persist and public safety requires it.
The Congress, if not in session, shall, within twenty-four hours
following such proclamation or suspension, convene in accordance
with its rules without need of a call.
The Supreme Court may review, in an appropriate proceeding
filed by any citizen, the sufficiency of the factual basis of the
proclamation of martial law or the suspension of the privilege of
the writ or the extension thereof, and must promulgate its
decision thereon within thirty days from its filing.

207

x x x."

calling out power by the President, ergo, this Court cannot pass
upon the validity of its exercise.

It is clear from the foregoing that the President, as Commanderin-Chief of the armed forces of the Philippines, may call out the
armed forces subject to two conditions: (1) whenever it
becomes necessary; and (2) to prevent or suppress lawless
violence, invasion or rebellion. Undeniably, these conditions lay
down thesine qua requirement for the exercise of the power and
the objective sought to be attained by the exercise of the
power. They define the constitutional parameters of the calling
out power. Whether or not there is compliance with these
parameters is a justiciable issue and is not a political question.

Given the light of our constitutional history, this express


grant of power merely means that the Court cannot decline the
exercise of its power because of the political question doctrine
as it did in the past. In fine, the express grant simply stresses
the mandatory duty of this Court to check the exercise of the
commander-in-chief powers of the President. It eliminated the
discretion of the Court not to wield its power of review thru the
use of the political question doctrine.

I am not unaware that in the deliberations of the Constitutional


Commission, Commissioner Bernas opined that the President's
exercise of the "calling out power," unlike the suspension of the
privilege of the writ of habeas corpus and the declaration of martial
law, is not a justiciable issue but a political question and therefore not
subject to judicial review.

It may be conceded that the calling out power may be a "lesser


power" compared to the power to suspend the privilege of the writ of
habeas corpus and the power to declare martial law. Even then, its
exercise cannot be left to the absolute discretion of the Chief
Executive as Commander-in-Chief of the arm

It must be borne in mind, however, that while a member's


opinion expressed on the floor of the Constitutional Convention is
valuable, it is not necessarily expressive of the people's intent. 55 The
proceedings of the Convention are less conclusive on the proper
construction of the fundamental law than are legislative proceedings
of the proper construction of a statute, for in the latter case it is the
intent of the legislature the courts seek, while in the former, courts
seek to arrive at the intent of the people through the discussions and
deliberations of their representatives. 56 The conventional wisdom is
that the Constitution does not derive its force from the convention
which framed it, but from the people who ratified it, the intent to be
arrived at is that of the people.57
It is true that the third paragraph of Section 18, Article VII of
the 1987 Constitution expressly gives the Court the power to
review the sufficiency of the factual bases used by the
President in the suspension of the privilege of the writ of
habeas corpus and the declaration of martial law. It does not
follow, however, that just because the same provision did not
grant to this Court the power to review the exercise of the

208

JOSE CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE


WEBB, SEN. WIGBERTO TAADA, and REP. JOKER P.
ARROYO,petitioners,
vs.
TEOFISTO GUINGONA, JR., in his capacity as Executive
Secretary, Office of the President; RENATO CORONA, in his
capacity as Assistant Executive Secretary and Chairman of
the Presidential review Committee on the Lotto, Office of the
President; PHILIPPINE CHARITY SWEEPSTAKES OFFICE;
and PHILIPPINE GAMING MANAGEMENT CORPORATION,
respondents.
Jovito R. Salonga, Fernando Santiago, Emilio C. Capulong, Jr.
and Felipe L. Gozon for petitioners.
Renato L. Cayetano and Eleazar B. Reyes for PGMC.
Gamaliel G. Bongco, Oscar Karaan and Jedideoh Sincero for
intervenors.

DAVIDE, JR., J.:

G.R. No. 113375 May 5, 1994

This is a special civil action for prohibition and injunction, with a


prayer for a temporary restraining order and preliminary
injunction, which seeks to prohibit and restrain the
implementation of the "Contract of Lease" executed by the
Philippine Charity Sweepstakes Office (PCSO) and the Philippine
Gaming Management Corporation (PGMC) in connection with the
on- line lottery system, also known as "lotto."

KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA,


CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG,
JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO
SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L.
GOZON, RAFAEL G. FERNANDO, RAOUL V. VICTORINO,

Petitioner Kilosbayan, Incorporated (KILOSBAYAN) avers that it is


a non-stock domestic corporation composed of civic-spirited
citizens, pastors, priests, nuns, and lay leaders who are
committed to the cause of truth, justice, and national renewal. The
rest of the petitioners, except Senators Freddie Webb and

EN BANC

209

Wigberto Taada and Representative Joker P. Arroyo, are suing


in their capacities as members of the Board of Trustees of
KILOSBAYAN and as taxpayers and concerned citizens. Senators
Webb and Taada and Representative Arroyo are suing in their
capacities as members of Congress and as taxpayers and
concerned citizens of the Philippines.
The pleadings of the parties disclose the factual antecedents
which triggered off the filing of this petition.
Pursuant to Section 1 of the charter of the PCSO (R.A. No. 1169,
as amended by B.P. Blg. 42) which grants it the authority to hold
and conduct "charity sweepstakes races, lotteries and other
similar activities," the PCSO decided to establish an on- line
lottery system for the purpose of increasing its revenue base and
diversifying its sources of funds. Sometime before March 1993,
after learning that the PCSO was interested in operating an online lottery system, the Berjaya Group Berhad, "a multinational
company and one of the ten largest public companies in
Malaysia," long "engaged in, among others, successful lottery
operations in Asia, running both Lotto and Digit games, thru its
subsidiary, Sports Toto Malaysia," with its "affiliate, the
International Totalizator Systems, Inc., . . . an American public
company engaged in the international sale or provision of
computer systems, softwares, terminals, training and other
technical services to the gaming industry," "became interested to
offer its services and resources to PCSO." As an initial step,
Berjaya Group Berhad (through its individual nominees)
organized with some Filipino investors in March 1993 a Philippine
corporation known as the Philippine Gaming Management
Corporation (PGMC), which "was intended to be the medium
through which the technical and management services required
for the project would be offered and delivered to PCSO." 1
Before August 1993, the PCSO formally issued a Request for
Proposal (RFP) for the Lease Contract of an on-line lottery
system for the PCSO. 2 Relevant provisions of the RFP are the
following:

1. EXECUTIVE SUMMARY
xxx xxx xxx
1.2. PCSO is seeking a suitable contractor which
shall build, at its own expense, all the facilities
('Facilities') needed to operate and maintain a
nationwide on-line lottery system. PCSO shall
lease the Facilities for a fixed percentage
ofquarterly gross receipts. All receipts from ticket
sales shall be turned over directly to PCSO. All
capital, operating expenses and expansion
expenses and risks shall be for the exclusive
account of the Lessor.
xxx xxx xxx
1.4. The lease shall be for a period not exceeding
fifteen (15) years.
1.5. The Lessor is expected to submit a
comprehensive nationwide lottery development
plan ("Development Plan") which will include the
game, the marketing of the games, and the
logistics to introduce the games to all the cities
and municipalities of the country within five (5)
years.
xxx xxx xxx
1.7. The Lessor shall be selected based on its
technical expertise, hardware and software
capability, maintenance support, and financial
resources. The Development Plan shall have a
substantial bearing on the choice of the Lessor.
The Lessor shall be a domestic corporation, with

210

at least sixty percent (60%) of its shares owned by


Filipino shareholders.
xxx xxx xxx
The Office of the President, the National Disaster
Control Coordinating Council, the Philippine
National Police, and the National Bureau of
Investigation shall be authorized to use the
nationwide telecommunications system of the
Facilities Free of Charge.
1.8. Upon expiration of the lease, the Facilities
shall be owned by PCSO without any additional
consideration. 3
xxx xxx xxx

2.2. OBJECTIVES
The objectives of PCSO in leasing the Facilities
from a private entity are as follows:
xxx xxx xxx
2.2.2. Enable PCSO to operate a nationwide online Lottery system at no expense or risk to the
government.
xxx xxx xxx
2.4. DUTIES AND RESPONSIBILITIES OF THE
LESSOR
xxx xxx xxx

2.4.2. THE LESSOR


The Proponent is expected to furnish and
maintain the Facilities, including the personnel
needed to operate the computers, the
communications network and sales offices under
a build-lease basis. The printing of tickets shall be
undertaken under the supervision and control of
PCSO. The Facilities shall enable PCSO to
computerize the entire gaming system.
The Proponent is expected to formulate and
design consumer-oriented Master Games Plan
suited to the marketplace, especially geared to
Filipino gaming habits and preferences. In
addition, the Master Games Plan is expected to
include a Product Plan for each game and explain
how each will be introduced into the market. This
will be an integral part of the Development Plan
which PCSO will require from the Proponent.
xxx xxx xxx
The Proponent is expected to provide upgrades to
modernize the entire gaming system over the life
ofthe lease contract.
The Proponent is expected to provide technology
transfer to PCSO technical personnel. 4
7. GENERAL GUIDELINES FOR PROPONENTS

xxx xxx xxx


Finally, the Proponent must be able to stand the
acid test of proving that it is an entity able to take
on the role of responsible maintainer of the on-line

211

lottery system, and able to achieve PSCO's goal


of formalizing an on-line lottery system to achieve
its mandated objective. 5
xxx xxx xxx

16. DEFINITION OF TERMS


Facilities: All capital equipment, computers,
terminals, software, nationwide
telecommunication network, ticket sales offices,
furnishings, and fixtures; printing costs; cost of
salaries and wages; advertising and promotion
expenses; maintenance costs; expansion and
replacement costs; security and insurance, and all
other related expenses needed to operate
nationwide on-line lottery system. 6
Considering the above citizenship requirement, the PGMC claims
that the Berjaya Group "undertook to reduce its equity stakes in
PGMC to 40%," by selling 35% out of the original 75% foreign
stockholdings to local investors.
On 15 August 1993, PGMC submitted its bid to the PCSO. 7
The bids were evaluated by the Special Pre-Qualification Bids
and Awards Committee (SPBAC) for the on-line lottery and its Bid
Report was thereafter submitted to the Office of the
President. 8 The submission was preceded by complaints by the
Committee's Chairperson, Dr. Mita Pardo de Tavera. 9
On 21 October 1993, the Office of the President announced that it
had given the respondent PGMC the go-signal to operate the
country's on-line lottery system and that the corresponding
implementing contract would be submitted not later than 8
November 1993 "for final clearance and approval by the Chief
Executive." 10 This announcement was published in the Manila

Standard, Philippine Daily Inquirer, and the Manila Times on 29


October 1993. 11

On 4 November 1993, KILOSBAYAN sent an open letter to


Presidential Fidel V. Ramos strongly opposing the setting up to
the on-line lottery system on the basis of serious moral and
ethical considerations. 12
At the meeting of the Committee on Games and Amusements of
the Senate on 12 November 1993, KILOSBAYAN reiterated its
vigorous opposition to the on-line lottery on account of its
immorality and illegality. 13
On 19 November 1993, the media reported that despite the
opposition, "Malacaang will push through with the operation of
an on-line lottery system nationwide" and that it is actually the
respondent PCSO which will operate the lottery while the winning
corporate bidders are merely "lessors." 14
On 1 December 1993, KILOSBAYAN requested copies of all
documents pertaining to the lottery award from Executive
Secretary Teofisto Guingona, Jr. In his answer of 17 December
1993, the Executive Secretary informed KILOSBAYAN that the
requested documents would be duly transmitted before the end of
the month. 15. However, on that same date, an agreement
denominated as "Contract of Lease" was finally executed by
respondent PCSO and respondent PGMC. 16 The President, per the
press statement issued by the Office of the President, approved it on
20 December 1993. 17
In view of their materiality and relevance, we quote the following
salient provisions of the Contract of Lease:
1. DEFINITIONS
The following words and terms shall have the
following respective meanings:

212

1.1 Rental Fee Amount to be paid by PCSO to


the LESSOR as compensation for the fulfillment of
the obligations of the LESSOR under this
Contract, including, but not limited to the lease of
the Facilities.
xxx xxx xxx

1.8 Escrow Deposit The proposal deposit in the


sum of Three Hundred Million Pesos
(P300,000,000.00) submitted by the LESSOR to
PCSO pursuant to the requirements of the
Request for Proposals.
2. SUBJECT MATTER OF THE LEASE

1.3 Facilities All capital equipment, computers,


terminals, software (including source codes for the
On-Line Lottery application software for the
terminals, telecommunications and central
systems), technology, intellectual property rights,
telecommunications network, and furnishings and
fixtures.

The LESSOR shall build, furnish and maintain at


its own expense and risk the Facilities for the OnLine Lottery System of PCSO in the Territory on
an exclusive basis. The LESSOR shall bear all
Maintenance and Other Costs as defined herein.

1.4 Maintenance and Other Costs All costs and


expenses relating to printing, manpower, salaries
and wages, advertising and promotion,
maintenance, expansion and replacement,
security and insurance, and all other related
expenses needed to operate an On-Line Lottery
System, which shall be for the account of the
LESSOR. All expenses relating to the setting-up,
operation and maintenance of ticket sales offices
of dealers and retailers shall be borne by PCSO's
dealers and retailers.

3. RENTAL FEE

1.5 Development Plan The detailed plan of all


games, the marketing thereof, number of players,
value of winnings and the logistics required to
introduce the games, including the Master Games
Plan as approved by PCSO, attached hereto as
Annex "A", modified as necessary by the
provisions of this Contract.
xxx xxx xxx

xxx xxx xxx

For and in consideration of the performance by


the LESSOR of its obligations herein, PCSO shall
pay LESSOR a fixed Rental Fee equal to four
point nine percent (4.9%) of gross receipts from
ticket sales, payable net of taxes required by law
to be withheld, on a semi-monthly basis. Goodwill,
franchise and similar fees shall belong to PCSO.
4. LEASE PERIOD
The period of the lease shall commence ninety
(90) days from the date of effectivity of this
Contract and shall run for a period of eight (8)
years thereafter, unless sooner terminated in
accordance with this Contract.
5. RIGHTS AND OBLIGATIONS OF PCSO AS
OPERATOR OF THE ON-LINE LOTTERY
SYSTEM

213

PCSO shall be the sole and individual operator of


the On-Line Lottery System. Consequently:
5.1 PCSO shall have sole responsibility to decide
whether to implement, fully or partially, the Master
Games Plan of the LESSOR. PCSO shall have
the sole responsibility to determine the time for
introducing new games to the market. The Master
Games Plan included in Annex "A" hereof is
hereby approved by PCSO.
5.2 PCSO shall have control over revenues and
receipts of whatever nature from the On-Line
Lottery System. After paying the Rental Fee to the
LESSOR, PCSO shall have exclusive
responsibility to determine the Revenue Allocation
Plan; Provided, that the same shall be consistent
with the requirement of R.A. No. 1169, as
amended, which fixes a prize fund of fifty five
percent (55%) on the average.
5.3 PCSO shall have exclusive control over the
printing of tickets, including but not limited to the
design, text, and contents thereof.
5.4 PCSO shall have sole responsibility over the
appointment of dealers or retailers throughout the
country. PCSO shall appoint the dealers and
retailers in a timely manner with due regard to the
implementation timetable of the On-Line Lottery
System. Nothing herein shall preclude the
LESSOR from recommending dealers or retailers
for appointment by PCSO, which shall act on said
recommendation within forty-eight (48) hours.
5.5 PCSO shall designate the necessary
personnel to monitor and audit the daily

performance of the On-Line Lottery System. For


this purpose, PCSO designees shall be given,
free of charge, suitable and adequate space,
furniture and fixtures, in all offices of the LESSOR,
including but not limited to its headquarters,
alternate site, regional and area offices.
5.6 PCSO shall have the responsibility to resolve,
and exclusive jurisdiction over, all matters
involving the operation of the On-Line Lottery
System not otherwise provided in this Contract.
5.7 PCSO shall promulgate procedural and
coordinating rules governing all activities relating
to the On-Line Lottery System.
5.8 PCSO will be responsible for the payment of
prize monies, commissions to agents and dealers,
and taxes and levies (if any) chargeable to the
operator of the On-Line Lottery System. The
LESSOR will bear all other Maintenance and
Other Costs, except as provided in Section 1.4.
5.9 PCSO shall assist the LESSOR in the
following:
5.9.1 Work permits for the
LESSOR's staff;