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July 14, 2016
Constitutional Law
Assignment: case digest
1.
2.
3.
4.
5.

ACCFA vs. Federation of Labor Union, 30 SCRA 649

Alcantara vs. Directors of Prisons, 75 Phil. 479
Agustin vs. Edu, 88 SCRA 195
Amigable vs. Cuenca, 43 SCRA 360
Bases Conversion and Development Authority vs. COA, 580 SCRA 295

1.
SUPREME COURT
EN BANC
G.R. No. L-21484 November 29, 1969ACCFA vs. CUGCO, ACCFA v. Cugco, 30 SCRA 649
THE AGRICULTURALCREDIT and COOPERATIVE FINANCING ADMINISTRATION(ACCFA),petitioner,
vs.
ACCFA SUPERVISORS' ASSOCIATION, ACCFA WORKERS' ASSOCIATION, and THE COURT
OFINDUSTRIALRELATIONS,
respondents.
Deogracias E. Lerma and EsmeraldoU. Guloy for petitioner Agricultural Credit and Cooperative Financing
Administration.Office of the Agrarian Counsel,Department of Justice for petitioner Agricultural Credit Administration J.
C. Espinas and Associates for respendents
Confederation of Unions in Government Corporations Offices (CUGCO)
, et al. MarianoB. Tuason for respondent Court of Industrial Relations.
CERTIORARI
MAKALINTAL,
J.
Summary: ACCFA vs. CUGCO (GR L-21484, 29 November 1969) The Agricultural Credit and Cooperative Financing
Administration (ACCFA) vs.Confederation of Unions in Government Corporations and Offices (CUGCO), etc.[GR L21484, 29 November 1969]; also The Agricultural Credit Administration(ACA) vs. ACCFA Supervisors' Association
(ASA), etc. [GR L-23605]En Banc, Makalintal (J): 7 concur, 1 concurs in result, 1 concurs in separateopinion
Facts: On 4 September 1961 a collective bargaining agreement (CBA), which wasto be effective for a period of 1 year
from 1 July 1961, was entered into by andbetween the Unions and the Agricultural Credit and Cooperative
FinancingAdministration (ACCFA). A few months thereafter, the Unions started protestingagainst alleged violations
and non-implementation of said agreement. Finally, on25 October 1962 the Unions declared a strike, which was
ended when the strikersvoluntarily returned to work on 26 November 1962. On 30 October 1962 theUnions, together
with its mother union, the Confederation of Unions inGovernment Corporations and Offices (CUGCO), filed a
complaint with the Court of Industrial Relations against the ACCFA (Case 3450-ULP) for having allegedlycommitted
acts of unfair labor practice, namely: violation of the CBA in order todiscourage the members of the Unions in the
exercise of their right to self-organization, discrimination against said members in the matter of promotions,and refusal
to bargain. The ACCFA denied the charges and interposed asaffirmative and special defenses lack of jurisdiction of
the CIR over the case,illegality of the bargaining contract, expiration of said Contract and lack of approval by the office
of the President of the fringe benefits provided for therein.Brushing aside the foregoing defenses, the CIR in its
decision dated 25 March1963 ordered the ACCFA (1) to cease and desist from committing further actstending to
discourage the members of complainant unions in the exercise of theirright to self organization; (2) to comply with and
implement the provision of thecollective bargaining contract executed on 4 September 1961, including thepayment of
P30.00 a month living allowance; and (3) to bargain in good faith andexpeditiously with the herein complainants.
ACCFA moved to reconsider but wasturned down in a resolution dated 25 April 1963 of the CIR en banc. Thereupon
itbrought the appeal by certiorari to the Supreme Court (GR L-21484). During thependency of the ACCFA's case,
specifically on 8 August 1963, the President of thePhilippines signed into law the Agricultural Land Reform Code
(Republic Act 3844),which among other things required the reorganization of the administrativemachinery of the
Agricultural Credit and Cooperative Financing Administration(ACCFA) and changed its name to Agricultural Credit
Administration (ACA). On 17March 1964 the ACCFA Supervisors' Association and the ACCFA Workers'Association
filed a petition for certification election with the Court of IndustrialRelations (Case 1327-MC) praying that they be
certified as the exclusivebargaining agents for the supervisors and rank-and-file employees, respectively,in the ACA.
The trial Court in its order dated 30 March 1964 directed the Manageror Officer-in-Charge of the ACA to allow the

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posting of said order "for theinformation of all employees and workers thereof," and to answer the petition.
Incompliance therewith, the ACA, while admitting most of the allegations in the
petition, denied that the Unions represented the majority of the supervisors andrank-and-file workers, respectively, in
the ACA. It further alleged that the petitionwas premature, that the ACA was not the proper party to be notified and
toanswer the petition, and that the employees and supervisors could not lawfullybecome members of the Unions, nor
be represented by them. However, in a jointmanifestation of the Unions dated 7 May 1964, with the conformity of the
ACAAdministrator and of the Agrarian Counsel in his capacity as such and as counselfor the National Land Reform
Council, it was agreed "that the union in this caserepresent the majority of the employees in their respective
bargaining units" andthat only the legal issues raised would be submitted for the resolution of the trialCourt. Finding
the remaining grounds for ACA's opposition to the petition to bewithout merit, the trial Court in its order dated 21 May
1964 certified the ACCFAWorkers' Association and the ACCFA Supervisors' Association as the sole andexclusive
bargaining representatives of the rank-and-file employees andsupervisors, respectively, of ACA. Said order was
affirmed by the CIR en banc inits resolution dated 24 August 1964. On 2 October 1964 the ACA filed in theSupreme
Court a petition for certiorari with urgent motion to stay the CIR order(GR L-23605). In a resolution dated 6 October
1964, the Supreme Court dismissedthe petition for 'lack of adequate allegations," but the dismissal was
laterreconsidered when the ACA complied with the formal requirement stated in saidresolution. As prayed for, the
Court ordered the CIR to stay the execution of itsorder of 21 May 1964.Issue: Whether the ACA is engaged in
governmental or proprietary functions.Held: The ACA is a government office or agency engaged in governmental,
notproprietary functions. These functions may not be strictly what President Wilsondescribed as "constituent" (as
distinguished from "ministrant"), such as thoserelating to the maintenance of peace and the prevention of crime,
thoseregulating property and property rights, those relating to the administration of justice and the determination of
political duties of citizens, and those relating tonational defense and foreign relations. Under this traditional
classification, suchconstituent functions are exercised by the State as attributes of sovereignty, andnot merely to
promote the welfare, progress and prosperity of the people theselatter functions being ministrant, the exercise of
which is optional on the part of the government. The growing complexities of modern society, however, haverendered
this traditional classification of the functions of government quiteunrealistic, not to say obsolete. The areas which used
to be left to privateenterprise and initiative and which the government was called upon to enteroptionally, and only
"because it was better equipped to administer for the publicwelfare than is any private individual or group of
individuals" continue to losetheir well-defined boundaries and to be absorbed within activities that thegovernment must
undertake in its sovereign capacity if it is to meet theincreasing social challenges of the times. Here as almost
everywhere else thetendency is undoubtedly towards a greater socialization of economic forces. Hereof course this
development was envisioned, indeed adopted as a national policy,by the Constitution itself in its declaration of
principle concerning the promotion of social justice. It was in furtherance of such policy that the Land Reform Code
was
enacted and the various agencies, the ACA among them, established to carry outits purposes. There can be no
dispute as to the fact that the land reform programcontemplated in the said Code is beyond the capabilities of any
private enterpriseto translate into reality. It is a purely governmental function, no less than, say, theestablishment and
maintenance of public schools and public hospitals. And when,aside from the governmental objectives of the ACA,
geared as they are to theimplementation of the land reform program of the State, the law itself declaresthat the ACA is
a government office, with the formulation of policies, plans andprograms vested no longer in a Board of Governors, as
in the case of the ACCFA,but in the National Land Reform Council, itself a government instrumentality; andthat its
personnel are subject to Civil Service laws and to rules of standardizationwith respect to positions and salaries, any
vestige of doubt as to thegovernmental character of its functions disappears. In view of the foregoingpremises, the
Unions are not entitled to the certification election sought in thelower Court. Such certification is admittedly for
purposes of bargaining in behalf of the employees with respect to terms and conditions of employment, including
theright to strike as a coercive economic weapon, as in fact the said unions did strikein 1962 against the ACCFA (GR
L-21824). This is contrary to Section 11 of Republic Act 875. With the reorganization of the ACCFA and its conversion
into theACA under the Land Reform Code and in view of the Court's ruling as to thegovernmental character of the
functions of the ACA, the decision of the lowerCourt, and the resolution en banc affirming it, in the unfair labor practice
casefiled by the ACCFA, which decision is the subject of the present review in GR L-21484, has become moot and
academic, particularly insofar as the order tobargain collectively with the Unions is concerned.Creative Commons
License

----------------------------------------------------------------------------------------------------------------------------------------------2. Republic of the Philippines

SUPREME COURT
Manila

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EN BANC
G.R. No. L-6

November 29, 1945

ANICETO ALCANTARA, petitioner,

vs.
DIRECTOR OF PRISONS, respondent.
Buenaventura B. Martinez for petitioner.
Office of the Solicitor General Taada for respondent.
FERIA, J.:
This is a petition for the issuance of a writ of habeas corpus and for the release of the petitioner on the ground that the
latter is unlawfully imprisoned and restrained of his liberty by the respondent Director of Prison in the provincial jail at
Vigan, Ilocos Sur.
Petitioner was convicted by the Court First Instance of Ilocos Sur (Criminal case No. 23) of the crime of illegal
discharge of firearms with less serious physical injuries. Upon appeal, the Court of Appeals of Northern Luzon at
Baguio modified said sentence (CA- G.R. No. 790)and sentence the petitioner to an indeterminate penalty of from four
months four months and twenty-one days of arresto mayor to three years, nine months and three days ofprison
correccional. The sentence as modified became final on September 12, 1944, and June 23, 1945, petitioner
commenced serving his sentence.
Petitioner now questions the validity of the decision of the Court of Appeals of Northern Luzon, on the sole ground that
said court was only a creation of the so-called Republic of the Philippines during the Japanese military occupation of
the Islands; that the Court of Appeals was not authorized by Commonwealth Act No. 3 to hold sessions in Baguio, and
that only the two Justices constituted the majority which promulgated the decision in question. The petitioner does not
question the validity of said decision on the strength of the Proclamation of General Douglas McArthur of October 23,
1944, which according to our decision in the case of Co Kim Cham vs. Valdez Tan Keh and Dizon, G.R. No. L-5 (p.
113, ante), does not refer to judicial processes.
In the said case of Co Kim Cham vs. Valdez Tan Keh and Dizon, this Court ruled that the so-called Republic of the
Philippines and the Philippine Executive Commission established in the Philippines during the Japanese regime were
governments de facto organized by the belligerent occupant by the judicial acts thereof were good and valid and
remained good and valid after the restoration of the Commonwealth Government, except those a political complexion.
In that the same case this Court held that the Court of Appeals which was continued throughout the Japanese
occupation, was the same Court of Appeals existed prior to the Japanese occupation and was lately abolished by
Executive Order No. 37. The division of the Court of Appeals into several District Court of Appeals, and the reduction
of the number of Justices sitting in each division, the regime of the so-called Republic effected no substantial change
in its nature and jurisdiction.
Even assuming that the Court of Appeals of Northern Luzon was a new court created by the belligerent occupant or
the de facto governments established by him, the judgments of such court, like those of the court which were
continued during the Japanese occupation, were good and valid and remain good and valid, and therefore
enforceable now after the liberation or occupation of the Philippines, provided that such judgments do not have a
political complexion, as this court held in its decision in the abovementioned case of Co Kim Cham vs. Valdez Tan
Keh and Dizon supra, in accordance with the authorities therein cited.
Obviously, the sentence which petitioner is now serving has no political complexion. He was charged with and
convicted of an offense punishable under the municipal law of the Commonwealth, the Revised Penal Code.
Therefore, the sentence of the Court of First Instance of Ilocos Sur, as modified by the Court of Appeals of Northern
Luzon, is valid and enforceable.
A punitive or penal sentence is said to of a political complexion when it penalizes either a new act not defined in the
municipal laws, or acts already penalized by the latter as a crime against the legitimate government, but taken out of
the territorial law and penalized as a new offenses committed against belligerent occupant, incident to a state of a war
and necessary for the control of the occupied territory and the protection of the army of the occupier. They are acts
penalized for public rather than private reasons, acts which tend, directly or indirectly, to aid or favor the enemy and
are directed against the welfare, safety and security, of the belligerent occupant. As example, the crimes against
national security , such as treason, espionage, etc., and against public order, such as rebellion, sedition, etc., were

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crimes against the Commonwealth or United States Government under the Revised Penal Code, which were made
crimes against the belligerent occupant.
In view of the foregoing, the petitioner for the writ of habeas corpus is denied.
Moran, C.J., Ozaeta, Paras, Jaranilla, Pablo and Bengzon, JJ., concur.
Separate Opinions
DE JOYA, J., concurring:
The principal question involved in this habeas corpus case is the validity of the judicial proceedings held, during the
Japanese occupation, in the Court First Instance of Ilocos Sur, in which herein petitioner was accused of frustrated
murder, and in the Court of Appeals of Northern Luzon, in which, on appeal, said petitioner was found guilty of illegal
discharge of firearms with less serious physical injuries, and sentenced to a term of imprisonment ranging from four
moths and twenty-one days of arresto mayor to three years, and nine months and three days ofprison correccional;
and the effect on said proceedings of the proclamation of General Douglas McArthur, dated October 24 1944. The
decision of this questions requires the application of principles of International Law, in connection with the municipal
law of this country.
Under the Constitution Commonwealth of the Philippines, International Law is part of the Fundamental law of the land
(Article II, sec. 3). As International Law is an integral part of our law, it must be ascertained and administered by this
Court, whenever question of right depending upon it are presented for our determination (Kansas vs.Colorado, 185
U.S. 146; 22 Sup. Ct., 552; 46 Law. ed., 838).
Since International Law is a body of rules accepted by nations as regulating their mutual relations, the proof of their
existence is to be found in the consent of the nations to abide by them; and this consent is evidenced chiefly by the
usages and customs of nation, as found in the writings of publicist and in the decisions of the highest courts of the
different countries of the world (The Habana, 175 U. S., 677; 20 Sup. Ct., 290; 44 Law. ed., 320.).
But while usages and customs are the older original source of International Law, great international treaties are a latter
source of increasing importance, such as The Hogue Conventions of 1899 and 1907.
The Hague Conventions of 1899, respecting laws and customs of war on land, expressly declare that:
ARTICLE XLII. Territory is considered occupied when it is actually placed under the authority of the hostile
army.
The occupation applies only to the territory where such authority is established, and in a position to assert
itself.
ART. XLII. The authority of the legitimate power having actually passed into the hands of the occupant, the
latter shall take all steps in his power to reestablish and insure, as far as possible, public order and safety,
while respecting, unless absolutely prevented, the laws in force in the country. (32 Stat., II, 1821.).
The above provisions of the Hague Conventions have been adopted by the nations giving adherence to them, among
which is the United States of America (32 Stat., II, 1821).
The commander in chief of the invading forces or military occupant may exercise governmental authority, but only
when in actual possession of the enemy's territory, and this authority will be exercised upon principles of International
Law (New Orleans vs. Steamship Co. [1874], 20 Wall., 387; Kelly vs. Sanders [1878], 99 U.S., 441;
MacLeod vs. United States 229 U.S. 416; 33 Sup Ct., 955; 57 Law. ed., 1260; II Oppenheim on International Law, sec.
167).
It will thus be readily seen that the civil laws of the invaded state continue in force, in so far as they do not affect the
hostile occupant unfavorably. The regular judicial tribunals of the occupied territory continue to act in cases not
affecting the military occupation, and is not usual for the invader to take the whole administration into his own hands,
because it is easier to preserve order through the agency of the native officials, and also because the latter are more
competent to administer the laws of the territory; and the military occupant generally keeps in their posts such of the
judicial and administrative officers as are willing to serve under him, subjecting them only to supervision by the military

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authorities, or by superior civil authorities appointed by him (Young vs. United States, 97 U.S. 39; 24 Law. ed 992;
Coleman vs. Tennessee, 97 U.S. 509; 24 Law ed., 1118; MacLeod vs. United States, 229 U.S. 416; 33 Sup Ct., 955;
57 Law. ed., 1260 Taylor, International Law, secs. 576, 578; Wilson, International Law, pp. 331-337; Hall, International
Law, 6th ed. [1909], pp. 464, 465, 475, 476; Lawrence, International Law, 7th ed., 412, 413; Davis, Elements of
International Law, 3d ed., pp. 330-332, 335; Holland, International Law, pp. 356, 357, 359; Westlake, International
Law, Part II, 2d ed., pp. 121-123).
In 1811, during the occupation of Catalonia, Spain, by the French army, a Frenchman, accused of the murder of a
Catalan in that province, was tried and convicted by the assize Court of the Department of the Pyrenees Orientales,
France. Upon appeal to the French Court of Cassation, the conviction was quashed, on the ground that the courts of
the territory within which the crime had been committed had exclusive jurisdiction to try the case and that "the
occupation of Catalonia by French troops and its government by the French authorities had not communicated to its
inhabitants the character of French citizens, nor to their territory the character of French territory, and that such
character could only be acquired by a solemn act of incorporation which had not been gone through." (Hall,
International Law, 6th ed., p. 461.)
It is, therefore, evident that the establishment of the government under the name of the Philippine Executive
Commission, or the so-called Philippine Republic, afterwards, during Japanese occupation, respecting the laws in
force in the country, and permitting our courts to function and administer said laws, as proclaim in the City of Manila,
by the commander in chief of the Japanese Imperial Forces, on January 3, 1942, was in accordance with the rules
and principles of International Law.
If the military occupant is thus in duty bound to establish in the territory under military occupation governmental
agencies for the preservation of peace and order and for the proper administration of justice, in accordance with the
local laws, it must necessarily follow that the judicial proceeding conducted before the courts established by the
military occupant must be considered legal and valid, even after said government established by the military occupant
had been displaced by the legitimate government of the territory.
Thus the judgments rendered by the Confederate Courts, during the American Civil War, merely setting the rights of
private parties actually within their jurisdiction, not only tending to defeat the legal rights of citizens of the United
States, nor in furtherance of laws passed in aid of the rebellion, had been declared valid and binding (Cook vs.Oliver,
1 Woods, 437; Fed. Cas., No. 3, 164; Coleman vs. Tennessee, 97 U.S., 509;24 Law. ed., 1118; Williamsvs. Bruffy, 96
U.S. 176; Horn vs. Lockhart, 17 Wall., 570; Sprott vs. United States, 20 Wall., 459; Texas vs. White, 7 Wall., 700;
Ketchum vs. Buckley [1878], 99 U.S., 188); and the judgment of a court of Georgia rendered in November, 1861, for
the purchase money slaves was held valid judgment when entered, and enforceable in 1871 (French vs. Tumllin, 10
Am. Law. Reg. [N.S.], 641; Fed. Case, No. 5104).
The judgments by the courts of the states constituting the Confederate States of the America were considered legal
and valid and enforceable, even after the termination of the American Civil War, because they had been rendered by
the courts of a de facto government. The Confederate States were a de facto government, in the sense that its citizens
were bound to render the government obedience in civil matters, and did not become responsible, as wrong-doers, for
such act of obedience (Thorington vs. Smith, 8 Wall. [U.S.] 9; 19 Law ed., 361).
In the more recent case of Ketchum vs. Buckley ([1878], 99 U.S., 188), the Supreme Court of the United States held-"It is now settled law in this court that during the late civil war the same general law for the administration of justice
and the protection of private rights, which had existed in the States prior to the rebellion, remained during its
continuance and afterwards. As far as the acts of the States did not impair or tend to impair the supremacy of the
national authority, or the just rights of the citizens, under the Constitution, they are in general to be treated as valid and
binding." (Williams vs. Bruffy, 96 U.S., 176; Horn vs. Lockhart, 17 Wall., 570; Sprott vs. United States, 20 Wall., 459;
Texas vs. White 7 Wall., 700.)
The government established in the Philippines, during Japanese occupation, would seem to fall under the following
definition of de facto government given by the Supreme Court of the United States:
But there is another description of government de facto, called also by publicists a government de facto, but
which might, perhaps, he more aptly denominated a government of paramount force. Its distinguishing
characteristics (1) that its existence is maintained by active military power within the territories, and against
the rightful authority of an established and lawful government; and (2) that while it exists it must necessarily be
obeyed in civil matters by private citizens who by acts of obedience rendered in submission to such force, do
not become responsible, as wrongdoers, for those acts though not warranted by the laws of the rightful
government. Actual governments of this sort are established over districts differing greatly in extent and

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conditions. They are usually administered directly by military authority, but they may be administered, also, by
civil authority, supported more or less directly by military force. (MacLeod vs. United States [1913], 229 U.S.,
416.)
The government established in the Philippines, under the Philippine Executive Commission or under the so-called
Philippine Republic, during Japanese occupation, was and should, therefor, be considered as a de factogovernment;
and that the judicial proceedings conducted before the courts has been established in this country, during said
Japanese occupation, and are should be considered as legal and valid enforceable, even after the liberation of this
country by the American forces, as a long a said judicial proceedings had been conducted, in accordance with the law
of the Commonwealth of the Philippines.
The judicial proceedings involved in the case under consideration merely refer to the prosecution of the petitioner in
this case, for the crime of frustrated murder, which was reduced to illegal discharge of firearms with less serious
physical injuries, under the provisions of the Revised Penal Code, in force in this country under the Commonwealth
government, before and during Japanese occupation.
Now, petitioner contends that the judicial proceedings in question are null and void, and that the accused should be
immediately released from the custody, under the provisions of the proclamation issued by General Douglas McArthur
dated October 23, 1944; as said proclamation nullifies all the laws, regulations and processes of any other
government in the Philippines than that of the Commonwealth of the Philippines.
In other words petition demands a literal interpretation of said proclamation issued by the General Douglas McArthur,
a contention which, in our opinion, is untenable, as it would inevitably produce judicial chaos and uncertainties. When
an act is susceptible of two or more constructions, one of which will maintain and the others destroy it, the Courts will
always adopt the former (United States vs. Coombs [1838]], 12 Pet., 72; 9 Law. ed., 1004; Board of Supervisors of
Grenada County vs. Brown [1884], 112 U.S., 261; 28 Law. ed., 704; 5 Sup. Ct. Rep., 125; In re Guaria [1913], 24
Phil., 37; Fuentes vs. Director of Prisons [1924], 46 Phil., 22; Yu Cong Eng vs.Trinidad [1925], 47 Phil., 385). The
judiciary, always alive to the dictates of national welfare, can properly incline the scales of its decisions in favor of that
solution which will most effectively promote the public policy (Smith, Bell & Co., Ltd. vs. Natividad [1919], 40 Phil.,
136). All laws should receive a sensible construction as not to lead it injustice, oppression or an absurd consequence.
It will always, therefore, be presumed that the legislature intended exception to its language, which would avoid results
of this character. The reason of the law in such cases should prevail over its letter (United States vs. Kirby, 7 Wall
[U.S.], 482; 19 Law. ed, 278; Church of Holy Trinity vs. United States, 143 U.S., 461; 12 Sup. Ct., 511; 36 Law. ed.,
226; Jacobson vs. Massachussetts, 197 U.S., 39; 25 Sup. Ct., 358; 49 Law. ed., 643; 3 Ann. Cas., 765; In re Allen, 2
Phil., 630). The duty of the court in construing a statute, which is reasonably susceptible of two constructions to adopt
that which saves its constitutionality, includes the duty of a avoiding a construction which raises grave and doubtful
constitutional questions, if it can be avoided (United States vs. Delaware & Hudson Co., 213 U.S., 366; 29 Sup. Ct.
527; 53 Law. ed., 836).
According to the rules and principles of International Law, and the legal doctrines cited above, the judicial proceedings
conducted before the court of the justice, established here during Japanese military occupation, merely applying the
provisions of the municipal law of the territory, as the provisions of the Revised Penal Code in the instant case which
have no political or military significance, are and should be considered legal, valid and binding. It is to be presumed
that General Douglas McArthur knows said rules and principles of International Law, as International Law is an integral
part of the fundamental law of the land, in accordance with the provisions of the Constitution of the United States. And
it is also to be presumed that General Douglas McArthur has acted, in accordance with said principles of International
Law, which have been sanction by the Supreme Court of the United States, as the nullification of all judicial
proceedings conducted before our courts, during the Japanese occupation would be highly detrimental to public
interests.
For the forgoing reasons, I concur in the majority opinion, and the petition for habeas corpus filed in this case should,
therefore, be denied.
PERFECTO, J., dissenting:
Following our opinions in this cases of Co Kim Cham vs. Valdez Tan Keh and Dizon (p. 153, ante), and Peralta vs.
Director of Prisons (p. 334, ante), G.R. No. L-5 and G.R. No. L-49 respectively, the proceedings attacked by petitioner
belong to the judicial processes declared null and void in the proclamation issued by General McArthur on October 23,
1944, and therefore, we vote the granting of the writ of habeas corpus prayed for.
HILADO, J., dissenting:

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Upon the grounds stated my main dissenting opinion, in G.R. No. L-5 Co Kim Cham vs. Valdez Tan Keh and Dizon (p.
199, ante), and in my concurring opinion in G.R. No. L-49, Peralta vs. Director of Prisons (p. 355, ante), I dissent from
the opinion of the majority herein. The writ of habeas corpus sought by petitioner should be granted because the
nullity of the judgment and proceedings under which he has been imprisoned and restrained of his liberty. As stated in
the majority opinion, the sentence against him became final on September 122, 1944, and had been pronounced by
the Japanese-sponsored Court of Appeals of Northern Luzon upon appeal from a judgment of conviction by the
Japanese sponsored Court of First Instance of Ilocos Sur.

3. Agustin v Edu (1979) 88 SCRA 195

Facts:
Leovillo Agustin, the owner of a Beetle, challenged the constitutionality of Letter of Instruction 229 and its
implementing order No. 1 issued by LTO Commissioner Romeo Edu. His car already had warning lights and did not
want to use this.
The letter was promulgation for the requirement of an early warning device installed on a vehicle to reduce accidents
between moving vehicles and parked cars.
The LTO was the issuer of the device at the rate of not more than 15% of the acquisition cost.
The triangular reflector plates were set when the car parked on any street or highway for 30 minutes. It was
mandatory.
Petitioner: 1. LOI violated the provisions and delegation of police power, equal protection, and due process/
2. It was oppressive because the make manufacturers and car dealers millionaires at the expense f car owners at 5672 pesos per set.
Hence the petition.
The OSG denied the allegations in par X and XI of the petition with regard to the unconstitutionality and undue
delegation of police power to such acts.
The Philippines was also a member of the 1968 Vienna convention of UN on road signs as a regulation. To the
petitioner, this was still an unlawful delegation of police power.
Issue:
Is the LOI constitutional? If it is, is it a valid delegation of police power?
Held: Yes on both. Petition dismissed.
Ratio:
Police power, according to the case of Edu v Ericta, which cited J. Taney, is nothing more or less than the power of
government inherent in every sovereignty.
The case also says that police power is state authority to enact legislation that may interfere with personal liberty or
property to promote the general welfare.
Primicias v Fulgoso- It is the power to describe regulations to promote the health, morals, peace, education, good
order, and general welfare of the people.
J. Carazo- government limitations to protect constitutional rights did not also intend to enable a citizen to obstruct
unreasonable the enactment of measures calculated to insure communal peace.
There was no factual foundation on petitioner to refute validity.
Ermita Malate Hotel-The presumption of constitutionality must prevail in the absence of factual record in over throwing
the statute.
Brandeis- constitutionality must prevail in the absence of some factual foundation in overthrowing the statute.
Even if the car had blinking lights, he must still buy reflectors. His claims that the statute was oppressive was fantastic
because the reflectors were not expensive.
SC- blinking lights may lead to confusion whether the nature and purpose of the driver is concerned.

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Unlike the triangular reflectors, whose nature is evident because its installed when parked for 30 minutes and placed
from 400 meters from the car allowing drivers to see clearly.
There was no constitutional basis for petitioner because the law doesnt violate any constitutional provision.
LOI 229 doesnt force motor vehicle owners to purchase the reflector from the LTO. It only prescribes rge requirement
from any source.
The objective is public safety.
The Vienna convention on road rights and PD 207 both recommended enforcement for installation of ewds. Bother
possess relevance in applying rules with the declaration of principles in the Constitution.
On the unlawful delegation of legislative power, the petitioners have no settled legal doctrines.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-26400 February 29, 1972

VICTORIA AMIGABLE, plaintiff-appellant,
vs.
NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE PHILIPPINES,defendantsappellees.

MAKALINTAL, J.:p
This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No. R-5977, dismissing the
plaintiff's complaint.
Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad Estate in Cebu City as
shown by Transfer Certificate of Title No. T-18060, which superseded Transfer Certificate of Title No. RT-3272 (T3435) issued to her by the Register of Deeds of Cebu on February 1, 1924. No annotation in favor of the government
of any right or interest in the property appears at the back of the certificate. Without prior expropriation or negotiated
sale, the government used a portion of said lot, with an area of 6,167 square meters, for the construction of the Mango
and Gorordo Avenues.
It appears that said avenues were already existing in 1921 although "they were in bad condition and very narrow,
unlike the wide and beautiful avenues that they are now," and "that the tracing of said roads was begun in 1924, and
the formal construction in
1925." *
On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting payment of the portion of
her lot which had been appropriated by the government. The claim was indorsed to the Auditor General, who
disallowed it in his 9th Indorsement dated December 9, 1958. A copy of said indorsement was transmitted to
Amigable's counsel by the Office of the President on January 7, 1959.
On February 6, 1959 Amigable filed in the court a quo a complaint, which was later amended on April 17, 1959 upon
motion of the defendants, against the Republic of the Philippines and Nicolas Cuenca, in his capacity as
Commissioner of Public Highways for the recovery of ownership and possession of the 6,167 square meters of land
traversed by the Mango and Gorordo Avenues. She also sought the payment of compensatory damages in the sum of

Honeys Note
*^_^*
P50,000.00 for the illegal occupation of her land, moral damages in the sum of P25,000.00, attorney's fees in the sum
of P5,000.00 and the costs of the suit.
Within the reglementary period the defendants filed a joint answer denying the material allegations of the complaint
and interposing the following affirmative defenses, to wit: (1) that the action was premature, the claim not having been
filed first with the Office of the Auditor General; (2) that the right of action for the recovery of any amount which might
be due the plaintiff, if any, had already prescribed; (3) that the action being a suit against the Government, the claim
for moral damages, attorney's fees and costs had no valid basis since as to these items the Government had not
given its consent to be sued; and (4) that inasmuch as it was the province of Cebu that appropriated and used the
area involved in the construction of Mango Avenue, plaintiff had no cause of action against the defendants.
During the scheduled hearings nobody appeared for the defendants notwithstanding due notice, so the trial court
proceeded to receive the plaintiff's evidence ex parte. On July 29, 1959 said court rendered its decision holding that it
had no jurisdiction over the plaintiff's cause of action for the recovery of possession and ownership of the portion of
her lot in question on the ground that the government cannot be sued without its consent; that it had neither original
nor appellate jurisdiction to hear, try and decide plaintiff's claim for compensatory damages in the sum of P50,000.00,
the same being a money claim against the government; and that the claim for moral damages had long prescribed,
nor did it have jurisdiction over said claim because the government had not given its consent to be sued. Accordingly,
the complaint was dismissed. Unable to secure a reconsideration, the plaintiff appealed to the Court of Appeals, which
subsequently certified the case to Us, there being no question of fact involved.
The issue here is whether or not the appellant may properly sue the government under the facts of the case.
In the case of Ministerio vs. Court of First Instance of Cebu, 1 involving a claim for payment of the value of a portion of
land used for the widening of the Gorordo Avenue in Cebu City, this Court, through Mr. Justice Enrique M. Fernando,
held that where the government takes away property from a private landowner for public use without going through the
legal process of expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the
government without thereby violating the doctrine of governmental immunity from suit without its consent. We there
said: .
... . If the constitutional mandate that the owner be compensated for property taken for public use
were to be respected, as it should, then a suit of this character should not be summarily dismissed.
The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an
injustice on a citizen. Had the government followed the procedure indicated by the governing law at
the time, a complaint would have been filed by it, and only upon payment of the compensation fixed
by the judgment, or after tender to the party entitled to such payment of the amount fixed, may it
"have the right to enter in and upon the land so condemned, to appropriate the same to the public use
defined in the judgment." If there were an observance of procedural regularity, petitioners would not
be in the sad plaint they are now. It is unthinkable then that precisely because there was a failure to
abide by what the law requires, the government would stand to benefit. It is just as important, if not
more so, that there be fidelity to legal norms on the part of officialdom if the rule of law were to be
maintained. It is not too much to say that when the government takes any property for public use,
which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes
manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine of
immunity from suit could still be appropriately invoked.
Considering that no annotation in favor of the government appears at the back of her certificate of title and that she
has not executed any deed of conveyance of any portion of her lot to the government, the appellant remains the
owner of the whole lot. As registered owner, she could bring an action to recover possession of the portion of land in
question at anytime because possession is one of the attributes of ownership. However, since restoration of
possession of said portion by the government is neither convenient nor feasible at this time because it is now and has
been used for road purposes, the only relief available is for the government to make due compensation which it could
and should have done years ago. To determine the due compensation for the land, the basis should be the price or
value thereof at the time of the taking. 2

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*^_^*
As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the price of the land
from the time it was taken up to the time that payment is made by the government. 3 In addition, the government
should pay for attorney's fees, the amount of which should be fixed by the trial court after hearing.
WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the court a quo for the
determination of compensation, including attorney's fees, to which the appellant is entitled as above indicated. No
pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo, Villamor and Makasiar JJ., concur.

Footnotes
* Decision, Record on Appeal, p. 12.
1 G.R. No. L-31635, August 31, 1971 (40 SCRA 464).
2 Alfonso vs. City of Pasay (106 Phil. 1017).
3 Alfonso vs. City of Pasay, supra.

5. EN B ANC
BASES CONVERSION AND G.R. No. 178160
DEVELOPMENT AUTHORITY,
Petitioner,
Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,*
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
- versus - TINGA,*
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION, and
PERALTA, JJ.
COMMISSION ON AUDIT, Promulgated:
Respondent. February 26, 2009
x-----------------------------------------------------x
DECISION
CARPIO, J.:
The Case
This is a petition for certiorari [1] with prayer for the issuance of a temporary restraining order and a writ of preliminary
injunction. The petition seeks to nullify Decision No. 2007-020 [2] dated 12 April 2007 of the Commission on Audit
(COA).

Honeys Note
*^_^*
The Facts
On 13 March 1992, Congress approved Republic Act (RA) No. 7227 [3] creating the Bases Conversion and
Development Authority (BCDA). Section 9 of RA No. 7227 states that the BCDA Board of Directors (Board) shall
exercise the powers and functions of the BCDA. Under Section 10, the functions of the Board include the
determination of the organizational structure and the adoption of a compensation and benefit scheme at least
equivalent to that of the Bangko Sentral ng Pilipinas (BSP). Accordingly, the Board determined the organizational
structure of the BCDA and adopted a compensation and benefit scheme for its officials and employees.
On 20 December 1996, the Board adopted a new compensation and benefit scheme which included a P10,000 yearend benefit granted to each contractual employee, regular permanent employee, and Board member. In a
memorandum[4] dated 25 August 1997, Board Chairman Victoriano A. Basco (Chairman Basco) recommended to
President Fidel V. Ramos (President Ramos) the approval of the new compensation and benefit scheme.In a
memorandum[5] dated 9 October 1997, President Ramos approved the new compensation and benefit scheme.
In 1999, the BSP gave a P30,000 year-end benefit to its officials and employees. In 2000, the BSP increased the yearend benefit from P30,000 to P35,000. Pursuant to Section 10 of RA No. 7227 which states that the compensation and
benefit scheme of the BCDA shall be at least equivalent to that of the BSP, the Board increased the year-end benefit
of BCDA officials and employees from P10,000 to P30,000. Thus in 2000 and 2001, BCDA officials and employees
received a P30,000 year-end benefit, and, on 1 October 2002, the Board passed Resolution No. 2002-10193[6] approving the release of a P30,000 year-end benefit for 2002.
Aside from the contractual employees, regular permanent employees, and Board members, the full-time consultants
of the BCDA also received the year-end benefit.
On 20 February 2003, State Auditor IV Corazon V. Espao of the COA issued Audit Observation Memorandum (AOM)
No. 2003-004[7] stating that the grant of year-end benefit to Board members was contrary to Department of Budget and
Management (DBM) Circular Letter No. 2002-2 dated 2 January 2002. In Notice of Disallowance (ND) No. 03-001BCDA-(02)[8] dated 8 January 2004, Director IV Rogelio D. Tablang (Director Tablang), COA, Legal and Adjudication
Office-Corporate, disallowed the grant of year-end benefit to the Board members and full-time consultants. In Decision
No. 2004-013[9] dated 13 January 2004, Director Tablang concurred with AOM No. 2003-004 and ND No. 03-001BCDA-(02).
In a letter[10] dated 20 February 2004, BCDA President and Chief Executive Officer Rufo Colayco requested the
reconsideration of Decision No. 2004-013. In a Resolution[11] dated 22 June 2004, Director Tablang denied the
request. The BCDA filed a notice of appeal [12] dated 8 September 2004 and an appeal memorandum [13] dated 23
December 2004 with the COA.
The COAs Ruling
In Decision No. 2007-020,[14] the COA affirmed the disallowance of the year-end benefit granted to the Board members
and full-time consultants and held that the presumption of good faith did not apply to them. The COA stated that:
The granting of YEB x x x is not without x x x limitation. DBM Circular Letter No. 2002-02 dated
January 2, 2002 stating, viz:
2.0 To clarify and address issues/requests concerning the same, the following compensation policies
are hereby reiterated:
2.1 PERA, ADCOM, YEB and retirement benefits, are personnel benefits granted in addition to
salaries. As fringe benefits, these shall be paid only when the basic salary is also paid.
2.2 Members of the Board of Directors of agencies are not salaried officials of the government. As
non-salaried officials they are not entitled to PERA, ADCOM, YEB and retirement benefits
unless expressly provided by law.
2.3 Department Secretaries, Undersecretaries and Assistant Secretaries who serve as Ex-officio
Members of the Board of Directors are not entitled to any remuneration in line with the Supreme Court
ruling that their services in the Board are already paid for and covered by the remuneration attached
to their office. (underscoring ours)
Clearly, as stated above, the members and ex-officio members of the Board of Directors are not
entitled to YEB, they being not salaried officials of the government. The same goes with full time

Honeys Note
*^_^*
consultants wherein no employer-employee relationships exist between them and the BCDA. Thus,
the whole amount paid to them totaling P342,000 is properly disallowed in audit.
Moreover, the presumption of good faith may not apply to the members and ex-officio members of the
Board of Directors because despite the earlier clarification on the matter by the DBM thru the issuance
on January 2, 2002 of DBM Circular Letter No. 2002-02, still, the BCDA Board of Directors enacted
Resolution No. 2002-10-93 on October 1, 2002 granting YEB to the BCDA personnel including
themselves. Full time consultants, being non-salaried personnel, are also not entitled to such
presumption since they knew from the very beginning that they are only entitled to the amount
stipulated in their contracts as compensation for their services. Hence, they should be made to refund
the disallowed YEB.[15] (Boldfacing in the original)
Hence, this petition.
The Courts Ruling
The Board members and full-time consultants of the BCDA are not entitled to the year-end benefit.
First, the BCDA claims that the Board can grant the year-end benefit to its members and full-time consultants
because, under Section 10 of RA No. 7227, the functions of the Board include the adoption of a compensation and
benefit scheme.
The Court is not impressed. The Boards power to adopt a compensation and benefit scheme is not unlimited. Section
9 of RA No. 7227 states that Board members are entitled to a per diem:
Members of the Board shall receive a per diem of not more than Five thousand pesos (P5,000)
for every board meeting: Provided, however, That the per diem collected per month does not
exceed the equivalent of four (4) meetings:Provided, further, That the amount of per diem for every
board meeting may be increased by the President but such amount shall not be increased within two
(2) years after its last increase. (Emphasis supplied)
Section 9 specifies that Board members shall receive a per diem for every board meeting; limits the amount of per
diem to not more than P5,000; and limits the total amount of per diem for one month to not more than four
meetings. In Magno v. Commission on Audit,[16] Cabili v. Civil Service Commission,[17] De Jesus v. Civil Service
Commission,[18] Molen, Jr. v. Commission on Audit,[19] and Baybay Water District v. Commission on Audit,[20] the Court
held that the specification of compensation and limitation of the amount of compensation in a statute indicate
that Board members are entitled only to the per diem authorized by law and no other. In Baybay Water District,
the Court held that:
By specifying the compensation which a director is entitled to receive and by limiting the amount
he/she is allowed to receive in a month, x x x the law quite clearly indicates that directors x x x are
authorized to receive only the per diem authorized by law and no other compensation or allowance in
whatever form.[21]
Also, DBM Circular Letter No. 2002-2 states that, Members of the Board of Directors of agencies are not salaried
officials of the government. As non-salaried officials they are not entitled to PERA, ADCOM,YEB and retirement
benefits unless expressly provided by law. RA No. 7227 does not state that the Board members are entitled to a
year-end benefit.
With regard to the full-time consultants, DBM Circular Letter No. 2002-2 states that, YEB and retirement benefits, are
personnel benefits granted in addition to salaries. As fringe benefits, these shall be paid only when the basic
salary is also paid. The full-time consultants are not part of the BCDA personnel and are not paid the basic
salary. The full-time consultants consultancy contracts expressly state that there is no employer-employee relationship
between the BCDA and the consultants, and that the BCDA shall pay the consultants a contract price. For example,
the consultancy contract[22] of a certain Dr. Faith M. Reyes states:
SECTION 2. Contract Price. For and in consideration of the services to be performed by the
CONSULTANT (16 hours/week), BCDA shall pay her the amount of TWENTY THOUSAND PESOS
and 00/100 (P20,000.00), Philippine currency, per month.
xxxx

Honeys Note
*^_^*
SECTION 4. Employee-Employer Relationship. It is understood that no employee-employer
relationship shall exist between BCDA and the CONSULTANT.
SECTION 5. Period of Effectivity. This CONTRACT shall have an effectivity period of one (1) year,
from January 01, 2002 to December 31, 2002, unless sooner terminated by BCDA in accordance with
Section 6 below.
SECTION 6. Termination of Services. BCDA, in its sole discretion may opt to terminate this
CONTRACT when it sees that there is no more need for the services contracted for. (Boldfacing in the
original)
Since full-time consultants are not salaried employees of BCDA, they are not entitled to the year-end benefit which is
a personnel benefit granted in addition to salaries and which is paid only when the basic salary is also paid.
Second, the BCDA claims that the Board members and full-time consultants should be granted the year-end benefit
because the granting of year-end benefit is consistent with Sections 5 and 18, Article II of the Constitution. Sections 5
and 18 state:
Section 5. The maintenance of peace and order, the protection of life, liberty, and property, and the
promotion of the general welfare are essential for the enjoyment by all people of the blessings of
democracy.
Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.
The Court is not impressed. Article II of the Constitution is entitled Declaration of Principles and State Policies. By its
very title, Article II is a statement of general ideological principles and policies. It is not a source of enforceable rights.
[23]
In Tondo Medical Center Employees Association v. Court of Appeals,[24] the Court held that Sections 5 and 18,
Article II of the Constitution are not self-executing provisions. In that case, the Court held that Some of the
constitutional provisions invoked in the present case were taken from Article II of the Constitution specifically, Sections
5 x x x and 18 the provisions of which the Court categorically ruled to be non self-executing.
Third, the BCDA claims that the denial of year-end benefit to the Board members and full-time consultants violates
Section 1, Article III of the Constitution. [25] More specifically, the BCDA claims that there is no substantial distinction
between regular officials and employees on one hand, and Board members and full-time consultants on the other. The
BCDA states that there is here only a distinction, but no difference because both have undeniably one common goal
as humans, that is x x x to keep body and soul together or, [d]ifferently put, both have mouths to feed and stomachs to
fill.
The Court is not impressed. Every presumption should be indulged in favor of the constitutionality of RA No.
7227 and the burden of proof is on the BCDA to show that there is a clear and unequivocal breach of the
Constitution.[26] In Abakada Guro Party List v. Purisima,[27] the Court held that:
A law enacted by Congress enjoys the strong presumption of constitutionality. To justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a doubtful and
unequivocal one. To invalidate [a law] based on x x x baseless supposition is an affront to the wisdom
not only of the legislature that passed it but also of the executive which approved it.
The BCDA failed to show that RA No. 7227 unreasonably singled out Board members and full-time consultants in the
grant of the year-end benefit. It did not show any clear and unequivocal breach of the Constitution. The claim that
there is no difference between regular officials and employees, and Board members and full-time consultants because
both groups have mouths to feed and stomachs to fill is fatuous. Surely, persons are not automatically similarly
situated thus, automatically deserving of equal protection of the laws just because they both have mouths to feed and
stomachs to fill. Otherwise, the existence of a substantial distinction would become forever highly improbable.
Fourth, the BCDA claims that the Board can grant the year-end benefit to its members and the full-time consultants
because RA No. 7227 does not expressly prohibit it from doing so.
The Court is not impressed. A careful reading of Section 9 of RA No. 7227 reveals that the Board is prohibited from
granting its members other benefits. Section 9 states:

Honeys Note
*^_^*
Members of the Board shall receive a per diem of not more than Five thousand pesos (P5,000)
for every board meeting: Provided, however, That the per diem collected per month does not
exceed the equivalent of four (4) meetings:Provided, further, That the amount of per diem for every
board meeting may be increased by the President but such amount shall not be increased within two
(2) years after its last increase. (Emphasis supplied)
Section 9 specifies that Board members shall receive a per diem for every board meeting; limits the amount of per
diem to not more than P5,000; limits the total amount of per diem for one month to not more than four meetings; and
does not state that Board members may receive other benefits. In Magno,[28] Cabili,[29] De Jesus,[30] Molen, Jr.,
[31]
and Baybay Water District,[32] the Court held that the specification of compensation and limitation of the
amount of compensation in a statute indicate that Board members are entitled only to the per diem authorized
by law and no other.
The specification that Board members shall receive a per diem of not more than P5,000 for every meeting and the
omission of a provision allowing Board members to receive other benefits lead the Court to the inference that
Congress intended to limit the compensation of Board members to the per diem authorized by law and no
other. Expressio unius est exclusio alterius. Had Congress intended to allow the Board members to receive other
benefits, it would have expressly stated so. [33] For example, Congress intention to allow Board members to receive
other benefits besides the per diem authorized by law is expressly stated in Section 1 of RA No. 9286: [34]
SECTION 1. Section 13 of Presidential Decree No. 198, as amended, is hereby amended to read as
follows:
SEC. 13. Compensation. Each director shall receive per diem to be determined by the Board, for each
meeting of the Board actually attended by him, but no director shall receive per diems in any given
month in excess of the equivalent of the total per diem of four meetings in any given month.
Any per diem in excess of One hundred fifty pesos (P150.00) shall be subject to the approval of the
Administration. In addition thereto, each director shall receive allowances and benefits as the
Board may prescribe subject to the approval of the Administration. (Emphasis supplied)
The Court cannot, in the guise of interpretation, enlarge the scope of a statute or insert into a statute what Congress
omitted, whether intentionally or unintentionally.[35]
When a statute is susceptible of two interpretations, the Court must adopt the one in consonance with the presumed
intention of the legislature to give its enactments the most reasonable and beneficial construction, the one that will
render them operative and effective.[36] The Court always presumes that Congress intended to enact sensible statutes.
[37]
If the Court were to rule that the Board could grant the year-end benefit to its members, Section 9 of RA No. 7227
would become inoperative and ineffective the specification that Board members shall receive a per diem of not more
than P5,000 for every meeting; the specification that the per diem received per month shall not exceed the equivalent
of four meetings; the vesting of the power to increase the amount of per diem in the President; and the limitation that
the amount of per diem shall not be increased within two years from its last increase would all become useless
because the Board could always grant its members other benefits.
With regard to the full-time consultants, DBM Circular Letter No. 2002-2 states that, YEB and retirement benefits, are
personnel benefits granted in addition to salaries. As fringe benefits, these shall be paid only when the basic
salary is also paid. The full-time consultants are not part of the BCDA personnel and are not paid the basic
salary. The full-time consultants consultancy contracts expressly state that there is no employer-employee relationship
between BCDA and the consultants and that BCDA shall pay the consultants a contract price. Since full-time
consultants are not salaried employees of the BCDA, they are not entitled to the year-end benefit which is
a personnel benefit granted in addition to salaries and which is paid only when the basic salary is also paid.
Fifth, the BCDA claims that the Board members and full-time consultants are entitled to the year-end benefit because
(1) President Ramos approved the granting of the benefit to the Board members, and (2) they have been receiving it
since 1997.
The Court is not impressed. The State is not estopped from correcting a public officers erroneous application of a
statute, and an unlawful practice, no matter how long, cannot give rise to any vested right. [38]
The Court, however, notes that the Board members and full-time consultants received the year-end benefit in good
faith. The Board members relied on (1) Section 10 of RA No. 7227 which authorized the Board to adopt a

Honeys Note
*^_^*
compensation and benefit scheme; (2) the fact that RA No. 7227 does not expressly prohibit Board members from
receiving benefits other than the per diem authorized by law; and (3) President Ramos approval of the new
compensation and benefit scheme which included the granting of a year-end benefit to each contractual employee,
regular permanent employee, and Board member. The full-time consultants relied on Section 10 of RA No. 7227 which
authorized the Board to adopt a compensation and benefit scheme. There is no proof that the Board members and
full-time consultants knew that their receipt of the year-end benefit was unlawful. In keeping with Magno,[39] De Jesus,
[40]
Molen, Jr.,[41] and Kapisanan ng mga Manggagawa sa Government Service Insurance System (KMG) v.
Commission on Audit,[42] the Board members and full-time consultants are not required to refund the year-end benefits
they have already received.
WHEREFORE, the petition is PARTIALLY GRANTED. Commission on Audit Decision No. 2007-020 dated 12 April
2007 is AFFIRMED with the MODIFICATION that the Board members and full-time consultants of the Bases
Conversion and Development Authority are not required to refund the year-end benefits they have already received.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice