JUDICIAL DEPARTMENT (ARTICLE VIII) its earlier decision that the qualified FWBs should be given an option to remain
fied FWBs should be given an option to remain as stockholders of HLI,
1. Hacienda Luisita vs. PARC
FACTS :On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the
petition filed by HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLIs Stock
Distribution Plan (SDP) and placing the subject lands in Hacienda Luisita under compulsory coverage of
the Comprehensive Agrarian Reform Program (CARP) of the government.
The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are
operative facts that occurred in the interim and which the Court cannot validly ignore. Thus, the Court
declared that the revocation of the SDP must, by application of the operative fact principle, give way to the
right of the original 6,296 qualified farmworkers-beneficiaries (FWBs) to choose whether they want to
remain as HLI stockholders or [choose actual land distribution]. It thus ordered the Department of Agrarian
Reform (DAR) to immediately schedule meetings with the said 6,296 FWBs and explain to them the
effects, consequences and legal or practical implications of their choice, after which the FWBs will be
asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their
thumbmarks, as the case may be, over their printed names.
The parties thereafter filed their respective motions for reconsideration of the Court decision.
ISSUES:
(1) Is the operative fact doctrine available in this case?
(2) Is Sec. 31 of RA 6657 unconstitutional?
(3) Cant the Court order that DARs compulsory acquisition of Hacienda Lusita cover the full 6,443
hectares allegedly covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco),
and not just the 4,915.75 hectares covered by HLIs SDP?
(4) Is the date of the taking (for purposes of determining the just compensation payable to HLI)
November 21, 1989, when PARC approved HLIs SDP?
(5) Has the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10,
1999 (since Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11,
1989), and thus the qualified FWBs should now be allowed to sell their land interests in Hacienda Luisita
to third parties, whether they have fully paid for the lands or not?
(6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision that the qualified FWBs be given
an option to remain as stockholders of HLI be reconsidered?
RULING: [The Court PARTIALLY GRANTED the motions for reconsideration of respondents PARC, et
al. with respect to the option granted to the original farmworkers-beneficiaries (FWBs) of Hacienda Luisita
to remain with petitioner HLI, which option the Court thereby RECALLED and SET ASIDE. It reconsidered
andUNANIMOUSLY directed immediate land distribution to the qualified FWBs.]
1. YES, the operative fact doctrine is applicable in this case.
[The Court maintained its stance that the operative fact doctrine is applicable in this case since, contrary
to the suggestion of the minority, the doctrine is not limited only to invalid or unconstitutional laws but also
applies to decisions made by the President or the administrative agencies that have the force and effect of
laws. Prior to the nullification or recall of said decisions, they may have produced acts and consequences
that must be respected. It is on this score that the operative fact doctrine should be applied to acts and
consequences that resulted from the implementation of the PARC Resolution approving the SDP of
HLI. The majority stressed that the application of the operative fact doctrine by the Court in its July 5, 2011
decision was in fact favorable to the FWBs because not only were they allowed to retain the benefits and
homelots they received under the stock distribution scheme, they were also given the option to choose for
themselves whether they want to remain as stockholders of HLI or not.]
2. NO, Sec. 31 of RA 6657 NOT unconstitutional.
[The Court maintained that the Court is NOT compelled to rule on the constitutionality of Sec. 31 of RA
6657, reiterating that it was not raised at the earliest opportunity and that the resolution thereof is not the
lismota of the case. Moreover, the issue has been rendered moot and academic since SDO is no longer
one of the modes of acquisition under RA 9700. The majority clarified that in its July 5, 2011 decision, it
made no ruling in favor of the constitutionality of Sec. 31 of RA 6657, but found nonetheless that there
was no apparent grave violation of the Constitution that may justify the resolution of the issue of
constitutionality.]
3. NO, the Court CANNOT order that DARs compulsory acquisition of Hacienda Lusita cover the
full 6,443 hectares and not just the 4,915.75 hectares covered by HLIs SDP.
[Since what is put in issue before the Court is the propriety of the revocation of the SDP, which only
involves 4,915.75 has. of agricultural land and not 6,443 has., then the Court is constrained to rule only as
regards the 4,915.75 has. of agricultural land. Nonetheless, this should not prevent the DAR, under its
mandate under the agrarian reform law, from subsequently subjecting to agrarian reform other agricultural
lands originally held by Tadeco that were allegedly not transferred to HLI but were supposedly covered by
RA 6657.
However since the area to be awarded to each FWB in the July 5, 2011 Decision appears too restrictive
considering that there are roads, irrigation canals, and other portions of the land that are considered
commonly-owned by farmworkers, and these may necessarily result in the decrease of the area size that
may be awarded per FWB the Court reconsiders its Decision and resolves to give the DAR leeway in
adjusting the area that may be awarded per FWB in case the number of actual qualified FWBs decreases.
In order to ensure the proper distribution of the agricultural lands of Hacienda Luisita per qualified FWB,
and considering that matters involving strictly the administrative implementation and enforcement of
agrarian reform laws are within the jurisdiction of the DAR, it is the latter which shall determine the area
with which each qualified FWB will be awarded.
On the other hand, the majority likewise reiterated its holding that the 500-hectare portion of Hacienda
Luisita that have been validly converted to industrial use and have been acquired by intervenors Rizal
Commercial Banking Corporation (RCBC) and Luisita Industrial Park Corporation (LIPCO), as well as the
separate 80.51-hectare SCTEX lot acquired by the government, should be excluded from the coverage of
the assailed PARC resolution. The Court however ordered that the unused balance of the proceeds of the
sale of the 500-hectare converted land and of the 80.51-hectare land used for the SCTEX be distributed to
the FWBs.]
4. YES, the date of taking is November 21, 1989, when PARC approved HLIs SDP.
[For the purpose of determining just compensation, the date of taking is November 21, 1989 (the date
when PARC approved HLIs SDP) since this is the time that the FWBs were considered to own and
possess the agricultural lands in Hacienda Luisita. To be precise, these lands became subject of the
agrarian reform coverage through the stock distribution scheme only upon the approval of the SDP, that
is, on November 21, 1989. Such approval is akin to a notice of coverage ordinarily issued under
compulsory acquisition. On the contention of the minority (Justice Sereno) that the date of the notice of
coverage [after PARCs revocation of the SDP], that is, January 2, 2006, is determinative of the just
compensation that HLI is entitled to receive, the Court majority noted that none of the cases cited to justify
this position involved the stock distribution scheme. Thus, said cases do not squarely apply to the instant
case. The foregoing notwithstanding, it bears stressing that the DAR's land valuation is only preliminary
and is not, by any means, final and conclusive upon the landowner. The landowner can file an original
action with the RTC acting as a special agrarian court to determine just compensation. The court has the
right to review with finality the determination in the exercise of what is admittedly a judicial function.]
5. NO, the 10-year period prohibition on the transfer of awarded lands under RA 6657 has NOT lapsed
on May 10, 1999; thus, the qualified FWBs should NOT yet be allowed to sell their land interests in
Hacienda Luisita to third parties.
[Under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after 10 years from
the issuance and registration of the emancipation patent (EP) or certificate of land ownership award
(CLOA). Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in the instant
case, the 10-year prohibitive period has not even started. Significantly, the reckoning point is the issuance
of the EP or CLOA, and not the placing of the agricultural lands under CARP coverage. Moreover, should
the FWBs be immediately allowed the option to sell or convey their interest in the subject lands, then all
efforts at agrarian reform would be rendered nugatory, since, at the end of the day, these lands will just be
transferred to persons not entitled to land distribution under CARP.]
6. YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as
stockholders of HLI should be reconsidered.
[The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain
as stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands]
given the present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the
HLI capital stock is [just] 33.296%. Thus, even if all the holders of this 33.296% unanimously vote to
remain as HLI stockholders, which is unlikely, control will never be in the hands of the FWBs. Control
means the majority of [sic] 50% plus at least one share of the common shares and other voting
shares. Applying the formula to the HLI stockholdings, the number of shares that will constitute the
majority is 295,112,101 shares (590,554,220 total HLI capital shares divided by 2 plus one [1] HLI
share). The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the
295,112,101 shares needed by the FWBs to acquire control over HLI.]
2. Malaga vs. Penachos
FACTS: The Iloilo State College of Fisheries (ISCOF) through its Pre-qualifications, Bids and Awards
Committee (PBAC) caused the publication in the November 25, 26 and 28, 1988 issues of the Western
Visayas Daily an Invitation to Bid for the construction of a Micro Laboratory Building at ISCOF. The notice
announced that the last day for the submission of pre-qualification requirements was on December 2,
1988, and that the bids would be received and opened on December 12, 1988 at 3 o'clock in the
afternoon.
Petitioners Malaga and Najarro, doing business under the name of BE Construction and Best Built
Construction, respectively, submitted their pre-qualification documents at two o'clock in the afternoon of
December 2, 1988. Petitioner Occeana submitted his own PRE-C1 on December 5, 1988. All three of
them were not allowed to participate in the bidding as their documents were considered late.
On December 12, 1988, the petitioners filed a complaint with the Iloilo RTC against the officers of PBAC
for their refusal without just cause to accept them resulting to their non-inclusion in the list of pre-qualified
bidders. They sought to the resetting of the December 12, 1988 bidding and the acceptance of their
documents. They also asked that if the bidding had already been conducted, the defendants be directed
not to award the project pending resolution of their complaint.
On the same date, Judge Lebaquin issued a restraining order prohibiting PBAC from conducting the
bidding and award the project. The defendants filed a motion to lift the restraining order on the ground that
the court is prohibited from issuing such order, preliminary injunction and preliminary mandatory injunction
in government infrastructure project under Sec. 1 of P.D. 1818. They also contended that the preliminary
injunction had become moot and academic as it was served after the bidding had been awarded and
closed.
On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary
injunction. It declared that the building sought to be constructed at the ISCOF was an infrastructure
project of the government falling within the coverage of the subject law.
ISSUE: Whether or not ISCOF is a government instrumentality subject to the provisions of PD 1818?
RULING: The 1987 Administrative Code defines a government instrumentality as follows:
Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate
powers, administering special funds, and enjoying operational autonomy, usually through a charter. This
term includes regulatory agencies, chartered institutions, and government-owned or controlled
corporations. (Sec. 2 (5) Introductory Provisions).
The same Code describes a chartered institution thus:
Chartered institution - refers to any agency organized or operating under a special charter, and vested by
law with functions relating to specific constitutional policies or objectives. This term includes the state
universities and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions).
It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D.
1818.
There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in
pursuance of the integrated fisheries development policy of the State, a priority program of the
government to effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the
Philippines shall also be the ex-officio Treasurer of the state college with its accounts and expenses to be
audited by the Commission on Audit or its duly authorized representative. Third, heads of bureaus and
offices of the National Government are authorized to loan or transfer to it, upon request of the president of
the state college, such apparatus, equipment, or supplies and even the services of such employees as
can be spared without serious detriment to public service. Lastly, an additional amount of P1.5M had been
appropriated out of the funds of the National Treasury and it was also decreed in its charter that the funds
and maintenance of the state college would henceforth be included in the General Appropriations Law.
Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree
as there are irregularities present surrounding the transaction that justified the injunction issued as regards
to the bidding and the award of the project (citing the case of Datiles vs. Sucaldito).
3. PACU vs Secretary of Education GR No 5279 31 October 1955
Facts: Petitioner, Philippine Association of Colleges and Universities (PACU) request that Act No. 2706 as
amended by Act No. 3075 and Commonwealth Act No. 180 be declared unconstitutional due to (1) They
deprive owners of schools and colleges as well as teachers and parents of liberty and property without
due process of law; (2) They deprive parents of their natural rights and duty to rear their children for civic
efficiency; and (3) Their provisions conferring on the Secretary of Education unlimited power and
discretion to prescribe rules and standards constitute an unlawful delegation of legislative power.
However, 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. They have suffered no wrong under the terms of law and had no need for relief.
Issue: Whether or not there is justiciable controversy to be settled by the Court
Decision: Petition for prohibition is denied. 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. The power of courts to declare a
law unconstitutional arises only when the interests of litigant require the use of that judicial authority for
their protection against actual interference, a hypothetical threat is insufficient. Judicial power is limited to
the decision of actual cases and controversies. Mere apprehension that the Secretary of Education might
under the law withdraw the permit of one of petitioners does not constitute a justiciable controversy.
4. Mariano vs. COMELEC
FACTS: This is a petition for prohibition and declaratory relief filed by petitioners Juanito Mariano, Jr.,
Ligaya S. Bautista, TeresitaTibay, Camilo Santos, Frankie Cruz, Ricardo Pascual, TeresitaAbang,
Valentina Pitalvero, RufinoCaldoza, Florante Alba, and Perfecto Alba. Of the petitioners, only Mariano, Jr.,
is a resident of Makati. The others are residents of IbayoUsusan, Taguig, Metro Manila. Suing
as taxpayers, they assail sections 2, 51, and 52 of Republic Act No. 7854 as unconstitutional.
ISSUE:Whether or not there is an actual case or controversy to challenge the constitutionality of one of
the questioned sections of R.A. No. 7854.
HELD: The requirements before a litigant can challenge the constitutionality of a law are well delineated.
They are: 1) there must 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.
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.
5. Macasiano vs. NHA
Facts: Petitioner seeks to have this Court declare as unconstitutional Sections 28 and 44 of Republic Act
No. 7279, otherwise known as the Urban Development and Housing Act of 1992.He predicates his locust
standi on his being a consultant of the Department of Public Works and Highways (DPWH) pursuant to
a Contract of Consultancy on Operation for Removal of Obstructions and Encroachments on Properties of
Public Domain (executed immediately after his retirement on 2 January 1992 from the Philippine National
Police) and his being a taxpayer. As to the first, he alleges that said Sections 28 and 44 "contain the
seeds of a ripening controversy that serve as drawback" to his "tasks and duties regarding demolition of
illegal structures"; because of the said sections, he "is unable to continue the demolition of illegal
structures which he assiduously and faithfully carried out in the past."
1. As a taxpayer, he alleges that "he has a direct interest in seeing to it that public funds are
properly and lawfully disbursed."
2. On 14 May 1993, the Solicitor General filed his Comment to the petition. He maintains that, the
instant petition is devoid of merit for non-compliance with the essential requisites for the exercise
of judicial review in cases involving the constitutionality of a law. He contends that there is no
actual case or controversy with litigants asserting adverse legal rights or interests, that the
petitioner merely asks for an advisory opinion, that the petitioner is not the proper party to
question the Act as he does not state that he has property "being squatted upon" and that there
is no showing that the question of constitutionality is the very lis mota presented. He argues that
Sections 28 and 44 of the Act are not constitutionality infirm.
Issue: Whether or not Petitioner has legal standing
Held: It is a rule firmly entrenched in our jurisprudence that the constitutionality of an act of the
legislature will not be determined by the courts unless that, question is properly raised and
presented in appropriate cases and is necessary to a determination of the case, i.e the issue
of constitutionality must be very lis mota presented.
To reiterate, the essential requisites for a successful judicial inquiry into the constitutionality of a law are:
(a) the existence of an actual case or controversy involving a conflict of legal rights susceptible of judicial
determination, (b) the constitutional question must be raised by a proper property, (c) the constitutional
question must be raised at the opportunity, and (d) the resolution of the constitutional question must be
necessary to the decision of the case.
A proper party is one who has sustained or is in danger of sustaining an immediate injury as a result of the
acts or measures complained of. It is easily discernible in the instant case that the first two (2)
fundamental requisites are absent. There is no actual controversy. Moreover, petitioner does not claim
that, in either or both of the capacities in which he is filing the petition, he has been actually prevented
from performing his duties as a consultant and exercising his rights as a property owner because of the
assertion by other parties of any benefit under the challenged sections of the said Act. Judicial review
cannot be exercised in vacuo. Judicial power is the "right to determine actual controversies arising
between adverse litigants.
Wherefore, for lack of merit, the instant petition is DISMISSED with costs against the petitioner.SO
ORDERED
J. Joya vs. PCGG
G.R. No. 96541, Aug. 24, 1993
Requisites for exercise of judicial review: (1) that the question must be raised by the proper party; (2) that
there must be an actual case or controversy; (3) that the question must be raised at the earliest possible
opportunity; and, (4) that the decision on the constitutional or legal question must be necessary to the
determination of the case itself.
LEGAL STANDING: 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.
EXCEPTIONS TO LEGAL STANDING: Mandamus and Taxpayer's Suits
REQUISITES FOR MANDAMUS: 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 unequivocally set forth in the Constitution.
WHEN TAXPAYER SUIT MAY PROSPER: 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.
ACTUAL 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.
FACTS:
The Republic of the Philippines through the PCGG entered into a Consignment Agreement with Christies
of New York, selling 82 Old Masters Paintings and antique silverware seized from Malacanang and the
Metropolitan Museum of Manila alleged to be part of the ill-gotten wealth of the late Pres. Marcos, his
relatives and cronies. Prior to the auction sale, COA questioned the Consignment Agreement, there was
already opposition to the auction sale. Nevertheless, it proceeded as scheduled and the proceeds of
$13,302,604.86 were turned over to the Bureau of Treasury.
ISSUE:
Whether or not PCGG has jurisdiction and authority to enter into an agreement with Christies of New York
for the sale of the artworks
RULING: On jurisdiction of the Court to exercise judicial review, 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. But the most important are the first two
(2) requisites.
Standing of Petitioners
On the first requisite, we have held that one having no right or interest to protect cannot invoke the
jurisdiction of the court as party-plaintiff in an action. 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. 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.
EXCEPTIONS TO LEGAL STANDING: Mandamus and Taxpayers Suit:
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, and when a taxpayer questions the validity of a
governmental act authorizing the disbursement of public funds.
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.
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 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.
Requisites for a Mandamus Suit
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, 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.
When a Taxpayer's Suit may prosper
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.
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.
Actual Controversy
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. A case becomes moot and academic when its purpose has become stale, 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. We find however that there is no such justification in the petition at bar to warrant the
relaxation of the rule.
7. Valentin Legaspi v. Civil Service Commission
Facts The fundamental right of the people to information on matters of public concern is invoked in this
special civil action for mandamus instituted by petitioner Valentin L. Legaspi against the Civil Service
Commission. The respondent had earlier denied Legaspi's request for information on the civil service
eligibilities of certain persons employed as sanitarians in the Health Department of Cebu City. These
government employees, Julian Sibonghanoy and Mariano Agas, had allegedly represented themselves as
civil service eligible who passed the civil service examinations for sanitarians.
Claiming that his right to be informed of the eligibilities of Julian Sibonghanoy and Mariano Agas, is
guaranteed by the Constitution, and that he has no other plain, speedy and adequate remedy to acquire
the information, petitioner prays for the issuance of the extraordinary writ of mandamus to compel the
respondent Commission to disclose said information.
The Solicitor General interposes procedural objections to give due course to this Petition. He challenges
the petitioner's standing to sue upon the ground that the latter does not possess any clear legal right to be
informed of the civil service eligibilities of the government employees concerned. He calls attention to the
alleged failure of the petitioner to show his actual interest in securing this particular information. He further
argues that there is no ministerial duty on the part of the Commission to furnish the petitioner with the
information he seeks.
Issues:
a. Whether or not the Civil Service Commission is obliged to produce the information regarding the
eligibilities of certain persons employed as sanitarians in the Health Department of Cebu City?
b. Whether or not the petitioner has a standing to assert the right to information?
Ruling: a. this question is first addressed to the government agency having custody of the desired
information. However, as already discussed, this does not give the agency concerned any discretion to
grant or deny access. In case of denial of access, the government agency has the burden of showing that
the information requested is not of public concern, or, if it is of public concern, that the same has been
exempted by law from the operation of the guarantee. To hold otherwise will serve to dilute the
constitutional right. As aptly observed, ". . . the government is in an advantageous position to marshall and
interpret arguments against release . . ." (87 Harvard Law Review 1511 [1974]). To safeguard the
constitutional right, every denial of access by the government agency concerned is subject to review by
the courts, and in the proper case, access may be compelled by a writ of Mandamus.
In determining whether or not a particular information is of public concern there is no rigid test which can
be applied. "Public concern" like "public interest" is a term that eludes exact definition. Both terms
embrace a broad spectrum of subjects which the public may want to know, either because these directly
affect their lives, or simply because such matters naturally arouse the interest of an ordinary citizen. In the
final analysis, it is for the courts to determine in a case by case basis whether the matter at issue is of
interest or importance, as it relates to or affects the public.
b. In the instant, case while refusing to confirm or deny the claims of eligibility, the respondent has
failed to cite any provision in the Civil Service Law which would limit the petitioner's right to know who are,
and who are not, civil service eligibles. We take judicial notice of the fact that the names of those who
pass the civil service examinations, as in bar examinations and licensure examinations for various
professions, are released to the public. Hence, there is nothing secret about one's civil service eligibility, if
actually possessed. Petitioner's request is, therefore, neither unusual nor unreasonable. And when, as in
this case, the government employees concerned claim to be civil service eligibles, the public, through any
citizen, has a right to verify their professed eligibilities from the Civil Service Commission.
The civil service eligibility of a sanitarian being of public concern, and in the absence of express limitations
under the law upon access to the register of civil service eligibles for said position, the duty of the
respondent Commission to confirm or deny the civil service eligibility of any person occupying the position
becomes imperative. Mandamus, therefore lies.
WHEREFORE, the Civil Service Commission is ordered to open its register of eligibles for the position of
sanitarian, and to confirm or deny, the civil service eligibility of Julian Sibonghanoy and Mariano Agas, for
said position in the Health Department of Cebu City, as requested by the petitioner Valentin L. Legaspi.
8. Bankers Association of the Philippines and Perry L. Pe vs. The Commission on Elections
The petitioners, Bankers Association of the Philippines and Perry L. Pe, assail the constitutionality and
legality of the respondent Commission on Elections (Comelec's) Resolution No. 96881 dated May 7,
2013, entitled "In the Matter of Implementing a Money Ban to Deter and Prevent Vote-Buying in
Connection with the May 13, 2013 National and Local Elections" (Money Ban Resolution).2 The
petitioners included a prayer for the issuance of a status quo ante/temporary restraining order and/or writ
of preliminary injunction to enjoin its implementation.
THE ASSAILED RESOLUTION
Under the Money Ban Resolution, the Comelec resolved:
1. To prohibit the withdrawal of cash, encashment of checks and conversion of any monetary instrument
into cash from May 8 to 13, 2013 exceeding One Hundred Thousand Pesos (P100,000.00) or its
equivalent in any foreign currency, per day in banks, finance companies, quasi-banks, pawnshops,
remittance companies and institutions performing similar functions. However, all other non-cash
transactions are not covered.
For this purpose, the BangkoSentral ng Pilipinas and other financial agencies of the government are
hereby deputized to implement with utmost dispatch and ensure strict compliance with this resolution
without violating the provisions of Republic Act No. 1405, as amended, and Republic Act No. 6426.
2. To prohibit the possession, transportation and/or carrying of cash exceeding Five Hundred Thousand
Pesos (P500,000.00) or its equivalent in any foreign currency from May 8 to May 13, 2013. For this
purpose, all cash being transported and carried exceeding such amount shall be presumed for the
purpose of vote-buying and electoral fraud in violation of the money ban. xxx.
3. All withdrawals of cash or encashment of checks or series of withdrawals or encashment of checks in
cash involving a total amount exceeding Five Hundred Thousand Pesos (P500,000.00) within one (1)
banking day from date of the publication of this resolution until May 13, 2013 shall be presumed to be for
the purpose of accumulating funds for vote-buying and election fraud and shall therefore be treated as a
"suspicious transaction" under Republic Act No. 9160 or the "Anti-Money Laundering Act of 2001" as
amended by Republic Act No. 9194. For this purpose, the Anti-Money Laundering Council (AMLC) is
hereby deputized to monitor and initiate investigations, and if necessary, inquire into and examine the
deposit and related accounts involved in the suspected transaction pursuant to procedure and
requirements of Republic Act No. 10167.3
The Comelecs Resolution No. 9688-A,4 issued on May 9, 2013, amended the Money Ban Resolution by:
1. exempting withdrawals that are routine, regular and made in the ordinary course of business of the
withdrawing client on the basis of the prevailing "Know-Your-Client/Customer" policy of the BangkoSentral
ng Pilipinas (BSP), which requires banks "not only to establish the identity of their clients but also to have
background knowledge of their normal business transactions,"5 and
2. presuming that the possession or transportation of cash in excess of P500,000.00 from May 8 to 13,
2013 was for the purpose of vote-buying and electoral fraud when the same was without tenable
justification or whenever attended by genuine reason engendering belief that the money would be used for
vote-buying.
The Comelec issued Resolution No. 9688-A on the same day that the petitioners filed the present petition.
On May 10, 2013, the Court issued a Status Quo Ante Order,6 enjoining the parties to maintain the status
quo prevailing before the issuance of the Money Ban Resolution.
THE PARTIES ARGUMENTS
The petitioners invoke the Courts power of judicial review to strike down the Money Ban Resolution.
They contend that the Comelecs Money Ban Resolution was issued without jurisdiction since the
Comelecs power to supervise and regulate the enjoyment or utilization of franchises or permits under
Section 4, Article IX-C of the Constitution does not extend to the BSP which is not a holder of any special
privilege from the government. The BSPs power to regulate and supervise banking operations stems from
its mandate under the Constitution7and Republic Act (RA) No. 8791 (The General Banking Law of
2000).8 Section 4, Article IX-C of the Constitution states
Section 4. The Commission may, during the election period, supervise or regulate the enjoyment or
utilization of all franchises or permits for the operation of transportation and other public utilities, media of
communication or information, all grants, special privileges, or concessions granted by the Government or
any subdivision, agency, or instrumentality thereof, including any government-owned or controlled
corporation or its subsidiary. Such supervision or regulation shall aim to ensure equal opportunity, time,
and space, and the right to reply, including reasonable, equal rates therefor, for public information
campaigns and forums among candidates in connection with the objective of holding free, orderly, honest,
peaceful, and credible elections. [emphasis ours]
They thus conclude that the Comelecs power of supervision and regulation cannot be exercised over the
BSP and the Anti-Money Laundering Council (AMLC) as they can exercise authority only over public
transportation and communication entities given special privileges by the government. The petitioners also
posit that the Comelecs power to deputize extends only to law enforcement agencies and only if the
President concurs. Section 2(4), Article IX-C of the Constitution states:
Section 2. The Commission on Elections shall exercise the following powers and functions:
xxxx
4. Deputize, with the concurrence of the President, law enforcement agencies and instrumentalities of the
Government, including the Armed Forces of the Philippines, for the exclusive purpose of ensuring free,
orderly, honest, peaceful, and credible elections. [emphasis ours]
They argue that the BSP and the AMLC are not law enforcement agencies unlike the National Bureau of
Investigation and the Philippine National Police. Assuming they may be considered as such, the Comelec
failed to secure the concurrence of the President to the deputation.
The petitioners note that paragraph 3 of the Money Ban Resolution effectively amended RA No. 9160
(Anti-Money Laundering Act of 2001 or AMLA) by treating the withdrawal of cash or encashment of checks
exceedingP500,000.00 within one banking day from May 8 to 13, 2013 as a "suspicious transaction," thus
authorizing the AMLC to monitor, initiate investigations, inquire into and examine the deposit. This type of
transaction, however, is not among those enumerated as suspicious under Section 3(b) of the AMLA. As
an administrative issuance, the Money Ban Resolution cannot amend a law enacted by Congress.
The petitioners also claim that the Money Ban Resolution violates a number of constitutional rights.
The Constitution guarantees that no person shall be deprived of life, liberty and property without due
process of law.9 The Money Ban Resolution violates an individuals due process rights because it unduly
and unreasonably restricts and prohibits the withdrawal, possession, and transportation of cash. The
prohibition effectively curtails a range of legitimate activities, and hampers and prejudices property rights.
Though the intent (i.e., to curb vote-buying and selling) is laudable, the means employed is not reasonably
necessary and is oppressive on an individuals rights. The limitation on withdrawal also goes against the
non-impairment clause because the prohibitions and restrictions impair the banks contractual obligations
with their depositors.
Finally, the petitioners claim that the Money Ban Resolution violates the constitutional presumption of
innocence because it declares that "all cash being transported and carried exceeding [P500,000.00] shall
be presumed for the purpose of vote-buying and electoral fraud in violation of the money ban."10 There is
no logical connection between the proven fact of possession and transportation of an amount in excess
of P500,000.00 and the presumed act of vote-buying because there are many other legitimate reasons for
the proven fact.
The Comelec, through the Office of the Solicitor General, filed its Comment on the petition, insisting on the
validity of the Money Ban Resolution and its amendment.
The Comelec argues that it has the constitutional authority to supervise and regulate banks and other
financial entities, citing Section 4, Article IX-C of the Constitution. It alleges that its power to regulate
covers banks and other finance companies, since these entities operate under an "authority" granted by
the BSP under Section 6 of RA No. 8791. This authority is of the same nature as "grants, special
privileges, or concessions" under Section 4, Article IX-C of the Constitution; thus, it may be validly
regulated by the Comelec.
The Comelec also claims that it may validly deputize the BSP, since the latter is a government
instrumentality covered by Section 2(4), Article IX-C of the Constitution. Contrary to the petitioners claim,
the Comelecs power to deputize is not limited to law enforcement agencies, but extends to
instrumentalities of the government. The constitutional intent is to give the Comelec unrestricted access to
the full machinery of the State to ensure free, orderly, honest, peaceful, and credible elections.
The Comelec further contends that Presidential concurrence with the exercise of the Comelecs
deputation power is required only if it involves agencies and instrumentalities within the Executive
Department, of which the BSP is not a part. Even assuming that Presidential concurrence is required, this
has been secured through Memorandum Order No. 52,11 s. 2013, where the President gave his blanket
concurrence to the deputation of all "law enforcement agencies and instrumentalities of the
Government."12
That the BSP is constitutionally and statutorily tasked to provide "policy direction in the areas of money,
banking, and credit," and vested with "supervision over the operations of bank," does not preclude the
Comelec from exercising its power to supervise and regulate banks during the election period. Notably,
the Comelecs power is limited in terms of purpose and duration, and should prevail in this specific
instance.
If the Comelec deems the supervision and regulation of banks necessary to curb vote-buying, this is a
political question that the Court may not inquire into. The choice of the measures that the Comelec may
undertake to ensure the conduct of a free, orderly, honest, peaceful, and credible election is a policy
question beyond the scope of judicial review.
The Comelec lastly defends the Money Ban Resolution as a reasonable measure that is not unduly
oppressive on individuals. It merely limits transactions involving cash (withdrawal, encashment,
possession, etc.), but does not affect other non-cash transactions such as those involving checks and
credit cards. Hence, only the medium or instrument of the transaction is affected; the transaction may
proceed using non-cash medium or instrument. There is, therefore, no impairment of rights and contracts
that would invalidate the Money Ban Resolution.
THE COURTS RULING
We resolve to dismiss the petition for being moot and academic.
By its express terms, the Money Ban Resolution was effective only for a specific and limited time during
the May 13, 2013 elections, i.e., from May 8 to 13, 2013. The Court issued a Status Quo Ante Order on
May 10, 2013; thus, the Money Ban Resolution was not in force during the most critical period of the
elections from May 10, 2013 to actual election day. With the May 13, 2013 elections over, the Money
Ban Resolution no longer finds any application so that the issues raised have become moot and
academic.
The power of judicial review is limited to actual cases or controversies.The Court, as a rule, will decline to
exercise jurisdiction over a case and proceed to dismiss it when the issues posed have been mooted by
supervening events. Mootness intervenes when a ruling from the Court no longer has any practical value
and, from this perspective, effectively ceases to be a justiciable controversy.13 "[W]ithout a justiciable
controversy, the [petition would] become a [plea] for declaratory relief, over which the Supreme Court has
no original jurisdiction."14
While the Court has recognized exceptions in applying the "moot and academic" principle, these
exceptions relate only to situations where: (1) there is a grave violation of the Constitution; (2) the situation
is of exceptional character and paramount public interest is involved; (3) the constitutional issue raised
requires formulation of controlling principles to guide the bench, the bar, and the public; and (4) the case is
capable of repetition yet evading review.15
In the present case, we find it unnecessary to consider the presence of the first, second and third
requirements when nothing in the facts and surrounding circumstances indicate the presence of the fourth
requirement, i.e., the case is capable of repetition yet evading review.
We note that the Comelec did not make any parallel move on or about the May 13, 2013 elections to
address the evil that its Money Ban Resolution sought to avoid and, in fact, it did not issue a similar
resolution for the October 28, 2013 barangay elections. If the May 13, 2013 elections had come and gone
without any need for the measures the assailed Resolution put in place and if no such measure was
necessary in the elections that immediately followed (i.e., the October 28, 2013 barangay elections), we
believe that it is now premature for the Court to assume that a similar Money Ban Resolution would be
issued in the succeeding elections such that we now have to consider the legality of the Comelec measure
that is presently assailed.
We consider it significant that the BSP and the Monetary Board continue to possess full and sufficient
authority to address the Comelecs concerns and to limit banking transactions to legitimate purposes
without need for any formal Comelec resolution if and when the need arises. Congress, too, at this point,
should have taken note of this case and has the plenary authority, through its lawmaking powers, to
address the circumstances and evils the Money Ban Resolution sought to address. In other words,
Congress can very well act to consider the required measures for future elections, thus rendering
unnecessary further action on the merits of the assailed Money Ban Resolution at this point.
WHEREFORE, we hereby DISMISS the petition for having become moot and academic. The Status Quo
Ante Order issued by the Court on May 10, 2013, having been rendered functus oficio by the May 13,
2013 elections, is hereby formally LIFTED.
SO ORDERED
 9. Kilosbayan vs. Guingona Jr.
FACTS: The PCSO decided to establish an online 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 on an online lottery system, the Berjaya Group Berhad, with its affiliate, the
International Totalizator Systems, Inc. became interested to offer its services and resources to PCSO.
Kilosbayan opposed the said agreement between PCSO and PGMC as it alleged that: PGMC does not
meet the nationality requirement because it is 75% foreign owned (owned by a Malaysian firm Berjaya
Group Berhad); PCSO, under Section 1 of its charter (RA 1169), is prohibited from holding and conducting
lotteries in collaboration, association or joint venture with any person, association, company or entity;
The network system sought to be built by PGMC for PCSO is a telecommunications network. Under the
law (Act No. 3846), a franchise is needed to be granted by the Congress before any person may be
allowed to set up such; PGMCs articles of incorporation, as well as the Foreign Investments Act (R.A. No.
7042) does not allow it to install, establish and operate the on-line lotto and telecommunications systems.
PGMC and PCSO, through Teofisto Guingona, Jr. and Renato Corona, Executive Secretary and Asst.
Executive Secretary respectively, alleged that PGMC is not a collaborator but merely a contractor for a
piece of work, i.e., the building of the network; that PGMC is a mere lessor of the network it will build as
evidenced by the nature of the contract agreed upon, i.e., Contract of Lease.
An open letter was sent to President Ramos strongly opposing the setting up of an online lottery system
due to ethical and moral concerns, however the project pushed through.
ISSUES:
Whether the petitioners have locus standi (legal standing); and
Whether the Contract of Lease is legal and valid in light of Sec. 1 of R.A. 1169 as amended by B.P. Blg.
42.
RULING:
The petitioners have locus standi due to the transcendental importance to the public that the case
demands. The ramifications of such issues immeasurably affect the social, economic and moral well-
being of the people. The legal standing then of the petitioners deserves recognition, and in the exercise of
its sound discretion, the Court brushes aside the procedural barrier.
Sec. 1 of R.A. No. 1169, as amended by B.P. Blg. 42, prohibits the PCSO from holding and conducting
lotteries in collaboration, association or joint venture with any person, association, company, or entity,
whether domestic or foreign. The language of the section is clear that with respect to its franchise or
privilege to hold and conduct charity sweepstakes races, lotteries and other similar activities, the PCSO
cannot exercise it in collaboration, association or joint venture with any other party. This is the
unequivocal meaning and import of the phrase. By the exception explicitly made, the PCSO cannot share
its franchise with another by way of the methods mentioned, nor can it transfer, assign or lease such
franchise.
10. Tatad vs. Garcia Jr.
Facts: In 1989, the government planned to build a railway transit line along EDSA. No bidding was made
but certain corporations were invited to prequalify. The only corporation to qualify was the EDSA LRT
Consortium which was obviously formed for this particular undertaking. An agreement was then made
between the government, through the DOTC, and EDSA LRT Consortium. The agreement was based on
the Build-Operate-Transfer scheme provided for by law (RA 6957, amended by RA 7718).Under the
agreement, EDSA LRT Consortium shall build the facilities, i.e., railways, and shall supply the train cabs.
Every phase that is completed shall be turned over to the DOTC and the latter shall pay rent for the same
for 25 years. By the end of 25 years, it was projected that the government shall have fully paid EDSA LRT
Consortium. Thereafter, EDSA LRT Consortium shall sell the facilities to the government for
$1.00.However, Senators Francisco Tatad, John Osmea, and Rodolfo Biazon opposed the
implementation of said agreement as they averred that EDSA LRT Consortium is a foreign corporation as
it was organized under Hongkong laws; that as such, it cannot own a public utility such as the EDSA
railway transit because this falls under the nationalized areas of activities..
Issue: Can respondent EDSA LRT Corporation, Ltd., a foreign corporation own EDSA LRT III; a public
utility?
Ruling: NO. EDSA LRT Consortium, under the agreement, does not and will not become the owner of a
public utility hence, the question of its nationality is misplaced. It is true that a foreign corporation cannot
own a public utility but in this case what EDSA LRT Consortium will own are the facilities that it will be
building for the EDSA railway project. There is no prohibition against a foreign corporation to own facilities
used for a public utility. Further, it cannot be said that EDSA LRT Consortium will be the one operating the
public utility for it will be DOTC that will operate the railway transit. DOTC will be the one exacting fees
from the people for the use of the railway and from the proceeds, it shall be paying the rent due to EDSA
LRT Consortium. All that EDSA LRT Consortium has to do is to build the facilities and receive rent from
the use thereof by the government for 25 years it will not operate the railway transit. Although EDSA
LRT Consortium is a corporation formed for the purpose of building a public utility it does not automatically
mean that it is operating a public utility. The moment for determining the requisite Filipino nationality is
when the entity applies for a franchise, certificate or any other form of authorization for that purpose.
 12. Kilosbayan vs. Manuel L. Morato
FACTS: In Jan. 25, 1995, PCSO and PGMC signed an Equipment Lease Agreement (ELA) wherein
PGMC leased online lottery equipment and accessories to PCSO. (Rental of 4.3% of the gross amount of
ticket or at least P35,000 per terminal annually). 30% of the net receipts is allotted to charity. Term of
lease is for 8 years. PCSO is to employ its own personnel and responsible for the facilities. Upon the
expiration of lease, PCSO may purchase the equipment for P25 million. Feb. 21, 1995. A petition was filed
to declare ELA invalid because it is the same as the Contract of Lease
Petitioner's Contention: ELA was same to the Contract of Lease. It is still violative of PCSO's charter. It is
violative of the law regarding public bidding. It violates Sec. 2(2) of Art. 9-D of the 1987 Constitution.
Standing can no longer be questioned because it has become the law of the case
Respondent's reply: ELA is different from the Contract of Lease. There is no bidding required. The power
to determine if ELA is advantageous is vested in the Board of Directors of PCSO. PCSO does not have
funds. Petitioners seek to further their moral crusade. Petitioners do not have a legal standing because
they were not parties to the contract
ISSUES: Whether or not the petitioners have standing?
HELD:NO. STARE DECISIS cannot apply. The previous ruling sustaining the standing of the petitioners is
a departure from the settled rulings on real parties in interest because no constitutional issues were
actually involved.
LAW OF THE CASE cannot also apply. Since the present case is not the same one litigated by the parties
before in Kilosbayan vs. Guingona, Jr., the ruling cannot be in any sense be regarded as the law of this
case. The parties are the same but the cases are not.
RULE ON CONCLUSIVENESS cannot still apply. An issue actually and directly passed upon and
determine in a former suit cannot again be drawn in question in any future action between the same
parties involving a different cause of action. But the rule does not apply to issues of law at least when
substantially unrelated claims are involved. When the second proceeding involves an instrument or
transaction identical with, but in a form separable from the one dealt with in the first proceeding, the Court
is free in the second proceeding to make an independent examination of the legal matters at issue. Since
ELA is a different contract, the previous decision does not preclude determination of the petitioner's
standing.
STANDING is a concept in constitutional law and here no constitutional question is actually involved. The
more appropriate issue is whether the petitioners are REAL PARTIES in INTEREST.
13. Atty. Oliver Lozano vs. Speaker Prospero Nograles
Facts: The two petitions, filed by their respective petitioners in their capacities as concerned citizens and
taxpayers, prayed for the nullification of House Resolution No. 1109 entitled A Resolution Calling upon
the Members of Congress to Convene for the Purpose of Considering Proposals to Amend or Revise the
Constitution, Upon a Three-fourths Vote of All the Members of Congress. Both petitions seek to trigger a
justiciable controversy that would warrant a definitive interpretation by the Court of Section 1, Article XVII,
which provides for the procedure for amending or revising the Constitution. The petitioners alleged that
HR 1109 is unconstitutional for deviation from the prescribed procedures to amend the Constitution by
excluding the Senate of the Philippines from the complete process of proposing amendments to the
Constitution and for lack of thorough debates and consultations.
Issue: Whether or not the Congress committed a violation in promulgating the HR1109.
Held: No, the House that the Congress ought to convene into a Constituent Assembly and adopt some
Rules for proposing changes to the charter. The House has said it would forward H.Res.1109 to the
Senate for its approval and adoption and the possible promulgation of a Joint and Concurrent Resolution
convening the Congress into a Constituent Assembly. Petitioners have not sufficiently proven any adverse
injury or hardship from the act complained of. House Resolution No. 1109 only resolved that the House of
Representatives shall convene at a future time for the purpose of proposing amendments or revisions to
the Constitution. No actual convention has yet transpired and no rules of procedure have yet been
adopted. No proposal has yet been made, and hence, no usurpation of power or gross abuse of discretion
has yet taken place. House Resolution No. 1109 involves a quintessential example of an uncertain
contingent future event that may not occur as anticipated, or indeed may not occur at all. The House has
not yet performed a positive act that would warrant an intervention from this Court. Judicial review is
exercised only to remedy a particular and concrete injury.
14. League of Cities of the Phils. Vs. Comelec
Action:
These are consolidated petitions for prohibition with prayer for the issuance of a writ of preliminary
injunction or temporary restraining order filed by the League of Cities of the Philippines, City of Iloilo, City
of Calbayog, and Jerry P. Treas assailing the constitutionality of the subject Cityhood Laws and enjoining
the Commission on Elections (COMELEC) and respondent municipalities from conducting plebiscites
pursuant to the Cityhood Laws.
Fact: During the 11th Congress, Congress enacted into law 33 bills converting 33 municipalities into
cities. However, Congress did not act on bills converting 24 other municipalities into cities.
During the 12th Congress, Congress enacted into law Republic Act No. 9009 (RA 9009), which took effect
on 30 June 2001. RA 9009 amended Section 450 of the Local Government Code by increasing the annual
income requirement for conversion of a municipality into a city from P20 million to P100 million. The
rationale for the amendment was to restrain, in the words of Senator Aquilino Pimentel, the mad rush of
municipalities to convert into cities solely to secure a larger share in the Internal Revenue Allotment
despite the fact that they are incapable of fiscal independence. After the effectivity of RA 9009, the House
of Representatives of the 12th Congress adopted Joint Resolution No. 29, which sought to exempt from
the P100 million income requirement in RA 9009 the 24 municipalities whose cityhood bills were not
approved in the 11th Congress. However, the 12th Congress ended without the Senate approving Joint
Resolution No. 29.
During the 13th Congress, the House of Representatives re-adopted Joint Resolution No. 29 as Joint
Resolution No. 1 and forwarded it to the Senate for approval. However, the Senate again failed to approve
the Joint Resolution. Following the advice of Senator Aquilino Pimentel, 16 municipalities filed, through
their respective sponsors, individual cityhood bills. The 16 cityhood bills contained a common provision
exempting all the 16 municipalities from the P100 million income requirement in RA 9009. On 22
December 2006, the House of Representatives approved the cityhood bills. The Senate also approved the
cityhood bills in February 2007, except that of Naga, Cebu which was passed on 7 June 2007. The
cityhood bills lapsed into law (Cityhood Laws) on various dates from March to July 2007 without the
Presidents signature.
The Cityhood Laws direct the COMELEC to hold plebiscites to determine whether the voters in each
respondent municipality approve of the conversion of their municipality into a city. Petitioners filed the
present petitions to declare the Cityhood Laws unconstitutional for violation of Section 10, Article X of the
Constitution, as well as for violation of the equal protection clause. Petitioners also lament that the
wholesale conversion of municipalities into cities will reduce the share of existing cities in the Internal
Revenue Allotment because more cities will share the same amount of internal revenue set aside for all
cities under Section 285 of the Local Government Code.
Issue:The petitions raise the following fundamental issues:
1. Whether the Cityhood Laws violate Section 10, Article X of the Constitution; and
2. Whether the Cityhood Laws violate the equal protection clause.
Held: We grant the petitions. The Cityhood Laws violate Sections 6 and 10, Article X of the Constitution,
and are thus unconstitutional. First, applying the P100 million income requirement in RA 9009 to the
present case is a prospective, not a retroactive application, because RA 9009 took effect in 2001 while the
cityhood bills became law more than five years later. Second, the Constitution requires that Congress
shall prescribe all the criteria for the creation of a city in the Local Government Code and not in any other
law, including the Cityhood Laws. Third, the Cityhood Laws violate Section 6, Article X of the Constitution
because they prevent a fair and just distribution of the national taxes to local government units. Fourth,
the criteria prescribed in Section 450 of the Local Government Code, as amended by RA 9009, for
converting a municipality into a city are clear, plain and unambiguous, needing no resort to any statutory
construction. Fifth, the intent of members of the 11th Congress to exempt certain municipalities from the
coverage of RA 9009 remained an intent and was never written into Section 450 of the Local Government
Code. Sixth, the deliberations of the 11th or 12th Congress on unapproved bills or resolutions are not
extrinsic aids in interpreting a law passed in the 13th Congress. Seventh, even if the exemption in the
Cityhood Laws were written in Section 450 of the Local Government Code, the exemption would still be
unconstitutional for violation of the equal protection clause.
15. Venancio Inonog vs. Judge Francisco Ibay
FACTS: The administrative case stemmed from the Sinumpaang Salaysay of Venancio P. Inonog, filed
with the Office of the Court Administrator (OCA) charging Judge Francisco B. Ibay of the Regional Trial
Court (RTC), Branch 135, Makati City with gross abuse of authority. The complaint involved an incident in
the Makati City Hall basement parking lot for which respondent judge cited complainant in contempt of
court because complainant parked his superior's vehicle at the parking space reserved for respondent
judge. Respondent judge blamed the usurpation of the said parking space for the delay in the
promulgation of the decision in 4 criminal cases scheduled at 8:00 a.m. of March 18, 2005 because the
latter had a hard time looking for another parking space. That same day, respondent judge issued another
order, finding complainant guilty of contempt.
ISSUE: Whether or not respondent judge is guilty of gross abuse of authority.
RULING: YES The Supreme Court held that power to punish for contempt is inherent in all courts so as to
preserve order in judicial proceedings as well as to uphold the administration of justice. The courts must
exercise the power of contempt for purposes that are impersonal because that power is intended as a
safeguard not for the judges but for the functions they exercise. Thus, judges have, time and again, been
enjoined to exercise their contempt power judiciously, sparingly, with utmost restraint and with the end in
view of utilizing the same for correction and preservation of the dignity of the court, not for retaliation or
vindication. Respondent judge's act of unceremoniously citing complainant in contempt is a clear evidence
of his unjustified use of the authority vested upon him by law. Besides possessing the requisite learning in
the law, a magistrate must exhibit that hallmark of judicial temperament of utmost sobriety and self-
restraint which are indispensable qualities of every judge. Respondent judge himself has characterized
this incident as a "petty disturbance" and he should not have allowed himself to be annoyed to a point that
he would even waste valuable court time and resources on a trivial matter.
Respondent Judge Francisco B. Ibay was found guilty of grave abuse of authority. He was ordered to pay
a FINE of Forty Thousand Pesos (P40,000.00)
 16. Biraogo vs. Phil. Truth Commission
FACTS:For consideration before the Court are two consolidated cases both of which essentially assail the
validity and constitutionality of Executive Order No. 1, dated July 30, 2010, entitled "Creating the
Philippine Truth Commission of 2010."In, G.R. No. 192935, Biraogo assails Executive Order No. 1 for
being violative of the legislative power of Congress under Section 1, Article VI of the Constitution as it
usurps the constitutional authority of the legislature to create a public office and to appropriate funds
therefor.The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition filed by
petitioners Edcel C. Lagman, Rodolfo B. Albano Jr., Simeon A. Datumanong, and Orlando B. Fua, Sr.
(petitioners-legislators) as incumbent members of the House of Representatives. The Philippine Truth
Commission (PTC) is a mere ad hoc body formed under the Office of the President with the primary task
to investigate reports of graft and corruption committed by third-level public officers and employees, their
co-principals, accomplices and accessories during the previous administration, and thereafter to submit its
finding and recommendations to the President, Congress and the Ombudsman. Though it has been
described as an "independent collegial body," it is essentially an entity within the Office of the President
Proper and subject to his control. Doubtless, it constitutes a public office, as an ad hoc body is one.
To accomplish its task, the PTC shall have all the powers of an investigative body under Section 37,
Chapter 9, Book I of the Administrative Code of 1987. It is not, however, a quasi-judicial body as it cannot
adjudicate, arbitrate, resolve, settle, or render awards in disputes between contending parties. All it can do
is gather, collect and assess evidence of graft and corruption and make recommendations. It may have
subpoena powers but it has no power to cite people in contempt, much less order their arrest. Although it
is a fact-finding body, it cannot determine from such facts if probable cause exists as to warrant the filing
of an information in our courts of law. Needless to state, it cannot impose criminal, civil or administrative
penalties or sanctions.
ISSUES: Whether or not EO No. 1 is Unconstitutional
HELD: Yes. The Court disagrees with the OSG in questioning the legal standing of the petitioners-
legislators to assail Executive Order No. 1. Evidently, their petition primarily invokes usurpation of the
power of the Congress as a body to which they belong as members. This certainly justifies their resolve to
take the cudgels for Congress as an institution and present the complaints on the usurpation of their
power and rights as members of the legislature before the Court.
As held in Philippine Constitution Association v. Enriquez:To the extent 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. 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. Indeed, legislators
have a legal standing to see to it that the prerogative, powers and privileges vested by the Constitution in
their office remain inviolate. Thus, they are allowed to question the validity of any official action which, to
their mind, infringes on their prerogatives as legislators.
The question, therefore, before the Court is this: Does the creation of the PTC fall within the ambit of the
power to reorganize as expressed in Section 31 of the Revised Administrative Code?
Section 31 contemplates "reorganization" as limited by the following functional and structural lines: (1)
restructuring the internal organization of the Office of the President Proper by abolishing, consolidating or
merging units thereof or transferring functions from one unit to another; (2) transferring any function under
the Office of the President to any other Department/Agency or vice versa; or (3) transferring any agency
under the Office of the President to any other Department/Agency or vice versa.
Clearly, the provision refers to reduction of personnel, consolidation of offices, or abolition thereof by
reason of economy or redundancy of functions. These point to situations where a body or an office is
already existent but a modification or alteration thereof has to be effected. The creation of an office is
nowhere mentioned, much less envisioned in said provision. Accordingly, the answer to the question is in
the negative.
To say that the PTC is borne out of a restructuring of the Office of the President under Section 31 is a
misplaced supposition, even in the plainest meaning attributable to the term "restructure" an "alteration of
an existing structure." Evidently, the PTC was not part of the structure of the Office of the President prior
to the enactment of Executive Order No. 1.
In the same vein, the creation of the PTC is not justified by the Presidents power of control. Control is
essentially the power to alter or modify or nullify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the former with that of the latter. Clearly, the
power of control is entirely different from the power to create public offices. The former is inherent in the
Executive, while the latter finds basis from either a valid delegation from Congress, or his inherent duty to
faithfully execute the laws.
The question is this, is there a valid delegation of power from Congress, empowering the President to
create a public office? According to the OSG, the power to create a truth commission pursuant to the
above provision finds statutory basis under P.D. 1416, as amended by P.D. No. 1772.
The Court, however, declines to recognize P.D. No. 1416 as a justification for the President to create a
public office. Said decree is already stale, anachronistic and inoperable. P.D. No. 1416 was a delegation
to then President Marcos of the authority to reorganize the administrative structure of the national
government including the power to create offices and transfer appropriations pursuant to one of the
purposes of the decree, embodied in its last "Whereas" clause:
WHEREAS, the transition towards the parliamentary form of government will necessitate flexibility in the
organization of the national government.
Clearly, as it was only for the purpose of providing manageability and resiliency during the interim, P.D.
No. 1416, as amended by P.D. No. 1772, became functusoficio upon the convening of the First Congress,
as expressly provided in Section 6, Article XVIII of the 1987 Constitution.
Invoking this authority, the President constituted the PTC to primarily investigate reports of graft and
corruption and to recommend the appropriate action. As previously stated, no quasi-judicial powers have
been vested in the said body as it cannot adjudicate rights of persons who come before it.
Contrary to petitioners apprehension, the PTC will not supplant the Ombudsman or the DOJ or erode their
respective powers. If at all, the investigative function of the commission will complement those of the two
offices. As pointed out by the Solicitor General, the recommendation to prosecute is but a consequence of
the overall task of the commission to conduct a fact-finding investigation. The actual prosecution of
suspected offenders, much less adjudication on the merits of the charges against them, is certainly not a
function given to the commission. The phrase, "when in the course of its investigation," under Section
2(g), highlights this fact and gives credence to a contrary interpretation from that of the petitioners. The
function of determining probable cause for the filing of the appropriate complaints before the courts
remains to be with the DOJ and the Ombudsman.
At any rate, the Ombudsmans power to investigate under R.A. No. 6770 is not exclusive but is shared with
other similarly authorized government agencies. The same holds true with respect to the DOJ. Its authority
under Section 3 (2), Chapter 1, Title III, Book IV in the Revised Administrative Code is by no means
exclusive and, thus, can be shared with a body likewise tasked to investigate the commission of crimes.
Although the purpose of the Truth Commission falls within the investigative power of the President, the
Court finds difficulty in upholding the constitutionality of Executive Order No. 1 in view of its apparent
transgression of the equal protection clause. The equal protection clause is aimed at all official state
actions, not just those of the legislature. Its inhibitions cover all the departments of the government
including the political and executive departments, and extend to all actions of a state denying equal
protection of the laws, through whatever agency or whatever guise is taken. It, however, does not require
the universal application of the laws to all persons or things without distinction. What it simply requires is
equality among equals as determined according to a valid classification. Indeed, the equal protection
clause permits classification. Such classification, however, to be valid must pass the test of
reasonableness. The test has four requisites: (1) The classification rests on substantial distinctions; (2) It
is germane to the purpose of the law; (3) It is not limited to existing conditions only; and (4) It applies
equally to all members of the same class."Superficial differences do not make for a valid classification."
Applying these precepts to this case, Executive Order No. 1 should be struck down as violative of the
equal protection clause. The clear mandate of the envisioned truth commission is to investigate and find
out the truth "concerning the reported cases of graft and corruption during the previous administration
only. The intent to single out the previous administration is plain, patent and manifest. Mention of it has
been made in at least three portions of the questioned executive order.
In this regard, it must be borne in mind that the Arroyo administration is but just a member of a class, that
is, a class of past administrations. It is not a class of its own. Not to include past administrations similarly
situated constitutes arbitrariness which the equal protection clause cannot sanction. Such discriminating
differentiation clearly reverberates to label the commission as a vehicle for vindictiveness and selective
retribution.
The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987 Constitution, is vested with
Judicial Power that "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 of
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality
of the government." Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review
which is the power to declare a treaty, international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation unconstitutional. This power also includes the
duty to rule on the constitutionality of the application, or operation of presidential decrees, proclamations,
orders, instructions, ordinances, and other regulations. These provisions, however, have been fertile
grounds of conflict between the Supreme Court, on one hand, and the two co-equal bodies of government,
on the other. Many times the Court has been accused of asserting superiority over the other departments.
Thus, the Court, in exercising its power of judicial review, is not imposing its own will upon a co-equal
body but rather simply making sure that any act of government is done in consonance with the authorities
and rights allocated to it by the Constitution. And, if after said review, the Court finds no constitutional
violations of any sort, then, it has no more authority of proscribing the actions under review. Otherwise, the
Court will not be deterred to pronounce said act as void and unconstitutional.
GRANTED.
17. AttyRumulo B. Macalintal vs. Pres. Electoral Tribunal
FACTS:A Motion for Reconsideration was filed by petitioner Atty. Romulo B. Macalintal from a decision
dismissing his petition and declaring the establishment of respondent Presidential Electoral Tribunal (PET)
as constitutional.
Petitioner reiterates his arguments on the alleged unconstitutional creation of the PET that Section 4,
Article VII of the Constitution does not provide for the creation of the PET. Thus, PET violates Section 12,
Article VIII of the Constitution.

To bolster his arguments that the PET is an illegal and unauthorized progeny of Section 4, Article VII of
the Constitution, petitioner invokes our ruling on the constitutionality of the Philippine Truth Commission
(PTC). Petitioner cites the concurring opinion of Justice Teresita J. Leonardo-de Castro that the PTC is a
public office which cannot be created by the President, the power to do so being lodged exclusively with
Congress. Thus, petitioner submits that if the President, as head of the Executive Department, cannot
create the PTC, the Supreme Court, likewise, cannot create the PET in the absence of an act of
legislature.
ISSUE: Whether the establishment of respondent Presidential Electoral Tribunal (PET) is constitutional.
HELD: The decision of the Court still stands on its constitutionality We reiterate that the PET is authorized
by the last paragraph of Section 4, Article VII of the Constitution and as supported by the discussions of
the Members of the Constitutional Commission, which drafted the present Constitution. The explicit
reference by the framers of our Constitution to constitutionalizing what was merely statutory before is not
diluted by the absence of a phrase, line or word, mandating the Supreme Court to create a Presidential
Electoral Tribunal. Suffice it to state that the Constitution, verbose as it already is, cannot contain the
specific wording required by petitioner in order for him to accept the constitutionality of the PET. Judicial
power granted to the Supreme Court by the same Constitution is plenary. And under the doctrine of
necessary implication, the additional jurisdiction bestowed by the last paragraph of Section 4, Article VII of
the Constitution to decide presidential and vice-presidential elections contests includes the means
necessary to carry it into effect.
Thus: Obvious from the foregoing is the intent to bestow independence to the Supreme Court as the PET,
to undertake the Herculean task of deciding election protests involving presidential and vice-presidential
candidates in accordance with the process outlined by former Chief Justice Roberto Concepcion. It was
made in response to the concern aired by delegate Jose E. Suarez that the additional duty may prove too
burdensome for the Supreme Court. This explicit grant of independence and of the plenary powers
needed to discharge this burden justifies the budget allocation of the PET.
The conferment of additional jurisdiction to the Supreme Court, with the duty characterized as an
"awesome" task, includes the means necessary to carry it into effect under the doctrine of necessary
implication. We cannot overemphasize that the abstraction of the PET from the explicit grant of power to
the Supreme Court, given our abundant experience, is not unwarranted. A plain reading of Article VII,
Section 4, paragraph 7, readily reveals a grant of authority to the Supreme Court sitting en banc. In the
same vein, although the method by which the Supreme Court exercises this authority is not specified in
the provision, the grant of power does not contain any limitation on the Supreme Court's exercise thereof.
The Supreme Court's method of deciding presidential and vice-presidential election contests, through the
PET, is actually a derivative of the exercise of the prerogative conferred by the aforequoted constitutional
provision. Thus, the subsequent directive in the provision for the Supreme Court to "promulgate its rules
for the purpose."
The conferment of full authority to the Supreme Court, as a PET, is equivalent to the full authority
conferred upon the electoral tribunals of the Senate and the House of Representatives, i.e., the Senate
Electoral Tribunal (SET) and the House of Representatives Electoral Tribunal (HRET), which we have
affirmed on numerous occasions. It is also beyond cavil that when the Supreme Court, as PET, resolves a
presidential or vice-presidential election contest, it performs what is essentially a judicial power. With the
explicit provision, the present Constitution has allocated to the Supreme Court, in conjunction with latter's
exercise of judicial power inherent in all courts, the task of deciding presidential and vice-presidential
election contests, with full authority in the exercise thereof. The power wielded by PET is a derivative of
the plenary judicial power allocated to courts of law, expressly provided in the Constitution. On the whole,
the Constitution draws a thin, but, nevertheless, distinct line between the PET and the Supreme Court.
We have previously declared that the PET is not simply an agency to which Members of the Court were
designated. Once again, the PET, as intended by the framers of the Constitution, is to be an institution
independent, but not separate, from the judicial department, i.e., the Supreme Court. McCulloch v. State
of Maryland proclaimed that "[a] power without the means to use it, is a nullity."The decision therein held
that the PTC "finds justification under Section 17, Article VII of the Constitution." A plain reading of the
constitutional provisions, i.e., last paragraph of Section 4 and Section 17, both of Article VII on the
Executive Branch, reveals that the two are differently worded and deal with separate powers of the
Executive and the Judicial Branches of government. And as previously adverted to, the basis for the
constitution of the PET was, in fact, mentioned in the deliberations of the Members of the Constitutional
Commission during the drafting of the present Constitution.
The Motion for Reconsideration is denied.
Section 3
18. Bengzon vs. Drilon, supra
FACTS: Petitioners are retired justices of the Supreme Court and Court of Appeals who are currently
receiving pensions under RA 910 as amended by RA 1797. President Marcos issued a decree repealing
section 3-A of RA 1797 which authorized the adjustment of the pension of retired justices and officers and
enlisted members of the AFP. PD 1638 was eventually issued by Marcos which provided for the automatic
readjustment of the pension of officers and enlisted men was restored, while that of the retired justices
was not. RA 1797 was restored through HB 16297 in 1990. When her advisers gave the wrong
information that the questioned provisions in 1992 GAA were an attempt to overcome her earlier veto in
1990, President Aquino issued the veto now challenged in this petition.
It turns out that PD 644 which repealed RA 1797 never became a valid law absent its publication, thus
there was no law. It follows that RA 1797 was still in effect and HB 16297 was superfluous because it tried
to restore benefits which were never taken away validly. The veto of HB 16297 did not also produce any
effect.
ISSUE: Whether or not the veto of the President of certain provisions in the GAA of FY 1992 relating to
the payment of the adjusted pensions of retired Justices is constitutional or valid.
HELD: The veto of these specific provisions in the GAA is tantamount to dictating to the Judiciary of its
funds should be utilized, which is clearly repugnant to fiscal autonomy. Pursuant to constitutional
mandate, the Judiciary must enjoy freedom in the disposition of the funds allocated to it in the
appropriations law. Any argument which seeks to remove special privileges given by law to former
Justices on the ground that there should be no grant of distinct privileges or preferential treatment to
retired Justices ignores these provisions of the Constitution and in effect asks that these Constitutional
provisions on special protections for the Judiciary be repealed.
The petition is granted and the questioned veto is illegal and the provisions of 1992 GAA are declared
valid and subsisting.
Section 4
18. Limketkai Sons Milling Inc. vs. CA et al
FACTS:
(1) Motion of petitioner Limketkai Sons Milling, Inc., for reconsideration of the Court' s resolution of March
29, 1996, which set aside the Court' s December 1, 1995 decision and affirmed in toto the Court of
Appeals' decision dated August 12, 1994.
(2) Petitioner questions the assumption of Chief Justice Narvasa of the chairmanship of the Third Division
and arrogantly rams its idea on how each Division should be chaired, i.e., the First Division should have
been chaired by Chief J ustice Narvasa, the Second Division by Mr. Justice Padilla, the next senior
Justice, and the Third Division by Mr. Justice Regalado, the third in line. We need only to stress that the
change in the membership of the three divisions of the Court was inevitable by reason of Mr. Justice
Feliciano's retirement. Such reorganization is purely an internal matter of the Court to which petitioner
certainly has no business at all.
(3) In this Manifestation, petitioner merely moved for the inhibition of the Chief Justice on the ground that
the Chief Justice previously acted as counsel for one of the respondents, which allegation the Chief
Justice vehemently denied by saying that the information upon which the petitioner relied "it utterly without
foundation in fact and is nothing but pure speculation or wistful yearning"
(4) Counsel for the petitioner additionally insinuates that the ponente employed a "double standard" in
deciding the case and professes bewilderment at the ponente's act of purportedly taking a position in the
ponencia contrary to ponente' s act of purportedly taking a position in the ponencia contrary to ponente' s
standing his book.
ISSUE:
Whether or not the case should be referred to Court En banc.
HELD:
ACCORDINGLY, petitioner's motion for reconsideration and motion to refer the case to the Court En Banc
are hereby DENIED WITH FINALITY, without prejudice to any and all appropriate actions that the Court
may take not only against counsel on record for the petitioner for his irresponsible remarks, but also
against other persons responsible for the reckless publicity anent this case calculated to maliciously erode
the people's faith and confidence in the integrity of this Court.
RATIO:
This reorganization, like those before it, was made only upon prior consultation with and approval of the
Members of the Court. The petitioner itself found such reorganization "long overdue"
Section 5
19. Drilon vs. Lim
The principal issue in this case is the constitutionality of Section 187 of the Local Government Code
reading as follows:
Procedure For Approval And Effectivity Of Tax Ordinances And Revenue Measures; Mandatory Public
Hearings. The procedure for approval of local tax ordinances and revenue measures shall be in
accordance with the provisions of this Code: Provided, That public hearings shall be conducted for the
purpose prior to the enactment thereof; Provided, further, That any question on the constitutionality or
legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the
effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the
date of receipt of the appeal: Provided, however, That such appeal shall not have the effect of suspending
the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein:
Provided, finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day
period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate
proceedings with a court of competent jurisdiction.
Pursuant thereto, the Secretary of Justice had, on appeal to him of four oil companies and a taxpayer,
declared Ordinance No. 7794, otherwise known as the Manila Revenue Code, null and void for non-
compliance with the prescribed procedure in the enactment of tax ordinances and for containing certain
provisions contrary to law and public policy.
In a petition for certiorari filed by the City of Manila, the Regional Trial Court of Manila revoked the
Secretary's resolution and sustained the ordinance, holding inter alia that the procedural requirements had
been observed. More importantly, it declared Section 187 of the Local Government Code as
unconstitutional because of its vesture in the Secretary of Justice of the power of control over local
governments in violation of the policy of local autonomy mandated in the Constitution and of the specific
provision therein conferring on the President of the Philippines only the power of supervision over local
governments. 2
The present petition would have us reverse that decision. The Secretary argues that the annulled Section
187 is constitutional and that the procedural requirements for the enactment of tax ordinances as specified
in the Local Government Code had indeed not been observed.
Parenthetically, this petition was originally dismissed by the Court for non-compliance with Circular 1-88,
the Solicitor General having failed to submit a certified true copy of the challenged decision. 3 However,
on motion for reconsideration with the required certified true copy of the decision attached, the petition
was reinstated in view of the importance of the issues raised therein.
We stress at the outset that the lower court had jurisdiction to consider the constitutionality of Section 187,
this authority being embraced in the general definition of the judicial power to determine what are the valid
and binding laws by the criterion of their conformity to the fundamental law. Specifically, BP 129 vests in
the regional trial courts jurisdiction over all civil cases in which the subject of the litigation is incapable of
pecuniary estimation,4 even as the accused in a criminal action has the right to question in his defense
the constitutionality of a law he is charged with violating and of the proceedings taken against him,
particularly as they contravene the Bill of Rights. Moreover, Article X, Section 5(2), of the Constitution
vests in the Supreme Court appellate jurisdiction over final judgments and orders of lower courts in all
cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.
In the exercise of this jurisdiction, lower courts are advised to act with the utmost circumspection, bearing
in mind the consequences of a declaration of unconstitutionality upon the stability of laws, no less than on
the doctrine of separation of powers. As the questioned act is usually the handiwork of the legislative or
the executive departments, or both, it will be prudent for such courts, if only out of a becoming modesty, to
defer to the higher judgment of this Court in the consideration of its validity, which is better determined
after a thorough deliberation by a collegiate body and with the concurrence of the majority of those who
participated in its discussion.
It is also emphasized that every court, including this Court, is charged with the duty of a purposeful
hesitation before declaring a law unconstitutional, on the theory that the measure was first carefully
studied by the executive and the legislative departments and determined by them to be in accordance with
the fundamental law before it was finally approved. To doubt is to sustain. The presumption of
constitutionality can be overcome only by the clearest showing that there was indeed an infraction of the
Constitution, and only when such a conclusion is reached by the required majority may the Court
pronounce, in the discharge of the duty it cannot escape, that the challenged act must be struck down.
In the case before us, Judge Rodolfo C. Palattao declared Section 187 of the Local Government Code
unconstitutional insofar as it empowered the Secretary of Justice to review tax ordinances and,
inferentially, to annul them. He cited the familiar distinction between control and supervision, the first being
"the power of an officer to alter or modify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the former for the latter," while the second is
"the power of a superior officer to see to it that lower officers perform their functions in accordance with
law." 6 His conclusion was that the challenged section gave to the Secretary the power of control and not
of supervision only as vested by the Constitution in the President of the Philippines. This was, in his view,
a violation not only of Article X, specifically Section 4 thereof, 7 and of Section 5 on the taxing powers of
local governments, 8 and the policy of local autonomy in general.
We do not share that view. The lower court was rather hasty in invalidating the provision.
Section 187 authorizes the Secretary of Justice to review only the constitutionality or legality of the tax
ordinance and, if warranted, to revoke it on either or both of these grounds. When he alters or modifies or
sets aside a tax ordinance, he is not also permitted to substitute his own judgment for the judgment of the
local government that enacted the measure. Secretary Drilon did set aside the Manila Revenue Code, but
he did not replace it with his own version of what the Code should be. He did not pronounce the ordinance
unwise or unreasonable as a basis for its annulment. He did not say that in his judgment it was a bad law.
What he found only was that it was illegal. All he did in reviewing the said measure was determine if the
petitioners were performing their functions in accordance with law, that is, with the prescribed procedure
for the enactment of tax ordinances and the grant of powers to the city government under the Local
Government Code. As we see it, that was an act not of control but of mere supervision.
An officer in control lays down the rules in the doing of an act. If they are not followed, he may, in his
discretion, order the act undone or re-done by his subordinate or he may even decide to do it himself.
Supervision does not cover such authority. The supervisor or superintendent merely sees to it that the
rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify
or replace them. If the rules are not observed, he may order the work done or re-done but only to conform
to the prescribed rules. He may not prescribe his own manner for the doing of the act. He has no judgment
on this matter except to see to it that the rules are followed. In the opinion of the Court, Secretary Drilon
did precisely this, and no more nor less than this, and so performed an act not of control but of mere
supervision.
The case of Taule v. Santos cited in the decision has no application here because the jurisdiction claimed
by the Secretary of Local Governments over election contests in the Katipunan ng Mga Barangay was
held to belong to the Commission on Elections by constitutional provision. The conflict was over
jurisdiction, not supervision or control.
Significantly, a rule similar to Section 187 appeared in the Local Autonomy Act, which provided in its
Section 2 as follows:
A tax ordinance shall go into effect on the fifteenth day after its passage, unless the ordinance shall
provide otherwise: Provided, however, That the Secretary of Finance shall have authority to suspend the
effectivity of any ordinance within one hundred and twenty days after receipt by him of a copy thereof, if, in
his opinion, the tax or fee therein levied or imposed is unjust, excessive, oppressive, or confiscatory, or
when it is contrary to declared national economy policy, and when the said Secretary exercises this
authority the effectivity of such ordinance shall be suspended, either in part or as a whole, for a period of
thirty days within which period the local legislative body may either modify the tax ordinance to meet the
objections thereto, or file an appeal with a court of competent jurisdiction; otherwise, the tax ordinance or
the part or parts thereof declared suspended, shall be considered as revoked. Thereafter, the local
legislative body may not reimpose the same tax or fee until such time as the grounds for the suspension
thereof shall have ceased to exist.
That section allowed the Secretary of Finance to suspend the effectivity of a tax ordinance if, in his
opinion, the tax or fee levied was unjust, excessive, oppressive or confiscatory. Determination of these
flaws would involve the exercise of judgment or discretion and not merely an examination of whether or
not the requirements or limitations of the law had been observed; hence, it would smack of control rather
than mere supervision. That power was never questioned before this Court but, at any rate, the Secretary
of Justice is not given the same latitude under Section 187. All he is permitted to do is ascertain the
constitutionality or legality of the tax measure, without the right to declare that, in his opinion, it is unjust,
excessive, oppressive or confiscatory. He has no discretion on this matter. In fact, Secretary Drilon set
aside the Manila Revenue Code only on two grounds, to with, the inclusion therein of certain ultra
vires provisions and non-compliance with the prescribed procedure in its enactment. These grounds
affected the legality, not the wisdom or reasonableness, of the tax measure.
The issue of non-compliance with the prescribed procedure in the enactment of the Manila Revenue Code
is another matter.
In his resolution, Secretary Drilon declared that there were no written notices of public hearings on the
proposed Manila Revenue Code that were sent to interested parties as required by Art. 276(b) of the
Implementing Rules of the Local Government Code nor were copies of the proposed ordinance published
in three successive issues of a newspaper of general circulation pursuant to Art. 276(a). No minutes were
submitted to show that the obligatory public hearings had been held. Neither were copies of the measure
as approved posted in prominent places in the city in accordance with Sec. 511(a) of the Local
Government Code. Finally, the Manila Revenue Code was not translated into Pilipino or Tagalog and
disseminated among the people for their information and guidance, conformably to Sec. 59(b) of the
Code.
Judge Palattao found otherwise. He declared that all the procedural requirements had been observed in
the enactment of the Manila Revenue Code and that the City of Manila had not been able to prove such
compliance before the Secretary only because he had given it only five days within which to gather and
present to him all the evidence (consisting of 25 exhibits) later submitted to the trial court.
To get to the bottom of this question, the Court acceded to the motion of the respondents and called for
the elevation to it of the said exhibits. We have carefully examined every one of these exhibits and agree
with the trial court that the procedural requirements have indeed been observed. Notices of the public
hearings were sent to interested parties as evidenced by Exhibits G-1 to 17. The minutes of the hearings
are found in Exhibits M, M-1, M-2, and M-3. Exhibits B and C show that the proposed ordinances were
published in the Balita and the Manila Standard on April 21 and 25, 1993, respectively, and the approved
ordinance was published in the July 3, 4, 5, 1993 issues of the Manila Standard and in the July 6, 1993
issue of Balita, as shown by Exhibits Q, Q-1, Q-2, and Q-3.
The only exceptions are the posting of the ordinance as approved but this omission does not affect its
validity, considering that its publication in three successive issues of a newspaper of general circulation
will satisfy due process. It has also not been shown that the text of the ordinance has been translated and
disseminated, but this requirement applies to the approval of local development plans and public
investment programs of the local government unit and not to tax ordinances.
We make no ruling on the substantive provisions of the Manila Revenue Code as their validity has not
been raised in issue in the present petition.
WHEREFORE, the judgment is hereby rendered REVERSING the challenged decision of the Regional
Trial Court insofar as it declared Section 187 of the Local Government Code unconstitutional but
AFFIRMING its finding that the procedural requirements in the enactment of the Manila Revenue Code
have been observed. No pronouncement as to costs.
SO ORDERED.
 20. Larranaga vs. CA
FACTS;On September 15, 1997, some members of the Philippine National Police Criminal Investigation
Group (PNP CIG) went to the Center for Culinary Arts in Quezon City to arrest petitioner, albeit without
warrant. Petitioner resisted the arrest and immediately phoned his sister and brother-in-law. Petitioners
sister sought the aid of Atty. Raymundo A. Armovit. Atty.Armovit, over the phone, dissuaded the police
officers from carrying out the warrantless arrest and proposed to meet with them at the CIG headquarters
in Camp Crame, Quezon City. The police officers yielded and returned to the CIG headquarters.
Petitioner, together with his sister and brother-in-law also went to the CIG headquarters aboard their own
vehicle. Atty. Armovit questioned the legality of the warrantless arrest before CIG Legal Officer Ruben
Zacarias. After consulting with his superiors, Legal Officer Zacarias ordered to stop the arrest and allowed
petitioner to go home. Atty. Armovit made an undertaking in writing that he and petitioner would appear
before the Cebu City Prosecutor on September 17, 1997 for preliminary investigation. Petitioner
Larranaga was charged with two counts of kidnapping and serious illegal detention before the RTC of
Cebu City. He was arrested and was detained without the filing of the necessary Information and warrant
of arrest. The petitioner alleged that he must be released and be subject to a preliminary investigation.
However pending the resolution of the court for the petition for certiorari, prohibition and mandamus
with writs of preliminary prohibitory and mandatory injunction filed by the petitioner, RTC judge issued a
warrant of arrest directed to the petitioner.
ISSUE:WON the arrest of Petitioner Larraga without a warrant was legal?
RULING: No. Petitioner in this case was, in the first place, not arrested either by a peace officer or a
private person. To be sure, even if petitioner were arrested by the PNP CIG personnel, such arrest would
still be illegal because of the absence of a warrant. It does not appear in the case at bar that petitioner has
just committed, is actually committing or is attempting to commit an offense when the police officers tried
to arrest him on September 15, 1997. In fact, petitioner was attending classes at the Center for Culinary
Arts at that time.
21. First Lepanto Ceramics Inc. Vs. CA
Facts: Petitioner assailed the conflicting provisions of B.P. 129, EO 226 (Art. 82) and a circular, 1-91
issued by the Supreme Court which deals with the jurisdiction of courts for appeal of cases decided by
quasi-judicial agencies such as the Board of Investments (BOI). BOI granted petitioner First Lepanto
Ceramics, Inc.'s application to amend its BOI certificate of registration by changing the scope of its
registered product from "glazed floor tiles" to "ceramic tiles." Oppositor Mariwasa filed a motion for
reconsideration of the said BOI decision while oppositor Fil-Hispano Ceramics, Inc. did not move to
reconsider the same nor appeal therefrom. Soon rebuffed in its bid for reconsideration, Mariwasa filed a
petition for review with CA. CA temporarily restrained the BOI from implementing its decision. The TRO
lapsed by its own terms twenty (20) days after its issuance, without respondent court issuing any
preliminary injunction. Petitioner filed a motion to dismiss and to lift the restraining order contending that
CA does not have jurisdiction over the BOI case, since the same is exclusively vested with the Supreme
Court pursuant to Article 82 of the Omnibus Investments Code of 1987. Petitioner argued that the
Judiciary Reorganization Act of 1980 or B.P. 129 and Circular 1-91, "Prescribing the Rules Governing
Appeals to the Court of Appeals from a Final Order or Decision of the Court of Tax Appeals and Quasi-
Judicial Agencies" cannot be the basis of Mariwasa's appeal to respondent court because the procedure
for appeal laid down therein runs contrary to Article 82 of E.O. 226, which provides that appeals from
decisions or orders of the BOI shall be filed directly with the Supreme Court.While Mariwasa maintains
that whatever inconsistency there may have been between B.P. 129 and Article 82 of E.O. 226 on the
question of venue for appeal, has already been resolved by Circular 1-91 of the Supreme Court, which
was promulgated on February 27, 1991 or four (4) years after E.O. 226 was enacted.
ISSUE: Whether or not the Court of Appeals has jurisdiction over the case
YES. Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226 insofar as the manner and
method of enforcing the right to appeal from decisions of the BOI are concerned. Appeals from decisions
of the BOI, which by statute was previously allowed to be filed directly with the Supreme Court, should
now be brought to the Court of Appeals.
Facts: Petitioner First Lepanto Ceramics, Inc., was registered as a non-pioneer enterprise with public
respondent BOI having been so issued a Certificate of Registration under Executive Order NO. 226, also
known as the Omnibus Investments Code of 1987, in the manufacture of glazed floor tiles. Among the
specific terms and conditions imposed on First Lepantos registration were that: (1) The enterprise shall
export at least 50% of its production; and (2) The enterprise shall produce only glazed floor tile. In a letter
addressed to the BOI, First Lepanto requested for an amendment of its registered product to ceramic
tiles in order to likewise enable it to manufacture ceramic wall tiles; however, before the BOI could act on
First Lepantos request for amendment, Mariwasa and Fil-Hispano Ceramics, Inc., already had on file their
separate complaints with the BOI against First Lepanto for violating the terms and conditions of its
registration by the use of its tax and duty-free equipment in the production of ceramic wall tiles. The BOI
rendered a decision finding First Lepanto guilty and imposing on the latter a fine of P797,950.40 without
prejudice, however, 1) to an imposition of additional penalty should First Lepanto continue to commit the
same violation; and 2) to the Boards authority to consider/ evaluate First Lepantos request for an
amendment of its certificate of registration, including, among other things, a change in its registered
product from glazed floor tiles to ceramic tiles. After paying the imposed fine, First Lepanto formally
filed its application with the BOI to amend its registered product from glazed floor tiles to ceramic tiles.
On 06 August 1992, another verified complaint was filed by Mariwasa with the BOI which asseverated
that, despite BOIs finding that First Lepanto had violated the terms and conditions of its registration, the
latter still continued with its unauthorized production and sale of ceramic wall tiles. Respondent BOI
dismissed the complaint for lack of merit. Its motion for reconsideration having been denied, Mariwasa
appealed the case to the Office of the President. In the meantime, First Lepanto caused the publicationin
the Manila Bulletin of a notice on the official filing with the BOI of the aforementioned application for
amendment of Certificate of Registration No. EP 89-452. Mariwasa opposed the application. On 10
December 1992, respondent BOI handed down its decision approving First Lepantos application.
Issue: whether or not the Court of Appeals erred in setting aside the decision of the Board of Investments
Held:The BOI is the agency tasked with evaluating the feasibility of an investment project and to decide
which investment might be compatible with its development plans. The exercise of administrative
discretion is a policy decision and a matter that can best be discharged by the government agency
concerned and not by the courts. BOI has allowed the amendment of First Lepantos product line because
that agency believes that allowing First Lepanto to manufacture wall tiles as well will give it the needed
technical and market flexibility, a key factor, to enable the firm to eventually penetrate the world market
and meet its export requirements. It is 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.
22. Aruelo v. CA
Facts: Aruelo claims that in election contests, the COMELEC Rules of Procedure gives the respondent
therein only five days from receipt of summons within which to file his answer to the petition (Part VI, Rule
35, Sec. 7) and that this five-day period had lapsed when Gatchalian filed his answer. According to him,
the filing of motions to dismiss and motions for bill of particulars is prohibited by Section 1, Rule 13, Part III
of the COMELEC Rules of Procedure; hence, the filing of said pleadings did not suspend the running of
the five-day period, or give Gatchalian a new five-day period to file his answer.
Issue: whether the trial court committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it allowed respondent Gatchalian to file his pleading beyond the five-day period
prescribed in Section 1, Rule 13, Part III of the COMELEC Rules of Procedure
Held: No. Petitioner filed the election protest with the Regional Trial Court, whose proceedings are
governed by the Revised Rules of Court.
Section 1, Rule 13, Part III of the COMELEC Rules of Procedure is not applicable to proceedings before
the regular courts. As expressly mandated by Section 2, Rule 1, Part I of the COMELEC Rules of
Procedure, the filing of motions to dismiss and bill of particulars, shall apply only to proceedings brought
before the COMELEC. Section 2, Rule 1, Part I provides:
Sec. 2. Applicability These rules, except Part VI, shall apply to all actions and proceedings brought
before the Commission. Part VI shall apply to election contests and quo warranto cases cognizable by
courts of general or limited jurisdiction. It must be noted that nowhere in Part VI of the COMELEC Rules of
Procedure is it provided that motions to dismiss and bill of particulars are not allowed in election protests
or quo warranto cases pending before the regular courts. Constitutionally speaking, the COMELEC cannot
adopt a rule prohibiting the filing of certain pleadings in the regular courts. The power to promulgate rules
concerning pleadings, practice and procedure in all courts is vested on the Supreme Court (Constitution,
Art VIII, Sec. 5 [5]).
23. Javellana v. DILG
Facts: Attorney Erwin B. Javellana was an elected City Councilor of Bago City, Negros Occidental. On
October 5, 1989, City Engineer Ernesto C. Divinagracia filed Administrative Case No. C-10-90 against
Javellana for: (1) violation of Department of Local Government (DLG) Memorandum Circular No. 80-38
dated June 10, 1980 in relation to DLG Memorandum Circular No. 74-58 and of Section 7, paragraph b,
No. 2 of Republic Act No. 6713, otherwise known as the Code of Conduct and Ethical Standards for
Public Officials and Employees, and (2) for oppression, misconduct and abuse of authority. Divinagracias
complaint alleged that Javellana, an incumbent member of the City Council or SanggunianPanglungsod of
Bago City, and a lawyer by profession, has continuously engaged in the practice of law without securing
authority for that purpose from the Regional Director, Department of Local Government, as required by
DILG Memorandum Circular No. 80-38 in relation to DLG Memorandum Circular No. 74-58 of the same
department; that on July 8, 1989, Javellana, as counsel for Antonio Javiero and Rolando Catapang, filed a
case against City Engineer Ernesto C. Divinagracia of Bago City for Illegal Dismissal and Reinstatement
with Damages putting him in public ridicule; that Javellana also appeared as counsel in several criminal
and civil cases in the city, without prior authority of the DLG Regional Director, in violation of DLG
Memorandum Circular No. 80-38. On August 13, 1990, a formal hearing of the complaint was held in Iloilo
City in which the complainant, Engineer Divinagracia, and the respondent, Councilor Javellana, presented
their respective evidence. Meanwhile, on September 10, 1990, Javellana requested the DLG for a permit
to continue his practice of law for the reasons stated in his letter-request. On September 21, 1991,
Secretary Luis T. Santos issued Memorandum Circular No. 90-81 setting forth guidelines for the practice
of professions by local elective officials. In an order dated May 2, 1991, Javellanas motion to dismiss was
denied by the public respondents. His motion for reconsideration was likewise denied on June 20, 1991.
Five months later or on October 10, 1991, the Local Government Code of 1991 (RA 7160) was signed into
law, Section 90 of which provides:
Sec. 90. Practice of Profession. (a) All governors, city and municipal mayors are prohibited from
practicing their profession or engaging in any occupation other than the exercise of their functions as local
chief executives.
(b) Sanggunian members may practice their professions, engage in any occupation, or teach in schools
except during session hours: Provided, that sanggunian members who are members of the Bar shall not:
(1) Appear as counsel before any court in any civil case wherein a local government unit or any office,
agency, or instrumentality of the government is the adverse party;
(2) Appear as counsel in any criminal case wherein an officer or employee of the national or local
government is accused of an offense committed in relation to his office;
(3) Collect any fee for their appearance in administrative proceedings involving the local government unit
of which he is an official; and
(4) Use property and personnel of the Government except when the sanggunian member concerned is
defending the interest of the Government.
(c) Doctors of medicine may practice their profession even during official hours of work only on occasions
of emergency: Provided, That the officials concerned do not derive monetary compensation therefrom.
Issue: whether or not DLG Memorandum Circulars Nos. 80-38 and 90-81 are unconstitutional because
the Supreme Court has the sole and exclusive authority to regulate the practice of law
Held: No. Petitioners contention that Section 90 of the Local Government Code of 1991 and DLG
Memorandum Circular No. 90-81 violate Article VIII, Section 5 of the Constitution is completely off tangent.
Neither the statute nor the circular trenches upon the Supreme Courts power and authority to prescribe
rules on the practice of law. The Local Government Code and DLG Memorandum Circular No. 90-81
simply prescribe rules of conduct for public officials to avoid conflicts of interest between the discharge of
their public duties and the private practice of their profession, in those instances where the law allows it.
24. Re: Petition for Recognition of the Exemption of the GSIS from payment of legal fees
FACTS: The GSIS seeks exemption from the payment of legal fees imposed on GOCCs under Sec 22,
Rule 141 (Legal Fees) of the ROC. The said provision states:
SEC. 22.Government exempt. The Republic of the Philippines, its agencies and instrumentalities are
exempt from paying the legal fees provided in this Rule. Local government corporations and government-
owned or controlled corporations with or without independent charter are not exempt from paying such
fees. xx
The GSIS anchors its petition on Sec 39 of its charter, RA 8291 (The GSIS Act of 1997):
SEC. 39. Exemption from Tax, Legal Process and Lien. It is hereby declared to be the policy of the State
that the actuarial solvency of the funds of the GSIS shall be preserved and maintained at all times and that
contribution rates necessary to sustain the benefits under this Act shall be kept as low as possible in order
not to burden the members of the GSIS and their employers. Taxes imposed on the GSIS tend to impair
the actuarial solvency of its funds and increase the contribution rate necessary to sustain the benefits of
this Act. Accordingly, notwithstanding any laws to the contrary, the GSIS, its assets, revenues including
accruals thereto, and benefits paid, shall be exempt from all taxes, assessments, fees, charges or duties
of all kinds. These exemptions shall continue unless expressly and specifically revoked and any
assessment against the GSIS as of the approval of this Act are hereby considered paid. Consequently, all
laws, ordinances, regulations, issuances, opinions or jurisprudence contrary to or in derogation of this
provision are hereby deemed repealed, superseded and rendered ineffective and without legal force and
effect. xx
Required to comment on the GSIS petition, the OSG maintains that the petition should be denied. On this
Courts order, the Office of the Chief Attorney (OCAT) submitted a report and recommendation on the
petition of the GSIS and the comment of the OSG thereon. According to the OCAT, the claim of the GSIS
for exemption from the payment of legal fees has no legal basis.
ISSUE: May the legislature exempt the GSIS from legal fees imposed by the Court on GOCCs and local
government units?
HELD: WHEREFORE, the petition of the GSIS for recognition of its exemption from the payment of legal
fees imposed under Sec 22 of Rule 141 of the ROC on GOCCs and LGUs is hereby DENIED . NO
Rule 141 (on Legal Fees) of the ROC was promulgated by this Court in the exercise of its rule-making
powers under Sec 5(5), Art VIII of the Constitution:
Sec. 5. The Supreme Court shall have the following powers:
x xxxxxxxx
(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.
x xxxxxxx
Clearly, therefore, the payment of legal fees under Rule 141 of the ROC is an integral part of the rules
promulgated by this Court pursuant to its rule-making power under Section 5(5), Article VIII of the
Constitution. In particular, it is part of the rules concerning pleading, practice and procedure in courts.
Indeed, payment of legal (or docket) fees is a jurisdictional requirement.
Since the payment of legal fees is a vital component of the rules promulgated by this Court concerning
pleading, practice and procedure, it cannot be validly annulled, changed or modified by Congress. As one
of the safeguards of this Courts institutional independence, the power to promulgate rules of pleading,
practice and procedure is now the Courts exclusive domain. That power is no longer shared by this Court
with Congress, much less with the Executive.
NOTES:
-The GSIS cannot successfully invoke the right to social security of government employees in support of
its petition. It is a corporate entity whose personality is separate and distinct from that of its individual
members. The rights of its members are not its rights; its rights, powers and functions pertain to it solely
and are not shared by its members.
-Congress could not have carved out an exemption for the GSIS from the payment of legal fees without
transgressing another equally important institutional safeguard of the Courts independence fiscal
autonomy. Fiscal autonomy recognizes the power and authority of the Court to levy, assess and collect
fees, including legal fees. Moreover, legal fees under Rule 141 have two basic components, the Judiciary
Development Fund (JDF) and the Special Allowance for the Judiciary Fund (SAJF). The laws which
established the JDF and the SAJF[33] expressly declare the identical purpose of these funds to
guarantee the independence of the Judiciary as mandated by the Constitution and public policy. Legal
fees therefore do not only constitute a vital source of the Courts financial resources but also comprise an
essential element of the Courts fiscal independence. Any exemption from the payment of legal fees
granted by Congress to government-owned or controlled corporations and local government units will
necessarily reduce the JDF and the SAJF. Undoubtedly, such situation is constitutionally infirm for it
impairs the Courts guaranteed fiscal autonomy and erodes its independence.
-Speaking for the Court, then Associate Justice (now Chief Justice) Reynato S. Puno traced the history of
the rule-making power of this Court and highlighted its evolution and development in Echegaray v.
Secretary of Justice:
Under the 1935 Constitution, the power of this Court to promulgate rules concerning pleading, practice
and procedure was granted but it appeared to be co-existent with legislative power for it was subject to the
power of Congress to repeal, alter or supplement. Thus, its Section 13, Article VIII provides:
Sec. 13. The Supreme Court shall have the power to promulgate rules concerning pleading, practice and
procedure in all courts, and the admission to the practice of law. Said rules shall be uniform for all courts
of the same grade and shall not diminish, increase, or modify substantive rights. The existing laws on
pleading, practice and procedure are hereby repealed as statutes, and are declared Rules of Court,
subject to the power of the Supreme Court to alter and modify the same. The Congress shall have the
power to repeal, alter or supplement the rules concerning pleading, practice and procedure, and the
admission to the practice of law in the Philippines.
The said power of Congress, however, is not as absolute as it may appear on its surface. In In re
Cunanan, Congress in the exercise of its power to amend rules of the Supreme Court regarding admission
to the practice of law, enacted the Bar Flunkers Act of 1953 which considered as a passing grade, the
average of 70% in the bar examinations after July 4, 1946 up to August 1951 and 71% in the 1952 bar
examinations. This Court struck down the law as unconstitutional. In his ponencia, Mr. Justice Diokno held
that x xx the disputed law is not a legislation; it is a judgment a judgment promulgated by this Court
during the aforecited years affecting the bar candidates concerned; and although this Court certainly can
revoke these judgments even now, for justifiable reasons, it is no less certain that only this Court, and not
the legislative nor executive department, that may do so. Any attempt on the part of these departments
would be a clear usurpation of its function, as is the case with the law in question. The venerable jurist
further ruled: It is obvious, therefore, that the ultimate power to grant license for the practice of law
belongs exclusively to this Court, and the law passed by Congress on the matter is of permissive
character, or as other authorities say, merely to fix the minimum conditions for the license. By its ruling,
this Court qualified the absolutist tone of the power of Congress to repeal, alter or supplement the rules
concerning pleading, practice and procedure, and the admission to the practice of law in the Philippines.
The ruling of this Court in In re Cunanan was not changed by the 1973 Constitution. For the 1973
Constitution reiterated the power of this Court to promulgate rules concerning pleading, practice and
procedure in all courts, x xx which, however, may be repealed, altered or supplemented by the
BatasangPambansa x xx. More completely, Section 5(2)5 of its Article X provided:
x xxxxxxxx
Sec. 5. The Supreme Court shall have the following powers.
x xxxxxxxx
(5) Promulgate rules concerning pleading, practice, and procedure in all courts, the admission to the
practice of law, and the integration of the Bar, which, however, may be repealed, altered, or supplemented
by the BatasangPambansa. 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.
Well worth noting is that the 1973 Constitution further strengthened the independence of the judiciary by
giving to it the additional power to promulgate rules governing the integration of the Bar.
The 1987 Constitution molded an even stronger and more independent judiciary. Among others, it
enhanced the rule making power of this Court. Its Section 5(5), Article VIII provides:
x xxxxxxxx
Section 5. The Supreme Court shall have the following powers:
x xxxxxxxx
(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.
The rule making power of this Court was expanded. This Court for the first time was given the power to
promulgate rules concerning the protection and enforcement of constitutional rights. The Court was also
granted for the first time the power to disapprove rules of procedure of special courts and quasi-judicial
bodies. But most importantly, the 1987 Constitution took away the power of Congress to repeal, alter, or
supplement rules concerning pleading, practice and procedure. In fine, the power to promulgate rules of
pleading, practice and procedure is no longer shared by this Court with Congress, more so with the
Executive.
Section 6
25. Maceda v. Vasquez
Facts: Petitioner BonifacioSanzMaceda, Presiding Judge of Branch 12 of the Regional Trial Court of
Antique, seeks the review of the following orders of the Office of the Ombudsman: (1) the Order dated
September 18, 1991 denying the ex-parte motion to refer to the Supreme Court filed by petitioner; and (2)
the Order dated November 22, 1951 denying petitioners motion for reconsideration and directing
petitioner to file his counter-affidavit and other controverting evidences. In his affidavit-complaint dated
April 18, 1991 filed before the Office of the Ombudsman, respondent Napoleon A. Abiera of the Public
Attorneys Office alleged that petitioner had falsified his Certificate of Service 1 dated February 6, 1989, by
certifying that all civil and criminal cases which have been submitted for decision or determination for a
period of 90 days have been determined and decided on or before January 31, 1998, when in truth and in
fact, petitioner knew that no decision had been rendered in five (5) civil and ten (10) criminal cases that
have been submitted for decision. Respondent Abiera further alleged that petitioner similarly falsified his
certificates of service for the months of February, April, May, June, July and August, all in 1989; and the
months beginning January up to September 1990, or for a total of seventeen (17) months. On the other
hand, petitioner contends that he had been granted by the Supreme Court an extension of ninety (90)
days to decide the aforementioned cases.
Issue: whether the Office of the Ombudsman could entertain a criminal complaint for the alleged
falsification of a judges certification submitted to the Supreme Court, and assuming that it can, whether a
referral should be made first to the Supreme Court
Held: In the absence of any administrative action taken against him by the Supreme Court with regard to
his certificates of service, the investigation being conducted by the Ombudsman encroaches into the
Courts power of administrative supervision over all courts and its personnel, in violation of the doctrine of
separation of powers. Article VIII, section 6 of the 1987 Constitution exclusively vests in the Supreme
Court administrative supervision over all courts and court personnel, from the Presiding Justice of the
Court of Appeals down to the lowest municipal trial court clerk. By virtue of this power, it is only the
Supreme Court that can oversee the judges and court personnels compliance with all laws, and take the
proper administrative action against them if they commit any violation thereof. No other branch of
government may intrude into this power, without running afoul of the doctrine of separation of powers.
Thus, the Ombudsman should first refer the matter of petitioners certificates of service to the Supreme
Court for determination of whether said certificates reflected the true status of his pending case load, as
the Supreme Court has the necessary records to make such a determination. The Ombudsman cannot
compel the Supreme Court, as one of the three branches of government, to submit its records, or to allow
its personnel to testify on this matter, as suggested by public respondent Abiera in his affidavit-complaint.
In fine, where a criminal complaint against a Judge or other court employee arises from their
administrative duties, the Ombudsman must defer action on said complaint and refer the same to the
Supreme Court for determination whether said Judge or court employee had acted within the scope of
their administrative duties.
26. Raquiza vs. Judge Castaeda Jr.
Petition to order the transfer of Special Proceedings No. 6824 of the Court of First Instance of Pampanga
(Testate Estate of the late Don Alfonso Castellvi) from the sala of respondent judge, Hon. Mariano
Castaeda to another branch and administrative complaint against the same judge for "(1) violation of the
Anti-Graft Law; (2) rendering decision knowing it to be unjust and illegal (3) extortion by means of
oppression; and (4) bribery.
After respondent judge had filed his comment on said petition and administrative complaint, the Court
resolved on August 3, 1976 to refer the a administrative complaint to Justice Jose G. Bautista of the Court
of Appeals for investigation, report and recommendation. Under date of September 1, 1977 and after duly
hearing the parties, Justice Bautista submitted the following report:
Complainant Antonio V. Raquiza charges the dent Hon. Mariano Castaeda Jr., under four counts,
namely:
I. Violation of the Anti-Graft Law;
II. Decision knowing it to be unjust and illegal;
III. Extortion by means of oppression; and
IV. Bribery.
I Under Count I. complainant charges respondent of giving Mrs. NatividadCastellviRaquiza and Mrs.
Nieves Toledo-Gozun unwarranted benefits, advantage or preference in violation of paragraph (e),
Section 3, Republic Act 3019, otherwise known as the Anti- Graft Law. which reads:
Sec. 3.Corrupt practices of public officers. In addition to acts or omissions of public officers already
penalized by existing law, the following shall constitute corrupt practices of any public officer and are
hereby declared to be unlawful:
xxxxxxxxx
(e) Causing any undue injury to any party, including the Government, or giving any private party
unwarranted benefits, advantage or preference in the discharge of hisofficial administrative or judicial
functions through manifest partiality, respondent bad faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices or government corporations charged with the grant of
licenses or permits or other concessions.
These two parties according to complainant are not entitled to get any share from the second release of
P1,000,000.00 for the Castellvi Estate and yet they were able to receive P200,000.00 and P500,000.00,
respectively. Complainant further claims that Mrs. Raquiza has no more share or participation in the
Castellvi Estate and in the case of Mrs. Gozun she has no right to be given a share of the second release
as it is intended solely for the Raquiza children.
Complainant also charges respondent under paragraph (f), section 3 of Republic Act 3019 which provides:
(f) Neglecting or refusing, after due demand or request, without sufficient justification, to act within a
reasonable time on any matter Pending before him for the purpose of obtaining, directly or indirectly from
any person interested in the matter some pecuniary or material benefit or advantage, or for the purpose of
favoring his own interest or giving undue advantage in favor of discriminating against any other interested
party.
in having allegedly neglected or refused after several motions and oral demands, the release of the
amount of P1,000,000.00 (Treasury Warrant No. D-04,231,948) to the Raquiza children thereby giving
undue advantage to both Mrs. Raquiza and Mrs. Gozun discriminating against the Raquiza children.
II Under Count II, complainant charges respondent with a violation of Article 204 of the Revised Penal
Code for knowingly and deliverately issuing his illegal orders of February 25, and 26, 1976 allowing Mrs.
Raquiza to obtain a loan of P200,000.00 from the Philippine Veterans Bank using the equivalent amount
in the second release of P1,000,000.00 deposited in the bank in the name of the Castellvi Estate as
collateral. Complainant contends that respondent Judge knows that Mrs. Raquiza has no more
participation or interest in or any rights to the Castellvi Estate since according to the records in Civil Case
No. 2761 entitled "Pobre vs. NatividadCastellviRaquiza," both parties agreed to give all the properties
subject matter of the suit to the Raquiza children.
III Under Count III, complainant alleges that respondent committed attempted extortion by oppression
in that after Mrs. Raquiza got the total of P330,000.00 from the Philippine Veterans Bank in connection
with the first release of P1,000,000.00, he visited the respondent Judge in his house asking that he would
also release the balance of P300,000.00 to the Raquiza children because part of the money would be
used by complainant in going to the United States for his eye treatment; and that respondent promised to
give the necessary order the following day. Complainant went to Pampanga the following morning per
advice of respondent and saw the judge in his private chamber; that the judge invited complainant to a
corner of the room and told him that he needed money, that taken aback by such alleged act of graft and
corruption, complainant shouted in a very loud voice, "You are corrupt." There is graft and corruption in
this office and then left the room; but that following the saying, "a man in need is a beggar", complainant
called the judge a few days later and assistant. that they were reconciled but nonetheless. the respondent
despite several requests from Atty. Yuzon, counsel for the complainant, consistently failed to comply with
his promise that he would release money for the Raquiza children; that after the reconciliation,
complainant visited the respondent Judge in his house and the latter promised to give the order the
following day; that it was only after repeated trips of Atty. Yuzon or his assistant. Mr. GracioDacutan, to
Pampanga that the respondent Judge released the total amount of P350,000.00 to the Raquiza children;
that as the Raquiza children urgently needed some of the money for themselves, the balance was not
enough anymore to finance the trip of the complainant to the United States; hence, he asked again the
President to release another P1,000,000.00; that the complainant brands the imposition of this hardships
by respondent Judge, which is supposedly a case of extortion by means of oppression where respondent
subjected complainant, his counsel Atty. Yuzon and his assistant GracioDacutan, had to shuttle everyday
for a period of about one month between Manila to Pampanga to get the promised order of release which
never came up to the present.
IV As to the fourth count, the complainant charges the respondent of bribery, in that "he (respondent)
gets bribe money from Mrs. Raquiza and surely from all other parties;" that on the first release of
P1,000,000.00, respondent Judge extorted P70,000.00 from Mrs. Raquiza out of the release of about
P330,000.00.
In his comment or answer to the charges, respondent alleged that those indictments are devoid of factual
and/or legal basis because:
As to Charge I (Violation of Anti-Graft Law) and II (knowingly rendering unjust and illegal judgment),
respondent Mrs. Raquiza still has a share in the Castellvi Estate because by testamentary provision
approved by final judgment, NatividadCastellviRaquiza as instituted heir, is entitled to 2/8 share of the
estate although one-half (1/2) of said 2/3 had been transferred to her children by virtue of a compromise
agreement submitted by Urbane Pobre in Civil Case No. 2761 entitled UrbanoPobre vs.
NatividadCastellvi-Raquiza (Exhs. 2 & 3, Orders of Judge Honorio Romero dated March 29, 1971 and
May 26, 1971 in Sp. Proc. No. 6824). Note that a case for reconveyance was filed by
NatividadCastellviRaquiza (Civil Case No. 3509 of the Court of First Instance of Pampanga against her
children. Said case is still pending hearing and decision according to respondent. Respondent avers that it
was only after careful study of the records (16 big volumes) of Special Proceeding No. 6824 that he
granted on June 19, 1975 the motion of Mrs. Raquiza filed on January 23, 1975 for authority to obtain loan
believing that Mrs. Raquiza still has a share, interest and participation in the subject estate.
Respondent also explained that the testate estate of Alfonso Castellvi is still on liquidation when the first
release of 1 million was made by the government in partial payment of the expropriated property of the
estate; that as several claim of creditors have not been paid, respondent was not inclined at the outset to
allow any Cash release; and that the second release of 1 million could not have been intended solely for
the Raquiza children, much less for the use of the complainant in his trip to the United States for his eye
treatment as claimed; that the reason given in complainant's request to the President dated December 29,
1975 for the release of the P1 million out of the P2,600,000.00 was that the money would be used "in
patenting the Super-Gas Reducer in all car manufacturing countries in the world" (Exh. 5); that
complainant's representative capacity as attorney-in-fact of his children as well as the purpose for seeking
the withdrawal of the entire second release of P1 million is questionable because Lily Raquiza, one of the
complainant's children, denied having signed or granted any power of attorney (p. 32, Rollo); that in view
of the foregoing, respondent judge could not properly be charged with having knowingly rendered an
unjust judgment or interlocutory order.
As to Charge III (IX) by Means of Oppression):
Respondent states that the commission of attempted extortion against complainant is highly improbable;
that complainant did not describe the' shouting spree' incident faithfully because:
Respondent does not approve of being approached in his house in connection with his official functions
and without promising complainant anything, advised the latter to see respondent in his office; that the
following morning when complainant went to his court chamber, Atty. Celia Macapagal and other lawyers
and two or three of the court's personnel were inside the chamber; that complainant then pleaded for help
that he would be able to go to the United States for his eye treatment, saying that after all the first release
was authorized by the President precisely for that purpose; that complainant wanted in the corresponding
order to be issued by respondent that so much amount of his children's shares in the second release
should be specifically ordered paid or given to complainant; that in a nice way, respondent explained to
complainant of the unsettled claims of creditors of the late that even more complainant was not the
movant but his children and what his children would want to lend him is a matter between him and his
children; that complainant then replied, "Judge, if you would not give me the small amount I need, I will be
your number one enemy ... you chut"; that respondent stood up to reach for his crutches (respondent then
had swollen foot due to his arthritis) and ordered 'Arrest that man' but complainant had already left; that
complainant's accusation is the height of absurdity since respondent would not be that stupid and careless
to choose his court chamber (barely 2-1/2 x 3-1/2 meters) and in the presence of many listeners and
viewers to attempt an extortion against complainant, a man of known stature, an ex-Governor.
Congressman, Cabinet member and a delegate to the Constitutional Convention.
As to Charge IV - (Bribery):
Respondent explains this is unthinkable because
Petitioner should surely admit that Mrs. Raquiza is even hard to converse with. To talk to her, one has to
speak loud or shout. She could much less be whispered to. This considering, one could not ask something
from her without being heard. Write her a note, for evidence in order to be caught This is absurd.
that authority was given Mrs. Raquiza only on June 19, 1975 almost 5 months of study of her motion filed
on January 23, 1975; that the authority was for P500,000.00, which was even reduced to only
P333,000.00 or 1/3 of P1,000,000.00 when such release was known.
As the letter complaint and the answer or comment of respondent are both verified, they were adopted as
part of the respective evidence of the parties. They also introduced additional oral and documentary
proofs. Besides complainant, his counsel Atty. Manuel Yuson and the latter's assistant. GracioDacutan,
testified. For the respondent, Atty. Celia Macapagal, Atty. Vicente Sicat and respondent Judge offered
testimonial and documentary evidence.
After a careful study of all the evidence on record, I find the charges not substantiated. There is factual
and legal basis for respondent's conclusion that Mrs. Raquiza has still a share or participation in the
Castellvi estate and that Mrs. Gozun has likewise a right to be given a share of the second release. As to
the first (Mrs. Raquiza,' her right as instituted heir of 2/3 of the estate is recognized by final judgment
although by compromise agreement, 1/2 was transferred by her to her children (Exh. 2). The Raquiza
children sought a reconsideration of the order of Judge Romero (Exh. 2), but the motion was denied by
the same Judge (Exh. 3). There appears no appeal from said order.
Moreover, the Raquiza children subsequently respected the remaining share of their mother by expressly
agreeing to her request to the Philippine Veterans Bank president for additional loan (Exh. 4).
It is not also rebutted that several claims chargeable against the estate has not been completely settled for
which reason respondent at the outset refused to grant any release. However, for humanitarian
considerations and
... mainly on the basis of the President's handwritten note on complainant's letter, dated July 16, 1975
(Exh. 8), respondent authorized the withdrawal from the funds of the Castellvi Estate in the Philippines
Veterans Bank derived from the first release of P1 million, for the delivery to the Raquiza children Daisy,
Antonio. Jr.. Levy and Douglas, in the amount of P248,000.00, and an additional amount of P20,000.00,
under his orders, dated August 20, 1975 and November 24, 1975 respectively; and a separate amount of
P60,000.00 to complainant's daughter Lily Raquiza (Exh. 9 and 19); and after the said Raquiza children
were granted their aforementioned shares, respondent ordered the immediate payment of Mrs. Raquiza's
loan by the said bank, in the amount of P330,000.00;
19 That under his letter, dated December 29, 1975, (Exh. 5), complainant requested again the
President to release P1 million from the funds of the Castellvi Estate to the Raquiza children to be used by
them in patenting the Super-Gas Reducer in all car manufacturing countries in the world', and after the
President authorized the release of PI million by the Government subject to the availability of funds, the
Treasurer of the Philippines, following the recommendation of the TJAG of the AFP, issued Treasury
Warrant No. D-281-948 for payment to the Castellvi Estate, which was actually released to the Phil.
Veterans Bank, by the Army, on February 11, 1976;
As regards the payment to Maria Nieves Toledo Gozun it appears that of the three expropriated
properties, one parcel belongs to the Castellvi Estate while two parcels are owned by Maria Nieves
Toledo, who at the time when payment was ordered, had not yet received any partial payment and had
filed a motion for execution (Civil Case No. 1623 or G.R. No. L-20620) praying for partial payment. As
respondent correctly argues, '... for reasons of justice and equity (he) just followed the mandate of the
Supreme Court in G.R. No. L-20620, August 15, 1974, for payment of the corresponding just
compensation to both owners of the properties condemned.' Thus, in sharing landowner Maria Nieves
Toledo Gozun in the second release, respondent had factual and legal basis and can hardly be branded
as giving "unwarranted benefits, advantage or preference" under paragraph (e), section 3 of the Anti-Graft
Law.
Similarly, considering that Mr. Raquiza has a sham in the Castellvi estate which is still on liquidation; that
the second release could not have been intended solely for the Raquiza children nor for complainant's trip
to the United States for his alleged eye treatment; and that complainant's authority to represent all his
children had been questioned by no less than one of his children, I find it hard to respondent Judge
knowing that they unjust and illegal.
Relative to the charge of extortion by means of oppression, the undersigned believes as more probable
the version testified to by the respondent at the investigation as well as in his verified comment. Indeed, it
would be stretching credibility to its b point to believe that in a small room (2-1/2 x 3-1/2 meters) the
respondent would have thrown all precautions to the winds and demand bribe money in the presence of
Atty. Celia Macapagal, Atty. Sicat, Atty. Yuzon, Fiscal Macalino, Messrs. Yalong and Dacutan-
Complainant's version cannot stand the test of common experience and the ordinary instincts of human
nature and therefore should be disbelieved. There is no evidence presented by complainant that when he
visited that respondent in the latter's residence in Quezon City, the respondent asked for money. There is
more privacy in respondent's home rather than in his small office and yet respondent in a place of
absolute privacy never asked or demanded for bribe money.
One salient fact also denies the veracity of the version of the complainant relative to the "shouting
incident." It is not denied that at the time the respondent could hardly stand and walk without crutches. He
could not have stood therefore on a corner of the court chamber during the incident. What is more, as he
was seated on a chair at the end of his desk to the right and that since complainant was only one meter
away from him, the conversation naturally would have been audible and the witnesses inside the court
chamber never testified that the respondent was asking money from the complainant. The evidence also
remains unrebutted that a few days after the said incident, the complainant apologized to the respondent
for what he had done. On top of it all, it is difficult to believe that the respondent would have committed
extortion or attempted extortion against the complainant, who is reputedly of high stature, not counting that
he was a former provincial governor, congressman, cabinet member and delegate to the Constitutional
Convention and it could have taken so much nerve and daring to do such an act.
As regards the fourth charge of bribery, complainant claims that Mrs. Raquiza had told him that out of the
P300,000.00 she obtained as loan from the first release of P1 million, she gave P70,000.00 to the
respondent, the undersigned also finds that this charge was not substantiated. In the first place, the
testimony is purely hearsay. As the complainant testified on cross-examination:
Q Your other charge is bribery. You mentioned that the Judge extorted P70,000 from Mrs. Raquiza, what
is your basis ?
A It was told to me by Mrs. Raquiza.
Q I thought you are a widower?
A I am separated from her, but she comes to the house very often.
INVESTIGATOR:
May the Investigator inquire, is that separation legal
A I filed a divorce in the States.
xxxxxxxxx
Q So you are not a widower?
A I am a widower.
Q I cannot understand that?
A Yes, I am married to another woman.
Q You said you were told by Mrs. Raquiza?
A She told me she practically spent 1/2 of what was given to her.
xxxxxxxxx
Q So, your basis is what you got from Mrs. Raquiza
A Yes.
Q Of your own personal knowledge, you don't know that?
A I have not seen Mrs. Raquiza giving the money to him. (pp. 16 17,18, tsn., Feb. 2, 1977)
Mrs. Raquiza was not presented to testify on the matter. The rules even in an administrative case
demands that if the respondent Judge should be disciplined for grave misconduct or any graver offense,
the evidence presented against him should be competent and derived from direct knowledge. The
judiciary, to which respondent belongs, no less demands that before its member could be faulted, it should
be only after due investigation and based on competent proofs, no less. This is all the more so when as in
this case the charges are penal in nature.
The ground for the removal of a judicial officer should be established beyond reasonable doubt. Such is
the rule where the charges on which the removal is sought is misconduct in office, willful neglect,
corruption, incompetency, etc. The general rules in regard to admissibility of evidence in criminal trials
apply (33 C.J. 945, see. 47); also National Intelligence and Security Authority (NISA) vs. Martinez, 62
SCRA 411; Castral vs. Bullecer 64 SCRA 289; MelquiadesUdani Jr. vs. Pagharion 65 SCRA 549)
Parenthetically, under Count I and II, 'misconduct' also implies a wrongful intention and not a mere error of
judgment' (Buenaventura v. Hon. Mariano V. Benedicto, 38 SCRA 71). It results that even if respondent
were not collect in his legal conclusions, his judicial actuations cannot be regarded as grave misconduct,
unless the contrary sufficiently appears. And undersigned finds, as above discussed, that complainant's
evidence is wanting in this respect.
WHEREFORE, it is respectfully recommended that the charges against the respondent be dismissed for
lack of merit.
We have reviewed the record, including the pt of the testimonies of the witnesses and the other evidence
submitted by the parties. After careful consideration thereof, We find the conclusions of fact and the
recommendations of the Investigator in the above report to be well taken and fully sup. ported by the
evidence on record.
ACCORDINGLY, the above-quoted report of Justice Bautista is approved, the respondent judge is
exonerated and the administrative case against him is dismissal The petition to transfer Special
Proceedings No. 6824 to another judge is denied.
Section 10
27. Nitafan vs. Commissioner of Internal Revenue
FACTS: Petitioners Nitafan, Polo and Savellano are judges presiding over branches in the RTC of the
NCJR Manila who seek to prohibit and/or perpetually enjoin respondents from making any deduction of
withholding taxes from their salaries. According to them, said tax deductions constitute a diminution of
their salaries, contrary to the provision of Section 10, Article VIII of the Constitution.
ISSUE: Whether or not salaries of the members of the Judiciary are subject to income tax.
RULING: YES. The salaries of the members of the Judiciary is subject to general income tax applicable to
all taxpayers. The clear intent of the ConComm was to delete the proposed express grant of exemption
from payment of income tax, so as to give substance to equality among the three branches of
Government. Though this intent was not clearly set forth in the final text of the Constitution, the Court
since then has authorised the deduction of the withholding tax from the salaries of said members.
FACTS: Nitafan and some others, duly qualified and appointed judges of the RTC, NCR, all with stations
in Manila, seek to prohibit and/or perpetually enjoin the Commissioner of Internal Revenue and the
Financial Officer of the Supreme Court, from making any deduction of withholding taxes from their
salaries.
They submit that "any tax withheld from their emoluments or compensation as judicial officers constitutes
a decrease or diminution of their salaries, contrary to the provision of Section 10, Article VIII of the 1987
Constitution mandating that during their continuance in office, their salary shall not be decreased," even
as it is anathema to the Ideal of an independent judiciary envisioned in and by said Constitution."
ISSUE: Whether or not members of the Judiciary are exempt from income taxes.
HELD: No. The salaries of members of the Judiciary are subject to the general income tax applied to all
taxpayers. Although such intent was somehow and inadvertently not clearly set forth in the final text of the
1987 Constitution, the deliberations of the1986 Constitutional Commission negate the contention that the
intent of the framers is to revert to the original concept of non-diminution of salaries of judicial officers.
Justices and judges are not only the citizens whose income has been reduced in accepting service in
government and yet subject to income tax. Such is true also of Cabinet members and all other employees.
Section 11
28. De La Llana vs. Alba
FACTS: De La Llana, et. al. filed a Petition for Declaratory Relief and/or for Prohibition, seeking to enjoin
the Minister of the Budget, the Chairman of the Commission on Audit, and the Minister of Justice from
taking any action implementing BP 129 which mandates that Justices and judges of inferior courts from
the CA to MTCs, except the occupants of the Sandiganbayan and the CTA, unless appointed to the
inferior courts established by such act, would be considered separated from the judiciary. It is the
termination of their incumbency that for petitioners justify a suit of this character, it being alleged that
thereby the security of tenure provision of the Constitution has been ignored and disregarded.
ISSUE: Whether or not the reorganization violate the security of tenure of justices and judges as provided
for under the Constitution.
RULING: What is involved in this case is not the removal or separation of the judges and justices from
their services. What is important is the validity of the abolition of their offices. Well-settled is the rule that
the abolition of an office does not amount to an illegal removal of its incumbent is the principle that, in
order to be valid, the abolition must be made in good faith. Removal is to be distinguished from
termination by virtue of valid abolition of the office. There can be no tenure to a non-existent office. After
the abolition, there is in law no occupant. In case of removal, there is an office with an occupant who
would thereby lose his position. It is in that sense that from the standpoint of strict law, the question of any
impairment of security of tenure does not arise.
29. People v. Gacott
Facts: On February 2, 1994, a complaint for violation of the Anti-Dummy Law (C.A. No. 108) was filed by
Asst. City Prosecutor Perfecto E. Pe against respondents Strom and Reyes. The accused filed a Motion to
Quash/Dismiss the criminal case contending that since the power to prosecute is vested exclusively in the
Anti-Dummy Board under Republic Act No. 1130, the City Prosecutor of Puerto Princesa has no power or
authority to file the same. The prosecution filed an opposition pointing out that the Anti-Dummy Board has
already been abolished by Letter of Implementation No. 2, Series of 1972. Despite such opposition,
however, respondent judge granted the motion espousing the position that the Letter Of Implementation
relied upon by the City Fiscal is not the law contemplated in Article 7 of the New Civil Code which can
repeal another law such as R.A. 1130. Thus, respondent judge in the assailed order of March 18, 1994
held that the City Prosecutor has no power or authority to file and prosecute the case and ordered that the
case be quashed.
Issue: whether or not respondent judge in granting the Motion to Quash gravely abused his discretion as
to warrant the issuance of a writ of certiorar
Held: Yes. The error committed by respondent judge in dismissing the case is quite obvious in the light of
P.D. No. 1, LOI No. 2 and P.D. No. 1275 aforementioned. The intent to abolish the Anti-Dummy Board
could not have been expressed more clearly than in the aforequoted LOI. Even assuming that the City
Fiscal of Puerto Princesa failed to cite P.D. No. 1 in his opposition to the Motion to Quash, a mere perusal
of the text of LOI No. 2 would have immediately apprised the respondent judge of the fact that LOI No. 2
was issued in implementation of P.D. No. 1. Paragraph 1 of LOI No. 2 reads:
Pursuant to Presidential Decree No. 1 dated September 23, 1972, Reorganizing the Executive Branch of
the National Government, the following agencies of the Department of Justice are herebyreorganized or
activated in accordance with the applicable provisions of the Integrated Reorganization Plan and the
following instructions: . . . (emphasis supplied).
General, Presidential Decrees, such as P.D No. 1, issued by the former President Marcos under his
martial law powers have the same force and effect as the laws enacted by Congress. As held by the
Supreme Court in the case of Aquino vs. Comelec, (62 SCRA 275 [1975]), all proclamations, orders,
decrees, instructions and acts promulgated, issued, or done by the former President are part of the law of
the land, and shall remain valid, legal, binding, and effective, unless modified, revoked or superseded by
subsequent proclamations, orders, decrees, instructions, or other acts of the President. LOI No. 2 is one
such legal order issued by former President Marcos in the exercise of his martial law powers to implement
P.D. No. 1. Inasmuch as neither P.D. No. 1 nor LOI No. 2 has been expressly impliedly revised, revoked,
or repealed, both continue to have the force and effect of law. Indeed, Section 3, Article XVII of the
Constitution explicitly ordains:
Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions, and other
executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed,
or revoked.
Section 12
In Re: Manzano 166 SCRA 246
Facts: Judge Manzano filed a petition allowing him to accept the appointment by Ilocos Sur Governor
Rodolfo Farinas as the member of Ilocos Norte provincial Committee on Justice created pursuant to a
Presidential Order. He petitioned that his membership in the Committee will not in any way amount to an
abandonment to his present position as Executive Judge of Branch XIX, RTC, 1st Judicial region and as a
member of judiciary.
Issue: What is an administrative agency? Where does it draw the line insofar as administrative functions
are concerned?
Ruling: The petition is denied. The Constitution prohibits the designation of members of the Judiciary to
any agency performing Quasi-Judicial or Administrative functions (Sec.12,Art.VIII, 1987 Constitution).
Quasi-Judicial has a fairly clear meaning and Judges can confidently refrain from participating in the work
of any Administrative Agency which adjudicates disputes & controversies involving the rights of parties
within its jurisdiction.
Administrative functions are those which involve the regulation and control over the conduct & affairs of
individuals for their own welfare and the promulgation of rules and regulations to better carry out the policy
of the Legislature or such as are devolved upon the administrative agency by the organic law of its
existence.
Administrative functions as used in Sec. 12 refers to the Governments executive machinery and its
performance of governmental acts. It refers to the management actions, determinations, and orders of
executive officials as they administer the laws and try to make government effective. There is an element
of positive action, of supervision or control. In the dissenting opinion of Justice Gutierrez: Administrative
functions are those which involve the regulation and control over the conduct and affairs of individuals for
their own welfare and the promulgation of rules and regulations to better carry out the policy of the
legislature or such as are devolved upon the administrative agency by the organic law of its existence we
can readily see that membership in the Provincial or City Committee on Justice would not involve any
regulation or control over the conduct and affairs of individuals. Neither will the Committee on Justice
promulgate rules and regulations nor exercise any quasi-legislative functions. Its work is purely advisory.
A member of the judiciary joining any study group which concentrates on the administration of justice as
long as the group merely deliberates on problems involving the speedy disposition of cases particularly
those involving the poor and needy litigants-or detainees, pools the expertise and experiences of the
members, and limits itself to recommendations which may be adopted or rejected by those who have the
power to legislate or administer the particular function involved in their implementation.
Section 14
31. Nicos Industrial Corporation vs. CA
FACTS: (1) The order is assailed by the petitioners on the principal ground that it violates the
aforementioned constitutional requirement of Article 8 Section 14 of the
Constitution. The petitioners claim that it is not a reasoned decision and does not clearly and
distinctly explain how it was reached by the trial court. Petitioners complain that there was no
analysis of their testimonial evidence or of their 21 exhibits, the trial court merely confining itself to the
pronouncement that the sheriff's sale was valid and that it had no jurisdiction over the derivative suit.
There was therefore no adequate factual or legal basis for the decision that could justify its review and
affirmance by the Court of Appeals.
(2) January 24, 1980, NICOS Industrial Corporation obtained a loan of P2,000,000.00 from private
respondent United Coconut Planters Bank and to secure payment thereof executed a real estate
mortgage on two parcels of land located at Marilao, Bulacan. The mortgage was foreclosed for the
supposed non-payment of the loan, and the sheriff's sale was held on July 11, 1983, without re-publication
of the required notices after the original date for the auction was
changed without the knowledge or consent of the mortgagor.
(3) CA decision: We hold that the order appealed from as framed by the court a quo while leaving much
to be desired, substantially complies with the rules.
ISSUE: Whether or not the trial courts decision is unconstitutional
HELD:WHEREFORE, the challenged decision of theCourt of Appeals is SET ASIDE for lack of b
asis. This case is REMANDED to the Regional Trial Court of Bulacan, Branch 10,
for revision, within 30 days from notice, of the Order of June 6, 1986, conformably to the
requirements of Article VIII, Section 14, of the Constitution, subject to the appeal thereof, if desired, in
accordance with law.
RATIO:
(1) The questioned order is an over-simplification of the issues, and violates both the letter and spirit
of Article VIII, Section 14, of the Constitution.
(2) It is a requirement of due process that the parties to a litigation be informed of how it was d
ecided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The
court cannot simply say that judgment is rendered in favor of X and against Y and just leave it at that
without any justification whatsoever for its action. The losing party is entitled to know why he lost, so
he may appeal to a higher court, if permitted, should he believe that the decision should be reversed.
A decision that does not clearly and distinctly state the facts and the law on which it is based leaves
the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who
is unable to pinpoint the possible errors of the court for review by a higher tribunal.
(3) Brevity is doubtless an admirable trait, but it should not and cannot be substituted for substance. As
the ruling on this second ground was unquestionably a judgment on the merits, the failure to state the
factual and legal basis thereof was fatal to the order.
(4) Kilometric decisions without much substance must be
avoided, to be sure, but the other extreme, where substance is also lost in the wish to be brief,
is no less
unacceptable either. The ideal decision is that which, with welcome economy of words, arrives at
the factual findings reaches the legal conclusions renders its ruling and having done so ends.
32. Komatsu Industries (Phils.), Inc. v. CA
Before the Court is a pleading filed on March 4, 1998 in behalf of petitioner and denominated as a Motion
for Leave to file Incorporated Second Motion for Reconsideration of the Resolution of September 10,
1997. This resolution does not in the least depart from or enervate the specific prohibition against second
motions for reconsideration 1 which are applicable thereto. Considering however, the increasing practice
by defeated parties of conjuring scenarios which they blame for their debacle instead of admitting the lack
of merit in their cases, the Court is constrained to once again express its displeasure against such
unethical disregard of the canons for responsible advocacy, with the warning that this insidious pattern of
professional misconduct shall not hereafter be allowed to pass with impunity.
Indeed, petitioner has gone to the extent of attributing supposed errors and irregularities in the disposition
of this case to both the Court of Appeals and this Court, with particular allusions amounting to misconduct
on the part of counsel for respondent private corporation and with specific imputations against retired
Justice Teodoro Padilla in connection therewith. These will hereafter be discussed in light of the records of
this Court and the vigorous disclaimer of counsel for said private respondent.
Petitioner's unbridled remonstrations are directed at the fact that its petition for review on certiorari of the
adverse decision of respondent Court of Appeals 2 was denied by this Court for failure to sufficiently show
that respondent court had committed any reversible error in its questioned judgment. 3 This was arrived at
after due consideration by the Second Division of this Court of the merits of the challenged decision and
the extended resolution of respondent court denying petitioner's motion for reconsideration thereof, the
arguments of petitioner in his present petition for review on certiorari, the joint comment of respondents,
the reply of petitioner, and the joint rejoinder of respondents, as well as the respective annexes of said
pleadings. Indeed, the parties had all the opportunity to expound on and dissect the issues in this case,
and in some instances even the non-issues, through the liberal admission by this Court of such pleadings.
Petitioner then filed a 24-page motion for reconsideration, and this Court required respondents to
comment thereon, after which petitioner's reply filed without leave was nonetheless admitted, and to
which, on leave sought and granted, respondents filed a joint rejoinder. All these pleadings, just like those
mentioned in the preceding paragraph, were so extensive, to the point of even incorporating new and
modified issues, as to cover all possible aspects of the case to subserve the partisan views of the parties.
Since no additional and substantial arguments were adduced to warrant the reconsideration sought, the
Court resolved to deny the motion on January 26, 1998.4
It defies explanation, therefore, why petitioner would still insist that the parties should further have been
allowed to file memoranda, an obvious ploy to justify a resolution giving due course to its petition, while
simultaneously insinuating that its pleadings were not read. Indeed, petitioner would even dictate how this
Court should have acted on its petition, with the improbable theory that because the case had progressed
to the rejoinder stage, the petition must be given due course and a decision be rendered thereafter in its
favor. This it tries to buttress by the palpably erroneous submission that since respondent court reversed
the decision of the court a quo, this Court is duty bound to determine the facts involved. Firstly, this is a
deliberate misstatement of our jurisprudence which merely holds that, in such a case, this Court may at its
option review the factual findings of the Court of Appeals instead of being bound thereby. Secondly, and
worse for petitioner, there is no conflict in the factual findings of the two lower courts as the Court of
Appeals actually adopted the findings of fact of the trial court.
In its second motion for reconsideration, petitioner now tries a different tack by lecturing this Court on its
theory that the "minute resolutions" it assails are supposedly in violation of Section 14, Article VIII of the
present Constitution. In characteristic fashion, it insinuates that such procedure adopted by this Court is a
culpable constitutional violation and can be subject of impeachment proceedings. Petitioner is, of course,
free to believe and act as it pleases just as this Court may likewise be minded to take the appropriate
sanctions, for which purpose it would do well for all and sundry to now imbibe the consistent doctrines laid
down by this Court.
As early as Novino, et al. vs. Court of Appeals, et al, 5 it has been stressed that these "resolutions" are not
"decisions" within the above constitutional requirements; they merely hold that the petition for review
should not be entertained and even ordinary lawyers have all this time so understood it; and the petition to
review the decision of the Court of Appeals is not a matter of right but of sound judicial discretion, hence
there is no need to fully explain the Court's denial since, for one thing, the facts and the law are already
mentioned in the Court of Appeals' decision.
This was reiterated in Que vs. People, et al., 6 and further clarified in Munal vs. Commission on Audit, et
al. 7 that the constitutional mandate is applicable only in cases "submitted for decision," i.e., given due
course and after the filing of briefs or memoranda and/or other pleadings, but not where the petition is
refused due course, with the resolution therefor stating the legal basis thereof. Thus, when the Court, after
deliberating on a petition and subsequent pleadings, decides to deny due course to the petition and states
that the questions raised are factual or there is no reversible error in the respondent court's decision, there
is sufficient compliance with the constitutional requirement. 8
For, as expounded more in detail in Borromeo vs. Court of Appeals, et al.: 9
The Court reminds all lower courts, lawyers, and litigants that it disposes of the bulk of its cases by minute
resolutions and decrees them as final and executory, as where a case is patently without merit, where the
issues raised are factual in nature, where the decision appealed from is supported by substantial evidence
and is in accord with the facts of the case and the applicable laws, where it is clear from the records that
the petition is filed merely to forestall the early execution of judgment and for non-compliance with the
rules. The resolution denying due course or dismissing the petition always gives the legal basis. As
emphasized in In Re: WenceslaoLaureta (148 SCRA 382, 417 [1987]), "[T]he Court is not "duty bound" to
render signed Decisions all the time. It has ample discretion to formulate Decisions and/or Minute
Resolutions, provided a legal basis is given, depending on its evaluation of a case" (Emphasis supplied).
This is the only way whereby it can act on all cases filed before it and, accordingly discharge its
constitutional functions. . . .
x xx x xx x xx
In G.R. No. 76355, MacarioTayamura, et al. v. Intermediate Appellate Court, et al. (May 21, 1987), the
Court clarified the constitutional requirement that a decision must express clearly and distinctly the facts
and law on which it is based as referring only to decisions. Resolutions disposing of petitions fall under the
constitutional provision which states that, "No petition for review . . . shall be refused due course . . .
without stating the legal basis therefor" (Section 14, Article VIII, Constitution). When the Court, after
deliberating on a petition and any subsequent pleadings, manifestations, comments, or motions decides to
deny due course to the petition and states that the questions raised are factual or no reversible error in the
respondent court's decision is shown or for some other legal basis stated in the resolution, there is
sufficient compliance with the constitutional requirement.
The course of action adopted by the Court in disposing of this case through its two resolutions, after a
thorough review of the issues and arguments of the parties in the plethora of pleadings they have filed, is
not only in accord with but is justified by this firm and realistic doctrinal rule:
. . . The Supreme Court is not compelled to adopt a definite and stringent rule on how its judgment shall
be framed. It has long been settled that this Court has discretion to decide whether a "minute resolution"
should be used in lieu of a full-blown decision in any particular case and that a minute Resolution of
dismissal of a Petition for Review on Certiorari constitutes an adjudication on the merits of the controversy
or subject matter of the Petition. It has been stressed by the Court that the grant of due course to a
Petition for Review is "not a matter of right, but of sound judicial discretion; and so there is no need to fully
explain the Court's denial. For one thing, the facts and law are already mentioned in the Court of Appeals'
opinion." A minute Resolution denying a Petition for Review of a Decision of the Court of Appeals can only
mean that the Supreme Court agrees with or adopts the findings and conclusions of the Court of Appeals,
in other words that the decision sought to be reviewed and set aside is correct. 10
That this Court was fully justified in handing down its minute resolutions because it "agrees with or adopts
the findings and conclusions of the Court of Appeals" since "the decision sought to be reviewed and set
aside is correct," is best demonstrated and appreciated by reproducing the salient pronouncements of
respondent court on the real issues actually involved in this case. The material holdings in its
decision 11 of June 28, 1996 are as follows:
The facts of the case as found by the trial court are as follows:
Sometime in 1975, NIDC granted KIPI a direct loan of Eight Million Pesos (P8,000,000.00) and a Two
Million (P2,000,000.00) guarantee to secure PNB. (Exh."M" of petitioner and Exh."22" of respondent PNB
and intervenor SLDC, T.S.N. October 14, 1992 pp. 19-28). As security thereof, a Deed of Real Estate
Mortgage dated April 24, 1975 was executed by Petitioner KIPI in favor of NIDC, covering, among others,
a parcel of land with all its improvements embraced in and covered by TCT No. 469737 of the Registry of
Deeds of the Province of Rizal (now Makati, Metro Manila). At the instance of Respondent PNB and with
the conformity of its subsidiary, NIDC, in order to secure the obligation of Petitioner KIPI under
Respondent PNB's deferred letter of credit for US$1,564,826.00 in favor of Toyota Tsusho Kaisha Ltd.,
Japan, Petitioner KIPI executed an Amendment of Mortgage Deed dated June 21, 1978 covering the
same parcel of land and its improvements under TCT No. 469737 on a paripassu basis in favor of
Respondent PNB and NIDC. (Exhibit "H", "H-1" to "H-9"). Upon full payment of Petitioner KIPI's account
with NIDC and the P2.0 M Credit Line with Respondent PNB, NIDC executed a Deed of Release and
Cancellation of Mortgage 12 dated January 7, 1981 releasing the mortgage on TCT No. 469737 (Exhibit
"1" to "1-4" of Petitioner and Exhibits "7" to "7-D" of Respondent PNB and Intervenor SLDC). In this Deed
of Release and Cancellation of Mortgage, it is provided among the whereas that "Whereas, the credit
accommodations had been fully paid by the Borrower to the Philippine National Bank (PNB) and NIDC".
(Exh. "1-5"). By virtue of this full payment and the execution of the Deed of Release and Cancellation of
Mortgage, NIDC returned the owner's copy of the TCT No. 469737 of the petitioner and accordingly the
Deed of Release and Cancellation of Mortgage was registered with the Registry of Deed on January 28,
1981. (Exhibits "E" to "E-5") (sic) that there were some accounts chargeable to Petitioner KIPI on deferred
letters of credit opened and established in 1974 and 1975 settled by Respondent PNB with the foreign
suppliers in 1978 and 1979 but came to the knowledge of Respondent PNB only in 1981 and 1982
(Exhibits "21-1" to "21-L". T.S.N. May 20, 1992 pp. 16-30).
In a letter to Petitioner KIPI dated March 31, 1992, Respondent PNB requested for the return of the
owner's copy of TCT No. 469737 (Exh. "22"). On July 7, 1982 in a letter addressed to Mr. Ricardo C.
Silverio, then President of Petitioner KIPI, Respondent PNB reiterated for the return of the aforesaid TCT
No. 469737 (Exh. "22-A") and the said title was returned to Respondent PNB.
On May 7, 1982, Respondent PNB filed a "Petition for Correction of Entry and Adverse Claim" with the
office of the Registry of Deeds of Makati, Metro Manila and was able to have the same annotated at the
back of TCT No. 469737 (Exh. "9" joint exhibit of Respondent PNB and Intervenor SLDC).
On November 2, 1983, Respondent PNB filed with the Ex-Officio Sheriff of Makati, Metro Manila a Petition
of Sale under ACT 1508, as amended by P.D. 385 to extra-judicially foreclose various properties
belonging to Petitioner by virtue of a Chattel Mortgage with Power of Attorney dated June 21, 1978
(Exhibits "J" to "J-4").
On November 25, 1983, Petitioner KIPI received an undated Notice of Sheriff's Sale to the effect that the
land covered by TCT No. 469737 would be foreclosed extra-judicially on December 19, 1983 at 9:00 a.m.
(Exhs. "K" to "K-2")."
x xx x xx x xx
Simplifying and summing up all the assigned errors of both appellants Philippine National Bank and
Santiago Land Development Corporation, there are actually three main issues to be resolved in this
appeal, to wit: (1) Whether the "Deed of Release" dated January 7, 1981 executed by the National
Investment and Development Corporation in favor of appellee Komatsu Industries (Phil.) Inc. [Exhibit "I",
p. 76 Record Vol. I; Exhibit "7", p. 1494 Record Vol. IV], had the effect of releasing the real estate
mortgage in favor of appellant Philippine National Bank as embodied in the "Amendment of Mortgage
Deed" dated June 21, 1978 [Exhibit "H", p. 64 Record Vol. I; Exhibit "6", p. 1482 Record Vol. IV]; (2)
Whether the foreclosure of appellee's property conducted on May 17, 1984 is valid; (3) Whether there is
legal and/or factual basis for the awards of damages in favor of the appellee.
Anent the first issue, We rule that the "Deed of Release" dated January 7, 1981 executed solely by the
National Investment and Development Corporation in favor of the appellee Komatsu Industries (Phil.) Inc.,
did not operate to release the real estate mortgage executed in favor of appellant Philippine National Bank
as embodied in the "Amendment of Mortgage Deed" dated June 21, 1978. Said "Deed of Release" is not
binding upon the appellant Philippine National Bank which was not a signatory to it and has not ratified the
same.
It is axiomatic under Our law on obligations and contracts that contracts take effect only between the
parties, their assigns and heirs (Art. 1311, New Civil Code). The characteristic of "relativity of contracts"
renders it binding only upon the parties and their successors. [Civil Code of the Philippines, Annotated,
Paras, Vol. IV 1994 ed., pp. 550-552]. A contract cannot be binding upon and cannot be enforced against
one who is not a party to it [Civil Code of the Philippines, Tolentino, Vol. IV 1995 ed., p. 428 citing Lopez
vs. Enriquez, 16 Phil. 336, Ibaez vs. Rodriguez, 47 Phil. 554, etc.] even if he is aware of such contract
and has acted with knowledge thereof [Civil Code of the Philippines, Tolentino, Vol. IV 1995, p. 428 citing
Manila Port Service et al. vs. Court of Appeals, et al. 20 SCRA 1214]. The rights of a party cannot be
prejudiced by the act, declaration, or omission of another, and proceedings against one cannot affect
another, except as expressly provided by law or the Rules of Court [Civil Code of the Philippines,
Tolentino, Vol. IV 1995 ed., p. 428 / Rule 123 sec. 10 Rules of Court].
We accordingly find no legal basis for the court's ruling that the "Deed of Release" dated January 7, 1981,
had the effect of releasing the mortgage in favor of appellant bank despite the fact that it was executed
solely by the National Investment and Development Corporation without any conformity or authority
whatsoever of its joint mortgagee, the appellant Philippine National Bank. It is not disputed that PNB is a
corporation with a separate and distinct personality from that of NIDC. The court a quo erred in holding
that PNB recognized the release of the mortgage as shown by its Exhibit "22" wherein Vice President
Ramirez stated in his memo to the Litigation and Collection Division of the PNB that upon discovery of the
aforecited release of the mortgage, "we immediately wrote NIDC informing them that KIPI effected the
release of PNB's mortgage using NIDC's Deed of Release". The same memo stated that PNB requested
KIPI to return the title for the reannotation of PNB's mortgage "which was erroneously cancelled" (p. 1712,
Record). Accordingly, the same exhibit indubitably showed that PNB promptly objected to the erroneous
cancellation of the mortgage in its favor. Moreover, as above pointed out, an agreement cannot bind one
who is not a party even if he had knowledge of the agreement and had acted on the basis thereof.
Moreover, a reading of the Amendment of Mortgage Deeds executed by Komatsu, PNB and NIDC, will
show that it covered not only the credit accommodations obtained by Komatsu with NIDC as described in
the first whereas clause, but also another obligation arising from the establishment of a deferred letter of
credit for US$1,564,826.00, and other credit accommodations. We quote from the said Amendment:
NOW THEREFORE, for and in consideration of the foregoing premises, the Deed of Mortgage in favor of
NIDC referred to in the first "Whereas" clause hereof shall be as it is hereby amended in the sense that
the mortgage shall be in favor of PNB and NIDC, their successors and assigns on a pari-passu basis to
secure the respective obligations of the MORTGAGOR to PNB and NIDC as follows:
NIDC : a) Direct loan of P8,000,000.00.
: b) Guarantee in the amount of P2,000,000.00 issued in favor of PNB to secure the Credit Line of
MORTGAGOR with PNB
PNB : US $1,564,826.00 or equivalent in Philippine Currency by way of deferred Letter of Credit issued by
PNB in favor of Toyoda Tsusho Kaisha Ltd., Japan, thru Republic National Bank of New York, N.Y.
plus interest and charges as well as all other obligations, whether direct or indirect, primary or secondary,
as appearing in the respective Books of Account of NIDC and PNB and other reasonable expenses and
charges arising thereunder, whether such obligations have been contracted before, during or after date
hereof. Subject to condition No. 4 hereinbelow, in case the MORTGAGOR execute subsequent
promissory note or notes either as renewal of the former note, an extension thereof, as new loan, or is
given any kind of accommodations such as overdraft, letters of credit, acceptance and bills of exchange,
release of import shipments, on trust receipts etc., this mortgage shall also stand as security for the
payment of said promissory notes or notes and/or accommodations without necessity of executing new
contract and this mortgage shall have the same force and effect as if the said promissory note or notes
and/or accommodations were existing on the date hereof. However, if the MORTGAGOR shall pay to the
MORTGAGEES, their successors or assigns the obligations secured by this mortgage, together with
interest, costs and other expenses on or before the date they are due and shall keep and perform all the
covenants and agreements herein contained for the MORTGAGOR then this mortgage shall be null and
void, otherwise, it shall remain in full force and effect. (pp. 65-66, Record).
It is clear that the reference to the credit accommodations consisting of P8,000,000.00 direct loan and
P2,000,000.00 guarantee mentioned in the third "whereas" clause of the Deed of Release "as having
been fully paid by the borrower" was to these two obligations obtained from NIDC, and not to the other
obligation described in the Amended Mortgage as pertaining to PNB directly, arising from the issuance of
the deferred letter of credit in the amount of US $1,564,826.00, the express inclusion of which obligation in
the Amended Mortgage cannot be ignored. It is equally clear that NIDC was in no position to state that
Komatsu's direct obligation to PNB has been fully paid. And on the basic proposition above-stated that the
deed of release executed by NIDC cannot bind its joint mortgagee, which is an entirely different entity, We
find that the courta quo erroneously invoked the 3rd whereas clause stating that "the credit
accommodations had been fully paid by the Borrower to the Philippine National Bank (PNB) and NIDC".
We are thus unable to accept the trial court's reasoning that the release executed by NIDC will
"necessarily include" the mortgage to PNB. The hypothesis that NIDC being a wholly owned subsidiary of
its joint mortgagee could not have executed the Deed of Release and Cancellation of Mortgage without
the knowledge and consent of respondent PNB, "its mother company", has no support in law and
jurisprudence. Neither does the evidence of record show that any confirmation or ratification of the release
of mortgage was made by the PNB. Nothing short of an actual payment of the debt or an express release
will operate to discharge a mortgage (55 Am. Jur. 394).
Defendants-appellants also question the trial court's ruling that even granting that PNB's claim is correct
that insofar as it is concerned, the mortgage was not released it being a separate entity and the mortgage
being on a pari-passu basis, the extrajudicial foreclosure should be to the extent only of its proportionate
credit.
We do not agree that the extrajudicial foreclosure of the mortgage on the whole Pasong Tamo property is
null and void. A mortgage is indivisible in nature, so that payment of a part of the secured debt does not
extinguish the entire mortgage (See Paras, Civil Code Anno., 1995 ed., Vol. V, p. 1044; Art. 2089, Civil
Code). There is also no language in the mortgage instrument to indicate otherwise, i.e. that the mortgage
of the Pasong Tamo property is divisible, so that in case of the payment of the obligation to one
mortgagee the mortgage would subsist only to the extent of the remaining lien of the other mortgagee.
The mortgage instrument contemplated not only obligations existing on the date thereof, but also future
obligations or accommodations appearing in the respective Books of Account of NIDC and PNB, thus
rendering it unlikely and impractical for the parties to have intended a division of the mortgaged property in
accordance with the proportionate credits of the two joint mortgagors.
The case of Central Bank of the Philippines vs. Court of Appeals (139 SCRA 46) cited by the court a
quo is not in point. It refers to a mortgage of one parcel of land in favor of one mortgagee, where there
was a failure of consideration, i.e. the entire amount of the loan was not released to the mortgagor and the
mortgage was thus held to be enforceable only to the extent of the amount of the loan that was released.
The factual situation in this case is obviously different. The mortgage here is not being enforced for more
than the actual sum due.
With respect to the court's pronouncement that the "Petition for Correction of Entry or Adverse Claim"
cannot be made as basis of any foreclosure proceeding, suffice it to point out that the records bear out
defendants-appellants' claim that the PNB filed a verified petition for extrajudicial foreclosure under Act
No. 3135 pursuant to the provisions of the Amendment of Mortgage Deed (Records, pp. 1482 to 1493).
The Petition for Sale under Act No. 3135, as amended, dated October 8, 1983, was made the basis for the
issuance of the Notice of Sheriff's sale (Exhs. "9" to "9-d", "9-e" to "9-bbb", "9-ccc Komatsu; Exhs. "10",
"14" to "14-b", "15", "17" PNB,/SLDC). The plaintiff-appellee has not controverted the veracity of these
documents either in the court below or in its Appellee's brief. Accordingly, We rule that since the mortgage
in favor of PNB is still subsisting, the sheriff's sale on the basis of the petition for extrajudicial foreclosure
is valid.
Finally, consistently with Our above ruling relative to the validity of the foreclosure proceedings and the
non-binding effect of the Deed of Release executed by the National Investment and Development
Corporation in so far as the mortgage in favor of the appellant Philippine National Bank is concerned, We
rule that the appellee Komatsu Industries (Phil.) Inc. is not entitled to any award of damages pursuant to
the principle ofdamnumabsque injuria, i.e. there might have been a loss (on the part of the appellee-
mortgagor) arising from the foreclosure but said loss does not create a ground of legal redress. A loss or
damage which does not constitute the violation of a legal right or amount to a legal wrong is damnum
absque injuria [HuyongHian vs. Court of Appeals, 59 SCRA 114, 134; Gilchrist vs. Cuddy, 29 Phil. 548].
(Emphasis supplied)
Consequently, respondent court reversed and set aside the judgment of the trial court in Civil Case No.
5957 and declared legal and valid the First Notice of Sheriff's Sale dated November 12, 1983, the Second
Notice of Sheriff's Sale dated April 6, 1984, the Extrajudicial Foreclosure Proceedings held and conducted
thereunder, the Certificate of Sale dated May 17, 1984 and the registration thereof, the Final Deed of Sale,
its registration and the Transfer Certificate of Title issued to respondent Philippine National Bank as the
highest and lone bidder, the Deed of Sale in favor of and the Transfer Certificate of Title issued to the
intervenor Santiago Land Development Corporation.
Petitioner's subsequent motion for reconsideration was denied by respondent court in its resolution 13 of
January 14, 1997, from which we quote the following pertinent excerpts:
The motion for reconsideration has no merit.
We reiterate our ruling that the "Deed of Release" executed solely by National Investment and
Development Corporation did not operate to release the real estate mortgage executed in favor of
appellant Philippine National Bank as embodied in the "Amendment of Mortgage Deed". This issue was
fully discussed in our decision and We find no substantial argument in the motion for reconsideration, the
petitioner-appellee's memorandum or at the hearing, that would warrant a reversal of our previous
findings.
It is evident that the "Deed of Release" pertains only to the mortgage executed in favor of the National
Investment and Development Corporation whose credit has been fully paid. Insofar as the mortgage
executed in favor of PNB is concerned, the same subsists as the credit in the amount of $1,564,826.00
remained unpaid. Contrary to appellee's submission, the "Deed of Release" executed by the National
Investment and Development Corporation is not an exercise in futility for said document actually released
the indebtedness due to the National Investment and Development Corporation consisting of an
P8,000,000.00 direct loan and P2,000,000.00 guarantee loan.
Petitioner-appellee submits that in the light of Article 2089 of the Civil Code, the "Amendment of Mortgage
Deed" is null and void, and there was no valid mortgage in favor of PNB. Hence when the "Deed of
Release" cancelled the only valid mortgage in favor of National Investment Development Corporation,
there was no more mortgage left to be foreclosed by Philippine National Bank.
We do not agree.
At the outset, We note that the legality and validity of the "Amendment of Mortgage Deed" was never put
in issue before the trial court nor was it raised in the appeal proper. "If well recognized jurisprudence
precludes raising an issue only for the first time on appeal proper, with more reason should such issue be
disallowed or disregarded when initially raised only in a motion for reconsideration of the decision of the
appellate court" [Manila Bay Club Corporation vs. Court of Appeals, 249 SCRA 303].
At any rate, We are not inclined to uphold appellee's contention that the "Amendment of Mortgage Deed"
(which is the basis of the mortgage in favor of the PNB) is null and void on the argument that Article 2089
of the Civil Code "prohibits a situation where two or more creditors, with separate and distinct credits
secured a mortgage over a single property".
There is nothing in Article 2089 of the Civil Code that prohibits the mortgagor from mortgaging the same
property for a separate and distinct debt in favor of another creditor. In this jurisdiction, the mortgagor is
allowed to obtain subsequent loans by means of subsequent and successive mortgages on the same
property. We further agree with appellant that "if an owner-mortgagor can enter into second and further
mortgages, there is no law that prohibits the mortgagor and the mortgagee from agreeing that the
mortgages would be pari-passu." What is proscribed by Article 2089 is for a debtor who has mortgaged
his property to secure a debt, to demand that the mortgage be released in proportion to the amount of the
debt he has paid. Under said article, the mortgagor has to pay the debt in full before he can ask for the
release of the mortgage. This is compatible with the principle that a mortgage is indivisible.
Our ruling that the extrajudicial foreclosure of the mortgage on the whole Pasong Tamo property is valid
since the mortgage is indivisible in nature is not inconsistent with our statement that "the Deed of
Released executed solely by National Investment and Development Corporation did not operate to
release the real estate mortgage executed in favor of appellant Philippine National Bank". The fact that the
Deed of Release executed by the National Investment and Development Corporation did not operate to
release the real estate mortgage in favor of appellant Philippine National Bank, does not render the
mortgage divisible. Indeed, foreclosure of the property in its entirety by Philippine National Bank is
necessary because of the indivisible nature of a mortgage. The fact that there are two obligations secured
by the same mortgaged property does not render the mortgage divisible. "The indivisibility of the mortgage
or pledge does not affect the divisibility of the principal obligation. When the same thing is pledged or
mortgaged to several creditors, the indivisibility of the pledge or mortgage entitled each and every creditor
to the same action against the thing which is liable in its entirety for the individual share of each creditor."
[Civil Code of the Philippines, by Tolentino, Vol. V, pp. 538-539, 1992 Ed.].
The rest of the arguments of the appellee in its motion for reconsideration are mere rehash of what have
been raised in its brief and were already fully considered and discussed in our decision. (Emphases ours)
In the same manner, we readily found that, despite the lengthy and repetitious submissions of petitioner in
its pleadings filed with this Court as earlier enumerated, all the arguments therein are also mere rehashed
versions of what it posited before respondent court. We have patiently given petitioner's postulates the
corresponding thorough and objective review but, on the real and proper issues so completely and
competently discussed and resolved by respondent court, petitioner's obvious convolutions of the same
arguments are evidently unavailing. It must be noted that its recourse to respondent court was by appeal
on writ of error, hence the preceding quotationinextenso of said court's decision readily shows how the
real issues were correctly particularized and summarized to meet petitioner's assignment of errors, and
then ably adjudicated on both evidential and legal grounds.
Petitioner has come to this Court this time on appeal by certiorari and it must be aware of the elementary
rule that, as emphasized in the decisions previously cited, a review thereunder is not a matter of right but
of sound judicial discretion, and will be granted only when there are special and important reasons
therefor. 14 Here, there is no novel question of substance nor has respondent court decided the case
contrary to law or our applicable decisions. On the contrary, it acted with commendable fealty to the same,
and that is the other reason why we extensively reproduced the pertinent discussions in its challenged
decision.
All these notwithstanding, petitioner still comes up with another supposed issue, this time faulting
respondent court for allegedly not resolving the question of whether or not petitioner is entitled to redeem
its foreclosed property from respondent Philippine National Bank in the event the foreclosure thereof is
held to be valid. We agree with respondents' observation that this matter is not proper at this stage of the
case since it was never raised in the complaint or admitted as an issue at the pre-trial, but was raised only
in petitioner's memorandum before the trial court. 15 Also, respondents point out that the period of
redemption had long lapsed since the sheriff's certificate of sale was registered on May 17, 1984 and,
citing applicable authorities, the one-year redemption period is not suspended by an action for nullification
of the auction sale.
What is more telling against petitioner's new proposition, however, is the documented fact that as early as
April 17, 1985, it executed a Deed of Assignment of Right of Redemption over the property in question in
favor of Atty. Norberto J. Quisumbing. 16 In fact, the exercise of such right of redemption by the assignee
is involved in Civil Case No. 105 of the Regional Trial Court of Makati, and the side issue of the right of
respondent Santiago Land Development Corporation to intervene therein was decided by this Court in
G.R. No. 106194. On both substantive and procedural considerations, therefore, petitioner's presentation
of that so-called issue in the present appellate stage is an undue imposition on the time of this Court.
We have stated, at the outset, that petitioner's second motion for reconsideration could have been
correctly rejected outright. But, as further noted, petitioner has distressingly adopted the lamentable
technique contrived by losing litigants of resorting to ascriptions of supposed irregularities in the courts of
justice as the cause for their defeat. Here, petitioner speaks of pressure having been employed by
respondents against the trial court. It then proceeds to insinuate anomalous haste on the part of
respondent court in reversing the trial court, pointing to the supposed short period of time it took the
former to come out with its decision. It never even bothered to mention that the issues are actually very
simple, that the evidence is basically documentary, and that the questions raised are easily answered by
applying settled doctrines of this Court.
On top of that, it now veers towards this Court, spinning the yarn that retired Justice Teodoro Padilla first
approached the ponente to whom its petition had been raffled, and asked for a disposition in favor of
respondents as a "birthday and parting gift"; that said ponente declined and unloaded the case such that it
was again raffled to a good friend of Justice Padilla. The records, however, show that this case was
directly raffled to the Second Division on January 28, 1997 and there was no prior ponente to whom it was
assigned who then supposedly unloaded it; and under the internal rules of this Court, when a case is
unloaded, there is no need for holding a second raffle.
Petitioner could have rendered a signal service to the judiciary if it had only verified and proved the facts it
purveyed but which are now belied even just by the internal rules of this Court, of which petitioner appears
to be ignorant hence the valor of his denunciation. The members of the Second Division of this Court
vehemently deny and denounce the animadversion on their allegedly having been approached by Justice
Padilla regarding this case. The Padilla Law Office, counsel for respondent private corporation, has
submitted its response to the imputations against it, thus calling for petitioner to prove its charges. The
same burden is also imposed upon petitioner for the aspersions it has cast upon respondent Court of
Appeals. We, therefore, leave it to the aforesaid law firm, Justice Teodoro Padilla and the Court of
Appeals, on the one hand, and to herein petitioner, on the other, to decide for themselves whether to
further pursue this incident in the proper proceedings.
On such contingency, this Court will content itself for the nonce with a stern admonition that petitioner
refrain from conduct tending to create mistrust in our judicial system through innuendos on which no
evidence is offered or indicated to be proffered. Responsible litigants need not be told that only pleadings
formulated with intellectual honesty on facts duly ascertained can subserve the ends of justice and dignify
the cause of the pleader.
WHEREFORE, petitioner's second motion for reconsideration is hereby DENIED for lack of merit and
EXPUNGED as an unauthorized pleading. This resolution is immediately final and executory, and no
further pleadings or motions will be entertained.
SO ORDERED.
Issue: whether or not issuance of Minute Resolutions is valid under Section 14, Article VIII of the
Constitution
Held: Resolutions are not decisions within the above constitutional requirements; they merely hold that
the petition for review should not be entertained. And the petition to review the decision of the Court of
Appeals is not a matter of right but of sound judicial discretion, hence there is no need to fully explain the
Courts denial since, for one thing, the facts and the law are already mentioned in the Court of Appeals
decision. The constitutional mandate is applicable only in cases submitted for decision, i.e., given due
course and after the filing of briefs or memoranda and/or other pleadings, but not where the petition is
refused due course, with the resolution therefor stating the legal basis thereof. Thus, when the Supreme
Court, after deliberating on a petition and subsequent pleadings, decides to deny due course to the
petition and states that the questions raised are factual or there is no reversible error in the res
33. Prudential Bank vs. Castro
Facts:The case at bar relates to the disbarment of Atty. Benjamin M. Grecia.Prudential Bank instituted an
administrative case and ask the court for theinitiation of proceedings for hisdisbarment or suspension in
connection with his actuations in a civil case ("Macro Textile Millsdel Rosario, Notary Public for Quezon
City, Defendants"), where he represented the plaintiff.Issue:Whether or not the Courts decision violates
the Constitution since it lacks certification by theChief Justice that the conclusions of the Court were
reached in consultation before the case was assignedto a member for the writing of the opinion of the
Court.Whether or not aconstitutional provision has been disregarded in the Court's Minute
Resolutiondated January 12, 1988.
Held:The certification requirement refers to decisions in judicial, not administrative cases. From the
verybeginning, resolutions/decisions of the Court in administrative cases have not been accompanied by
anyformal certification. Such a certification would be a superfluity in administrative cases. But even if such
acertification were required, it is beyond doubt that the conclusions of the Court in its decision werearrived
at after consultation and deliberation. The signatures of the members who actually took part in
thedeliberations and voted attest to that.No constitutional provision has been disregarded either in the
Court's Minute Resolution, datedJanuary 12,1988, denying the motion for reconsideration "for lack of
merit, the issues raised thereinhaving been previously duly considered and passed upon." It bears
repeating that this is an administrativecase so that the Constitutional mandate that "no ... motion for
reconsideration of a decision of the courtshallbe ... denied without stating the legal basis therefore" is
inapplicable. And even if it were, saidResolution stated the legal basis for the denial and, therefore,
adhered faithfully to the Constitutionalrequirement. "Lack of merit," which was one of the grounds for
denial, is a legal basis
34. Oil and Natural Gas Commission v. CA
This proceeding involves the enforcement of a foreign judgment rendered by the Civil Judge of Dehra
Dun, India in favor of the petitioner, OIL AND NATURAL GAS COMMISSION and against the private
respondent, PACIFIC CEMENT COMPANY, INCORPORATED.
The petitioner is a foreign corporation owned and controlled by the Government of India while the private
respondent is a private corporation duly organized and existing under the laws of the Philippines. The
present conflict between the petitioner and the private respondent has its roots in a contract entered into
by and between both parties on February 26, 1983 whereby the private respondent undertook to supply
the petitioner FOUR THOUSAND THREE HUNDRED (4,300) metric tons of oil well cement. In
consideration therefor, the petitioner bound itself to pay the private respondent the amount of FOUR
HUNDRED SEVENTY-SEVEN THOUSAND THREE HUNDRED U.S. DOLLARS ($477,300.00) by
opening an irrevocable, divisible, and confirmed letter of credit in favor of the latter. The oil well cement
was loaded on board the ship MV SURUTANA NAVA at the port of Surigao City, Philippines for delivery at
Bombay and Calcutta, India. However, due to a dispute between the shipowner and the private
respondent, the cargo was held up in Bangkok and did not reach its point destination. Notwithstanding the
fact that the private respondent had already received payment and despite several demands made by the
petitioner, the private respondent failed to deliver the oil well cement. Thereafter, negotiations ensued
between the parties and they agreed that the private respondent will replace the entire 4,300 metric tons
of oil well cement with Class "G" cement cost free at the petitioner's designated port. However, upon
inspection, the Class "G" cement did not conform to the petitioner's specifications. The petitioner then
informed the private respondent that it was referring its claim to an arbitrator pursuant to Clause 16 of their
contract which stipulates:
Except where otherwise provided in the supply order/contract all questions and disputes, relating to the
meaning of the specification designs, drawings and instructions herein before mentioned and as to quality
of workmanship of the items ordered or as to any other question, claim, right or thing whatsoever, in any
way arising out of or relating to the supply order/contract design, drawing, specification, instruction or
these conditions or otherwise concerning the materials or the execution or failure to execute the same
during stipulated/extended period or after the completion/abandonment thereof shall be referred to the
sole arbitration of the persons appointed by Member of the Commission at the time of dispute. It will be no
objection to any such appointment that the arbitrator so appointed is a Commission employer (sic) that he
had to deal with the matter to which the supply or contract relates and that in the course of his duties as
Commission's employee he had expressed views on all or any of the matter in dispute or difference.
The arbitrator to whom the matter is originally referred being transferred or vacating his office or being
unable to act for any reason the Member of the Commission shall appoint another person to act as
arbitrator in accordance with the terms of the contract/supply order. Such person shall be entitled to
proceed with reference from the stage at which it was left by his predecessor. Subject as aforesaid the
provisions of the Arbitration Act, 1940, or any Statutory modification or re-enactment there of and the rules
made there under and for the time being in force shall apply to the arbitration proceedings under this
clause.
The arbitrator may with the consent of parties enlarge the time, from time to time, to make and publish the
award.
The venue for arbitration shall be at Dehra dun. 1*
On July 23, 1988, the chosen arbitrator, one Shri N.N. Malhotra, resolved the dispute in petitioner's favor
setting forth the arbitral award as follows:
NOW THEREFORE after considering all facts of the case, the evidence, oral and documentarys adduced
by the claimant and carefully examining the various written statements, submissions, letters, telexes, etc.
sent by the respondent, and the oral arguments addressed by the counsel for the claimants, I, N.N.
Malhotra, Sole Arbitrator, appointed under clause 16 of the supply order dated 26.2.1983, according to
which the parties, i.e. M/S Oil and Natural Gas Commission and the Pacific Cement Co., Inc. can refer the
dispute to the sole arbitration under the provision of the Arbitration Act. 1940, do hereby award and direct
as follows:
The Respondent will pay the following to the claimant:
1. Amount received by the Respondent
against the letter of credit No. 11/19
dated 28.2.1983 US $ 477,300.00
2. Re-imbursement of expenditure incurred
by the claimant on the inspection team's
visit to Philippines in August 1985 US $ 3,881.00
3. L.C. Establishment charges incurred
by the claimant US $ 1,252.82
4. Loss of interest suffered by claimant
from 21.6.83 to 23.7.88 US $ 417,169.95
Total amount of award US $ 899,603.77
In addition to the above, the respondent would also be liable to pay to the claimant the interest at the rate
of 6% on the above amount, with effect from 24.7.1988 up to the actual date of payment by the
Respondent in full settlement of the claim as awarded or the date of the decree, whichever is earlier.
I determine the cost at Rs. 70,000/- equivalent to US $5,000 towards the expenses on Arbitration, legal Award dated 23.7.88, Paper No. 3/B-1 is made Rule of the Court. On the basis of conditions of award
expenses, stamps duly incurred by the claimant. The cost will be shared by the parties in equal proportion. decree is passed. Award Paper No. 3/B-1 shall be a part of the decree. The plaintiff shall also be entitled
to get from defendant (US$ 899,603.77 (US$ Eight Lakhs ninety nine thousand six hundred and three
Pronounced at Dehra Dun to-day, the 23rd of July 1988. 2 point seventy seven only) along with 9% interest per annum till the last date of realisation.4
To enable the petitioner to execute the above award in its favor, it filed a Petition before the Court of the Despite notice sent to the private respondent of the foregoing order and several demands by the petitioner
Civil Judge in Dehra Dun. India (hereinafter referred to as the foreign court for brevity), praying that the for compliance therewith, the private respondent refused to pay the amount adjudged by the foreign court
decision of the arbitrator be made "the Rule of Court" in India. The foreign court issued notices to the as owing to the petitioner. Accordingly, the petitioner filed a complaint with Branch 30 of the Regional Trial
private respondent for filing objections to the petition. The private respondent complied and sent its Court (RTC) of Surigao City for the enforcement of the aforementioned judgment of the foreign court. The
objections dated January 16, 1989. Subsequently, the said court directed the private respondent to pay private respondent moved to dismiss the complaint on the following grounds: (1) plaintiffs lack of legal
the filing fees in order that the latter's objections could be given consideration. Instead of paying the capacity to sue; (2) lack of cause of action; and (3) plaintiffs claim or demand has been waived,
required filing fees, the private respondent sent the following communication addressed to the Civil judge abandoned, or otherwise extinguished. The petitioner filed its opposition to the said motion to dismiss, and
of Dehra Dun: the private respondent, its rejoinder thereto. On January 3, 1992, the RTC issued an order upholding the
petitioner's legal capacity to sue, albeit dismissing the complaint for lack of a valid cause of action. The
The Civil Judge
Dehra Dun (U.P.) India RTC held that the rule prohibiting foreign corporations transacting business in the Philippines without a
Re: Misc. Case No. 5 of 1989 license from maintaining a suit in Philippine courts admits of an exception, that is, when the foreign
M/S Pacific Cement Co., corporation is suing on an isolated transaction as in this case. 5 Anent the issue of the sufficiency of the
Inc. vs. ONGC Case petitioner's cause of action, however, the RTC found the referral of the dispute between the parties to the
Sir: arbitrator under Clause 16 of their contract erroneous. According to the RTC,
1. We received your letter dated 28 April 1989 only last 18 May 1989.
2. Please inform us how much is the court fee to be paid. Your letter did not mention the amount to be [a] perusal of the shove-quoted clause (Clause 16) readily shows that the matter covered by its terms is
paid. limited to "ALL QUESTIONS AND DISPUTES, RELATING TO THE MEANING OF THE SPECIFICATION,
3. Kindly give us 15 days from receipt of your letter advising us how much to pay to comply with the same.
DESIGNS, DRAWINGS AND INSTRUCTIONS HEREIN BEFORE MENTIONED and as to the QUALITY
Thank you for your kind consideration.
Pacific Cement Co., Inc. OF WORKMANSHIP OF THE ITEMS ORDERED or as to any other questions, claim, right or thing
By: whatsoever, but qualified to "IN ANY WAY ARISING OR RELATING TO THE SUPPLY
Jose Cortes, Jr. ORDER/CONTRACT, DESIGN, DRAWING, SPECIFICATION, etc.," repeating the enumeration in the
opening sentence of the clause.
President 3
The court is inclined to go along with the observation of the defendant that the breach, consisting of the
Without responding to the above communication, the foreign court refused to admit the private non-delivery of the purchased materials, should have been properly litigated before a court of law,
respondent's objections for failure to pay the required filing fees, and thereafter issued an Order on pursuant to Clause No. 15 of the Contract/Supply Order, herein quoted, to wit:
February 7, 1990, to wit:
"JURISDICTION
ORDER
All questions, disputes and differences, arising under out of or in connection with this supply order, shall
Since objections filed by defendant have been rejected through Misc. Suit No. 5 on 7.2.90, therefore, be subject to the EXCLUSIVE JURISDICTION OF THE COURT, within the local limits of whose
award should be made Rule of the Court. jurisdiction and the place from which this supply order is situated." 6
ORDER The RTC characterized the erroneous submission of the dispute to the arbitrator as a "mistake of law or
fact amounting to want of jurisdiction". Consequently, the proceedings had before the arbitrator were null
and void and the foreign court had therefore, adopted no legal award which could be the source of an
enforceable right. 7
The petitioner then appealed to the respondent Court of Appeals which affirmed the dismissal of the
complaint. In its decision, the appellate court concurred with the RTC's ruling that the arbitrator did not
have jurisdiction over the dispute between the parties, thus, the foreign court could not validly adopt the
arbitrator's award. In addition, the appellate court observed that the full text of the judgment of the foreign
court contains the dispositive portion only and indicates no findings of fact and law as basis for the award.
Hence, the said judgment cannot be enforced by any Philippine court as it would violate the constitutional
provision that no decision shall be rendered by any court without expressing therein clearly and distinctly
the facts and the law on which it is based. 8 The appellate court ruled further that the dismissal of the
private respondent's objections for non-payment of the required legal fees, without the foreign court first
replying to the private respondent's query as to the amount of legal fees to be paid, constituted want of
notice or violation of due process. Lastly, it pointed out that the arbitration proceeding was defective
because the arbitrator was appointed solely by the petitioner, and the fact that the arbitrator was a former
employee of the latter gives rise to a presumed bias on his part in favor of the petitioner. 9
A subsequent motion for reconsideration by the petitioner of the appellate court's decision was denied,
thus, this petition for review on certiorari citing the following as grounds in support thereof:
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE LOWER COURT'S
ORDER OF DISMISSAL SINCE:
A. THE NON-DELIVERY OF THE CARGO WAS A MATTER PROPERLY COGNIZABLE BY THE
PROVISIONS OF CLAUSE 16 OF THE CONTRACT;
B. THE JUDGMENT OF THE CIVIL COURT OF DEHRADUN, INDIA WAS AN AFFIRMATION OF THE
FACTUAL AND LEGAL FINDINGS OF THE ARBITRATOR AND THEREFORE ENFORCEABLE IN THIS
JURISDICTION;
C. EVIDENCE MUST BE RECEIVED TO REPEL THE EFFECT OF A PRESUMPTIVE RIGHT UNDER A
FOREIGN JUDGMENT. 10
The threshold issue is whether or not the arbitrator had jurisdiction over the dispute between the petitioner
and the private respondent under Clause 16 of the contract. To reiterate, Clause 16 provides as follows:
Except where otherwise provided in the supply order/contract all questions and disputes, relating to the
meaning of the specification designs, drawings and instructions herein before mentioned and as to quality
of workmanship of the items ordered or as to any other question, claim, right or thing whatsoever, in any
way arising out of or relating to the supply order/contract design, drawing, specification, instruction or
these conditions or otherwise concerning the materials or the execution or failure to execute the same
during stipulated/extended period or after the completion/abandonment thereof shall be referred to the
sole arbitration of the persons appointed by Member of the Commission at the time of dispute. It will be no
objection to any such appointment that the arbitrator so appointed is a Commission employer (sic) that he
had to deal with the matter to which the supply or contract relates and that in the course of his duties as
Commission's employee he had expressed views on all or any of the matter in dispute or difference. 11
The dispute between the parties had its origin in the non-delivery of the 4,300 metric tons of oil well
cement to the petitioner. The primary question that may be posed, therefore, is whether or not the non-
delivery of the said cargo is a proper subject for arbitration under the above-quoted Clause 16. The
petitioner contends that the same was a matter within the purview of Clause 16, particularly the phrase, ".
. . or as to any other questions, claim, right or thing whatsoever, in any way arising or relating to the supply
order/contract, design, drawing, specification, instruction . . .". 12 It is argued that the foregoing phrase
allows considerable latitude so as to include non-delivery of the cargo which was a "claim, right or thing
relating to the supply order/contract". The contention is bereft of merit. First of all, the petitioner has
misquoted the said phrase, shrewdly inserting a comma between the words "supply order/contract" and
"design" where none actually exists. An accurate reproduction of the phrase reads, ". . . or as to any other
question, claim, right or thing whatsoever, in any way arising out of or relating to the supply order/contract
design, drawing, specification, instruction or these conditions . . .". The absence of a comma between the
words "supply order/contract" and "design" indicates that the former cannot be taken separately but
should be viewed in conjunction with the words "design, drawing, specification, instruction or these
conditions". It is thus clear that to fall within the purview of this phrase, the "claim, right or thing
whatsoever" must arise out of or relate to the design, drawing, specification, or instruction of the supply
order/contract. The petitioner also insists that the non-delivery of the cargo is not only covered by the
foregoing phrase but also by the phrase, ". . . or otherwise concerning the materials or the execution or
failure to execute the same during the stipulated/extended period or after completion/abandonment
thereof . . .".
The doctrine of noscitur a sociis, although a rule in the construction of statutes, is equally applicable in the
ascertainment of the meaning and scope of vague contractual stipulations, such as the aforementioned
phrase. According to the maxim noscitur a sociis, where a particular word or phrase is ambiguous in itself
or is equally susceptible of various meanings, its correct construction may be made clear and specific by
considering the company of the words in which it is found or with which it is associated, or stated
differently, its obscurity or doubt may be reviewed by reference to associated words. 13 A close
examination of Clause 16 reveals that it covers three matters which may be submitted to arbitration
namely,
(1) all questions and disputes, relating to the meaning of the specification designs, drawings and
instructions herein before mentioned and as to quality of workmanship of the items ordered; or
(2) any other question, claim, right or thing whatsoever, in any way arising out of or relating to the supply
order/contract design, drawing, specification, instruction or these conditions; or
(3) otherwise concerning the materials or the execution or failure to execute the same during
stipulated/extended period or after the completion/abandonment thereof.
The first and second categories unmistakably refer to questions and disputes relating to the design,
drawing, instructions, specifications or quality of the materials of the supply/order contract. In the third
category, the clause, "execution or failure to execute the same", may be read as "execution or failure to
execute the supply order/contract". But in accordance with the doctrine of noscitur a sociis, this reference
to the supply order/contract must be construed in the light of the preceding words with which it is
associated, meaning to say, as being limited only to the design, drawing, instructions, specifications or
quality of the materials of the supply order/contract. The non-delivery of the oil well cement is definitely not
in the nature of a dispute arising from the failure to execute the supply order/contract design, drawing,
instructions, specifications or quality of the materials. That Clause 16 should pertain only to matters
involving the technical aspects of the contract is but a logical inference considering that the underlying
purpose of a referral to arbitration is for such technical matters to be deliberated upon by a person
possessed with the required skill and expertise which may be otherwise absent in the regular courts.
This Court agrees with the appellate court in its ruling that the non-delivery of the oil well cement is a
matter properly cognizable by the regular courts as stipulated by the parties in Clause 15 of their contract:
All questions, disputes and differences, arising under out of or in connection with this supply order, shall
be subject to the exclusive jurisdiction of the court, within the local limits of whose jurisdiction and the
place from which this supply order is situated. 14
The following fundamental principles in the interpretation of contracts and other instruments served as our
guide in arriving at the foregoing conclusion:
Art. 1373. If some stipulation of any contract should admit of several meanings, it shall be understood as
bearing that import which is most adequate to render it effectual. 15
Art. 1374. The various stipulations of a contract shall be interpreted together, attributing the doubtful ones
that sense which may result from all of them taken jointly. 16
Sec. 11. Instrument construed so as to give effect to all provisions. In the construction of an instrument,
where there are several provisions or particulars, such a construction is, if possible, to be adopted as will
give effect to all. 17
Thus, this Court has held that as in statutes, the provisions of a contract should not be read in isolation
from the rest of the instrument but, on the contrary, interpreted in the light of the other related
provisions. 18 The whole and every part of a contract must be considered in fixing the meaning of any of
its harmonious whole. Equally applicable is the canon of construction that in interpreting a statute (or a
contract as in this case), care should be taken that every part thereof be given effect, on the theory that it
was enacted as an integrated measure and not as a hodge-podge of conflicting provisions. The rule is that
a construction that would render a provision inoperative should be avoided; instead, apparently
inconsistent provisions should be reconciled whenever possible as parts of a coordinated and harmonious
whole. 19
The petitioner's interpretation that Clause 16 is of such latitude as to contemplate even the non-delivery of
the oil well cement would in effect render Clause 15 a mere superfluity. A perusal of Clause 16 shows that
the parties did not intend arbitration to be the sole means of settling disputes. This is manifest from Clause
16 itself which is prefixed with the proviso, "Except where otherwise provided in the supply order/contract .
. .", thus indicating that the jurisdiction of the arbitrator is not all encompassing, and admits of exceptions
as may be provided elsewhere in the supply order/contract. We believe that the correct interpretation to
give effect to both stipulations in the contract is for Clause 16 to be confined to all claims or disputes
arising from or relating to the design, drawing, instructions, specifications or quality of the materials of the
supply order/contract, and for Clause 15 to cover all other claims or disputes.
The petitioner then asseverates that granting, for the sake of argument, that the non-delivery of the oil well
cement is not a proper subject for arbitration, the failure of the replacement cement to conform to the
specifications of the contract is a matter clearly falling within the ambit of Clause 16. In this contention, we
find merit. When the 4,300 metric tons of oil well cement were not delivered to the petitioner, an
agreement was forged between the latter and the private respondent that Class "G" cement would be
delivered to the petitioner as replacement. Upon inspection, however, the replacement cement was
rejected as it did not conform to the specifications of the contract. Only after this latter circumstance was
the matter brought before the arbitrator. Undoubtedly, what was referred to arbitration was no longer the
mere non-delivery of the cargo at the first instance but also the failure of the replacement cargo to conform
to the specifications of the contract, a matter clearly within the coverage of Clause 16.
The private respondent posits that it was under no legal obligation to make replacement and that it
undertook the latter only "in the spirit of liberality and to foster good business relationship". 20 Hence, the
undertaking to deliver the replacement cement and its subsequent failure to conform to specifications are
not anymore subject of the supply order/contract or any of the provisions thereof. We disagree.
As per Clause 7 of the supply order/contract, the private respondent undertook to deliver the 4,300 metric
tons of oil well cement at "BOMBAY (INDIA) 2181 MT and CALCUTTA 2119 MT". 21 The failure of the
private respondent to deliver the cargo to the designated places remains undisputed. Likewise, the fact
that the petitioner had already paid for the cost of the cement is not contested by the private respondent.
The private respondent claims, however, that it never benefited from the transaction as it was not able to
recover the cargo that was unloaded at the port of Bangkok. 22 First of all, whether or not the private
respondent was able to recover the cargo is immaterial to its subsisting duty to make good its promise to
deliver the cargo at the stipulated place of delivery. Secondly, we find it difficult to believe this
representation. In its Memorandum filed before this Court, the private respondent asserted that the Civil
Court of Bangkok had already ruled that the non-delivery of the cargo was due solely to the fault of the
carrier. 23 It is, therefore, but logical to assume that the necessary consequence of this finding is the
eventual recovery by the private respondent of the cargo or the value thereof. What inspires credulity is
not that the replacement was done in the spirit of liberality but that it was undertaken precisely because of
the private respondent's recognition of its duty to do so under the supply order/contract, Clause 16 of
which remains in force and effect until the full execution thereof.
We now go to the issue of whether or not the judgment of the foreign court is enforceable in this
jurisdiction in view of the private respondent's allegation that it is bereft of any statement of facts and law
upon which the award in favor of the petitioner was based. The pertinent portion of the judgment of the
foreign court reads:
ORDER
Award dated 23.7.88, Paper No. 3/B-1 is made Rule of the Court. On the basis of conditions of award
decree is passed. Award Paper No. 3/B-1 shall be a part of the decree. The plaintiff shall also be entitled
to get from defendant (US$ 899,603.77 (US$ Eight Lakhs ninety nine thousand six hundred and three
point seventy seven only) along with 9% interest per annum till the last date of realisation.24
As specified in the order of the Civil Judge of Dehra Dun, "Award Paper No. 3/B-1 shall be a part of the
decree". This is a categorical declaration that the foreign court adopted the findings of facts and law of the
arbitrator as contained in the latter's Award Paper. Award Paper No. 3/B-1, contains an exhaustive
discussion of the respective claims and defenses of the parties, and the arbitrator's evaluation of the
same. Inasmuch as the foregoing is deemed to have been incorporated into the foreign court's judgment
the appellate court was in error when it described the latter to be a "simplistic decision containing literally,
only the dispositive portion". 25
The constitutional mandate that no decision shall be rendered by any court without expressing therein
dearly and distinctly the facts and the law on which it is based does not preclude the validity of
"memorandum decisions" which adopt by reference the findings of fact and conclusions of law contained
in the decisions of inferior tribunals. In Francisco v. Permskul, 26 this Court held that the following
memorandum decision of the Regional Trial Court of Makati did not transgress the requirements of
Section 14, Article VIII of the Constitution:
MEMORANDUM DECISION
After a careful perusal, evaluation and study of the records of this case, this Court hereby adopts by
reference the findings of fact and conclusions of law contained in the decision of the Metropolitan Trial
Court of Makati, Metro Manila, Branch 63 and finds that there is no cogent reason to disturb the same.
WHEREFORE, judgment appealed from is hereby affirmed in toto. 27 (Emphasis supplied.)
This Court had occasion to make a similar pronouncement in the earlier case of Romero v. Court of
Appeals, 28 where the assailed decision of the Court of Appeals adopted the findings and disposition of
the Court of Agrarian Relations in this wise:
We have, therefore, carefully reviewed the evidence and made a re-assessment of the same, and We are
persuaded, nay compelled, to affirm the correctness of the trial court's factual findings and the soundness
of its conclusion. For judicial convenience and expediency, therefore, We hereby adopt by way of
reference, the findings of facts and conclusions of the court a quo spread in its decision, as integral part of
this Our decision. 29 (Emphasis supplied)
Hence, even in this jurisdiction, incorporation by reference is allowed if only to avoid the cumbersome
reproduction of the decision of the lower courts, or portions thereof, in the decision of the higher
court. 30This is particularly true when the decision sought to be incorporated is a lengthy and thorough
discussion of the facts and conclusions arrived at, as in this case, where Award Paper No. 3/B-1 consists
of eighteen (18) single spaced pages.
Furthermore, the recognition to be accorded a foreign judgment is not necessarily affected by the fact that
the procedure in the courts of the country in which such judgment was rendered differs from that of the
courts of the country in which the judgment is relied on. 31 This Court has held that matters of remedy and
procedure are governed by the lexfori or the internal law of the forum. 32 Thus, if under the procedural
rules of the Civil Court of Dehra Dun, India, a valid judgment may be rendered by adopting the arbitrator's
findings, then the same must be accorded respect. In the same vein, if the procedure in the foreign court
mandates that an Order of the Court becomes final and executory upon failure to pay the necessary
docket fees, then the courts in this jurisdiction cannot invalidate the order of the foreign court simply
because our rules provide otherwise.
The private respondent claims that its right to due process had been blatantly violated, first by reason of
the fact that the foreign court never answered its queries as to the amount of docket fees to be paid then
refused to admit its objections for failure to pay the same, and second, because of the presumed bias on
the part of the arbitrator who was a former employee of the petitioner.
Time and again this Court has held that the essence of due process is to be found in the reasonable
opportunity to be heard and submit any evidence one may have in support of one's defense 33 or stated
otherwise, what is repugnant to due process is the denial of opportunity to be heard. 34 Thus, there is no
violation of due process even if no hearing was conducted, where the party was given a chance to explain
his side of the controversy and he waived his right to do so. 35
In the instant case, the private respondent does not deny the fact that it was notified by the foreign court to
file its objections to the petition, and subsequently, to pay legal fees in order for its objections to be given
consideration. Instead of paying the legal fees, however, the private respondent sent a communication to
the foreign court inquiring about the correct amount of fees to be paid. On the pretext that it was yet
awaiting the foreign court's reply, almost a year passed without the private respondent paying the legal
fees. Thus, on February 2, 1990, the foreign court rejected the objections of the private respondent and
proceeded to adjudicate upon the petitioner's claims. We cannot subscribe to the private respondent's
claim that the foreign court violated its right to due process when it failed to reply to its queries nor when
the latter rejected its objections for a clearly meritorious ground. The private respondent was afforded
sufficient opportunity to be heard. It was not incumbent upon the foreign court to reply to the private
respondent's written communication. On the contrary, a genuine concern for its cause should have
prompted the private respondent to ascertain with all due diligence the correct amount of legal fees to be
paid. The private respondent did not act with prudence and diligence thus its plea that they were not
accorded the right to procedural due process cannot elicit either approval or sympathy from this Court. 36
The private respondent bewails the presumed bias on the part of the arbitrator who was a former
employee of the petitioner. This point deserves scant consideration in view of the following stipulation in
the contract:
. . . . It will be no objection any such appointment that the arbitrator so appointed is a Commission
employer (sic) that he had to deal with the matter to which the supply or contract relates and that in the
course of his duties as Commission's employee he had expressed views on all or any of the matter in
dispute or difference. 37 (Emphasis supplied.)
Finally, we reiterate hereunder our pronouncement in the case of Northwest Orient Airlines, Inc. v. Court
of Appeals 38 that:
A foreign judgment is presumed to be valid and binding in the country from which it comes, until the
contrary is shown. It is also proper to presume the regularity of the proceedings and the giving of due
notice therein.
Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in personam of a tribunal of a
foreign country having jurisdiction to pronounce the same is presumptive evidence of a right as between
the parties and their successors-in-interest by a subsequent title. The judgment may, however, be
assailed by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of
law or fact. Also, under Section 3 of Rule 131, a court, whether of the Philippines or elsewhere, enjoys the
presumption that it was acting in the lawful exercise of jurisdiction and has regularly performed its official
duty. 39
Consequently, the party attacking a foreign judgment, the private respondent herein, had the burden of
overcoming the presumption of its validity which it failed to do in the instant case.
The foreign judgment being valid, there is nothing else left to be done than to order its enforcement,
despite the fact that the petitioner merely prays for the remand of the case to the RTC for further
proceedings. As this Court has ruled on the validity and enforceability of the said foreign judgment in this
jurisdiction, further proceedings in the RTC for the reception of evidence to prove otherwise are no longer
necessary.
WHEREFORE, the instant petition is GRANTED, and the assailed decision of the Court of Appeals
sustaining the trial court's dismissal of the OIL AND NATURAL GAS COMMISSION's complaint in Civil
Case No. 4006 before Branch 30 of the RTC of Surigao City is REVERSED, and another in its stead is
hereby rendered ORDERING private respondent PACIFIC CEMENT COMPANY, INC. to pay to petitioner
the amounts adjudged in the foreign judgment subject of said case.
SO ORDERED.
Issue: whether or not Memorandum Decisions are violative of Section 14, Article VIII of the Constitution
Held: No. The constitutional mandate that no decision shall be rendered by any court without expressing
therein dearly and distinctly the facts and the law on which it is based does not preclude the validity of
memorandum decisions which adopt by reference the findings of fact and conclusions of law contained
in the decisions of inferior tribunals. Even in this jurisdiction, incorporation by reference is allowed if only to
avoid the cumbersome reproduction of the decision of the lower courts, or portions thereof, in the decision
of the higher court. This is particularly true when the decision sought to be incorporated is a lengthy and
thorough discussion of the facts and conclusions arrived at
35. Atty Alice Odchigue-Bondoc vs. Tan Tiong Bio AKA Henry Tan
Tan Tiong Bio (respondent) had fully paid the installment payments of a 683-square-meter lot in the
Manila Southwoods Residential Estates, a project of Fil-Estate Golf & Development, Inc. (Fil-Estate) in
Carmona, Cavite, but Fil-Estate failed to deliver to him the title covering the lot, despite repeated
demands. Fil-Estate also failed to heed the demand for the refund of the purchase price.1
Respondent, later learning that the lot "sold" to him was inexistent,2 filed a complaint for Estafa against
Fil-Estate officials including its Corporate Secretary Atty. Alice Odchigue-Bondoc (petitioner) and other
employees.3
In her Counter-Affidavit, petitioner alleged that, inter alia,
x xxx
5. I had no participation at all in the acts or transactions alleged in the Complaint-Affidavit. As a Corporate
Secretary, I have never been involved in the management and day-to-day operations of [Fil-Estate]. x xx
x xxx.
7. xxx. [Herein respondent] alleges:
"The letter showed that the request was approved by [herein petitioner], provided that the transfer fee was
paid, and that there be payment of full downpayment, with the balance payable in two years."
8) The handwritten approval and endorsement, however, are not mine. I have never transacted, either
directly or indirectly, with Mrs. Ona or [herein respondent]. x x x4 (emphasis partly in the original, partly
supplied; underscoring supplied)
On the basis of petitioners above-quoted allegations in her Counter-Affidavit, respondent filed a complaint
for Perjury against petitioner, docketed as I.S. No. PSG 03-07-11855 before the Pasig City Prosecutors
Office, which dismissed it by Resolution of June 17, 20045 for insufficiency of evidence, and denied
respondents Motion for Reconsideration.6
On petition for review, the Department of Justice (DOJ), by Resolution of July 20, 2005 signed by the
Chief State Prosecutor for the Secretary of Justice,7 motuproprio dismissed the petition on finding that
there was no showing of any reversible error, following Section 12(c) of Department Circular No. 70 dated
July 3, 2000 (National Prosecution Service [NPS] Rule on Appeal).
Respondents motion for reconsideration having been denied8 by Resolution of January 23, 2006, he filed
a petition for certiorari before the Court of Appeals which, by Decision of September 5, 2008,9 set aside
the DOJ Secretarys Resolution, holding that it committed grave abuse of discretion in issuing its
Resolution dismissing respondents petition for review without therein expressing clearly and distinctly the
facts on which the dismissal was based, in violation of Section 14, Article VIII of the Constitution.10
The appellate court went on to hold that the matter of disposing the petition outright is clearly delineated,
not under Section 12 but, under Section 7 of the NPS Rule on Appeal which categorically directs the
Secretary to dismiss outright an appeal or a petition for review filed after arraignment; and that under
Section 7, the Secretary may dismiss the petition outright if he finds the same to be patently without merit,
or manifestly intended for delay, or when the issues raised are too unsubstantial to require
consideration.11
Petitioners Motion for Reconsideration having been denied by the appellate court, she filed the present
petition for review on certiorari.
Petitioner asserts that the requirement in Section 14, Article VIII of the Constitution applies only to
decisions of "courts of justice"12; that, citing Solid Homes, Inc. v. Laserna,13 the constitutional provision
does not extend to decisions or rulings of executive departments such as the DOJ; and that Section 12(c)
of the NPS Rule on Appeal allows the DOJ to dismiss a petition for review motuproprio, and the use of the
word "outright" in the DOJ Resolution simply means "altogether," "entirely" or "openly."14
In his Comment, respondent counters that the constitutional requirement is not limited to courts, citing
Presidential Ad hoc Fact-Finding Committee on Behest Loans v. Desierto,15 as it extends to quasi-judicial
and administrative bodies, as well as to preliminary investigations conducted by these tribunals.
Further, respondent, citing Adasa v. Abalos,16 argues that the DOJ "muddled" the distinction between
Sections 7 and 12 of the NPS Rule on Appeal and that an "outright" dismissal is not allowed since the
DOJ must set the reasons why it finds no reversible error17 in an assailed resolution.
The petition is impressed with merit.
A preliminary investigation is not a quasi-judicial proceeding since "the prosecutor in a preliminary
investigation does not determine the guilt or innocence of the accused."18
x xx [A prosecutor] does not exercise adjudication nor rule-making functions. Preliminary investigation is
merely inquisitorial, and is often the only means of discovering the persons who may be reasonably
charged [of] a crime and to enable the [prosecutor] to prepare his complaint or information. It is not a trial
of the case on the merits and has no purpose except that of determining whether a crime has been
committed and whether there is probable cause to believe that the accused is guilty thereof. While the
[prosecutor] makes that determination, he cannot be said to be acting as a quasi-court, for it is the courts,
ultimately, that pass judgment on the accused, not the [prosecutor].19 (emphasis and underscoring
supplied)
A preliminary investigation thus partakes of an investigative or inquisitorial power for the sole purpose of
obtaining information on what future action of a judicial nature may be taken.20
Balangauan v. Court of Appeals21 in fact iterates that even the action of the Secretary of Justice in
reviewing a prosecutors order or resolution via appeal or petition for review cannot be considered a quasi-
judicial proceeding since the "DOJ is not a quasi-judicial body."22 Section 14, Article VIII of the
Constitution does not thus extend to resolutions issued by the DOJ Secretary.
Respondent posits, however, that Balangauan finds no application in the present case for, as the
Supreme Court stated, the DOJ "rectified the shortness of its first resolution by issuing a lengthier one
when it resolved [the therein] respondent[s] . . . motion for reconsideration."23 Respondents position
fails.
Whether the DOJ in Balangauan issued an extended resolution in resolving the therein respondents
motion for reconsideration is immaterial. The extended resolution did not detract from settling that the DOJ
is not a quasi-judicial body.
Respondents citation of Presidential Ad hoc Fact-Finding Committee on Behest Loans is misplaced as
the Ombudsman dismissed the therein subject complaint prior to any preliminary investigation. The
Ombudsman merely evaluated the complaint pursuant to Section 2, Rule II of the Rules of Procedure of
the Office of the Ombudsman which reads:
SEC. 2. Evaluation.Upon evaluating the complaint, the investigating officer shall recommend whether it
may be:
a) dismissed outright for want of palpable merit;
b) referred to respondent for comment;
c) indorsed to the proper government office or agency which has jurisdiction over the case;
d) forwarded to the appropriate officer or official for fact-finding investigation;
e) referred for administrative adjudication; or
f) subjected to a preliminary investigation. (emphasis supplied)
Respecting the action of the Secretary of Justice on respondents petition for review under Section 12 of
the NPS Rule on Appeal, respondent posits that "outright" dismissal is not sanctioned thereunder but
under Section 7. Respondents position similarly fails.
That the DOJ Secretary used the word "outright" in dismissing respondents petition for review under
Section 12 of the Rule which reads:
SEC. 12. Disposition of the appeal.The Secretary may reverse, affirm or modify the appealed resolution.
He may, motuproprio or upon motion, dismiss the petition for review on any of the following grounds:
x xxx
(a) That there is no showing of any reversible error;
x xxx (italics in the original; emphasis and underscoring supplied)
does not dent his action. To be sure, the word "outright" was merely used in conjunction with the
motuproprio action.
Section 7 has an altogether different set of grounds for the outright dismissal of a petition for
review.1awphil These are (a) when the petition is patently without merit; (b) when the petition is manifestly
intended for delay; (c) when the issues raised therein are too unsubstantial to require consideration; and
(d) when the accused has already been arraigned in court.24
When the Secretary of Justice is convinced that a petition for review does not suffer any of the infirmities
laid down in Section 7, it can decide what action to take (i.e., reverse, modify, affirm or dismiss the appeal
altogether), conformably with Section 12. In other words, Sections 7 and 12 are part of a two-step
approach in the DOJ Secretarys review power.
As for respondents reliance on Adasa, it too fails for, unlike in the case of Adasa, herein petitioner has not
been arraigned as in fact no Information has been filed against her.
In the absence of grave abuse of discretion on the part of a public prosecutor who alone determines the
sufficiency of evidence that will establish probable cause in filing a criminal information,25 courts will not
interfere with his findings; otherwise, courts would be swamped with petitions to review the exercise of
discretion on his part each time a criminal complaint is dismissed or given due course.26
WHEREFORE, the petition for review on certiorari is GRANTED. The assailed Decision of the Court of
Appeals is REVERSED AND SET ASIDE and the Resolutions of July 20, 2005 and January 23, 2006 of
the Secretary of Justice are REINSTATED.
SO ORDERED.
Section 16
36. Valdez vs. CA
This is a case of double sale of real property where both vendees registered the sales with the Register of
Deeds and each produced their respective owner's duplicate copy of the certificate of title to the property.
Spouses Francisco Ante and Manuela Ante were the registered owners of a parcel of land located at 20th
Avenue, Murphy, Quezon City, with an area of approximately 625.70 square meters as evidenced by
Transfer Certificate of Title (TCT) No. 141582 issued by the Register of Deeds of Quezon City. Said
spouses executed a special power of attorney in favor of their son, Antonio Ante, a lawyer, authorizing him
to execute any document conveying by way of mortgage or sale a portion or the whole of said property, to
receive payment and dispose of the same as he may deem fit and proper under the premises. 1
Antonio Ante offered to sell the lot to Eliseo Viernes, who was occupying the same with the permission of
Ante. Viernes, however, turned down the offer as he did not have money. Antonio Ante then told Viernes
that he will instead sell the property to Pastor Valdez and Virginia Valdez. 2
Antonio Ante had the said lot subdivided into Lot A with an area of 280 square meters and Lot B with an
area or 345.70 square meters, each lot having its corresponding technical description.
On June 15, 1980, Antonio Ante, as attorney in fact, executed a deed of sale of Lot A in favor of spouses
Pastor Valdez and Virginia Valdez, for and in consideration of the amount of P112,000.00 3
On February 12, 1987, in the same capacity, Antonio Ante sold to said Valdez spouses, Lot B for the
amount of P138,000.00. 4
The Valdez spouses demanded from Antonio Ante the delivery of the owner's duplicate copy of TCT No.
141582 covering said two (2) lots. Ante promised them that he will deliver the title to them in a few days.
In the meanwhile petitioners started fencing the whole lot with cement hollow blocks in the presence of
spouses Eliseo and Felicidad Viernes. Except for the gate, it took them two weeks to finish fencing the
whole lot. On said occasion the Viernes spouses were informed by the Valdez spouses that they were
fencing the same as they purchased the land from Antonio Ante.
As Ante failed to deliver the owner's duplicate certificate of title demanded by the Valdez spouses, the
latter filed their affidavit of adverse claim over the subject lot with the Register of Deeds of Quezon City on
September 6, 1982 as the vendees of the property. 5
Upon inquiries made, the Valdez spouses learned that Antonio Ante had delivered the owner's duplicate
certificate of title as a collateral to one Dr. Camilo Garma of Purdue Street., Cubao Quezon City to secure
his rentals in arrears in the amount of P9,000.00. On September 13, 1983, upon the prodding of the
Valdez spouses, Antonio Ante wrote to Dr. & Mrs. Garma to request them to entrust the owner's duplicate
copy of the title of the questioned lot to the Valdez spouses with the assurance that Ante will pay his
indebtedness to them. 6 The Garma spouses turned over to the Valdez spouses the said owner's
duplicate certificate of title after said Valdez spouses paid for the obligation of Antonio Ante to the Garma
spouses.
The Valdez spouses then proceeded to register the two deeds of sale dated June 15, 1980 and February
12, 1981 7 with the Register of Deeds of Quezon City by presenting the owner's duplicate copy of the title.
They were, however, informed that the said owner's duplicate certificate of title had been declared null and
void per order of Judge Tutaan dated November 10, 1982. They also found out that spouses Francisco
and Manuela Ante earlier filed a petition for the issuance of a new owner's duplicate certificate of title and
to declare null and void the lost owner's duplicate certificate of title.
The Valdez spouses also discovered that the Register of Deeds cancelled TCT No. 141582 and in lieu
thereof issued TCT No. 293889 in the name of Felicidad Viernes on the basis of a deed of assignment of
the same property dated February 17, 1982 executed by Antonio Ante in her favor.
When Virginia Valdez inquired from Antonio Ante why he executed the said deed of assignment when he
had previously sold the same lot to them, Ante replied that they could sue him in court.
Thus, the Valdezes filed their adverse claim over the lot covered by TCT No. 293889 in the name of
Felicidad Viernes. They filed the complaint in Barangay office of San Roque, Quezon City against
Felicidad Viernes but as no amicable settlement was reached, the Valdezes filed a complaint in the
Regional Trial Court of Quezon City seeking among others, that the order dated November 10, 1982 of the
Court of First Instance of Quezon City authorizing the issuance of a new owner's duplicate certificate of
title in the name of Francisca Ante be declared null any void; that the deed of assignment dated February
17, 1982 executed by Antonio Ante in favor of Felicidad Viernes be cancelled and revoked; that TCT No.
293889 in the name of Felicidad Viernes in the Register of Deeds of Quezon City be cancelled and
declared null and void; that the Register of Deeds of Quezon City be ordered to reinstate, revalidate and
give full force and effect to the owner's duplicate copy of TCT No. 141582 in the name of spouses
Francisco and Manuela Ante and declare petitioners as the true and lawful owners of the property;
ordering respondents Viernes and all persons claiming right under them to vacate the property, and to pay
damages and costs to petitioners.
After trial on the merits before which the Antes were declared in default, a decision was rendered by the
trial court on April 9, 1986, the dispositive part of which reads as follows:
WHEREFORE, the complaint is dismissed as against defendants Vierneses, and defendants Antes are
hereby ordered to pay to plaintiff, as prayed for in their complaint, as follows:
Defendant Antes are hereby ordered to pay actual damages in the amount of P250,000.00 to plaintiffs.
Defendants Antes are hereby ordered to pay moral and exemplary damages in the amount of P15,000.00
and exemplary damages in the amount of P5,000.00.
Defendants Antes, are hereby ordered to pay P5,000.00 for attorney's fees.
SO ORDERED. 8
Not satisfied therewith the Valdezes interposed an appeal therefrom to the Court of Appeals wherein in
due course a decision was rendered on September 12, 1988, affirming in toto the appealed decision, with
costs against the appellants.
Hence this petition for review on certiorari filed by the Valdezes wherein the following issues are raised:
1. Whether the Order dated November 10, 1983 declaring as null and void the Owner's copy of Transfer
Certificate of Title No. 141582 and ordering the issuance of a new Owner's copy of said title should be set
aside having been secured fraudulently and in bad faith by Francisco Ante and Antonio Ante who had
already sold the property to the spouses Pastor and Virginia Valdez and who knew fully well that the said
Owner's copy of said title has never been lost.
2. As between plaintiff-spouses Pastor and Virginia Valdez, petitioners in this case and defendant
Felicidad Viernes, one of the private respondents, who is entitled to the subject lot?
3. Who is entitled to damages? 9
The petition is impressed with merit.
Article 1544 of the Civil Code provides as follows:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred
to the person who may have first taken possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith
first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is
good faith.
From the aforesaid provision of the law, it is clear that if movable property is sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession thereof in good faith.
However, should the subject of the sale be immovable property, the ownership shall vest in the person
acquiring it who in good faith first recorded it in the registry of property. Should none of the vendees
inscribe the sale in the Registry of Property, then the ownership of the subject real property shall pertain to
the person who in good faith was first in possession; and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith.
In this case, Lot A of the subject property was sold to the petitioners by Antonio Ante, as attorney-in-fact,
on June 15, 1980, while Lot B was sold by the same attorney-in-fact to petitioners on February 12,
1981.10 Since the owner's copy of TCT No. 141582 was not delivered in due time to the petitioners by
Antonio Ante despite his promise to deliver the same in a few days, petitioners registered their notice of
adverse claim over the said property on September 6, 1982 with the Register of Deeds of Quezon City
wherein it was duly annotated as follows:
PE-3004/T-141582 Affidavit of Adverse Claim
Filed under sworn statement of Pastor Valdez & Virginia C. Valdez claiming that they are the vendees of
the property described herein, but the title was not delivered (Doc. 253, Page 51, Bk. I of the Not.Pub.of
Q. City, Prudencio W. Valido)
Date of Instrument August 19, 1982
Date of Inscription Sept. 6, 1982 11
However, earlier, that is on February 17, 1982, a Deed of Assignment of the same property was executed
by Antonio Ante in favor of respondent Felicidad Viernes. 12 Ante filed a petition for the issuance of
another owner's duplicate copy of TCT No. 141582 with the then Court of First Instance of Quezon City on
the ground that the owner's duplicate copy had been lost. The petition was granted in an order dated
November 10, 1983 declaring null and void the lost owner's duplicate copy of the title and ordering the
issuance of a new owner's duplicate copy of the title in favor of the Antes. Said owner's duplicate copy
was delivered by Ante to respondent Viernes who thereafter together with the Deed of Assignment
presented the same to the Register of Deeds of Quezon City for registration on November 11, 1982. Thus,
on the basis thereof, TCT No. 141582 was cancelled and TCT No. 293889 was issued in the name of
respondent Felicidad Viernes.
Petitioners again filed an adverse claim this time on the property covered by TCT No. 293889 in the name
of respondent Viernes.
From the foregoing set of facts there can be no question that the sale of the subject lot to petitioners was
made long before the execution of the Deed of Assignment of said lot to respondent Viernes and that
petitioners annotated their adverse claim as vendees of the property as early as September 6, 1982 with
the Register of Deeds of Quezon City. On the other hand the deed of Assignment in favor of Viernes of
the said lot was registered with the Register of Deeds of Quezon City only on November 11, 1982
whereby a new title was issued in the name of Viernes as above stated.
The rule is clear that a prior right is accorded to the vendee who first recorded his right in good faith over
an immovable property. 13 In this case, the petitioners acquired subject lot in good faith and for valuable
consideration from the Antes and as such owners petitioners fenced the property taking possession
thereof. Thus, when petitioners annotated their adverse claim in the Register of Deeds of Quezon City
they thereby established a superior right to the property in question as against respondent Viernes. 14
On the other hand, respondent Viernes cannot claim good faith in the purchase of the subject lot and the
subsequent registration of the Deed of Assignment in her favor. Even before the petitioners purchased the
lot from the Antes respondent Viernes' husband was first given the option to purchase the same by
Antonio Ante but he declined because he had no money and so he was informed that it would be sold to
petitioners. After petitioners purchased the lot they immediately fenced the same with the knowledge and
without objection of respondent Viernes and her husband and they were informed by the petitioners about
their purchase of the same. Moreover, when petitioners annotated their adverse claim as vendees of the
property with the Register of Deeds of Quezon City, it was effectively a notice to the whole world including
respondent Viernes.
Respondent Ante obviously in collusion with respondent Viernes sold the same property to Viernes which
was earlier sold to petitioners, by virtue of a subsequent Deed of Assignment. It was fraudulently made to
appear that the owner's duplicate copy of TCT No. 141582 was lost through a petition filed with the trial
court to nullify the said owner's duplicate copy and for the issuance of another owner's duplicate copy.
Unfortunately, such fraud was unmasked as early as July 14, 1981 when respondent Francisco Ante, in
Civil Case No. 29617, filed an urgent motion for the issuance of a subpoena and subpoena ducestecum to
require Paz Garma of 8 Purdue Street, Cubao, Quezon City to produce before the court on July 16, 1981
at 2:00 o'clock p.m. at the scheduled pre-trial of the case, the owner's duplicate copy of TCT No. 141582
issued by the Register of Deeds in the name of the Antes as the same was entrusted to Paz Garma as a
realtor for the proposed sale of the property which did not materialize. 15 Respondent Viernes admitted in
her answer dated January 7, 1984 that she knew of the filing in court of said urgent motion and that the
branch clerk of court issued the correspondingsubpoena. 16 Thus, respondent Ante, as well as
respondent Viernes, knew that the owner's duplicate copy of certificate of title No. 141582 was never lost,
consequently the filing of the petition in court for the issuance of a new one was attended with fraud and
gross misrepresentation.
As a matter of fact, as hereinabove discussed, upon the urging of petitioners, respondent Antonio Ante
wrote to the Garma spouses to entrust the TCT to petitioners on September 30, 1983 17 and when
petitioners paid the standing account of Ante to the Garmas said owner's duplicate copy was delivered by
the Garmas to the petitioners. The bad faith of respondents Viernes and Ante is obvious.
Further, even while the notice of adverse claim of September 6, 1982 filed by the petitioners on TCT No.
141582 in the Register of Deeds was still existing and had not been cancelled, on November 11, 1982 the
Register of Deeds nevertheless cancelled said TCT and issued a new title in favor of respondent Viernes.
The annotation was not even carried over nor was it ordered cancelled under the new title issued to
respondent Viernes. The Register of Deeds and/or his subordinates apparently yielded to the fraudulent
design of respondents Viernes and Ante.
An examination of the decision of the trial court dated April 9, 1986 shows that there are no findings of
facts to serve as basis for its conclusions. 18 Section 14, Article VIII of the Constitution mandates as
follows:
No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and
the law on which it is based.
No petition for review or motion for reconsideration of a decision shall be refused due course or denied
without stating the legal basis therefor. (Emphasis supplied.)
Section 1, Rule 36 of the Rules of Court also provides clearly as follows:
Sec. 1.Rendition of judgments. All judgments determining the merits of cases shall be in writing
personally and directly prepared by the judge, stating clearly and distinctly the facts and the law on which
it is based, signed by him, and filed with the clerk of the court. (Emphasis supplied.)
That is the reason why this Court, through Administrative Circular No. 1 dated January 28, 1988, reminded
all judges "to make complete findings of facts in their decisions, and scrutinize closely the legal aspects of
the case in the light of the evidence presented. They should avoid the tendency to generalize and form
conclusions without detailing the facts from which such conclusions are deduced."
Of course, when a petition for review or motion for reconsideration of a decision of the court is denied due
course, or is otherwise denied, it is not necessary that such findings of facts be made. However, the denial
must state the legal basis thereof.
In the present case, the three-paged decision of the trial court contained in the first two pages a statement
of the allegations of the pleadings of the parties and enumerates the witnesses presented and the exhibits
marked during the trial. Thereafter, the trial court arrived at the following conclusion:
After considering the evidence on record, this Court finds that plaintiff have failed to prove their case as
against defendant Felicidad Viernes, but proved their case against defaulted defendants Antes. The Court
finds that there is no sufficient proof of knowledge or bad faith on the part of defendant Vierneses, and on
the basis of existing jurisprudence, a third person who in good faith purchases and registers a property
cannot be deprived of his title as against plaintiff who had previously purchased same property but failed
to register the same. 19
This is not what is contemplated under the Constitution and the Rules as a clear and distinct statement of
the facts on the basis of which the decision is rendered. The foregoing one paragraph statement constitute
a mere conclusion of facts and of law arrived at by the trial court without stating the facts which serve as
the basis thereof. Indeed the conclusion of fact therein that petitioners had not registered the sale to them
is traversed by the records which show on the contrary, petitioners earlier registered the sale to them. The
court statement in the decision that a party has proven his case while the other has not, is not the findings
of facts contemplated by the Constitution and the rules to be clearly and distinctly stated.
Unfortunately, the appellate court overlooked this fatal defect in the appealed decision.1wphi1 It merely
adopted the alleged findings of facts of the trial court. Although it made some findings on how the deed of
assignment in favor of respondent Viernes came about, it is far from complete and is hardly a substantial
compliance with the mandate aforestated.
As it is now, this Court has before it a challenged decision that failed to state clearly and distinctly the facts
on which it is predicated. This Court has said again and again that it is not a trier of facts and that it relies,
on the factual findings of the lower court and the appellate court which are conclusive. But as it is, in this
case, the Court has to wade through the records and make its own findings of facts, rather than further
delay the disposition of the case by remanding the records for further proceedings.

Hence, the appealed decision should be struck down.

WHEREFORE, the petition is GRANTED. The appealed decision of the appellate court dated September
12, 1988 is hereby SET ASIDE and another judgment is hereby rendered declaring the order of the trial
court dated November 10, 1982 null and void and reinstating the owner's duplicate copy of TCT No.
141582 in the possession of the petitioners; declaring the petitioners to have the superior right to the
property in question and to be the true and lawful owners of the same; directing the Register of Deeds of
Quezon City to cancel TCT No. 293889 in the name of respondent Felicidad Viernes and to issue a new
title in favor of petitioners spouses Pastor and Virginia Valdez upon the presentation of the owner's
duplicate copy of TCT No. 141582; directing respondent Felicidad Viernes and other persons claiming
rights under her residing in the premises of the land in question to vacate the same immediately and to
remove whatever improvement she has placed in the premises; and ordering private respondents to jointly
and severally pay the petitioners the amounts of P15,000.00 as moral damages, P5,000.00 exemplary
damages, and P20,000.00 as attorney's fees. The docket fees for the amount of damages and attorney's
fees awarded to the petitioners, if not yet duly paid, shall constitute a prior lien in favor of the government,
before the satisfaction of the judgment in favor of the petitioners. Costs against private respondents.

SO ORDERED.