1

SECOND DIVISION

[G.R. No. L-2662. March 26, 1949.]

SHIGENORI KURODA, petitioner, vs. Major General RAFAEL

JALANDONI, Brigadier General CALIXTO DUQUE, Colonel
MARGARITO TORALBA, Colonel IRENEO BUENCONSEJO, Colonel
PEDRO TABUENA, Major FEDERICO ARANAS, MELVILLE S.
HUSSEY and ROBERT PORT, respondents.

DECISION

MORAN, C. J p:

Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and

Commanding General of the Japanese Imperial Forces in the Philippines during a period
covering 1943 and 1944, who is now charged before a Military Commission convened by the
Chief of Staff of the Armed Forces of the Philippines, with having unlawfully disregarded
and failed "to discharge his duties as such commander to control the operations of members
of his command, permitting them to commit brutal atrocities and other high crimes against
noncombatant civilians and prisoners of the Imperial Japanese Forces, in violation of the
laws and customs of war" comes before this Court seeking to establish the illegality of
Executive Order No. 68 of the President of the Philippines; to enjoin and prohibit
respondents Melville S. Hussey and Robert Port from participating in the prosecution of
petitioner's case before the Military Commission; and to permanently prohibit respondents
from proceeding with the case of petitioner.
In support of his case, petitioner tenders the following principal arguments:
First. "That Executive Order No. 68 is illegal on the ground that it violates not
only the provisions of our constitutional law but also our local laws, to say nothing of the fact
(that) the Philippines is not a signatory nor an adherent to the Hague Convention on Rules
and Regulations covering Land Warfare and, therefore, petitioner is charged of 'crimes' not
based on law, national and international." Hence, petitioner argues "That in view of the
fact that this commission has been empanelled by virtue of an unconstitutional law and an
illegal order, this commission is without jurisdiction to try herein petitioner."
Second. That the participation in the prosecution of the case against petitioner
before the Commission in behalf of the United States of America, of attorneys Melville
Hussey and Robert Port, who are not attorneys authorized by the Supreme Court to practice
law in the Philippines, is a diminution of our personality as an independent state, and their
appointments as prosecutors are a violation of our Constitution for the reason that they are
not qualified to practice law in the Philippines.
 2

Third. That Attorneys Hussey and Port have no personality as prosecutors, the
United States not being a party in interest in the case.
Executive Order No. 68, establishing a National War Crimes Office and prescribing
rules and regulations governing the trial of accused war criminals, was issued by the
President of the Philippines on the 29th day of July, 1947. This Court holds that this order is
valid and constitutional. Article 2 of our Constitution provides in its section 3, that
"The Philippines renounces war as an instrument of national policy, and
adopts the generally accepted principles of international law as part of the law
of the nation."
In accordance with the generally accepted principles of international law of the present day,
including the Hague Convention, the Geneva Convention and significant precedents of
international jurisprudence established by the United Nations, all those persons, military or
civilian, who have been guilty of planning, preparing or waging a war of aggression and of
the commission of crimes and offenses consequential and incidental thereto, in violation of
the laws and customs of war, of humanity and civilization, are held accountable therefor.
Consequently, in the promulgation and enforcement of Executive Order No. 68, the President
of the Philippines has acted in conformity with the generally accepted principles and policies
of international law which are part of our Constitution.
The promulgation of said executive order is an exercise by the President of his
powers as Commander in Chief of all our armed forces, as upheld by this Court in the case of
Yamashita vs. Styer L-129, 42 Off. Gaz., 654) 1 when we said
"War is not ended simply because hostilities have ceased. After
cessation of armed hostilities, incidents of war may remain pending which
should be disposed of as in time of war. 'An important incident to a conduct of
war is the adoption of measures by the military command not only to repel and
defeat the enemies but to seize and subject to disciplinary measures those
enemies who in their attempt to thwart or impede our military effort have
violated the law of war.' (Ex parte Quirin, 317 U. S., 1; 63 Sup. Ct., 2.) Indeed,
the power to create a military commission for the trial and punishment of war
criminals is an aspect of waging war. And, in the language of a writer, a military
commission 'has jurisdiction so long as a technical state of war continues. This
includes the period of an armistice, or military occupation, up to the effective
date of a treaty of peace, and may extend beyond, by treaty agreement.' (Cowls,
Trial of War Criminals by Military Tribunals, American Bar Association
Journal, June, 1944.)"
Consequently, the President as Commander in Chief is fully empowered to
consummate this unfinished aspect of war, namely, the trial and punishment of war criminals,
through the issuance and enforcement of Executive Order No. 68.
Petitioner argues that respondent Military Commission has no jurisdiction to try
petitioner for acts committed in violation of the Hague Convention and the Geneva
Convention because the Philippines is not a signatory to the first and signed the second only
in 1947. It cannot be denied that the rules and regulations of the Hague and Geneva
conventions form part of and are wholly based on the generally accepted principles of
international law. In fact, these rules and principles were accepted by the two belligerent
 3

nations, the United States and Japan, who were signatories to the two Conventions. Such
rules and principles, therefore, form part of the law of our nation even if the Philippines was
not a signatory to the conventions embodying them, for our Constitution has been
deliberately general and extensive in its scope and is not confined to the recognition of rules
and principles of international law as contained in treaties to which our government may
have been or shall be a signatory.
Furthermore, when the crimes charged against petitioner were allegedly committed,
the Philippines was under the sovereignty of the United States, and thus we were equally
bound together with the United States and with Japan, to the rights and obligations contained
in the treaties between the belligerent countries. These rights and obligations were not erased
by our assumption of full sovereignty. If at all, our emergence as a free state entitles us to
enforce the right, on our own, of trying and punishing those who committed crimes against
our people. In this connection, it is well to remember what we have said in the case of Laurel
vs. Misa (76 Phil., 372):
". . . The change of our form of government from Commonwealth to
Republic does not affect the prosecution of those charged with the crime of
treason committed during the Commonwealth, because it is an offense against
the same government and the same sovereign people . . . "
By the same token, war crimes committed against our people and our government while we
were a Commonwealth, are triable and punishable by our present Republic.
Petitioner challenges the participation of two American attorneys, namely, Melville S.
Hussey and Robert Port, in the prosecution of his case, on the ground that said attorneys are
not qualified to practice law in the Philippines in accordance with our Rules of Court and the
appointment of said attorneys as prosecutors is violative of our national sovereignty.
In the first place, respondent Military Commission is a special military tribunal
governed by a special law and not by the Rules of Court which govern ordinary civil courts.
It has already been shown that Executive Order No. 68 which provides for the organization
of such military commissions is a valid and constitutional law. There is nothing in said
executive order which requires that counsel appearing before said commissions must be
attorneys qualified to practice law in the Philippines in accordance with the Rules of Court.
In fact, it is common in military tribunals that counsel for the parties are usually military
personnel who are neither attorneys nor even possessed of legal training.
Secondly, the appointment of the two American attorneys is not violative of our
national sovereignty. It is only fair and proper that the United States, which has submitted the
vindication of crimes against her government and her people to a tribunal of our nation,
should be allowed representation in the trial of those very crimes. If there has been any
relinquishment of sovereignty, it has not been by our government but by the United States
Government which has yielded to us the trial and punishment of her enemies. The least that
we could do in the spirit of comity is to allow them representation in said trials.
Alleging that the United States is not a party in interest in the case, petitioner
challenges the personality of attorneys Hussey and Port as prosecutors. It is of common
knowledge that the United States and its people have been equally, if not more greatly,
aggrieved by the crimes with which petitioner stands charged before the Military
Commission. It can be considered a privilege for our Republic that a leader nation should
 4

submit the vindication of the honor of its citizens and its government to a military tribunal of
our country.

The Military Commission having been convened by virtue of a valid law, with
jurisdiction over the crimes charged which fall under the provisions of Executive Order No.
68, and having jurisdiction over the person of the petitioner by having said petitioner in its
custody, this Court will not interfere with the due processes of such Military Commission.
 5

EN BANC

[G.R. No. L-4352. September 28, 1951.]

VICTOR BOROVSKY, petitioner, vs. THE COMMISSIONER OF

IMMIGRATION and THE DIRECTOR OF PRISONS, respondents.

DECISION

TUASON, J p:

This is a second petition for habeas corpus filed by the petitioner with this Court, the
first having been denied in a decision promulgated on June 30, 1949.
Victor A. Borovsky, the petitioner, claims to be a stateless citizen, born in Shanghai,
China, of Russian parentage. He came to the Philippines in 1936 and had resided therein ever
since, if the period of his detention be included.
On June 24, 1946, by order of the Commissioner of Immigration, the petitioner was
arrested for investigation as to his past activities. Following his arrest, a warrant for his
deportation was issued by the Deportation Board, which is said to have found him an
undesirable alien, a vagrant and habitual drunkard. The petitioner protests that he was not
given a hearing, nor informed of the charges preferred against him. This point however is
unimportant in this proceeding.
In May, 1947, the petitioner was put on board a ship which took him to Shanghai, but
he was not allowed to land there because he was not a national of China and was not
provided with an entry visa. He was therefore brought back to Manila and was confined to
the new Bilibid Prison in Muntinlupa until December 8, 1947, when he was granted
provisional release by the President through the Secretary of Justice for a period of six
months. Before the expiration of that period, namely, on March 20, 1948, the Commissioner
of Immigration caused his rearrest and he has been in confinement in the abovementioned
prison ever since.
In his return to the writ, the Solicitor General in behalf of the respondents alleges that
the Commissioner of Immigration "has availed of every opportunity presented to carry out
the deportation order as shown by the fact that when the petitioner was enjoying his
provisional release after the unsuccessful attempt to deport him to Shanghai, China, he was
again re-arrested and flown to Cebu for the purpose of placing him on board a Russian vessel
which had called at the port, with a view to carrying out the deportation order issued against
him, but said deportation was not carried out for the reason that the captain of the said boat
refused to take on board the herein petitioner on the ground that he had no permission from
the Russian government to take on board the petitioner." It is further alleged that "the
immigration officials have taken steps regarding the disposition of those foreigners subject to
deportation while awaiting availability of transportation or arrangements to the place where
they may be sent."
 6

In this Court's majority decision on the first application it was observed that the
applicant's detention was temporary, and it was held that "temporary detention is a necessary
step in the process of exclusion or expulsion of undesirable aliens and that pending
arrangements for his deportation, the Government has the right to hold the undesirable alien
under confinement for a reasonable length of time." It took note of the fact that "this
Government desires to expel the alien, and does not relish keeping him at the people's
expense . . . making efforts to carry out the decree of exclusion by the highest officer of the
land." No period was fixed within which the immigration authorities were to carry out the
contemplated deportation beyond the statement that "The meaning of 'reasonable time'
depends upon the circumstances, specially the difficulties of obtaining a passport, the
availability of transportation, the diplomatic arrangements with the governments concerned
and the efforts displayed to send the deportee away," but the Court warned that "under
established precedents, too long a detention may justify the issuance of a writ of habeas
corpus."
Mr. Justice Paras, now Chief Justice, Mr. Justice Feria, Mr. Justice Perfecto, and the
writer of this decision dissented. Mr. Justice Feria and Mr. Justice Perfecto voted for outright
discharge of the prisoner from custody. Mr. Justice Paras qualified his dissent by stating that
he might agree "to a further detention of the herein petitioner, provided that he be released if
after six months, the Government is still unable to deport him." This writer joined in the
latter dissent but thought that two months constituted reasonable time.
Over two years having elapsed since the decision aforesaid was promulgated, the
Government has not found ways and means of removing the petitioner out of the country,
and none are in sight, although, it should be said in justice to the deportation authorities, it
was through no fault of theirs that no ship or country would take the petitioner.
Aliens illegally staying in the Philippines have no right of asylum therein
(Soewapadji vs. Wixon, Sept. 13, 1946, 157 F. ed., 289, 290), even if they are "stateless,"
which the petitioner claims to be. It is no less true however as impliedly stated in this Court's
decision, supra, and numerous American decisons, that foreign nationals, not enemy, against
whom no criminal charges have been formally made or judicial order issued, may not
indefinitely be kept in detention. The protection against deprivation of liberty without due
process of law and except for crimes committed against the laws of the land is not limited to
Philippine citizens but extends to all residents, except enemy aliens, regardless of nationality.
Whether an alien who entered the country in violation of its immigration laws may be
detained for as long as the Government is unable to deport him, is beside the point and we
need not decide. There is no allegation that the petitioner's entry into the Philippines was not
lawful; on the contrary, the inference from the pleadings and the Deportation Board's
findings is that he came to and lived in this country under legal permit.
Moroever, by its Constitution (Art. II, sec. 3) the Philippines "adopts the generally
accepted principles of international law as part of the law of Nation." And in a resolution
entitled "Universal Declaration of Human Rights" and approved by the General Assembly of
the United Nations of which the Philippines is a member, at its plenary meeting on December
10, 1948, the right to life and liberty and all other fundamental rights as applied to all human
beings were proclaimed. It was there resolved that "All human beings are born free and equal
in degree and rights" (Art. 1); that "Everyone is entitled to all the rights and freedom set forth
in this Declaration, without distinction of any kind, such as race, colour, sex, language,
 7

religion, political or other opinion, nationality or social origin, property, birth, or other status
(Art. 2); that "Everyone has the right to an effective remedy by the competent national
tribunals for acts violating the fundamental rights granted him by the Constitution or by law"
(Art. 8); that "No one shall be subjected to arbitrary arrest, detention or exile" (Art. 9); etc.
In U. S. vs. Nichols, 47 Fed. Supp., 201, it was said that the court "has the power to
release from custody an alien who has been detained an unreasonably long period of time by
the Department of Justice after it has become apparent that although a warrant for his
deportation has been issued, the warrant can not be effectuated;" that "the theory on which
the court is given the power to act is that the warrant of deportation, not having been able to
be executed, is functus officioand the alien is being held without any authority of law." The
decision cited several cases which, it said, settled the matter definitely in that jurisdiction,
adding that the same result had been reached in innumerable cases elsewhere. The cases
referred to were United States ex rel. Ross vs. Wallis, 2 Cir. 279 F. 401, 404; Caranica vs.
Nagle, 9 Cir., 28 F. 2d 955; Saksagansky vs. Weedin, 9 Cir., 53 F. 2d 13, 16 last paragraph;
Ex parte Matthews, D.C.W.D. Wash., 277 F. 857; Moraitis vs. Delany, D.C. Md. Aug. 28,
1942, 46 F. Supp. 425.
The most recent case, as far as we have been able to find, was that of Staniszewski vs.
Watkins (1948), 80 Fed. Supp. 132, which is nearly foursquare with the case at hand. In that
case a stateless person, formerly a Polish national, resident in the United States since 1911
and many times serving as a seaman on American vessels both in peace and in war, was
ordered excluded from the United States and detained at Ellis Island at the expense of the
steamship company, when he returned from a voyage on which he had shipped from New
York for one or more European ports and return to the United States. The grounds for his
exclusion were that he had no passport or immigration visa, and that in 1937 had been
convicted of perjury because in certain documents he represented himself to be an American
citizen. Upon his application for release on habeas corpus, the Court released him upon his
own recognizance. Judge Leibell, of the United States District Court for the Southern District
of New York, said in part:

"When the return to the writ of habeas corpus came before this court, I
suggested that all interested parties . . . make an effort to arrange to have the
petitioner ship out to some country that would receive him as a resident. He is a
native-born Pole but the Polish Consul has advised him in writing that he is no
longer a Polish subject. This Government does not claim that he is a Polish
citizen. His attorney says he is stateless. The Government is willing that he go
back to the ship, but if he were sent back aboard ship and sailed to the port
(Cherbourg, France) from which he last sailed to the United States he would
probably be denied permission to land. There is no other country that would
take him, without proper documents.
"It seems to me that this is a genuine hardship case and that the
petitioner should be released from custody on proper terms . . .
"What is to be done with the petitioner? The government has had him in
custody almost seven months and practically admits it has no place to send him
out of this country. The steamship company, which employed him as one of a
 8

group sent to the ship by the Union, with proper seaman's papers issued by the
United States Coast Guard, is paying $3.00 a day for petitioner's board at Ellis
Island. It is no fault of the steamship company that petitioner is an inadmissible
alien as the immigration officials describe him . . .
"I intend to sustain the writ of habeas corpus and order the release of the
petitioner on his own recognizance. He will be required to inform the
immigration officials at Ellis Island by mail on the 15th of each month stating
where he is employed and where he can be reached by mail. If the government
does succeed in arranging for petitioner's deportation to a country that will be
ready to receive him as a resident, it may then advise the petitioner to that effect
and arrange for his deportation in the manner provided by law."
Although not binding upon this Court as a precedent, the case aforecited offered a
happy solution to the quandary in which the parties here find themselves, solution which we
think is sensible, sound and compatible with law and the Constitution. For this reason, and
since the Philippine law on immigration was patterned after or copied from the American law
and practice, we choose to follow and adopt the reasoning and conclusions in the
Staniszewski decision with some modifications which, it is believed, are in consonance with
the prevailing conditions of peace and order in the Philippines.
It was said or insinuated at the hearing of the petition at bar, but not alleged in the
return, that the petitioner was engaged in subversive activities, and fear was expressed that he
might join or aid the disloyal elements if allowed to be at large. Bearing in mind the
Government's allegation in its answer that "the herein petitioner was brought to the
Philippines by the Japanese forces," and the fact that Japan is no longer at war with the
United States or the Philippines nor identified with the countries allied against those nations,
the possibility of the petitioner's entertaining or committing hostile acts prejudicial to the
interest and security of this country seems remote.
If we grant, for the sake of argument, that such a possibility exists, still the
petitioner's unduly prolonged detention would be unwarranted by law and the Constitution, if
the only purpose of the detention be to eliminate a danger that is by no means, actual,
present, or uncontrollable. After all, the Government is not impotent to deal with or prevent
any threat by such measure as that just outlined. The thought eloquently expressed by Mr.
Justice Jackson of the United States Supreme Court in connection with the application for
bail of ten Communists convicted by a lower court of advocacy of violent overthrow of the
United States Government is, in principle pertinent and may be availed of at this juncture.
Said the learned Jurist:
"The Government's alternative contention is that defendants, by
misbehavior after conviction, have forfeited their claim to bail. Grave public
danger is said to result from what they may be expected to do, in addition to
what they have done since their conviction. If I assume that defendants are
disposed to commit every opportune disloyal act helpful to Communist
countries, it is still difficult to reconcile with traditional American law the
jailing of persons by the courts because of anticipated but as yet uncommitted
crimes. Imprisonment to protect society from predicted but unconsummated
offenses is so unprecedented in this country and so fraught with danger of
excesses and injustice that I am loath to resort to it, even as a discretionary
 9

judicial technique to supplement conviction of such offenses as those of which

defendants stand convicted.
xxx xxx xxx
"But the right of every American to equal treatment before the law is
wrapped up in the same constitutional bundle with those of these Communists.
If in anger or disgust with these defendants we throw out the bundle, we also
cast aside protection for the liberties of more worthy critics who may be in
opposition to the government of some future day.
xxx xxx xxx
"If, however, I were to be wrong on all of these abstract or theoretical
matters of principle, there is a very practical aspect of this application which
must not be overlooked or underestimated - that is the disastrous effect on the
reputation of American justice if I should now send these men to jail and the full
Court later decide that their conviction is invalid. All experience with litigation
teaches that existence of a substantial question about a conviction implies a
more than negligible risk of reversal. Indeed this experience lies back of our
rule permitting and practice of allowing bail where such questions exist, to
avoid the hazard of unjustifiably imprisoning persons with consequent reproach
to our system of justice. If that is prudent judical practice in the ordinary case,
how much more important to avoid every chance of handing to the Communist
world such an ideological weapon as it would have if this country should
imprison this handful of Communist leaders on a conviction that our own
highest Court would confess to be illegal. Risks, of course, are involved in
either granting or refusing bail. I am not naive enough to underestimate the
troublemaking propensities of the defendants. But, with the Department of
Justice alert to the dangers, the worst they can accomplish in the short time it
will take to end the litigation is preferable to the possibility of national
embarrassment from a celebrated case of unjustified imprisonment of
Communist leaders. Under no circumstances must we permit their
symbolization of an evil force in the world to be hallowed and glorified by any
semblance of martyrdom. The way to avoid that risk is not to jail those men
until it is finally decided that they should stay jailed."
If that case is not comparable with ours on the issues presented, its underlying
principle is of universal application. In fact, its ratio decidendi applies with greater force to
the present petition, since the right of accused to bail pending appeal of his case, as in the
case of the ten Communists, depends upon the discretion of the court, whereas the right to be
enlarged before formal charges are instituted is absolute. As already noted, not only are there
no charges pending against the petitioner, but the prospects of bringing any against him are
slim and remote.
Premises considered, the writ will issue commanding the respondents to release the
petitioner from custody upon these terms: The petitioner shall be placed under the
surveillance of the immigration authorities or their agents in such form and manner as may
be deemed adequate to insure that he keep peace and be available when the Government is
ready to deport him. The surveillance shall be reasonable and the question of reasonableness
 10

shall be submitted to this Court or to the Court of First Instance of Manila for decision in
case of abuse. He shall also put up a bond for the above purpose in the amount of P5,000.00
with sufficient surety or sureties, which bond the Commissioner of Immigration is authorized
to exact by Section 40 of Commonwealth Act No. 613. No costs will be charged.
 11

EN BANC

[G.R. No. L-4254. September 26, 1951.]

BORIS MEJOFF, petitioner, vs. THE DIRECTOR OF

PRISONS, respondent.

DECISION

TUASON, J p:

This is a second petition for habeas corpus by Boris Mejoff, the first having been
denied in a decision of this Court of July 30, 1949. The history of the petitioner's detention
was thus briefly set forth in that decision, written by Mr. Justice Bengzon:
"The petitioner Boris Mejoff is an alien of Russian descent who was
brought to this country from Shanghai as a secret operative by the Japanese
forces during the latter's regime in these Islands. Upon liberation he was
arrested as a Japanese spy, by U. S. Army Counter Intelligence Corps. Later he
was handed to the Commonwealth Government for disposition in accordance
with Commonwealth Act No. 682. Thereafter the People's Court ordered his
release. But the Deportation Board taking his case up, found that having no
travel documents Mejoff was illegally in this country, and consequently referred
the matter to the immigration authorities. After the corresponding investigation,
the Board of Commissioners of Immigration on April 5, 1948, declared that
Mejoff had entered the Philippines illegally in 1944, without inspection and
admission by the immigration officials at a designation port of entry and,
therefore, it ordered that he be deported on the first available transportation to
Russia. The petitioner was then under custody, he having been arrested on
March 18, 1948. In May 1948 he was transferred to the Cebu Provincial Jail
together with three other Russians to await the arrival of some Russian vessels.
In July and August of that year two boats of Russian nationality called at the
Cebu Port. But their masters refused to take petitioner and his companions
alleging lack of authority to do so. In October 1948 after repeated failures to
ship this deportee abroad, the authorities removed him to Bilibid Prison at
Muntinglupa where he has been confined up to the present time, inasmuch as
the Commissioner of Immigration believes it is for the best interests of the
country to keep him under detention while arrangements for his departure are
being made."
The Court held the petitioner's detention temporary and said that "temporary
detention is a necessary step in the process of exclusion or expulsion of undersirable aliens
and that pending arrangements for his deportation, the Government has the right to hold the
undersirable alien under confinement for a reasonable length of time." It took note of the fact,
manifested by the Solicitor General's representative in the course of the oral argument, that
 12

"this Government desires to expel the alien, and does not relish keeping him at the people's
expense . . . making efforts to carry out the decree of exclusion by the highest officer of the
land." No period was fixed within which the immigration authorities should carry out the
contemplated deportation beyond the statement that "The meaning of 'reasonable time'
depends upon the circumstances, specially the difficulties of obtaining a passport, the
availability of transportation, the diplomatic arrangements with the governments concerned
and the efforts displayed to send the deportee away;" but the Court warned that "under
established precedents, too long a detention may justify the issuance of a writ of habeas
corpus."
Mr. Justice Paras, now Chief Justice, Mr. Justice Feria, Mr. Justice Perfecto, and the
writer of this decision dissented. Mr. Justice Feria and Mr. Justice Perfecto voted for outright
discharge of the prisoner from custody. Mr. Justice Paras qualified his dissent by stating that
he might agree "to a further detention of the herein petitioner, provided that he be released if
after six months, the Government is still unable to deport him." This writer joined in the
latter dissent but thought that two months constituted reasonable time.
Over two years having elapsed since the decision aforesaid was promulgated, the
Government has not found ways and means of removing the petitioner out of the country,
and none are in sight, although, it should be said in justice to the deportation authorities, it
was through no fault of theirs that no ship or country would take the petitioner.
Aliens illegally staying in the Philippines have no right of asylum therein
(Soewapadji vs. Wixon, Sept. 18, 1946, 157 F. ed., 289, 290), even if they are "stateless,"
which the petitioner claims to be. It is no less true however, as impliedly stated in this Court's
decision, supra, that foreign nationals, not enemy, against whom no charge has been made
other than that their permission to stay has expired, may not indefinitely be kept in detention.
The protection against deprivation of liberty without due process of law and except for
crimes committed against the laws of the land is not limited to Philippine citizens but extends
to all residents, except enemy aliens, regardless of nationality. Whether an alien who entered
the country in violation of its immigration laws may be detained for as long as the
Government is unable to deport him, is a point we need not decide. The petitioner's entry into
the Philippines was not unlawful; he was brought by the armed and belligerent forces of a de
facto government whose decrees were law during the occupation.
Moreover, by its Constitution (Art. II, Sec. 3) the Philippines "adopts the generally
accepted principles of international law as part of the law of Nation." And in a resolution
entitled "Universal Declaration Of Human Rights" and approved by the General Assembly of
the United Nations of which the Philippines is a member, at its plenary meeting on December
10, 1948, the right to life and liberty and all other fundamental rights as applied to all human
beings were proclaimed. It was there resolved that "All human beings are born free and equal
in degree and rights" (Art. 1); that "Everyone is entitled to all the rights and freedom set forth
in this Declaration, without distinction of any kind, such as race, colour, sex, language,
religion, political or other opinion, nationality or social origin, property, birth, or other
status" (Art. 2); that "Every one has the right to an effective remedy by the competent
national tribunals for acts violating the fundamental rights granted him by the Constitution or
by law" (Art. 8); that "No one shall be subjected to arbitrary arrest, detention or exile" (Art. 9
); etc.
 13

In U. S. vs. Nichols, 47 Fed. Supp., 201, it was said that the court "has the power to
release from custody an alien who has been detained an unreasonably long period of time by
the Department of Justice after it has become apparent that although a warrant for his
deportation has been issued, the warrant can not be effectuated;" that "the theory on which
the court is given the power to act is that the warrant of deportation, not having been able to
be executed, is functus officioand the alien is being held without any authority of law." The
decision cited several cases which, it said, settled the matter definitely in that jurisdiction,
adding that the same result had been reached in innumerable cases elsewhere. The cases
referred to were United States ex rel. Ross vs. Wallis, 2 Cir. 279 F. 401, 404; Caranica vs.
Nagle, 9 Cir., 28 F. 2d 955; Saksagansky vs. Weedin, 9 Cir., 53 F. 2d 13, 16 last paragraph;
Ex parte Matthews, D.C.W.D. Wash., 277 F. 857; Moraitis vs. Delany, D.C. Md. Aug. 28,
1942, 46 F. Supp. 425.
The most recent case, as far as we have been able to find, was that of Staniszewski vs.
Watkins (1948), 80 Fed. Supp., 132, which is nearly foursquare with the case at hand. In that
case a stateless person, formerly a Polish national, resident in the United States since 1911
and many times serving as a seaman on American vessels both in peace and in war, was
ordered excluded from the United States and detained at Ellis Island at the expense of the
steamship company, when he returned from a voyage on which he had shipped from New
York for one or more European ports and return to the United States. The grounds for his
exclusion were that he had no passport or immigration visa, and that in 1937 had been
convicted of perjury because in certain documents he represented himself to be an American
citizen. Upon his application for release on habeas corpus, the Court released him upon his
own recognizance. Judge Leibell, of the United States District Court for the Southern District
of New York, said in part:
"When the return to the writ of habeas corpus came before this court, I
suggested that all interested parties . . . make an effort to arrange to have the
petitioner ship out of some country that would receive him as a resident. He is a
native-born Pole but the Polish Consul has advised him in writing that he is no
longer a Polish subject. This Government does not claim that he is a Polish
citizen. This attorney says he is stateless. The Government is willing that he go
back to the ship, but if he were sent back aboard ship and sailed to the Port
(Cherbourg, France) from which he last sailed to the United States, he would
probably be denied permission to land. There is no other country that would
take him, without proper documents.

"It seems to me that this is a genuine hardship case and that the
petitioner should be released from custody on proper terms . . ..
"What is to be done with the petitioner? The government has had him in
custody almost seven months and practically admits it has no place to send him
out of this country. The steamship company, which employed him as one of a
group sent to the ship by the Union, with proper seaman's papers issued by the
United States Coast Guard, is paying $3 a day for petitioner's board at Ellis
Island. It is no fault of the steamship company that petitioner is an inadmissible
alien as the immigration officials describe him . . ..
 14

"I intend to sustain the writ of habeas corpus and order the release of the
petitioner on his own recognizance. He will be required to inform the
immigration officials at Ellis Island by mail on the 15th of each month, stating
where he is employed and where he can be reached by mail. If the government
does succeed in arranging for petitioner's deportation to a country that will be
ready to receive him as a resident, it may then advise the petitioner to that effect
and arrange for his deportation in the manner provided by law."
Although not binding upon this Court as a precedent, the case aforecited affords a
happy solution to the quandary in which the parties here find themselves, solution which we
think is sensible, sound and compatible with law and the Constitution. For this reason, and
since the Philippine law on immigration was patterned after or copied from the American law
and practice, we choose to follow and adopt the reasoning and conclusions in the
Staniszewski decision with some modifications which, it is believed, are in consonance with
the prevailing conditions of peace and order in the Philippines.
It was said or insinuated at the hearing of the petition at bar, but not alleged in the
return, that the petitioner was engaged in subversive activities, and fear was expressed that he
might join or aid the disloyal elements if allowed to be at large. Bearing in mind the
Government's allegation in its answer that "the herein petitioner was brought to the
Philippines by the Japanese forces," and the fact that Japan is no longer at war with the
United States or the Philippines nor identified with the countries allied against these nations,
the possibility of the petitioner's entertaining or committing hostile acts prejudicial to the
interest and security of this country seems remote.
If we grant, for the sake of argument, that such a possibility exists, still the
petitioner's unduly prolonged detention would be unwarranted by law and the Constitution, if
the only purpose of the detention be to eliminate a danger that is by no means actual, present,
or uncontrolable. After all, the Government is not impotent to deal with or prevent any threat
by such measure as that just outlined. The thought eloquently expressed by Mr. Justice
Jackson of the United States Supreme Court in connection with the application for bail of ten
Communists convicted by a lower court of advocacy of violent overthrow of the United
States Government is, in principle, pertinent and may be availed of at this juncture. Said the
learned Jurist:
"The Government's alternative contention is that defendants, by
misbehavior after conviction, have forfeited their claim to bail. Grave public
danger is said to result from what they may be expected to do, in addition to
what they have done since their conviction. If I assume that defendants are
disposed to commit every opportune disloyal act helpful to Communist
countries, it is still difficult to reconcile with traditional American law the
jailing of persons by the courts because of anticipated but as yet uncommitted
crimes. Imprisonment to protect society from predicted but unconsummated
offenses is so unprecedented in this country and so fraught with danger of
excesses and injustice that I am loath to resort to it, even as a discretionary
judicial technique to supplement conviction of such offenses as those of which
defendants stand convicted.
xxx xxx xxx
 15

"But the right of every American to equal treatment before the law is
wrapped up in the same constitutional bundle with those of these Communists.
If in anger or disgust with these defendants we throw out the bundle, we also
cast aside protection for the liberties of more worthy critics who may be in
opposition to the government of some future day.
xxx xxx xxx
"If, however, I were to be wrong on all of these abstract or theoretical
matters of principle, there is a very practical aspect of this application which
must not be overlooked or underestimated that is the disastrous effect on the
reputation of American justice if I should now send these men to jail and the full
Court later decide that their conviction is invalid. All experience with litigation
teaches that existence of a substantial question about a conviction implies a
more than negligible risk of reversal. Indeed this experience lies hack of our
rule permitting and practice of allowing bail where such questions exist, to
avoid the hazard of unjustifiably imprisoning persons with consequent reproach
to our system of justice. If that is prudent judicial practice in the ordinary case,
how much more important to avoid every chance of handing to the Communist
world such an ideological weapon as it would have if this country should
imprison this handful of Communist leaders on a conviction that our own
highest Court would confess to be illegal. Risks, of course, are involved in
either granting or refusing bail. I am not naive enough to underestimate the
troublemaking propensities of the defendants. But, with the Department of
Justice alert to the dangers, the worst they can accomplish in the short time it
will take to end the litigation is preferable to the possibility of national
embarrassment from a celebrated case of unjustified imprisonment of
Communist leaders. Under no circumstances must we permit their
symbolization of an evil force in the world to be hallowed and glorified by any
semblance of martyrdom. The way to avoid that risk is not to jail these men
until it is finally decided that they should stay jailed."
If that case is not comparable with ours on the issues presented, its underlying
principle is of universal application. In fact, its ratio decidendi applies with greater force to
the present petition, since the right of accused to bail pending appeal of his case, as in the
case of the ten Communists, depends upon the discretion of the court, whereas the right to be
enlarged before formal charges are instituted is absolute. As already noted, not only are there
no charges pending against the petitioner, but the prospects of bringing any against him are
slim and remote.
Premises considered, the writ will issue commanding the respondents to release the
petitioner from custody upon these terms: The petitioner shall be placed under the
surveillance of the immigration authorities or their agents in such form and manner as may
be deemed adequate to insure that he keep peace and be available when the Government is
ready to deport him. The surveillance shall be reasonable and the question of reasonableness
shall be submitted to this Court or to the Court of First Instance of Manila for decision in
case of abuse. He shall also put up a bond for the above purpose in the amount of P5,000
with sufficient surety or sureties, which bond the Commissioner of Immigration is authorized
to exact by section 40 of Commonwealth Act No. 613. No costs will be charged.
 16

EN BANC

[G.R. No. L-7995. May 31, 1957.]

LAO H. ICHONG, in his own behalf and in behalf of other alien residents,
corporations and partnerships adversely affected by Republic Act No.
1180, petitioner, vs. JAIME HERNANDEZ, Secretary of Finance, and
MARCELINO SARMIENTO, City Treasuer of Manila, respondent.

DECISION

LABRADOR, J p:

I. The case and the issue, in general

This Court has before it the delicate task of passing upon the validity and
constitutionality of a legislative enactment, fundamental and far-reaching in significance The
enactment poses questions of due process, police power and equal protection of the laws. It
also poses an important issue of fact, that is whether the conditions which the disputed law
purports to remedy really or actually exist. Admittedly springing from a deep, militant, and
positive nationalistic impulse, the law purports to protect citizen and country from the alien
retailer. Through it, and within the field of economy it regulates, Congress attempts to
translate national aspirations for economic independence and national security, rooted in the
drive and urge for national survival and welfare, into a concrete and tangible measures
designed to free the national retailer from the competing dominance of the alien, so that the
country and the nation may be free from a supposed economic dependence and bondage. Do
the facts and circumstances justify the enactment?
II. Pertinent provisions of Republic Act No. 1180
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect
it nationalizes the retail trade business. The main provisions of the Act are: (1) a prohibition
against persons, not citizens of the Philippines, and against associations, partnerships, or
corporations the capital of which are not wholly owned by citizens of the Philippines, from
engaging directly or indirectly in the retail trade; (2) an exception from the above prohibition
in favor of aliens actually engaged in said business on May 15, 1954, who are allowed to
continue to engage therein, unless their licenses are forfeited in accordance with the law,
until their death or voluntary retirement in case of natural persons, and for ten years after the
approval of the Act or until the expiration of term in case of juridical persons; (3) an
exception therefrom in favor of citizens and juridical entities of the United States; (4) a
provision for the forfeiture of licenses (to engage in the retail business) for violation of the
laws on nationalization, economic control weights and measures and labor and other laws
relating to trade, commerce and industry; (5) a prohibition against the establishment or
opening by aliens actually engaged in the retail business of additional stores or branches of
retail business, (6) a provision requiring aliens actually engaged in the retail business to
 17

present for registration with the proper authorities a verified statement concerning their
businesses, giving, among other matters, the nature of the business, their assets and liabilities
and their offices and principal offices of juridical entities; and (7) a provision allowing the
heirs of aliens now engaged in the retail business who die, to continue such business for a
period of six months for purposes of liquidation.
III. Grounds upon which petition is based Answer thereto
Petitioner, for and in his own behalf and on behalf of other alien residents,
corporations and partnerships adversely affected by the provisions of Republic Act No. 1180,
brought this action to obtain a judicial declaration that said Act is unconstitutional, and to
enjoin the Secretary of Finance and all other persons acting under him, particularly city and
municipal treasurers, from enforcing its provisions. Petitioner attacks the constitutionality of
the Act, contending that: (1) it denies to alien residents the equal protection of the laws and
deprives them of their liberty and property without due process of law; (2) the subject of the
Act is not expressed or comprehended in the title thereof; (3) the Act violates international
and treaty obligations of the Republic of the Philippines; (4) the provisions of the Act against
the transmission by aliens of their retail business thru hereditary succession, and those
requiring 100% Filipino capitalization for a corporation or entity to entitle it to engage in the
retail business, violate the spirit of Sections 1 and 5, Article XIII and Section 8 of Article
XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1)
the Act was passed in the valid exercise of the police power of the State, which exercise is
authorized in the Constitution in the interest of national economic survival; (2) the Act has
only one subject embraced in the title; (3) no treaty or international obligations are infringed;
(4) as regards hereditary succession, only the form is affected but the value of the property is
not impaired, and the institution of inheritance is only of statutory origin.
IV. Preliminary consideration of legal principles involved
a. The police power.
There is no question that the Act was approved in the exercise of the police power,
but petitioner claims that its exercise in this instance is attended by a violation of the
constitutional requirements of due process and equal protection of the laws. But before
proceeding to the consideration and resolution of the ultimate issue involved, it would be
well to bear in mind certain basic and fundamental, albeit preliminary, considerations in the
determination of the ever recurrent conflict between police power and the guarantees of due
process and equal protection of the laws. What is the scope of police power and how are the
due process and equal protection clauses related to it? What is the province and power of the
legislature, and what is the function and duty of the courts? These consideration must be
clearly and correctly understood that their application to the facts of the case may be brought
forth with clarity and the issue accordingly resolved.
It has been said that police power is so far-reaching in scope, that it has become
almost impossible to limit its sweep. As it derives its existence from the very existence of the
State itself, it does not need to be expressed or defined in its scope; it is said to be co-
extensive with self-protection and survival, and as such it is the most positive and active of
all governmental processes, the most essential, insistent and illimitable. Especially is it so
under a modern democratic framework where the demands of society and of nations have
 18

multiplied to almost unimaginable proportions; the field and scope of police power has
become almost boundless, just as the fields of public interest and public welfare have become
almost all- embracing and have transcended human foresight. Otherwise stated, as we cannot
foresee the needs and demands of public interest and welfare in this constantly changing and
progressive world, so we cannot delimit beforehand the extent or scope of police power by
which and through which the State seeks to attain or achieve public interest or welfare. So it
is that Constitutions do not define the scope or extent of the police power of the State; what
they do is to set forth the limitations thereof. The most important of these are the due process
clause and the equal protection clause.
b. Limitations on police power.
The basic limitations of due process and equal protection are found in the following
provisions of our Constitution:
"SECTION 1.(1) No person shall be deprived of life, liberty or property
without due process of law, nor shall any person be denied the equal protection
of the laws." (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual liberty and freedom
in democracies, are not limited to citizens alone but are admittedly universal in their
application, without regard to any differences of race, of color, or of nationality. (Yick
Wo vs. Hopkins, 30, L. ed. 220, 226.)
c. The equal protection clause.
The equal protection of the law clause is against undue favor and individual or class
privilege, as well as hostile discrimination or the oppression of inequality. It is not intended
to prohibit legislation, which is limited either in the object to which it is directed or by
territory within which it is to operate. It does not demand absolute equality among residents;
it merely requires that all persons shall be treated alike, under like circumstances and
conditions both as to privileges conferred and liabilities enforced. The equal protection
clause is not infringed by legislation which applies only to those persons falling within a
specified class, if it applies alike to all persons within such class, and reasonable grounds
exists for making a distinction between those who fall within such class and those who do
not. (2 Cooley, Constitutional Limitations, 824-825.)

d. The due process clause.

The due process clause has to do with the reasonableness of legislation enacted in
pursuance of the police power, Is there public interest, a public purpose; is public welfare
involved? Is the Act reasonably necessary for the accomplishment of the legislature's
purpose; is it not unreasonable, arbitrary or oppressive? Is there sufficient foundation or
reason in connection with the matter involved; or has there not been a capricious use of the
legislative power? Can the aims conceived be achieved by the means used, or is it not merely
an unjustified interference with private interest? These are the questions that we ask when the
due process test is applied.
The conflict, therefore, between police power and the guarantees of due process and
equal protection of the laws is more apparent than real. Properly related, the power and the
guarantees are supposed to coexist. The balancing is the essence or, shall it be said, the
 19

indispensable means for the attainment of legitimate aspirations of any democratic society.
There can be no absolute power, whoever exercise it, for that would be tyranny. Yet there
can neither be absolute liberty, for that would mean license and anarchy. So the State can
deprive persons of life, liberty and property, provided there is due process of law; and
persons may be classified into classes and groups, provided everyone is given the equal
protection of the law. The test or standard, as always, is reason. The police power legislation
must be firmly grounded on public interest and welfare, and a reasonable relation must exist
between purposes and means. And if distinction and classification has been made, there must
be a reasonable basis for said distinction.
e. Legislative discretion not subject to judicial review.
Now, in this matter of equitable balancing, what is the proper place and role of the
courts? It must not be overlooked, in the first place, that the legislature, which is the
constitutional repository of police power and exercises the prerogative of determining the
policy of the State, is by force of circumstances primarily the judge of necessity, adequacy or
reasonableness and wisdom, of any law promulgated in the exercise of the police power, or
of the measures adopted to implement the public policy or to achieve public interest. On the
other hand, courts, although zealous guardians of individual liberty and right, have
nevertheless evinced a reluctance to interfere with the exercise of the legislative prerogative.
They have done so early where there has been a clear, patent or palpable arbitrary and
unreasonable abuse of the legislative prerogative. Moreover, courts are not supposed to
override legitimate policy, and courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly into the
issue involved. If the disputed legislation were merely a regulation, as its title indicates, there
would be no question that it falls within the legitimate scope of legislative power. But it goes
further and prohibits a group of residents, the aliens, from engaging therein. The problem
becomes more complex because its subject is a common, trade or occupation, as old as
society itself, which from time immemorial has always been open to residents, irrespective of
race, color or citizenship.
a. Importance of retail trade in the economy of the nation.
In a primitive economy where families produce all that they consume and consume
all that they produce, the dealer, of course, is unknown. But as group life develops and
families begin to live in communities producing more than what they consume and needing
an infinite number of things they do not produce, the dealer comes into existence. As villages
develop into big communities and specialization in production begins, the dealer's
importance is enhanced. Under modern conditions and standards of living, in which man's
needs have multiplied and diversified to unlimited extents and proportions, the retailer comes
as essential as the producer, because thru him the infinite variety of articles, goods and
commodities needed for daily life are placed within the easy reach of consumers. Retail
dealers perform the functions of capillaries in the human body, thru which all the needed
food and supplies are ministered to members of the communities comprising the nation.
There cannot be any question about the importance of the retailer in the life of the
community. He ministers to the resident's daily needs, food in all its increasing forms, and
the various little gadgets and things needed for home and daily life. He provides his
 20

customers around his store with the rice or corn, the fish, the salt, the vinegar, the spices
needed for the daily cooking. He has cloths to sell, even the needle and the thread to sew
them or darn the clothes that wear out. The retailer, therefore, from the lowly peddler, the
owner of a small sari-sari store, to the operator of a department store or a supermarket is so
much a part of day-to-day existence.
b. The alien retailer's traits.
The alien retailer must have started plying his trade in this country in the bigger
centers of population (Time there was when he was unknown in provincial towns and
villages). Slowly but gradually he invaded towns and villages; now he predominates in the
cities and big centers of population. He even pioneers in far away nooks where the
beginnings of community life appear, ministering to the daily needs of the residents and
purchasing their agricultural produce for sale in the towns. It is an undeniable fact that in
many communities the alien has replaced the native retailer. He has shown in this trade,
industry without limit, and the patience and forbearance of a slave. Derogatory epithets are
hurled at him, but he laughs these off without murmur; insults of ill-bred and insolent
neighbors and customers are made in his face, but he heeds them not, and he forgets and
forgives. The community takes no note of him, as he appears to be harmless and extremely
useful.
c. Alleged alien control and dominance.
There is a general feeling on the part of the public, which appears to be true to fact,
about the controlling and dominant position that the alien retailer holds in the nation's
economy. Food and other essentials, clothing, almost all articles of daily life reach the
residents mostly through him. In big cities and centers of population he has acquired not only
predominance, but apparent control over distribution of almost all kinds of goods, such as
lumber, hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of other goods
and articles. And were it not for some national corporations like the Naric, the Namarco, the
Facomas and the Accfa, his control over principal foods and products would easily become
full and complete.
Petitioner denies that there is alien predominance and control in the retail trade. In
one breath it is said that the fear is unfounded and the threat is imagined; in another, it is
charged that the law is merely the result of racialism and pure and unabashed nationalism.
Alienage, it is said, is not an element of control; also so many unmanageable factors in the
retail business make control virtually impossible. The first argument which brings up an issue
of fact merits serious consideration. The others are matters of opinion within the exclusive
competence of the legislature and beyond our prerogative to pass upon and decide.
The best evidence are the statistics on the retail trade, which put down the figures in
black and white. Between the constitutional convention year (1935), when the fear of alien
domination and control of the retail trade already filled the minds of our leaders with fears
and misgivings, and the year of the enactment of the nationalization of the retail trade act
(1954), official statistics unmistakably point out to the ever-increasing dominance and
control by the alien of the retail trade, as witness the following tables:
Assets Gross Sales
Year and Retailer's No.-Estab- Per cent Per cent
 21

Nationality ishments Pesos Distri- Pesos Distri-

bution bution
1941:
Filipino 106,671 200,323,138 55.82 174,181,924 5174
Chinese 15,356 118,348,692 32.98 148,813,239 44.21
Others 1,646 40,187,090 11.20 13,630,239 4.05
1947:
Filipino 111,107 208,658,946 65.05 279,583,333 57.03
Chinese 13,774 106,156,218 33.56 205,701,134 41.96
Others 354 8,761,260 .49 4,927,168 1.01
1948:
Filipino 113,631 213,342,264 67.30 467,161,667 60.51
Chinese 12,087 93,155,459 29.38 294,894,227 38.20
Others 422 10,514,675 3.32 9,995,402 1.29
1949:
Filipino 113,659 213,451,602 60.89 462,532,901 53.47
Chinese 16,248 125,223,336 35.72 392,414,875 45.36
Others 486 12,056,365 3.39 10,078,364 1.17
1951:
Filipino 119,352 224,053,620 61.09 466,058,052 53.07
Chinese 17,429 134,325,303 36.60 404,481,384 46.06
Others 347 8,614,025 2.31 7,645,327 .87
AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Item Gross Sales
Year and Retailer's Assets (Pesos)
Nationality (Pesos)
1941:
Filipino 1,878 1,633
Chinese 7,707 9,691
Others 24,415 8,281
1947:
Filipino 1,878 2,516
Chinese 7,707 14,934
Others 24,749 13,919
1948: (Census)
Filipino 1,878 4,111
Chinese 7,707 24,398
Others 24,916 23,686
 22

1949:
Filipino 1,878 4,069
Chinese 7,707 24,152
Others 24,807 20,737
1951:
Filipino 1,877 3,905
Chinese 7,707 33,207
Others 24,824 22,033
(Estimates Assets and Gross Sales of Retail Establishments, By year and
Nationality of Owners, Benchmark: 1948 Census, issued by the Bureau of
Census and Statistics, Department of Commerce and Industry; pp. 18-19 of
Answer.)
The above statistics do not include corporations and partnerships, while the figures on
Filipino establishments already include mere market vendors, whose capital is necessarily
small.
The above figures reveal that in percentage distribution of assets and of gross sales,
alien participation has steadily increased during the years. It is true, of course, that Filipinos
have the edge in the number of retailers, but aliens more than make up for the numerical gap
through their assets and gross sales which average between six and seven times those of the
very many Filipino retailers Numbers in retailers, here, do not imply superiority; the alien
invests more capital, buys and sells six to seven times more, and gains much more. The same
of official report, pointing out to the known predominance of foreign elements in the retail
trade, remarks that the Filipino retailers were largely engaged in minor retailer enterprises.
As observed by respondents, the native investment is thinly spread, and the Filipino retailer is
practically helpless in matters of capital, credit, price and supply.

d. Alien control and threat, subject of apprehension in Constitutional Convention.

It is this domination and control, which we believe has been sufficiently shown to
exist, that is the legislature's target in the enactment of the disputed nationalization law. If
they did not exist as a fact the sweeping remedy of nationalization would never have been
adopted. The framers of our Constitution also believed in the existence of this alien
dominance and control when they approved a resolution categorically declaring among other
things, that "it is the sense of the Convention that the public interest requires the
nationalization of the retail trade; . . ." (II Aruego, The Framing of the Philippine
Constitution, 662-663, quoted on page 67 of Petitioner.) That was twenty-two years ago; and
the events since then have not been either pleasant or comforting. Dean Since of the
University of the Philippines College of Law, commenting on the patrimony clause of the
Preamble opines that the fathers of our Constitution were merely translating the general
preoccupation of Filipinos "of the dangers from alien interests that had already brought under
their control the commercial and other economic activities of the country" (Sinco, Phil.
Political Law, 10th ed., p. 114); and analyzing the concern of the members of the
constitutional convention for the economic life of the citizens, in connection with the
nationalistic provisions of the Constitution, he says:
 23

"But there has been a general feeling that alien dominance over the
economic life of the country is not desirable and that if such a situation should
remain, political independence alone is no guarantee to national stability and
strength. Filipino private capital is not big enough to wrest from alien hands the
control of the national economy. Moreover, it is but of recent formation and
hence, largely inexperienced, timid and hesitant. Under such conditions, the
government as the instrumentality of the national will, has to step in and assume
the initiative, if not the leadership, in the struggle for the economic freedom of
the nation in somewhat the same way that it did in the crusade for political
freedom. Thus . . . It (the Constitution) envisages an organized movement for
the protection of the nation not only against the possibilities of armed invasion
but also against its economic subjugation by alien interests in the economic
field." (Phil. Political Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other quarters.
Filipino business men, manufacturers and producers believe so; they fear the business
coming from alien control, and they express sentiments of economic independence. Witness
thereto is Resolution No. 1, approved on July 18, 1953, of the Fifth National Convention of
Filipino Businessmen, and a similar resolution, approved on March 20, 1954, of the Second
National Convention of Manufacturers and Producers. The man in the street also believes,
and fears, alien predominance and control; so our newspapers, which have editorially pointed
out not only to control but to alien stranglehold. We, therefore, find alien domination and
control to be a fact, a reality proved by official statistics, and felt by all the sections and
groups that compose the Filipino community.
e. Dangers of alien control and dominance in retail.
But the dangers arising from alien participation in the retail trade does not seem to lie
in the predominance alone; there is a prevailing feeling that such predominance may truly
endanger the national interest. With ample capital, unity of purpose and action and thorough
organization, alien retailers and merchants can act in such complete unison and concert on
such vital matters as the fixing of prices, the determination of the amount of goods or articles
to be made available in the market, and even the choice of the goods or articles they would or
would not patronize or distribute, that fears of dislocation of the national economy and of the
complete subservience of national retailers and of the consuming public are not entirely
unfounded. Nationals, producers and consumers alike, can be placed completely at their
mercy. This is easily illustrated. Suppose an article of daily use is desired to be prescribed by
the aliens, because the producer or importer does not offer them sufficient profits, or because
a new competing article offers bigger profits for its introduction. All that aliens would do is
to agree to refuse to sell the first article, eliminating it from their stocks, offering the new one
as a substitute. Hence, the producers or importers of the prescribed article, or its consumers,
find the article suddenly out of circulation. Freedom of trade is thus curtailed and free
enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious influences
of alien domination. Grave abuses have characterized the exercise of the retail trade by
aliens. It is a fact within judicial notice, which courts of justice may not properly overlook or
ignore in the interests of truth and justice, that there exists a general feeling on the part of the
public that alien participation in the retail trade has been attended by a pernicious and
 24

intolerable practices, the mention of a few of which would suffice for our purposes; that at
some time or other they have cornered the market of essential commodities, like corn and
rice, creating artificial scarcities to justify and enhance profits to unreasonable proportions;
that they have hoarded essential foods to the inconvenience and prejudice of the consuming
public, so much so that the Government has had to establish the National Rice and Corn
Corporation to save the public from their continuous hoarding practices and tendencies; that
they have violated price control laws, especially on foods and essential commodities, such
that the legislature had to enact a law (Sec. 9, Republic Act No. 1168), authorizing their
immediate and automatic deportation for price control convictions; that they have secret
combinations among themselves to control prices, cheating the operation of the law of supply
and demand; that they have connived to boycott honest merchants and traders who would not
cater or yield to their demands, in unlawful restraint of freedom of trade and enterprise. They
are believed by the public to have evaded tax laws, smuggled goods and money into and out
of the land, violated import and export prohibitions, control laws and the like, in derision and
contempt of lawful authority. It is also believed that they have engaged in corrupting public
officials with fabulous bribes, indirectly causing the prevalence of graft and corruption in the
Government. As a matter of fact appeals to unscrupulous aliens have been made both by the
Government and by their own lawful diplomatic representatives, action which impliedly
admits a prevailing feeling about the existence of many of the above practices.
The circumstances above set forth create well founded fears that worse things may
come in the future. The present dominance of the alien retailer, especially in the big centers
of population, therefore, becomes a potential source of danger on occasions of war or other
calamity. We do not have here in this country isolated groups of harmless aliens retailing
goods among nationals; what we have are well organized and powerful groups that dominate
the distribution of goods and commodities in the communities and big centers of population.
They owe no allegiance or loyalty to the State, and the State cannot rely upon them in times
of crisis or emergency. While the national holds his life, his person and his property subject
to the needs of his country, the alien may even become the potential enemy of the State.
f. Law enacted in interest of national economic survival and security.
We are fully satisfied upon a consideration of all the facts and circumstances that the
disputed law is not the product of racial hostility, prejudice or discrimination, but the
expression of the legitimate desire and determination of the people, thru their authorized
representatives, to free the nation from the economic situation that has unfortunately been
saddled upon it rightly or wrongly, to its disadvantage. The law is clearly in the interest of
the public, any of the national security itself, and indisputably falls within the scope of police
power, thru which and by which the State insures its existence and security and the supreme
welfare of its citizens.
VI. The Equal Protection Limitation
a. Objections to alien participation in retail trade.
The next question that now poses solution is, Does the law deny the equal protection
of the laws? As pointed out above, the mere fact of alienage is the root and cause of the
distinction between the alien and the national as a trader. The alien resident owes allegiance
to the country of his birth or his adopted country; his stay here is for personal convenience;
he is attracted by the lure of gain and profit. His aim or purpose of stay, we admit, is neither
 25

illegitimate nor immoral, but he is naturally lacking in that spirit of loyalty and enthusiasm
for this country where he temporarily stays and makes his living, or of that spirit of regard,
sympathy and consideration for his Filipino customers as would prevent him from taking
advantage of their weakness and exploiting them. The faster he makes his pile, the earlier can
the alien go back to his beloved country and his beloved kin and country men. The
experience of the country is that the alien retailer has shown such utter disregard for his
customers and the people on whom he makes his profit, that it has been found necessary to
adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really makes a
genuine contribution to national income and wealth. He undoubtedly contributes to general
distribution, but the gains and profits he makes are not invested in industries that would help
the country's economy and increase national wealth. The alien's interest in this country being
merely transient and temporary, it would indeed be ill-advised to continue entrusting the very
important function of retail distribution to his hands.

The practices resorted to by aliens in the control of distribution, as already pointed

out above, their secret manipulations of stocks of commodities and prices, their utter
disregard of the welfare of their customers and of the ultimate happiness of the people of the
nation of which they are mere guests, which practices, manipulations and disregard do not
attend the exercise of the trade by the nationals, show the existence of real and actual,
positive and fundamental differences between an alien and a national which fully justify the
legislative classification adopted in the retail trade measure. These differences are certainly a
valid reason for the State to prefer the national over the alien in the retail trade. We would be
doing violence to fact and reality were we to hold that no reason or ground for a legitimate
distinction can be found between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction.
The above objectionable characteristics of the exercise of the retail trade by the
aliens, which are actual and real, furnish sufficient grounds for legislative classification of
retail traders into nationals and aliens. Some may disagree with the wisdom of the
legislature's classification. To this we answer, that this is the prerogative of the law-making
power. Since the Court finds that the classification is actual, real and reasonable, and all
persons of one class are treated alike, and as it cannot be said that the classification is
patently unreasonable and unfounded, it is in duty bound to declare that the legislature acted
within its legitimate prerogative and it cannot declare that the act transcends the limit of
equal protection established by the Constitution.
Broadly speaking, the power of the legislature to make distinctions and classifications
among persons is not curtailed or denied by the equal protection of the laws clause. The
legislative power admits of a wide scope of discretion, and a law can be violative of the
constitutional limitation only when the classification is without reasonable basis. In addition
to the authorities we have earlier cited, we can also refer to the case of Lindsley vs. Natural
Carbonic Gas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined the application
of equal protection clause to a law sought to be voided as contrary thereto:
". . . '1. The equal protection clause of the Fourteenth Amendment does
not take from the state the power to classify in the adoption of police laws, but
 26

admits of the exercise of the wide scope of discretion in that regard, and avoids
what is done only when it is without any reasonable basis, and therefore is
purely arbitrary. 2. A classification having some reasonable basis does not
offend against that clause merely because it is not made with mathematical
nicety, or because in practice it results in some inequality. 3. When the
classification in such a law is called in question, if any state of facts reasonably
can be conceived that would sustain it, the existence of that state of facts at the
time the law was enacted must be assumed. 4. One who assails the classification
in such a law must carry the burden of showing that it does not rest upon any
reasonable basis, but is essentially arbitrary.'"
c. Authorities recognizing citizenship as basis for classification.
The question as to whether or not citizenship is a legal and valid ground for
classification has already been affirmatively decided in this jurisdiction as well as in various
courts in the United States. In the case of Smith Bell & Co. vs. Natividad, 40 Phil. 136, where
the validity of Act No. 2761 of the Philippine Legislature was in issue, because of a condition
therein limiting the ownership of vessels engaged in coastwise trade to corporations formed
by citizens of the Philippine Islands or the United States, thus denying the right to aliens, it
was held that the Philippine Legislature did not violate the equal protection clause of the
Philippine Bill of Rights. The Legislature in enacting the law had as ultimate purpose the
encouragement of Philippine shipbuilding and the safety for these Islands from foreign
interlopers. We held that this was a valid exercise of the police power, and all presumptions
are in favor of its constitutionality. In substance, we held that the limitation of domestic
ownership of vessels engaged in coastwise trade to citizens of the Philippines does not
violate the equal protection of the law and due process of law clauses of the Philippine Bill of
Rights. In rendering said decision we quoted with approval the concurring opinion of Justice
Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
"'Licensing acts, in fact, in legislation, are universally restraining acts;
as, for example, acts licensing gaming houses, retailers of spirituous liquors, etc.
The act, in this instance, is distinctly of that character, and forms part of an
extensive system, the object of which is to encourage American shipping, and
place them on an equal footing with the shipping of other nations. Almost every
commercial nation reserves to its own subjects a monopoly of its coasting trade;
and a countervailing privilege in favor of American shipping is contemplated, in
the whole legislation of the United States on this subject. It is not to give the
vessel an American character, that the license is granted; that effect has been
correctly attributed to the act of her enrollment. But it is to confer on her
American privileges, as contra distinguished from foreign; and to preserve the
Government from fraud by foreigners; in surreptitiously intruding themselves
into the American commercial marine, as well as frauds upon the revenue in the
trade coastwise, that this whole system is projected.'"
The rule in general is as follows:
"Aliens are under no special constitutional protection which forbids a
classification otherwise justified simply because the limitation of the class falls
along the lines of nationality. That would be requiring a higher degree of
protection for aliens as a class than for similar classes of American citizens.
 27

Broadly speaking, the difference in status between citizens and aliens

constitutes a basis for reasonable classification in the exercise of police power."
(2 Am. Jur. 468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the
licensing of hawkers and peddlers, which provided that no one can obtain a license unless he
is, or has declared his intention, to become a citizen of the United States, was held valid, for
the following reason: It may seem wise to the legislature to limit the business of those who
are supposed to have regard for the welfare, good order and happiness of the community, and
the court cannot question this judgment and conclusion. In Bloomfield vs. State, 99 N.E. 309
(Ohio, 1912), a statute which prevented certain persons, among them aliens, from engaging
in the traffic of liquors, was found not to be the result of race hatred, or in hospitality, or a
deliberate purpose to discriminate, but was based on the belief that an alien cannot be
sufficiently acquainted with 'our institutions and our life as to enable him to appreciate the
relation of this particular business to our entire social fabric", and was not, therefore, invalid.
In Ohio ex rel. Clarke vs. Deckebach, 274 U.S. 392, 71 L. ed. 1115 (1926), the U. S.
Supreme Court had under consideration an ordinance of the city of Cincinnati prohibiting the
issuance of licenses (pools and billiard rooms) to aliens. It held that plainly irrational
discrimination against aliens is prohibited, but it does not follow that alien race and
allegiance may not bear in some instances such a relation to a legitimate object of legislation
as to be made the basis of permitted classification, and that it could not state that the
legislation is clearly wrong; and that latitude must be allowed for the legislative appraisement
of local conditions and for the legislative choice of methods for controlling an apprehended
evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one at
bar. In Asakura vs. City of Seattle, 210 P. 30 (Washington, 1922), the business of
pawnbroking was considered as having tendencies injuring public interest, and limiting it to
citizens is within the scope of police power. A similar statute denying aliens the right to
engage in auctioneering was also sustained in Wright vs. May, L. R. A., 1915 P. 151
(Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court
said that aliens are judicially known to have different interests, knowledge, attitude,
psychology and loyalty, hence the prohibition of issuance of licenses to them for the business
of pawnbroker, pool, billiard, card room, dance hall, is not an infringement of constitutional
rights. In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058 (Michigan, 1902),
a law prohibiting the licensing of aliens as barbers was held void, but the reason for the
decision was the court's finding that the exercise of the business by the aliens does not in any
way affect the morals, the health, or even the convenience of the community. In
Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a California statute
banning the issuance of commercial fishing licenses to persons ineligible to citizenship was
held void, because the law conflicts with Federal power over immigration, and because there
is no public interest in the mere claim of ownership of the waters and the fish in them, so
there was no adequate justification for the discrimination. It further added that the law was
the outgrowth of antagonism toward persons of Japanese ancestry. However, two Justices
dissented on the theory that fishing rights have been treated traditionally as natural resources.
In Fraser vs. McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which
imposed a tax on every employer of foreign-born unnaturalized male persons over 21 years
of age, was declared void because the court found that there was no reason for the
classification and the tax was an arbitrary deduction from the daily wage of an employee.
 28

d. Authorities contra explained.

It is true that some decisions of the Federal court and of the State courts in the United
States hold that the distinction between aliens and citizens is not a valid ground for
classification. But in these decisions the laws declared invalid were found to be either
arbitrary, unreasonable or capricious, or were the result or product of racial antagonism and
hostility, and there was no question of public interest involved or pursued. In Yu Cong
Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared invalid a
Philippine law making unlawful the keeping of books of account in any language other than
English, Spanish or any other local dialect, but the main reasons for the decisions are: (1) that
if Chinese were driven out of business there would be no other system of distribution, and (2)
that the Chinese would fall prey to all kinds of fraud, because they would be deprived of their
right to be advised of their business and to direct its conduct. The real reason for the decision,
therefore, is the court's belief that no public benefit would be derived from the operation of
the law and on the other hand it would deprive Chinese of something indispensable for
carrying on their business. In Yick Wo vs. Hopkins, 30 L. ed. 220 (1885) an ordinance
conferring power on officials to withhold consent in the operation of laundries both as to
persons and place, was declared invalid, but the court said that the power granted was
arbitrary, that there was no reason for the discrimination which attended the administration
and implementation of the law, and that the motive thereof was mere racial hostility. In
State vs. Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to engage as
hawkers and peddlers was declared void, because the discrimination bore no reasonable and
just relation to the act in respect to which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we already have
said, aliens do not naturally possess the sympathetic consideration and regard for customers
with whom they come in daily contact, nor the patriotic desire to help bolster the nation's
economy, except in so far as it enhances their profit, nor the loyalty and allegiance which the
national owes to the land. These limitations on the qualifications of aliens have been shown
on many occasions and instances, especially in times of crisis and emergency. We can do no
better than borrow the language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the
reality and significance of the distinction between the alien and the national, thus:
". . . It may be judicially known, however, that aliens coming into this
country are without the intimate knowledge of our laws, customs, and usages
that our own people have. So it is likewise known that certain classes of aliens
are of different psychology from our fellow countrymen. Furthermore, it is
natural and reasonable to suppose that the foreign born, whose allegiance is first
to their own country, and whose ideals of governmental environment and
control have been engendered and formed under entirely different regimes and
political systems, have not the same inspiration for the public weal, nor are they
as well disposed toward the United States, as those who by citizenship, are a
part of the government itself. Further enlargement, is unnecessary. I have said
enough so that obviously it cannot be affirmed with absolute confidence that the
Legislature was without plausible reason for making the classification, and
therefore appropriate discrimination against aliens as it relates to the subject of
legislation. . . ."
 29

VII. The Due Process of Law Limitation

a. Reasonability, the test of the limitation; determination by legislature decisive.
We now come to due process as a limitation on the exercise of the police power. It
has been stated by the highest authority in the United States that:
". . . And the guaranty of due process, as has often been held, demands
only that the law shall not be unreasonable, arbitrary or capricious, and that the
means selected shall have a real and substantial relation to the subject sought to
be attained. . . ."
xxx xxx xxx
"So far as the requirement of due process is concerned and in the
absence of other constitutional restriction a state is free to adopt whatever
economic policy may reasonably be deemed to promote public welfare, and to
enforce that policy by legislation adapted to its purpose. The courts are without
authority either to declare such policy, or, when it is declared by the legislature,
to override it. If the laws passed are seen to have a reasonable relation to a
proper legislative purpose, and are neither arbitrary nor discriminatory, the
requirements of due process are satisfied, and judicial determination to that
effect renders a court functus officio. . . ." (Nebbia vs. New York, 78 L. ed. 940,
950, 957.)
Another authority states the principle thus:
". . . Too much significance cannot be given to the word 'reasonable' in
considering the scope of the police power in a constitutional sense, for the test
used to determine the constitutionality of the means employed by the legislature
is to inquire whether the restrictions it imposes on rights secured to individuals
by the Bill of Rights are unreasonable, and not whether it imposes any
restrictions on such rights. . . ."
xxx xxx xxx
". . . A statute to be within this power must also be reasonable in its
operation upon the persons whom it affects, must not be for the annoyance of a
particular class, and must not be unduly oppressive." (11 Am. Jur. Sec. 302, pp.
1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388, it was also held:
". . . To justify the state in thus interposing its authority in behalf of the
public, it must appear, first, that the interests of the public generally, as
distinguished from those of a particular class, require such interference; and
second, that the means are reasonably necessary for the accomplishment of the
purpose, and not unduly oppressive upon individuals. . . ."
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of
constitutionality:
"In determining whether a given act of the Legislature, passed in the
exercise of the police power to regulate the operation of a business, is or is not
constitutional, one of the first questions to be considered by the court is whether
 30

the power as exercised has a sufficient foundation in reason in connection with

the matter involved, or is an arbitrary, oppressive, and capricious use of that
power, without substantial relation to the health, safety, morals, comfort, and
general welfare of the public."
b. Petitioner's argument considered.
Petitioner's main argument is that retail is a common, ordinary occupation, one of
those privileges long ago recognized as essential to the orderly pursuit of happiness by free
men; that it is a gainful and honest occupation and therefore beyond the power of the
legislature to prohibit and penalize. This argument overlooks fact and reality and rests on an
incorrect assumption and premise, i.e., that in this country where the occupation is engaged
in by petitioner, it has been so engaged by him, by the alien, in an honest creditable and
unimpeachable manner, without harm or injury to the citizens and without ultimate danger to
their economic peace, tranquility and welfare. But the Legislature has found, as we have also
found and indicated, that the privilege has been so grossly abused by the alien, thru the
illegitimate use of pernicious designs and practices, that he now enjoys a monopolistic
control of the occupation and threatens a deadly stranglehold on the nation's economy
endangering the national security in times of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which overlooks
and ignores the facts and circumstances, but this, Is the exclusion in the future of aliens from
the retail trade unreasonable, arbitrary and capricious, taking into account the illegitimate and
pernicious form and manner in which the aliens have heretofore engaged therein? As thus
correctly stated the answer is clear. The law in question is deemed absolutely necessary to
bring about the desired legislative objective, i.e., to free national economy from alien control
and dominance. It is not necessarily unreasonable because it affects private rights and
privileges (11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is the
appropriateness or adequacy under all circumstances of the means adopted to carry out its
purpose into effect (Id.) Judged by this test, disputed legislation, which is not merely
reasonable but actually necessary, must be considered not to have infringed the constitutional
limitation of reasonableness.
The necessity of the law in question is explained in the explanatory note that
accompanied the bill, which later was enacted into law:
"This bill proposes to regulate the retail business. Its purpose is to
prevent persons who are not citizens of the Philippines from having a strangle
hold upon our economic life. If the persons who control this vital artery of our
economic life are the ones who owe no allegiance to this Republic, who have no
profound devotion to our free institutions, and who have no permanent stake in
our people's welfare, we are not really the masters of our own destiny. All
aspects of our life, even our national security, will be at the mercy of other
people.
"In seeking to accomplish the foregoing purpose, we do not propose to
deprive persons who are not citizens of the Philippines of their means of
livelihood. While this bill seeks to take away from the hands of persons who are
not citizens of the Philippines a power that can be wielded to paralyze all
 31

aspects of our national life and endanger our national security it respects
existing rights.

"The approval of this bill is necessary for our national survival."

If political independence is a legitimate aspiration of a people, then economic
independence is none the less legitimate. Freedom and liberty are not real and positive if the
people are subject to the economic control and domination of others, especially if not of their
own race or country. The removal and eradication of the shackles of foreign economic
control and domination, is one of the noblest motives that a national legislature may pursue.
It is impossible to conceive that legislation that seeks to bring it about can infringe the
constitutional limitation of due process. The attainment of a legitimate aspiration of a people
can never be beyond the limits of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere of
legislative action.
The framers of the Constitution could not have intended to impose the constitutional
restrictions of due process on the attainment of such a noble motive as freedom from
economic control and domination, thru the exercise of the police power. The fathers of the
Constitution must have given to the legislature full authority and power to enact legislation
that would promote the supreme happiness of the people, their freedom and liberty. On the
precise issue now before us, they expressly made their voice clear; they adopted a resolution
expressing their belief that the legislation in question is within the scope of the legislative
power. Thus they declared in their Resolution:
"'That it is the sense of the Convention that the public interest requires
the nationalization of retail trade; but it abstains from approving the amendment
introduced by the Delegate for Manila, Mr. Araneta, and others on this matter
because it is convinced that the National Assembly is authorized to promulgate
a law which limits to Filipino and American citizens the privilege to engage in
the retail trade.'" (II Aruego, The Framing of the Philippine Constitution, 662-
663, quoted on pages 66 and 67 of the Memorandum for the Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various
provisions of the Constitution. Thus in the preamble, a principal objective is the conservation
of the patrimony of the nation and as corollary thereto the provision limiting to citizens of the
Philippines the exploitation, development and utilization of its natural resources. And in
Section 8 of Article XIV, it is provided that "no franchise, certificate, or any other form of
authorization for the operation of a public utility shall be granted except to citizens of the
Philippines." The nationalization of the retail trade is only a continuance of the nationalistic
protective policy laid down as a primary objective of the Constitution. Can it be said that a
law imbued with the same purpose and spirit underlying many of the provisions of the
Constitution is unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals as
manifested in the approval of the radical measure is, therefore, fully justified. It would have
been recreant to its duties towards the country and its people would it view the sorry plight of
the nationals with complacency and refuse or neglect to adopt a remedy commensurate with
the demands of public interest and national survival. As the repository of the sovereign
 32

power of legislation, the Legislature was in duty bound to face the problem and meet,
through adequate measures, the danger and threat that alien domination of retail trade poses
to national economy.
d. Provisions of law not unreasonable.
A cursory study of the provisions of the law immediately reveals how tolerant, how
reasonable the Legislature has been. The law is made prospective and recognizes the right
and privilege of those already engaged in the occupation to continue therein during the rest of
their lives; and similar recognition of the right to continue is accorded associations of aliens.
The right or privilege is denied to those only upon conviction of certain offenses. In the
deliberations of the Court on this case, attention was called to the fact that the privilege
should not have been denied to children and heirs of aliens now engaged in the retail trade.
Such provision would defeat the law itself, its aims and purposes. Besides, the exercise of
legislative discretion is not subject to judicial review It is well settled that the Court will not
inquire into the motives of the Legislature, nor pass upon general matters of legislative
judgment. The Legislature is primarily the judge of the necessity of an enactment or of any of
its provisions, and every presumption is in favor of its validity, and though the Court may
hold views inconsistent with the wisdom of the law, it may not annul the legislation if not
palpably in excess of the legislative power. Furthermore, the test of the validity of a law
attacked as a violation of due process, is not its reasonableness, but its unreasonableness, and
we find the provisions are not unreasonable. These principles also answer various other
arguments raised against the law, some of which are: that the law does not promote general
welfare; that thousands of aliens would be thrown out of employment; that prices will
increase because of the elimination of competition; that there is no need for the legislation;
that adequate replacement is problematical; that there may be general breakdown; that there
would be repercussions from foreigners; etc. Many of these arguments are directed against
the supposed wisdom of the law which lies solely within the legislative prerogative; they do
not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the claim that
the title thereof is misleading or deceptive, as it conceals the real purpose of the bill, which is
to nationalize the retail business and prohibit aliens from engaging therein. The constitutional
provision which is claimed to be violated in Section 21 (1) of Article VI, which reads:
"No bill which may be enacted into law shall embrace more then one
subject which shall be expressed in the title of the bill".
What the above provision prohibits is duplicity, that is, if its title completely fails to
apprise the legislators or the public of the nature, scope and consequences of the law or its
operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297.) A cursory consideration
of the title and the provisions of the bill fails to show the presence of duplicity. It is true that
the term "regulate" does not and may not readily and at first glance convey the idea of
"nationalization" and "prohibition", which terms express the two main purposes and
objectives of the law. But "regulate" is a broader term than either prohibition or
nationalization. Both of these have always been included within the term regulation.
 33

"Under the title of an act to 'regulate', the sale of intoxicating liquors, the
Legislature may prohibit the sale of intoxicating liquors." (Sweet vs. City of
Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
"Within the meaning of the Constitution requiring that the subject of
every act of the Legislature shall be stated in the title, the title 'To regulate the
sale of intoxicating liquors, etc." sufficiently expresses the subject of an
act prohibiting the sale of such liquors to minors and to persons in the habit of
getting intoxicated; such matters being properly included within the subject of
regulating the sale." (Williams vs. State, 48 Ind. 306, 308, quoted in p. 42 of
Answer.)
"The word 'regulate' is of broad import, and necessarily implies some
degree of restraint and prohibition of acts usually done in connection with the
thing to be regulated. While word regulate' does not ordinarily convey meaning
of prohibit, there is no absolute reason why it should not have such meaning
when used in delegating police power in connection with a thing the best or
only efficacious regulation of which involves suppression." (State vs. Morton,
162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has also been
said that the title need not be an index to the entire contents of the law (I Sutherland,
Statutory Construction, Sec. 4803, p. 345.) The above rule was followed when the title of the
Act in question adopted the more general term "regulate" instead of "nationalize" or
"prohibit". Furthermore, the law also contains other rules for the regulation of the retail trade,
which may not be included in the terms "nationalization" or "prohibition"; so were the title
changed from "regulate" to "nationalize" or "prohibit", there would have been many
provisions not falling within the scope of the title which would have made the Act invalid.
The use of the term "regulate", therefore, is in accord with the principle governing the
drafting of statutes, under which a simple or general term should be adopted in the title,
which would include all other provisions found in the body of the Act.
One purpose of the constitutional directive that the subject of a bill should be
embraced in its title is to apprise the legislators of the purposes, the nature and scope of its
provisions, and prevent the enactment into law of matters which have not received the notice,
action and study of the legislators or of the public. In the case at bar it cannot be claimed that
the legislators have not been apprised of the nature of the law, especially the nationalization
and prohibition provisions. The legislators took active interest in the discussion of the law,
and a great many of the persons affected by the prohibition in the law conducted a campaign
against its approval. It cannot be claimed, therefore, that the reasons for declaring the law
invalid ever existed. The objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations

Another subordinate argument against the validity of the law is the supposed violation
thereby of the Charter of the United Nations and of the Declaration of Human Rights adopted
by the United Nations General Assembly. We find no merit in the above contention. The
United Nations Charter imposes no strict or legal obligations regarding the rights and
freedom of their subjects (Hans Kelsen, The Law of the United Nations, 1951 ed. pp. 29-32),
 34

and the Declaration of Human Rights contains nothing more than a mere recommendation, or
a common standard of achievement for all peoples and all nations (Id. p. 39.) That such is the
import of the United Nations Charter aid of the Declaration of Human Rights can be inferred
from the fact that members of the United Nations Organization, such as Norway and
Denmark, prohibit foreigners from engaging in retail trade, and in most nations of the world
laws against foreigners engaged in domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the Republic of
China of April 18, 1947 is also claimed to be violated by the law in question. All that the
treaty guarantees is equality of treatment to the Chinese nationals "upon the same terms as
the nationals of any other country." But the nationals of China are not discriminated against
because nationals of all other countries, except those of the United States, who are granted
special rights by the Constitution, are all prohibited from engaging in the retail trade. But
even supposing that the law infringes upon the said treaty, the treaty is always subject to
qualification or amendment by a subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260),
and the same may never curtail or restrict the scope of the police power of the State
(Palston vs. Pennsylvania, 58 L. ed. 539.).
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was enacted to
remedy a real actual threat and danger to national economy posed by alien dominance and
control of the retail business and free citizens and country from such dominance and control;
that the enactment clearly falls within the scope of the police power of the State, thru which
and by which it protects its own personality and insures its security and future; that the law
does not violate the equal protection clause of the Constitution because sufficient grounds
exist for the distinction between alien and citizen in the exercise of the occupation regulated,
nor the due process of law clause, because the law is prospective in operation and recognizes
the privilege of aliens already engaged in the occupation and reasonably protects their
privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us to
be plainly evident as a matter of fact it seems not only appropriate but actually necessary
and that in any case such matter falls within the prerogative of the Legislature, with whose
power and discretion the Judicial department of the Government may not interfere; that the
provisions of the law are clearly embraced in the title, and this suffers from no duplicity and
has not misled the legislators or the segment of the population affected; and that it cannot be
said to be void for supposed conflict with treaty obligations because no treaty has actually
been entered into on the subject and the police power may not be curtailed or surrendered by
any treaty or any other conventional agreement.
Some members of the Court are of the opinion that the radical effects of the law could
have been made less harsh in its impact on the aliens. Thus it is stated that more time should
have been given in the law for the liquidation of existing businesses when the time comes for
them to close. Our legal duty, however, is merely to determine if the law falls within the
scope of legislative authority and does not transcend the limitations of due process and equal
protection guaranteed in the Constitution. Remedies against the harshness of the law should
be addressed to the Legislature; they are beyond our power and jurisdiction.
The petition is hereby denied, with costs against petitioner.
 35

EN BANC

[G.R. No. L-554. April 9, 1948.]

HAW PIA, plaintiff-appellant, vs. THE CHINA BANKING

CORPORATION, defendant-appellee.

DECISION

FERIA, J p:

Plaintiff-appellant instituted this action in the Court of First Instance of Manila

against the defendant-appellee, China Banking Corporation, to compel the latter to execute a
deed of cancellation of the mortgage on the property described in the complaint, and to
deliver to the said plaintiff the Transfer Certificate of Title No. 47634 of the Register of
Deeds of Manila, with the mortgage annotated therein already cancelled, as well as to pay the
plaintiff the sum of P1,000.00 for damages as attorney's fees and to pay the costs of the suit.
The cause of action is that the plaintiff's indebtedness to the China Banking Corporation in
the sum of P5,103.35 by way of overdraft in current account payable on demand together
with its interests, has been completely paid, on different occasions, from October 7, 1942, to
August 29, 1944, to the defendant China Banking Corporation through the defendant Bank of
Taiwan, Ltd., that was appointed by the Japanese Military authorities as liquidator of the
China Banking Corporation.
Upon having been served with summons the defendant-appellee China Banking
Corporation made a demand from the plaintiff-appellant for the payment of the sum of
P5,103.35 with interests representing the debt of the said appellant, and in the answer it set
up a counter claim against the plaintiff-appellant demanding the payment, within 90 days
from and after the date Executive Order No. 32 on moratorium, series of 1945, has been
repealed, of said amount due from the latter to the former by way of overdraft together with
its interests at the rate of 9 per cent per annum to be compounded monthly, and the additional
sum of P1,500 as attorney's fees and the costs of the suit.
After the hearing of the case, the trial court rendered a decision holding that, as there
was no evidence presented to show that the defendant China Banking Corporation had
authorized the Bank of Taiwan, Ltd., to accept the payment of the plaintiff's debt to the said
defendant, and said Bank of Taiwan, as an agency of the Japanese invading army, was not
authorized under the international law to liquidate the business of the China Banking
Corporation, the payment has not extinguished the indebtedness of the plaintiff to the said
defendant under article 1162 of the Civil Code. The court absolved the defendant China
Banking Corporation from the complaint of the plaintiff, and sentenced the latter to pay the
former the sum of P5,103.35 with interests within the period of 90 days from and after the
 36

above mentioned Executive Order No. 32 had been repealed or set aside, and ordered that, if
the plaintiff failed to pay it within the said period, the property mortgaged shall be sold at
public auction and the proceeds of the sale applied to the payment of said obligation. The
plaintiff appealed from the decision to this Court.

The appellant's assignments of error may be reduced to two, to wit: First, whether or
not the Japanese Military Administration had authority to order the liquidation or winding up
of the business of defendant-appellee China Banking Corporation, and to appoint the Bank of
Taiwan liquidator authorized as such to accept the payment by the plaintiff-appellant to said
defendant-appellee; and second, whether or not such payment by the plaintiff-appellant has
extinguished her obligation to said defendant-appellee.
(1) As to the first question, we are of the considered opinion, and therefore hold, that
the Japanese military authorities had power, under the international law, to order the
liquidation of the China Banking Corporation and to appoint and authorize the Bank of
Taiwan as liquidator to accept the payment in question, because such liquidation is not a
confiscation of the properties of the bank appellee, but a mere sequestration of its assets
which required the liquidation or winding up of the business of said bank. All the arguments
to the contrary in support of the decision appealed from are predicated upon the erroneous
assumption that the liquidation or winding up of the affairs of the China Banking
Corporation, in order to determine its liabilities and net assets to be sequestrated or
controlled, was an act of confiscation or appropriation of private property contrary to Article
46, section III of the Hague Regulations of 1907.
The provisions of the Hague Regulations, section III, on Military Authority over
Hostile Territory, which is a part of the Hague Convention respecting the laws and customs
of war on land, are intended to serve as a general rule of conduct for the belligerents in their
relations with each other and with the inhabitants, but as it had not been found possible then
to concert regulations covering all the circumstances which occur in practice, and on the
other hand it could not have been intended by the High Contracting Parties that the
unforeseen cases should, in the absence of a written undertaking, be left to the arbitrary
judgment of military commanders, it was agreed that "Until a complete code of the laws of
war has been issued, the High Contracting Parties deem it expedient to declare that in cases
not included in the Regulations adopted by them, the inhabitants and the belligerents remain
under the protection and the rule of the principles of international law, as they result for the
usages established among civilized peoples, from the laws of humanity, and the dictates of
public conscience."
Before the Hague Convention, it was the usage or practice to allow or permit the
confiscation or appropriation by the belligerent occupant not only of public but also of
private property of the enemy in a territory occupied by the belligerent hostile army; and as
such usage or practice was allowed, a fortiori, any other act short of confiscation was
necessarily permitted. Section III of the Hague Regulations only prohibits the confiscation of
private property by order of the military authorities (article 46), and pillage or stealing and
thievery thereof by individuals (article 47); and as regards public property, article 53
provides that cash funds, and property liable to requisition and all other movable property
belonging to the State susceptible of military use or operation, may be confiscated or taken
possession of as a booty and utilized for the benefit of the invader's government (II
 37

Oppenheim, 8th ed. section 137; 320 & 321, War Department; Basic Field Manual, Rules of
Land Warfare FM 27-10). The belligerents in their effort to control enemy property within
their jurisdiction or in territories occupied by their armed forces in order to avoid their use in
aid of the enemy and to increase their own resources, after the Hague Convention and
specially during the first World War, had to resort to such measures of prevention which do
not amount to a straight confiscation, as freezing, blocking, placing under custody and
sequestrating the enemy private property. Such acts are recognized as not repugnant to the
provisions of Article 46 or any other article of the Hague Regulations by well-known writers
on International Law, and are authorized in the Army and Navy Manual of Military
Government and Civil Affairs not only of the United States, but also in similar manuals of
Army and Navy of other civilized countries, as well as in the Trading with the Enemy Acts of
said countries.
Hyde in his International Law chiefly as interpreted and applied by the United States,
Vol. 3, 6th ed., p. 1727, has the following to say:
"In examining the efforts of a belligerent to control in various ways
property within its domain that has such a connection with nationals of the
enemy that it may be fairly regarded as enemy property, it is important to
inquire whether the attempt is made to appropriate property without
compensation, divesting him not only of title, but also of any right or interest in
what is taken, without prospect of reimbursement, or whether those efforts
constitute an assumption of control which, regardless of any transfer of title, is
not designed to produce such a deprivation. The character of the belligerent acts
in the two situations is not identical. To refer to both as confiscatory is not
productive of clearness of thought, unless a loose and broad signification be
attached to the term 'confiscation.' The point to be noted is that a belligerent
may in fact deprive an alien enemy owner of property by process that are not
essentially confiscatory, even though the taking and retention may cause him
severe loss and hardship. Recourse to such non-confiscatory retentions or
deprivations has marked the conduct of belligerents since the beginning of the
World War in 1914. They may perhaps be appropriately referred to as
sequestrations. The propriety of what they have involved is, therefore, hardly
discernible by reference to objections directed against confiscatory action as
such, and must be tested by other means or standards.
"A belligerent may fairly endeavor to prevent enemy property of any
kind within its territory (or elsewhere within its reach) from being so employed
as to afford direct military aid to its foe. Measures of prevention may, in a
particular case, assume a confiscatory aspect. In such a situation the question
may arise whether those measures are, nevertheless, excusable. It is believed
that they may be, and that they are not invariably unlawful despite the absence
of efforts to compensate the owners."
And in the footnote of the same page, said author adds:
"This analysis differs sharply from that of those who would regard
almost all uncompensated deprivations of property as essentially confiscatory,
and as, therefore, internationally illegal because of the further assumption or
conclusion that confiscatory action must inevitably be so regarded. Belligerent
 38

States have not, however, generally acted on such a theory. They have in fact
proceeded, especially since 1914, to exercise varying degrees of control over
vast amounts of enemy private property by strictly non-confiscatory processes
from which they have felt no sense of legal obligation to abstain. In so doing
they have been creative of relatively fresh practices which logic has ordained
and war-terminating treaties have sanctioned. Thus it happens that proper
estimation of the place of confiscation of enemy private property in the law of
nations has become of less importance than formerly, because both of the
reluctance of States and notably of the United States to have recourse to it,
and of their preference for non-confiscatory measures exemplified in
sequestrations as a desirable and sufficient means of utilizing such property."
And Oppenheim in his International Law, Vol. 2, 6th ed., by Lauterpacht, says:
"But the desire to eliminate the financial and commercial influence of
the enemy, and other motives, presently led in most States to exceptional war
measures against the businesses and property of enemies, which, though not
confiscation, inflicted great loss and injury. Sometimes these measures stopped
short of divesting the enemy ownership of the property; but in other cases the
businesses or property were liquidated, and were represented at the close of
hostilities by nothing else than the proceeds of their realization, often enough
out of all proportion to their value. In the Trading with the Enemy Act, 1939,
provisions was made for the appointment of custodians of enemy property in
order to prevent the payment of money to enemies and to preserve enemy
property in contemplation of arrangements to be made at the conclusion of
peace.
"The readjustment of rights of private property on land was provided for
by the Treaties of Peace. The general principles underlying their complicated
arrangements were that the validity of all completed war measures was
reciprocally confirmed; but that while uncompleted liquidations on the
territories of the Central Powers were to be discontinued, and the subjects of the
victorious Powers were to receive compensation for the loss or damage inflicted
on their property by the emergency war measures, the property of subjects of
the vanquished Powers on the territories of the Allied and Associated Powers
might be retained and liquidated, and the owner was to look for compensation to
his own State. The proceeds of the realization of such property were not to be
handed over to him, or to his State, but were to be credited to his State as a
payment on account of the sums payable by it under the treaties."
In paragraph 143 (p. 313) of the same work, Oppenheim states that "Private personal
property which does not consist of war materials or means of transport serviceable for
military operations may not be as a rule seized". It is obvious that the word "seized" used
therein signifies "confiscated" in view of the above quoted paragraphs, and therefore when
Oppenheim says, in the footnote to said passage, "Nor may the occupant liquidate the
business of enemy subject in occupied territories," he means "confiscate" by the word
"liquidate".
 39

Ernest K. Feildchenfeld in his "The International Economic Law of Belligerent

Occupation (1942)" supports the foregoing conclusion of Hyde, when he says that
"According to Article 46 of the Hague Regulations, private property must be respected and
cannot be confiscated. This rule affords protection against the loss of property, through
outright confiscation, but not against losses under lawful requisition, contribution, seizure,
fines, taxes, and expropriation" (Par. 208, p. 51). And later on he adds: "A complete
nationalization of a corporation for the benefit of the occupant could not be anything but a
permanent measure involving final effects beyond the duration of the occupation. There is no
military need for it because the same practical results can be achieved by
temporary sequestration," (par. 385, p. 107).
Martin Domke in his Trading with the Enemy in World War II, pp. 4 and 5, speaking
of Warfare on Economic and military fronts, says that "Freezing Control is but one phase of
the present war effort; it is but one weapon on the total war which is now being waged on
both economic and military fronts. Coupled with Freezing Control as a part of this nation's
program of economic warfare are to be found export control, the promulgation of a Black
List, censorship, seizure of enemy-owned property, and financial and lend-lease aid to allied
and friendly nations. As to Japan, no official information is available as yet on steps taken by
the Japanese Government. As a Commentary of April 11, 1942, points out, the Japanese
Trading with the Enemy legislation enacted during the last war against Germany might throw
some light on the views adopted by Japan in this matter."
The sequestration or liquidation of enemy banks in occupied territories is authorized
expressly by the United States Army and Navy Manual of Military Government and Civil
Affairs F. M. 2710 OPNAV 50-E-3, which, mandatory and controlling upon the theatre
commanders of the U. S. forces in said territories, provides in its paragraph 12 the following:
"Functions of Civil Affairs Officers. In the occupation of such
territories for a considerable period of time, the civil affairs officers will in most
cases be concerned with the following and other activities:
"1. MONEY AND BANKING. Closing, if necessary and guarding of
banks, bank funds, safe deposit boxes, securities and records; providing interim
banking and credit needs; liquidation; reorganization, and reopening of banks
at appropriate times; regulation and supervision of credit cooperatives and other
financial agencies and organizations; execution of policies on currency fixed by
higher authority, such as the designation of types of currency to be used and
rates of exchange supervision of the issue and use of all types of money and
credit; declaration of debt moratoria; prevention of financial transactions with
enemy occupied territory."
The civil affairs officers are concerned, that is, entrusted with the performance of the
functions enumerated above, when so directed by the chief commander of the occupant
military forces.
Not only the United States Army and Navy Manual of Military Government and Civil
Affairs but similar manuals of other countries authorize the liquidation or impounding of the
assets of enemy banks or the freezing, blocking and impounding of enemy properties in the
occupied hostile territories without violating article 46 or other articles of the Hague
Regulations. They do not amount to an outright confiscation of private property, and were
 40

put into effect by the Allied Army in the occupied hostile territories in Europe during World
War II.
The Combined Chiefs of Staff, in their Directive of May 31, 1943, on Military
Government in Sicily, Italy, addressed to the Supreme Allied Commander, Mediterranean
Theater, ordered: "(h) An Allied Military Financial Agency under the control of the
Military Government shall be established with such sub-agencies as considered necessary,"
"(i) Military authorities on occupying an area shall immediately take the following steps: '(1)
All financial institutions and banks shall be closed and put under the custody of the military
forces'," (2) a general moratorium shall be declared. (j) . . . all papers of value, foreign
securities, gold and foreign currencies shall be impounded with receipts granted to
recognized owners. (k) "The Allied Military Financial Agency or any appointed agency by
the MG will take into immediate custody all foreign securities and currencies, holding of
gold, national funds and holdings of Fascist organizations for deposit." (Appendix on
American Military Government, its Organization and Policies, by Hajo Holborn, 1947, pp.
116, 117.)
The Combined Directive of April 28, 1944, for Military Government in Germany
Prior to Defeat or Surrender, provided that the Allied Forces "Upon entering the area of
Germany will take the following steps and put into effect only such further financial
measures as they deem to be necessary from a strictly military standpoint. (b) "Banks should
be placed under such control as deemed necessary by them in order that adequate facilities or
military needs may be provided and to insure that instructions and regulations issued by
military authorities will be fully complied with." (c) "Pending determination of future
disposition, all gold, foreign currencies, foreign securities, accounts in financial institutions,
credits, valuable papers, and all similar assets held by or on behalf of the following, will be
impounded or blocked and will be used or otherwise dealt with only as permitted under
licenses or other instructions which you may issue: (1) German national state, provincial and
local governments and agencies and instrumentalities thereof." (4) "Nazi party organizations
including the party formations, affiliates and supervised associations, and the officials,
leading members and supporters thereof; and (5) Persons under detention or other types of
custody by Allied Military authorities and other persons whose activities are hostile to the
interests of military government" (Holborn, supra, p. 141).
In the Allied Directive of June 27, 1945, to the Commander in Chief of the United
States forces of occupation regarding the military government of Austria, the Commanding
General of the United States forces of occupation in Austria, serving as United States
member of the Allied Council of the Allied Commission for Austria, was authorized, subject
to agreed policies of the Allied Council to close banks, insurance companies, and other
financial institutions for a period long enough to introduce satisfactory control to ascertain
their cash position and to issue instructions for the determination of accounts and assets to be
blocked under paragraph 55 which authorized him to impound or block all gold, silver,
currencies, securities accounts in financial institutions, credits, valuable papers, and all other
assets falling within the following categories: a. Property owned or controlled, directly or
indirectly, in whole or in part, by any of the following: (1) the governments, nationals or
residents of the German Reich, Italy, Bulgaria, Rumania, Hungary, Finland and Japan,
including those of territories occupied by them; (3) the Nazi Party, its formations, affiliated
associations and supervised organizations, its officials, leading members and supporters; (4)
 41

all organizations, clubs or other associations prohibited or dissolved by military government;

(5) absentee owners, including United Nations and neutral governments; (7) persons subject
to arrest under the provisions of paragraph 7, and all other persons specified by military
government by inclusion in lists or otherwise, (Holborn, supra, p. 192).
On the other hand, the provisions of the Trading with the Enemy Acts enacted by the
United States and almost all the principal nations since the first World War, including
England, Germany, France, and other European countries, as well as Japan, confirms that the
assets of enemy corporations, specially banks incorporated under the laws of the country at
war with the occupant and doing business in the occupied territory, may be legally
sequestrated, and the business thereof wound up or liquidated. Such sequestration or seizure
of properties is not an act for the confiscation of enemy property, but for the conservation of
it, subject to further disposition by treaty between the belligerents at the end of the war.
Section 12 of the Trading with the Enemy Act of the United States provides that "after the
end of the war any claim of enemy or ally of an enemy to any money or other property
received and held by the Alien Custodian or deposited in the United States Treasury, shall be
settled as Congress shall direct.
"The purpose of such sequestration is well expounded in the Annual Report of the
Office of the Alien Custodian for a period from March 11, 1943, to June 30, 1943. "In the
absence of effective measures of control, enemy-owned property can be used to further the
interest of the enemy and to impede our own war effort. All enemy-controlled assets can be
used to finance propaganda, espionage, and sabotage in this country or in countries friendly
to our cause. They can be used to acquire stocks of strategic materials and supplies . . . use to
the enemy, they will be diverted from our own war effort.
The national safety requires the prohibition of all unlicensed communication, direct or
indirect, with enemy and enemy-occupied territories. To the extent that this prohibition is
effective, the residents of such territory are prevented from exercising the rights and
responsibilities of ownership over property located in the United States. Meanwhile,
decisions affecting the utilization of such property must be made and carried out. Houses
must be maintained and rents collected; payments of principal and interest on mortgages
must be made for the account of foreign debtors and foreign creditors; stranded stocks of
material and equipment must be sold; patents must be licensed, business enterprises must be
operated or liquidated, and foreign interest must be represented in court actions. The number
of decisions to be made in connection with property is in fact multiplied by a state of war,
which requires that productive resources be shifted from one use to another so as to conform
with the requirements of a war economy."

The defendant-appellee, China Banking Corporation, comes within the meaning of

the word "enemy" as used in the Trading with the Enemy Acts of civilized countries, because
not only it was controlled by Japan's enemies, but it was, besides, incorporated under the
laws of a country with which Japan was at war.
Section 2 (1) of the Trading with the Enemy Act of Great Britain provides that the
expression "enemy" means: "any body of persons (whether corporate or incorporate) carrying
on business in any place, if and so long as the body is controlled by a person who, under this
section, is an enemy." The control test has also been expressly adopted in the French Trading
 42

with the Enemy Act. The Italian Act regards as enemies "legal persons when enemy subject
have any prevalent interests whatever in them." The Decree of the Dutch Government-in-
exile of June 7, 1940, also adopted the control test by including in the term enemy subjects
"legal persons in which interest of an enemy state or enemy subjects are predominantly
involved." (Domke Trading with the Enemy Act, pp. 127-130.)
In the United States, the Trading with the Enemy Act has not adopted the control
theory. But section 2-a of the said Act says that the word enemy shall be deemed to mean any
"corporation incorporated within such territory of any nation with which the United States is
at war." And the same definition is given to the word "enemy" by the Trading with the
Enemy Act of the above named countries. The British Act in section 2 (1) defines as enemy
"any body of persons constituted or incorporated in or under the laws of a state at war with
his Majesty," it being immaterial that they are under the control of allied or neutral
stockholders. Similarly the French Act regards as enemies, corporations incorporated in
conformity with the laws of an enemy state. The decree of the Dutch Government-in-exile on
June 7, 1940, considers as enemies legal persons "organized or existing according to or
governed by the law of an enemy state." The German Act of January 15, 1940, I section 3 (1)
3, deems enemies all corporations, "the original legal personality of which is based on the
laws of an enemy state." The Italian Act of 1938, section 5, regards corporations as enemies
if they are enemy of nationality under the law of the enemy state. So too the Japanese Act,
Chapter 1, No. 25, deems enemies "all corporations belonging to enemy countries." ( See
Martin Domke, Trading with the Enemy Act in World War II, pp. 120-122.)
Section 3-A of the Trading with the Enemy Act of the United Kingdom of September
5, 1939, as amended up to April 1, 1943, provides that "Where any business is being carried
in the United Kingdom by, on behalf of, or under the direction of, persons all or any of whom
are enemies or enemy subjects or appear to the Board of Trade to be associated with enemies,
the Board of Trade may, if they think it expedient so to do, make . . .;" (b) an order
(hereinafter in this section referred to as a winding up orders) requiring the business to be
wound up;" and section 14(c) of the same Act (that obviously makes it applicable to enemy
territories occupied by the United Kingdoms armed forces) provides that "His Majesty may
by Order in council direct that the provisions of this Act other than this section shall extend,
with such exceptions, adaptations and modifications, if any, as may be prescribed by or under
the order . . . (to the extent of His Majesty's jurisdiction therein) to any other country or
territory being a foreign country or territory, in which for the time being His Majesty has
jurisdiction." (The Trading with the Enemy Act in World War II, p. 481, by Martin Domke.)
Section 5 (b) of the Trading with the Enemy Act of the United States provides that
"during the time of war or during any period in which national emergencies declared by the
President, the President may under any agency that he may designate or otherwise and under
such rule and regulation as he may prescribe," and "any property or interest of any foreign
country or national thereof shall vest, when, as, and upon the terms, directed by the President,
in such agency or person as may be designated from time to time by the President, and upon
such terms and conditions as the President may prescribe, such interest or property shall be
held, used, administered, liquidated, etc." and section 6 (e) of the same Act provides that
"any payment, . . . of money or property made to the alien property custodian hereunder shall
be a full acquaintance and discharge for all purposes of the obligation of the person making
the same to the extent of same. . . . and shall, in case of payment to the alien property
 43

custodian of any debt or obligation owed to an enemy or ally of enemy, deliver up any notes,
bonds, or other evidences of indebtedness or obligation, . . . with like effect as if he or they,
respectively, were duly appointed by the enemy or ally of enemy, creditor, or obligee."
It is evident that the Trading with the Enemy Act of the United States, like that of the
United Kingdom or Great Britain above quoted, and those of other countries, may be applied
and enforced in a hostile territory occupied by the United States armed forces, because
section 2 of said Act provides "That the words 'United States', as used herein, shall be
deemed to mean all land and water, continental or insular, in any way within the jurisdiction
of the United States or occupied by the military or naval forces thereof." After the liberation
of the Philippines during World War II, properties belonging to Japanese Nationals located in
this country were taken possession of by the Alien Property Custodian appointed by the
President of the United States under the Trading with the Enemy Act, because, although the
Philippines was not a territory or within the jurisdiction or national domain of the United
States, it was then occupied by the military and naval forces thereof.
Of course it is obvious that the obligations assumed by the United States, in applying
the Trading with the Enemy Act of the United States to properties within her national
domain, is different and distinct from those arising from the application thereof to enemy
properties located within the hostile territory occupied by her armed forces. In the first case,
Congress is untramelled and free to authorize the seizure, use, or appropriation of such
properties without any compensation to the owners, for although section 2 of the Trading
with the Enemy Act provides that "at the end of the war any claim of any enemy or of an ally
of enemy to any money or other property received and held by the alien property custodian or
deposited in the United States Treasury shall be settled by Congress," the owners of the
properties seized within the national domain of the United States are not entitled to demand
its release or compensation for its seizure, but what would ultimately come back to them,
might be secured, not as a matter of right, but as a matter either of grace to the vanquished or
exacted by the victor, for the case is to be governed by the domestic laws of the United
States, and not by the Hague Regulations or International law (U. S. vs. Chemical
Foundation, Inc., 272 U. S. 1; United States vs. S. S. White Dental Manufacturing Company,
274 U. S., 402). While in the latter case, when properties are sequestrated in a hostile
occupied territory by the armed forces of the United States, Congress can not legally refuse
to credit the compensation for them to the States of the owners as payment on account of the
sums payable by said States under treaties, and the owners have to look for compensation to
their States, otherwise, they would violate article 46 of the Hague Regulations or their pledge
of good faith implied in the act of sequestrating or taking control of such properties.
It is to be presumed that Japan, in sequestrating and liquidating the China Banking
Corporation, must have acted in accordance, either with her own Manual of the Army and
Navy and Civil Affairs, or with her Trading with the Enemy Act, and even if not, it being
permitted to the Allied Nations, specially the United States and England, to sequestrate,
impound, and block enemy properties found within their own domain or in enemy territories
occupied during the war by their armed forces, and it being not contrary to the Hague
Regulations or international law, Japan had also the right to do the same in the Philippines by
virtue of the international law principle that "what is permitted to one belligerent is also
allowed to the other.
 44

"Taking into consideration the acts of the Japanese Military Administration in treating
the private properties of the so-called enemy banks, it appears evident that Japan did not
intend to confiscate or appropriate the assets of said banks or the debts due them from their
debtors, and thus violate article 46 or any other article of the Hague Regulations. It is true
that, as to private personal properties of the enemy, freezing, blocking or impounding thereof
is sufficient for the purpose of preventing their being used in aid of the enemy; but with
regard to the funds of commercial banks like the so-called enemy banks, it was impossible or
impracticable to attain the purpose for which the freezing, blocking and impounding are
intended, without liquidating the said banks and collecting the loans given by them to
hundreds if not thousands of persons scattered over the Islands. Without doing so, their assets
or money loaned to so many persons can not properly be impounded or blocked, in order to
prevent their being used in aid to the enemy through the intervention of their very debtors,
and successfully wage economic as well as military war.
That the liquidation or winding up of the business of the China Banking Corporation
and other enemy banks did not constitute a confiscation or appropriation of their properties or
of the debts due them from their debtors, but a mere sequestration of their assets during the
duration of the war for the purposes already stated, is evidenced conclusively by the
following uncontroverted facts set forth in the briefs of both parties and amici curi:

(1) Out of the sum of about P34,000,000 collected from the debtors by the liquidator
Bank of Taiwan, the latter paid out to the depositors or creditors of the same bank about
P9,000,000; and it is common sense that this last amount should not have been disbursed or
taken out of the said amount of about P34,000,000 had it been the intention of the Japanese
Military Administration to confiscate this amount collected by the Bank of Taiwan.
(2) The members of Chinese Associations were permitted to withdraw from their
deposits with the China Banking Corporation a considerable amount of money which was
paid out of the sum collected from the debtors of said bank, in order that they may pay the
contribution legally exacted from them by the military occupant in accordance with article 51
of the Hague Regulations. And this showed the intention of the belligerent occupant not to
confiscate the bank's assets and to act, at least in this respect, in accordance with said
Regulations; because otherwise the Japanese Military Administration could have properly
required the Chinese to pay the contribution out of their own funds, without diminishing or
reducing the amounts collected by the Bank of Taiwan from the debtors of the China Bank.
(3) The collection of the aforementioned debts from the bank's debtors, as well as the
payment of withdrawal by the depositors, were regularly entered into the books of said
Banks, so that after liberation they could easily determine the respective amounts and the
persons who had made the payments, which enabled all said banks to reopen and continue
their business; and the regular keeping of said books would have been unnecessary or
useless, were it the intention of the military occupant to close definitely the enemy banks and
appropriate all their resources.
(4) There was absolutely no reason for confiscating the funds of the banks collected
from their debtors, because by sequestrating or impounding their assets or funds after the
latter had been collected from their debtors, the principal purpose of preventing the possible
use of the funds of the banks in aid of Japan's enemy was completely accomplished.
 45

Absolutely no other benefit could be derived by Japan from confiscating or appropriating the
payments made in Japanese war military notes to the enemy banks by their debtors, because
the Japanese Government could have them at will without cost, except that of the ink, paper
and labor necessary for printing and issuing them.
(5) The annual report, 31st December, 1945, of the Chartered Bank of India, Australia
& China (pp. 11-12), which had a branch in Manila liquidated by Japanese Military
authorities as one of the enemy banks, clearly shows that the liquidation of said branch was a
mere sequestration, impounding or control of its assets, and not a confiscation or
appropriation thereof during the occupation by the Japanese. It says that during the enemy
occupation the cash balance of our Branches were seized, their assets realized and repayment
of varying amounts, but up to 100 per cent in one Branch at least, made to depositors. Said
report reads, in its pertinent part, as follows:
"I informed you, when commenting upon the Balance sheet figures for
the year ending 31st December, 1942, that we had reason to believe that
accounts of some of our occupied Branches had been partly or wholly
liquidated, and that the liquidation of such accounts would ultimately bring
about shrinkage in both Assets and Liabilities in the Balance Sheet figures. The
information now in our possession and the various changes in the Balance Sheet
figures to which I have referred above, confirm the correctness of this
statement, for during the enemy occupation the cash balances of our Branches
were seized, their assets realized where possible, andrepayment of varying
amounts, but up to 100 per cent in one Branch at least, made to depositors.
Even so, the business of the offices of the Bank which remained under our own
control throughout the war has steadily increased and has offset to a great extent
decreases brought about by the partial liquidation of Branches which were in
Japanese control." (Italics ours.)
It is obvious that the fact that Japanese Military authorities failed to pay the enemy
banks the balance of the money collected by the Bank of Taiwan from the debtors of said
banks, did not and could not change the sequestration or impounding by them of the bank's
assets during the war, into an outright confiscation or appropriation thereof. Aside from the
fact that it was physically impossible for the Japanese Military authorities to do so because
they were forcibly driven out of the Philippines or annihilated by the forces of liberation,
following the readjustment of rights of private property on land seized by the enemy
provided by the Treaty of Versailles and other peace treaties entered into at the close of the
first World War, the general principles underlying such arrangements are that the owners of
properties seized, sequestrated or impounded who are nationals of the victorious belligerent
are entitled to receive compensation for the loss or damage inflicted on their property by the
emergency war measures taken by the enemy, through their respective States or
Governments who may officially intervene and demand the payment of the claim on behalf
of their nationals (VI Hackworth Digest of International Law, pages 232, 233; 11
Oppenheim, sixth edition, page 263). Naturally, as the Japanese war notes were issued as
legal tender for payment of all kinds at par with the Philippine peso, by the Imperial Japanese
Government, which in its proclamations of January 3, 1942, and February 1, 1942, "takes full
responsibility for their usage having the correct amount to back them up" (See said
Proclamations and their official explanation, O. T. IMA Vol. 1, pp. 39, 40), Japan is bound to
 46

indemnify the aggrieved banks for the loss or damage on their property, in terms of
Philippine pesos or U. S. dollars at the rate of one dollar for two pesos.
(2) The second question is, we may say, corollary of the first. It having been shown
above that the Japanese Military Forces had power to sequestrate and impound the assets or
funds of the China Banking Corporation, and for that purpose to liquidate it by collecting the
debts due to said bank from its debtors, and paying its creditors, and therefore to appoint the
Bank of Taiwan as liquidator with the consequent authority to make the collection, it follows
evidently that the payments by the debtors to the Bank of Taiwan of their debts to the China
Banking Corporation have extinguished their obligation to the latter. Said payments were
made to a person, the Bank of Taiwan, authorized to receive them in the name of the bank
creditor under article 1162, of the Civil Code. Because it is evident the words "a person
authorized to receive it," as used therein, means not only a person authorized by the same
creditor, but also a person authorized by law to do so, such as guardian, executor or
administrator of estate of a deceased, and assignee or liquidator of a partnership or
corporation, as well as any other who may be authorized to do so by law (Manresa, Civil
Code, 4th ed. p. 254.)
The fact that the money with which the debts have been paid were Japanese war notes
does not affect the validity of the payments. The provision of article 1170 of our Civil Code
to the effect that "payment of debts of money must be made in the specie stipulated and if it
is not possible to deliver such specie in silver or gold coins which is a legal tender," is not
applicable to the present case, because the contract between the parties was to pay Philippine
pesos and not some specifically defined species of money. The Philippine peso and half-
pesos including the Philippine Treasury Certificate was and is the legal tender in the
Philippines under section 612 of the Administrative Code, as amended by Act No. 4199. As
well stated by the Supreme Court of the United States in Knox vs. Lee and Parker (Legal
Tender Cases, 12 Wall., 457-681, 20 Law. ed., 287). "The expectation of the creditor and the
anticipation of the debtor may have been that the contract would be discharged by the
payment of coined metals, but neither the expectation of one party to the contract, respecting
its fruits, nor the anticipation of the other, constitutes its obligation. There is a well-
recognized distinction between the expectation of the parties to a contract and the duty
imposed by it. Aspdin vs. Austin, 5 Ad. & Bl. (N. S.) 671; Dunn vs. Sayles, Ibid. 685; Coffin
vs. Landis, 46 Pa. 426. Were it not so, the expectation of results would be always equivalent
to a binding engagement that they should follow. But the obligation of contract to pay money
is to pay that which the law shall recognize as money when the payment is to be made. If
there is anything settled by decision it is this, and we do not understand it to be
controverted." (Knox vs. Exchange Bank of Virginia, 12 Wall., 457; 20 U. S. Supreme Court
Reports, 20 L. ed., 287, 311.) In said case it was held that the Legal Tender Acts of Congress
which made the treasury notes legal tender for payment of debts contracted before and after
their passage were not inappropriate for carrying into execution the legitimate purpose of the
Government. And this Court, in Rogers vs. Smith Bell (10 Phil., 319), held that "A debt of
12,000 pesos created in 1876 can now (1908) be paid by 12,000 of the Philippine pesos
authorized by the Act of Congress of March 2, 1903, although at the time the loan was made
which created the debt, the creditor delivered to the debtor 12,000 pesos in gold coin."
The power of the military governments established in occupied enemy territory to
issue military currency in the exercise of their governmental power has never been seriously
 47

questioned. Such power is based, not only on the occupant's general power to maintain law
and order recognized in article 43 of the Hague Regulations (Feilchenfeld says in his treatise
on International Economic Law of Belligerent Occupation, paragraph 6), but on military
necessity as shown by the history of the use of money or currency in wars.

As early as the year 1122, during the siege of Tyre, Doge Micheli paid his troops in
leather money which he promised to redeem when he returned to Venice (Del Mar, Money
and Civilization, 26), and when Frederick II besieged Milan he also used leather money to
pay his troops, as well as in payment of wages (id. 33). When the French forces occupied the
Ruhr in 1923, they finished the printing of some Reichsbank notes in process and issued
them. (Nussbaum, Money in the Law, note 6, 158-59.) The British during the Boer War
issued receipts for requisitioned goods and made such receipts readily negotiable, an
arrangement very similar to the issuance of currency (Spaight, War Rights on Land, 396).
During the American Revolution, the Continental Congress issued currency even before the
issuance of the Declaration of Independence, when the territory controlled by Congress was
held in military occupation against the then legitimate government. (Dewey, Financial
History of the United States, 37-38; Morrison and Commager, Growth of the American
Republic, 207; Nussbaum, op. cit. supra note 6, 172-173.) The Confederacy issued its own
currency in Confederate territory (Thorington vs. Smith, 8 Wall., 1) and also in northern
areas occupied from time to time during the war. (Spaight, op. cit. supra, note 19, 392.) The
Japanese issued special occupation currency in Korea and Manchuria during the Russo-
Japanese War of 1905. (Takahashi, International Law Applied to the Russo-Japanese War,
1908, 260-61; Spaight, op. cit. note 19, 397; Ariga, La Guerre Russo-Japanese, 1908, 450 et
seq.) The British also issued currency notes redeemable in Sterling in London at a fixed rate
of exchange, in their occupation of Archangel during and after the first World War. (White,
Currency of the Great War, 66; League of Nations, Currency After the War, 100.)
During the World War II, the Germans had been using a variety of occupation
currencies as legal tenders on a large scale, the currency initially used in most occupied areas
being the Reichskroditkassa mark, a paper currency printed in German and denominated in
German monetary units, which circulated side by side with the local currency at decreased
rates of exchange. And the Allies have introduced notes as legal currency in Sicily, Germany
and Austria. The Combined Directive of the combined Chief of Staffs to the Supreme Allied
Commander issued on June 24, 1943, directed that the task forces of the U. S. will use,
besides regular U. S. coins, yellow seal dollars, and the forces of Great Britain will use
besides British coins, British Military Notes (BMA), to supplement the local lire currency
then in use (Hajo Holborn, American Military Government, 1947, pp. 115, 116). The
Combined Directive for Military Government in Germany, prior to defeat or surrender, of
April 28, 1944, directed the United States, British and other Allied forces to use Allied
military mark and Reichsmark currency in circulation in Germany as legal tender and the
Allied Military Marks will be interchangeable with the Reichsmark currency at the rate of
Allied Mark for Reichsmark; and that in the event adequate supplies of them were not
available, the United States forces will use Yellow seal dollars and the British forces will use
British Military Authority (BMN) notes. (Holborn, op. cit.supra, p. 140.) And the American
Directive on the Military Government of Austria of June 27, 1945, ordered that the United
States forces and other Allied forces within Austria will use only Allied Military Schillings
 48

for pay of troops and other military requirements, declaring it legal tender in Austria
interchangeably with Reichsmarks at a rate of one Allied military schilling for one
Reichsmarks. (Holborn, op. cit. supra, p. 192.)
In the above cited case of Thorington vs. Smith, the Supreme Court of the United
States said:
". . . While the war lasted, however, they had a certain contingent value,
and were used as money in nearly all business transactions of many millions of
people. They must be regarded, therefore, as a currency, imposed on the
community by irresistible force.
"It seems to follow as a necessary consequence from this actual
supremacy of the insurgent government, as a belligerent, within the territory
where it circulated, and from the necessity of civil obedience on the part of all
who remained in it, that this currency must be considered in courts of law in the
same light as if it has been issued by a foreign government, temporarily
occupying a part of the territory of the United States."
According to Feilchenfeld in his book "The International Economic Law of
Belligerent Occupation," the occupant in exercising his powers in regard to money and
currency, may adopt one of the following methods according to circumstances: (1) When the
coverage of the currency of the territory occupied has become inadequate as found in several
Balkan countries during the War of 1914-18, and "the local currency continues to be used, an
occupant may reorganize the national currency by appropriate methods, such as the creation
of new types and supplies of coverage" (paragraph 272). (2) The occupant may, and not
infrequently, use his own currency, in the occupied region. But this method may be found
inconvenient if the coverage for their national currency had already become inadequate, and
for that reason authorities are afraid of exposing it to additional strain, and for that reason an
occupant may not replace the local currency by his own currency for all currency for all
purposes, and enforce its use not only for his own payment but also for payments among
inhabitants (paragraph 285). (3) Where the regional currency has become inadequate and it is
deemed inadvisable by the occupant to expose his own currency to further strain, new types
of money may be created by the occupant. Such new currency may have a new name and
may be issued by institution created for that purpose (paragraph 296). This last method was
the one adopted by Japan in this country, because the coverage of the Philippine Treasury
Certificate of the territory occupied had become inadequate, for most if not all the said
coverage have been taken to the United States and many millions of silver pesos were buried
or thrown into the sea near Corregidor, and Japan did not want to use her national currency,
and expose it to additional strains.
But be that as it may, whatever might have been the intrinsic or extrinsic worth of the
Japanese war-notes which the Bank of Taiwan has received as full satisfaction of the
obligations of the appellee's debtors to it, is of no consequence in the present case. As we
have already stated, the Japanese war-notes were issued as legal tender at par with the
Philippine peso, and guaranteed by Japanese Government "which takes full responsibility for
their usage having the correct amount to back them up (Proclamation of January 3, 1942).
Now that the outcome of the war has turned against Japan, the enemy banks have the right to
demand from Japan, through their States or Government, payments or compensation in
Philippine peso or U. S. dollars as the case may be, for the loss or damage inflicted on the
 49

property by the emergency war measure taken by the enemy. If Japan had won the war or
were the victor, the property or money of said banks sequestrated or impounded by her might
be retained by Japan and credited to the respective State of which the owners of said banks
were nationals, as a payment on account of the sums payable by them as indemnity under the
treaties, and the said owners were to look for compensation in Philippine pesos or U. S.
dollars to their respective States. (Treaty of Versailles and other peace treaties entered at the
close of the first world war; VI Hackworth Digest of International Law, p. 232.) And if they
cannot get any or sufficient compensation either from the enemy or from their States,
because of their insolvency or impossibility to pay, they have naturally to suffer, as
everybody else, the losses incident to all wars.
In view of all the foregoing, the judgment appealed from is reversed, and the
defendant-appellee is sentenced to execute the deed of cancellation of mortgage of the
property described in the complaint, and to deliver to the plaintiff-appellant the Transfer
Certificate of Title No. 47634 of the Register of Deeds in Manila with the annotation of
mortgage therein already cancelled, without pronouncement as to costs. So ordered.
 50

EN BANC

[G.R. No. 76607. February 26, 1990.]

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE

REEVES, petitioners, vs. HON. ELIODORO B. GUINTO, Presiding Judge,
Branch LVII, Regional Trial Court, Angeles City, ROBERTO T. VALENCIA,
EMERENCIANA C. TANGLAO, AND PABLO C. DEL PILAR, respondents.

DECISION

CRUZ, J p:

These cases have been consolidated because they all involve the doctrine of state immunity. The
United States of America was not impleaded in the complaints below but has moved to dismiss
on the ground that they are in effect suits against it to which it has not consented. It is now
contesting the denial of its motions by the respondent judges. cdll
In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force
stationed in Clark Air Base in connection with the bidding conducted by them for contracts for
barbering services in the said base.
On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S.
Air Force, solicited bids for such contracts through its contracting officer, James F. Shaw.
Among those who submitted their bids were private respondents Roberto T. Valencia,
Emerenciana C. Tanglao, and Pablo C. del Pilar. Valencia had been a concessionaire inside Clark
for 34 years; del Pilar for 12 years; and Tanglao for 50 years. LLjur
The bidding was won by Ramon Dizon, over the objection of the private respondents, who
claimed that he had made a bid for four facilities, including the Civil Engineering Area, which
was not included in the invitation to bid.
The private respondents complained to the Philippine Area Exchange (PHAX). The latter,
through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse, explained that
the Civil Engineering concession had not been awarded to Dizon as a result of the February 24,
1986 solicitation. Dizon was already operating this concession, then known as the NCO club
concession, and the expiration of the contract had been extended from June 30, 1986 to August
31, 1986. They further explained that the solicitation of the CE barbershop would be available
only by the end of June and the private respondents would be notified. Cdpr
On June 30,1986, the private respondents filed a complaint in the court below to compel PHAX
and the individual petitioners to cancel the award to defendant Dizon, to conduct a rebidding for
the barbershop concessions and to allow the private respondents by a writ of preliminary
injunction to continue operating the concessions pending litigation. 1
Upon the filing of the complaint, the respondent court issued an ex parte order directing the
individual petitioners to maintain the status quo.
 51

On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for
preliminary injunction on the ground that the action was in effect a suit against the United States
of America, which had not waived its non-suability. The individual defendants, as
officials/employees of the U.S. Air Force, were also immune from suit.
On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary
injunction.
On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part as
follows:
From the pleadings thus far presented to this Court by the parties, the Court's
attention is called by the relationship between the plaintiffs as well as the
defendants, including the US Government in that prior to the bidding or
solicitation in question, there was a binding contract between the plaintiffs as
well as the defendants, including the US Government. By virtue of said contract
of concession, it is the Court's understanding that neither the US Government
nor the herein principal defendants would become the employer/s of the
plaintiffs but that the latter are the employers themselves of the barbers, etc.
with the employer, the plaintiffs herein, remitting the stipulated percentage of
commissions to the Philippine Area Exchange. The same circumstance would
become m effect when the Philippine Area Exchange opened for bidding or
solicitation the questioned barber shop concessions. To this extent, therefore,
indeed a commercial transaction has been entered, and for purposes of the said
solicitation, would necessarily be entered between the plaintiffs as well as the
defendants.
The Court, further, is of the view that Article XVIII of the RP-US Bases
Agreement does not cover such kind of services falling under the
concessionaireship, such as a barber shop concession. 2
On December 11, 1986, following the filing of the herein petition for certiorari and prohibition
with preliminary injunction, we issued a temporary restraining order against further proceedings
in the court below. 3

In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony
Lamachia, Wilfredo Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the U.S.
Air Force Recreation Center at the John Hay Air Station in Baguio City. It had been ascertained
after investigation, from the testimony of Belsa, Cartalla and Orascion, that Genove had poured
urine into the soup stock used in cooking the vegetables served to the club customers. Lamachia,
as club manager, suspended him and thereafter referred the case to a board of arbitrators
conformably to the collective bargaining agreement between the Center and its employees. The
board unanimously found him guilty and recommended his dismissal. This was effected on
March 5, 1986, by Col. David C. Kimball, Commander of the 3rd Combat Support Group,
PACAF Clark Air Force Base. Genove's reaction was to file his complaint in the Regional Trial
Court of Baguio City against the individual petitioners. 4
On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss
the complaint, alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay
 52

Air Station, was immune from suit for the acts done by him in his official capacity. They argued
that the suit was in effect against the United States, which had not given its consent to be
sued. Cdpr
This motion was denied by the respondent judge on June 4, 1987, in an order which read in part:
It is the understanding of the Court, based on the allegations of the complaint
which have been hypothetically admitted by defendants upon the filing of their
motion to dismiss that although defendants acted initially in their official
capacities, their going beyond what their functions called for brought them out
of the protective mantle of whatever immunities they may have had in the
beginning. Thus, the allegation that the acts complained of were "illegal," done,
with "extreme bad faith" and with "pre-conceived sinister plan to harass and
finally dismiss" the plaintiff, gains significance. 5
The petitioners then came to this Court seeking certiorari and prohibition with preliminary
injunction.
In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O'Donnell, an
extension of Clark Air Base, was arrested following a buy-bust operation conducted by the
individual petitioners herein, namely, Tomi J. King, Darrel D. Dye and Stephen F. Bostick,
officers of the U.S. Air Force and special agents of the Air Force Office of Special Investigators
(AFOSI). On the basis of the sworn statements made by them, an information for violation
of R.A. 6425, otherwise known as the Dangerous Drugs Act, was filed against Bautista in the
Regional Trial Court of Tarlac. The above-named officers testified against him at his trial. As a
result of the filing of the charge, Bautista was dismissed from his employment. He then filed a
complaint for damages against the individual petitioners herein claiming that it was because of
their acts that he was removed. 6
During the period for filing of the answer, Mariano Y. Navarro, a special counsel assigned to the
International Law Division, Office of the Staff Judge Advocate of Clark Air Base, entered a
special appearance for the defendants and moved for an extension within which to file an
"answer and/or other pleadings." His reason was that the Attorney General of the United States
had not yet designated counsel to represent the defendants, who were being sued for their official
acts. Within the extended period, the defendants, without the assistance of counsel or authority
from the U.S. Department of Justice, filed their answer. They alleged therein as affirmative
defenses that they had only done their duty in the enforcement of the laws of the Philippines
inside the American bases pursuant to the RP-US Military Bases Agreement.
On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the
defendants, filed with leave of court a motion to withdraw the answer and dismiss the complaint.
The ground invoked was that the defendants were acting in their official capacity when they did
the acts complained of and that the complaint against them was in effect a suit against the United
States without its consent. prcd
The motion was denied by the respondent judge in his order dated September 11, 1987, which
held that the claimed immunity under the Military Bases Agreement covered only criminal and
not civil cases. Moreover, the defendants had come under the jurisdiction of the court when they
submitted their answer. 7
 53

Following the filing of the herein petition for certiorari and prohibition with preliminary
injunction, we issued on October 14, 1987, a temporary restraining order. 8
In G.R. No. 80258, a complaint for damages was filed by the private respondents against the
herein petitioners (except the United States of America), for injuries allegedly sustained by the
plaintiffs as a result of the acts of the defendants. 9 There is a conflict of factual allegations here.
According to the plaintiffs, the defendants beat them up, handcuffed them and unleashed dogs on
them which bit them in several parts of their bodies and caused extensive injuries to them. The
defendants deny this and claim the plaintiffs were arrested for theft and were bitten by the dogs
because they were struggling and resisting arrest. The defendants stress that the dogs were called
off and the plaintiffs were immediately taken to the medical center for treatment of their wounds.
In a motion to dismiss the complaint, the United States of America and the individually named
defendants argued that the suit was in effect a suit against the United States, which had not given
its consent to be sued. The defendants were also immune from suit under the RP-US Bases
Treaty for acts done by them in the performance of their official functions.
The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading in
part as follows:
The defendants certainly cannot correctly argue that they are immune from suit.
The allegations, of the complaint which is sought to be dismissed, had to be
hypothetically admitted and whatever ground the defendants may have, had to
be ventilated during the trial of the case on the merits. The complaint alleged
criminal acts against the individually-named defendants and from the nature of
said acts it could not be said that they are Acts of State, for which immunity
should be invoked. If the Filipinos themselves are duty bound to respect, obey
and submit themselves to the laws of the country, with more reason, the
members of the United States Armed Forces who are being treated as guests of
this country should respect, obey and submit themselves to its laws. 10
and so was the motion for reconsideration. The defendants submitted their answer as required
but subsequently filed their petition for certiorari and prohibition with preliminary injunction
with this Court. We issued a temporary restraining order on October 27, 1987. 11
II
The rule that a state may not be sued without its consent, now expressed in Article XVI, Section
3, of the 1987 Constitution, is one of the generally accepted principles of international law that
we have adopted as part of the law of our land under Article II, Section 2. This latter provision
merely reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and also intended
to manifest our resolve to abide by the rules of the international community.
Even without such affirmation, we would still be bound by the generally accepted principles of
international law under the doctrine of incorporation. Under this doctrine, as accepted by the
majority of states, such principles are deemed incorporated in the law of every civilized state as a
condition and consequence of its membership in the society of nations. Upon its admission to
such society, the state is automatically obligated to comply with these principles in its relations
with other states.
As applied to the local state, the doctrine of state immunity is based on the justification given by
Justice Holmes that "there can be no legal right against the authority which makes the law on
 54

which the right depends." 12 There are other practical reasons for the enforcement of the
doctrine. In the case of the foreign state sought to be impleaded in the local jurisdiction, the
added inhibition is expressed in the maxim par in parem, non habet imperium. All states are
sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would,
in the language of a celebrated case, "unduly vex the peace of nations." 13
While the doctrine appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them
in the discharge of their duties. The rule is that if the judgment against such officials will require
the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the
amount needed to pay the damages awarded against them, the suit must be regarded as against
the state itself although it has not been formally impleaded. 14 In such a situation, the state may
move to dismiss the complaint on the ground that it has been filed without its consent.
The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the
privilege it grants the state to defeat any legitimate claim against it by simply invoking its non-
suability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling
tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does
not say the state may not be sued under any circumstance. On the contrary, the rule says that the
state may not be sued without its consent, which clearly imports that it may be sued if it
consents.

The consent of the state to be sued may be manifested expressly or impliedly. Express consent
may be embodied in a general law or a special law. Consent is implied when the state enters into
a contract or it itself commences litigation.
The general law waiving the immunity of the state from suit is found in Act No. 3083, under
which the Philippine government "consents and submits to be sued upon any moneyed claim
involving liability arising from contract, express or implied, which could serve as a basis of civil
action between private parties." In Merritt v. Government of the Philippine Islands, 15 a special
law was passed to enable a person to sue the government for an alleged tort. When the
government enters into a contract, it is deemed to have descended to the level of the other
contracting party and divested of its sovereign immunity from suit with its implied
consent. 16 Waiver is also implied when the government files a complaint, thus opening itself to
a counterclaim. 17
The above rules are subject to qualification. Express consent is effected only by the will of the
legislature through the medium of a duly enacted statute. 18 We have held that not all contracts
entered into by the government will operate as a waiver of its non-suability; distinction must be
made between its sovereign and proprietary acts.19 As for the filing of a complaint by the
government, suability will result only where the government is claiming affirmative relief from
the defendant. 20
In the case of the United States of America, the customary rule of international law on state
immunity is expressed with more specificity in the RP-US Bases Treaty.Article III thereof
provides as follows:
It is mutually agreed that the United States shall have the rights, power and
authority within the bases which are necessary for the establishment, use,
 55

operation and defense thereof or appropriate for the control thereof and all the
rights, power and authority within the limits of the territorial waters and air
space adjacent to, or in the vicinity of, the bases which are necessary to provide
access to them or appropriate for their control.
The petitioners also rely heavily on Baer v. Tizon, 21 along with several other decisions, to
support their position that they are not suable in the cases below, the United States not having
waived its sovereign immunity from suit. It is emphasized that in Baer, the Court held:
The invocation of the doctrine of immunity from suit of a foreign state without
its consent is appropriate. More specifically, insofar as alien armed forces is
concerned, the starting point is Raquiza v. Bradford, a 1945 decision. In
dismissing a habeas corpus petition for the release of petitioners confined by
American army authorities, Justice Hilado, speaking for the Court, cited
Coleman v. Tennessee, where it was explicitly declared: `It is well settled that a
foreign army, permitted to march through a friendly country or to be stationed
in it, by permission of its government or sovereign, is exempt from the civil and
criminal jurisdiction of the place.' Two years later, in Tubb and Tedrow v.
Griess, this Court relied on the ruling in Raquiza v. Bradford and cited in
support thereof excerpts from the works of the following authoritative writers:
Vattel, Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair
and Lauterpacht. Accuracy demands the clarification that after the conclusion of
the Philippine-American Military Bases Agreement, the treaty provisions should
control on such matter, the assumption being that there was a manifestation of
the submission to jurisdiction on the part of the foreign power whenever
appropriate. More to the point is Syquia v. Almeda Lopez, where plaintiffs as
lessors sued the Commanding General of the United States Army in the
Philippines, seeking the restoration to them of the apartment buildings they
owned leased to the United States armed forces stationed in the Manila area. A
motion to dismiss on the ground of non-suability was filed and upheld by
respondent Judge. The matter was taken to this Court in a mandamus
proceeding. It failed. It was the ruling that respondent Judge acted correctly
considering that the `action must be considered as one against the U.S.
Government.' The opinion of Justice Montemayor continued: `It is clear that the
courts of the Philippines including the Municipal Court of Manila have no
jurisdiction over the present case for unlawful detainer. The question of lack of
jurisdiction was raised and interposed at the very beginning of the action. The
U.S. Government has not given its consent to the filing of this suit which is
essentially against her, though not in name. Moreover, this is not only a case of
a citizen filing a suit against his own Government without the latter's consent
but it is of a citizen filing an action against a foreign government without said
government's consent, which renders more obvious the lack of jurisdiction of
the courts of his country. The principles of law behind this rule are so
elementary and of such general acceptance that we deem it unnecessary to cite
authorities in support thereof.' Then came Marvel Building Corporation v.
Philippine War Damage Commission, where respondent, a United States
Agency established to compensate damages suffered by the Philippines during
World War II was held as falling within the above doctrine as the suit against it
 56

`would eventually be a charge against or financial liability of the United States

Government because . . ., the Commission has no funds of its own for the
purpose of paying money judgments.' The Syquia ruling was again explicitly
relied upon in Marquez Lim v. Nelson, involving a complaint for the recovery
of a motor launch, plus damages, the special defense interposed being `that the
vessel belonged to the United States Government, that the defendants merely
acted as agents of said Government, and that the United States Government is
therefore the real party in interest.' So it was in Philippine Alien Property
Administration v. Castelo, where it was held that a suit against Alien Property
Custodian and the Attorney General of the United States involving vested
property under the Trading with the Enemy Act is in substance a suit against the
United States. To the same effect is Parreno v. McGranery, as the following
excerpt from the opinion of Justice Tuazon clearly shows: `It is a widely
accepted principle of international law, which is made a part of the law of the
land (Article II, Section 3 of the Constitution), that a foreign state may not be
brought to suit before the courts of another state or its own courts without its
consent.' Finally, there is Johnson v. Turner, an appeal by the defendant, then
Commanding General, Philippine Command (Air Force, with office at Clark
Field) from a decision ordering the return to plaintiff of the confiscated military
payment certificates known as scrip money. In reversing the lower court
decision, this Tribunal, through Justice Montemayor, relied on Syquia v.
Almeda Lopez, explaining why it could not be sustained. LLphil
It bears stressing at this point that the above observations do not confer on the United States of
America a blanket immunity for all acts done by it or its agents in the Philippines. Neither may
the other petitioners claim that they are also insulated from suit in this country merely because
they have acted as agents of the United States in the discharge of their official functions.
There is no question that the United States of America, like any other state, will be deemed to
have impliedly waived its non-suability if it has entered into a contract in its proprietary or
private capacity. It is only when the contract involves its sovereign or governmental capacity that
no such waiver may be implied. This was our ruling inUnited States of America v.
Ruiz, 22 where the transaction in question dealt with the improvement of the wharves in the
naval installation at Subic Bay. As this was a clearly governmental function, we held that the
contract did not operate to divest the United States of its sovereign immunity from suit. In the
words of Justice Vicente Abad Santos:
The traditional rule of immunity exempts a State from being sued in the courts
of another State without its consent or waiver. This rule is a necessary
consequence of the principles of independence and equality of States. However,
the rules of International Law are not petrified; they are constantly developing
and evolving. And because the activities of states have multiplied, it has been
necessary to distinguish them between sovereign and governmental acts (jure
imperii) and private, commercial and proprietary acts (jure gestionis). The result
is that State immunity now extends only to acts jure imperii. The restrictive
application of State immunity is now the rule in the United States, the United
Kingdom and other states in Western Europe.
xxx xxx xxx
 57

The restrictive application of State immunity is proper only when the

proceedings arise out of commercial transactions of the foreign sovereign, its
commercial activities or economic affairs. Stated differently, a State may be
said to have descended to the level of an individual and can thus be deemed to
have tacitly given its consent to be sued only when it enters into business
contracts. It does not apply where the contract relates to the exercise of its
sovereign functions. In this case the projects are an integral part of the naval
base which is devoted to the defense of both the United States and the
Philippines, indisputably a function of the government of the highest order; they
are not utilized for nor dedicated to commercial or business purposes.
The other petitioners in the cases before us all aver they have acted in the discharge of their
official functions as officers or agents of the United States. However, this is a matter of evidence.
The charges against them may not be summarily dismissed on their mere assertion that their acts
are imputable to the United States of America, which has not given its consent to be sued. In
fact, the defendants are sought to be held answerable for personal torts in which the United
States itself is not involved. If found liable, they and they alone must satisfy the judgment.

In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever,

appropriated private land and converted it into public irrigation ditches. Sued for the value of the
lots invalidly taken by him, he moved to dismiss the complaint on the ground that the suit was in
effect against the Philippine government, which had not given its consent to be sued. This Court
sustained the denial of the motion and held that the doctrine of state immunity was not
applicable. The director was being sued in his private capacity for a personal tort.
With these considerations in mind, we now proceed to resolve the cases at hand.
III
It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners
therein were acting in the exercise of their official functions when they conducted the buy-bust
operation against the complainant and thereafter testified against him at his trial. The said
petitioners were in fact connected with the Air Force Office of Special Investigators and were
charged precisely with the function of preventing the distribution, possession and use of
prohibited drugs and prosecuting those guilty of such acts. It cannot for a moment be imagined
that they were acting in their private or unofficial capacity when they apprehended and later
testified against the complainant. It follows that for discharging their duties as agents of the
United States, they cannot be directly impleaded for acts imputable to their principal, which has
not given its consent to be sued. As we observed in Sanders v. Veridiano: 24
Given the official character of the above-described letters, we have to conclude
that the petitioners were, legally speaking, being sued as officers of the United
States government. As they have acted on behalf of that government, and within
the scope of their authority, it is that government, and not the petitioners
personally, that is responsible for their acts.
The private respondent invokes Article 2180 of the Civil Code which holds the government
liable if it acts through a special agent. The argument, it would seem, is premised on the ground
 58

that since the officers are designated "special agents," the United States government should be
liable for their torts.
There seems to be a failure to distinguish between suability and liability and a misconception
that the two terms are synonymous. Suability depends on the consent of the state to be sued,
liability on the applicable law and the established facts. The circumstance that a state is suable
does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does
not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed
itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff
the chance to prove, if it can, that the defendant is liable.
The said article establishes a rule of liability, not suability. The government may be held liable
under this rule only if it first allows itself to be sued through any of the accepted forms of
consent.
Moreover, the agent performing his regular functions is not a special agent even if he is so
denominated, as in the case at bar. No less important, the said provision appears to regulate only
the relations of the local state with its inhabitants and, hence, applies only to the Philippine
government and not to foreign governments impleaded in our courts.
We reject the conclusion of the trial court that the answer filed by the special counsel of the
Office of the Sheriff Judge Advocate of Clark Air Base was a submission by the United States
government to its jurisdiction. As we noted in Republic v. Purisima, 25 express waiver of
immunity cannot be made by a mere counsel of the government but must be effected through a
duly-enacted statute. Neither does such answer come under the implied forms of consent as
earlier discussed. Cdpr
But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the
discharge of their official functions, we hesitate to make the same conclusion in G.R. No. 80258.
The contradictory factual allegations in this case deserve in our view a closer study of what
actually happened to the plaintiffs. The record is too meager to indicate if the defendants were
really discharging their official duties or had actually exceeded their authority when the incident
in question occurred. Lacking this information, this Court cannot directly decide this case. The
needed inquiry must first be made by the lower court so it may assess and resolve the conflicting
claims of the parties on the basis of the evidence that has yet to be presented at the trial. Only
after it shall have determined in what capacity the petitioners were acting at the time of the
incident in question will this Court determine, if still necessary, if the doctrine of state immunity
is applicable.
In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located
at the U.S. Air Force Recreation Center, also known as the Open Mess Complex, at John Hay
Air Station. As manager of this complex, petitioner Lamachia is responsible for eleven
diversified activities generating an annual income of $2 million. Under his executive
management are three service restaurants, a cafeteria, a bakery, a Class VI store, a coffee and
pantry shop, a main cashier cage, an administrative office, and a decentralized warehouse which
maintains a stock level of $200,000.00 per month in resale items. He supervises 167 employees,
one of whom was Genove, with whom the United States government has concluded a collective
bargaining agreement.
From these circumstances, the Court can assume that the restaurant services offered at the John
Hay Air Station partake of the nature of a business enterprise undertaken by the United States
 59

government in its proprietary capacity. Such services are not extended to the American
servicemen for free as a perquisite of membership in the Armed Forces of the United States.
Neither does it appear that they are exclusively offered to these servicemen; on the contrary, it is
well known that they are available to the general public as well, including the tourists in Baguio
City, many of whom make it a point to visit John Hay for this reason. All persons availing
themselves of this facility pay for the privilege like all other customers as in ordinary restaurants.
Although the prices are concededly reasonable and relatively low, such services are undoubtedly
operated for profit, as a commercial and not a governmental activity.
The consequence of this finding is that the petitioners cannot invoke the doctrine of state
immunity to justify the dismissal of the damage suit against them by Genove. Such defense will
not prosper even if it be established that they were acting as agents of the United States when
they investigated and later dismissed Genove. For that matter, not even the United States
government itself can claim such immunity. The reason is that by entering into the employment
contract with Genove in the discharge of its proprietary functions, it impliedly divested itself of
its sovereign immunity from suit.
But these considerations notwithstanding, we hold that the complaint against the petitioners in
the court below must still be dismissed. While suable, the petitioners are nevertheless not liable.
It is obvious that the claim for damages cannot be allowed on the strength of the evidence before
us, which we have carefully examined.
The dismissal of the private respondent was decided upon only after a thorough investigation
where it was established beyond doubt that he had polluted the soup stock with urine. The
investigation, in fact, did not stop there. Despite the definitive finding of Genove's guilt, the case
was still referred to the board of arbitrators provided for in the collective bargaining agreement.
This board unanimously affirmed the findings of the investigators and recommended Genove's
dismissal. There was nothing arbitrary about the proceedings. The petitioners acted quite
properly in terminating the private respondent's employment for his unbelievably nauseating act.
It is surprising that he should still have the temerity to file his complaint for damages after
committing his utterly disgusting offense.
Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions granted
by the United States government are commercial enterprises operated by private persons. They
are not agencies of the United States Armed Forces nor are their facilities demandable as a
matter of right by the American servicemen. These establishments provide for the grooming
needs of their customers and offer not only the basic haircut and shave (as required in most
military organizations) but such other amenities as shampoo, massage, manicure and other
similar indulgences. And all for a fee. Interestingly, one of the concessionaires, private
respondent Valencia, was even sent abroad to improve his tonsorial business, presumably for the
benefit of his customers . No less significantly, if not more so, all the barbershop concessionaires
are, under the terms of their contracts, required to remit to the United States government fixed
commissions in consideration of the exclusive concessions granted to them in their respective
areas.
This being the case, the petitioners cannot plead any immunity from the complaint filed by the
private respondents in the court below. The contracts in question being decidedly commercial,
the conclusion reached in the United States of America v. Ruiz case cannot be applied here.
 60

The Court would have directly resolved the claims against the defendants as we have done in
G.R. No. 79470, except for the paucity of the record in the case at hand. The evidence of the
alleged irregularity in the grant of the barbershop concessions is not before us. This means that,
as in G.R. No. 80258, the respondent court will have to receive that evidence first, so it can later
determine on the basis thereof if the plaintiffs are entitled to the relief they seek. Accordingly,
this case must also be remanded to the court below for further proceedings.

IV
There are a number of other cases now pending before us which also involve the question of the
immunity of the United States from the jurisdiction of the Philippines. This is cause for regret,
indeed, as they mar the traditional friendship between two countries long allied in the cause of
democracy. It is hoped that the so-called "irritants" in their relations will be resolved in a spirit of
mutual accommodation and respect, without the inconvenience and asperity of litigation and
always with justice to both parties.
WHEREFORE, after considering all the above premises, the Court hereby renders judgment as
follows:
1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is directed to
proceed with the hearing and decision of Civil Case No. 4772. The temporary restraining order
dated December 11, 1986, is LIFTED.
2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298) is DISMISSED.
3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is DISMISSED.
The temporary restraining order dated October 14, 1987, is made permanent.
4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is directed to proceed
with the hearing and decision of Civil Case No. 4996. The temporary restraining order dated
October 27, 1987, is LIFTED. LibLex
All without any pronouncement as to costs.
SO ORDERED.
 61

EN BANC

[G.R. No. 173034. October 9, 2007.]

PHARMACEUTICAL and HEALTH CARE ASSOCIATION of the

PHILIPPINES, petitioner, vs. HEALTH SECRETARY FRANCISCO T.
DUQUE III; HEALTH UNDERSECRETARIES DR. ETHELYN P.
NIETO, DR. MARGARITA M. GALON, ATTY. ALEXANDER A.
PADILLA, & DR. JADE F. DEL MUNDO; and ASSISTANT
SECRETARIES DR. MARIO C. VILLAVERDE, DR. DAVID J.
LOZADA, AND DR. NEMESIO T. GAKO, respondents.

DECISION

AUSTRIA-MARTINEZ, J p:

The Court and all parties involved are in agreement that the best nourishment for an infant is
mother's milk. There is nothing greater than for a mother to nurture her beloved child straight
from her bosom. The ideal is, of course, for each and every Filipino child to enjoy the unequaled
benefits of breastmilk. But how should this end be attained?
Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to
nullify Administrative Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and
Regulations of Executive Order No. 51, Otherwise Known as The "Milk Code," Relevant
International Agreements, Penalizing Violations Thereof, and for Other Purposes (RIRR).
Petitioner posits that the RIRR is not valid as it contains provisions that are not constitutional and
go beyond the law it is supposed to implement.
Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of
the Department of Health (DOH). For purposes of herein petition, the DOH is deemed impleaded
as a co-respondent since respondents issued the questioned RIRR in their capacity as officials of
said executive agency. 1
Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28,
1986 by virtue of the legislative powers granted to the president under the Freedom Constitution.
One of the preambular clauses of the Milk Code states that the law seeks to give effect to Article
11 2 of the International Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted
by the World Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several
Resolutions to the effect that breastfeeding should be supported, promoted and protected, hence,
it should be ensured that nutrition and health claims are not permitted for breastmilk substitutes.
In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article
24 of said instrument provides that State Parties should take appropriate measures to diminish
infant and child mortality, and ensure that all segments of society, specially parents and children,
are informed of the advantages of breastfeeding.
 62

On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7,
2006.
However, on June 28, 2006, petitioner, representing its members that are manufacturers of
breastmilk substitutes, filed the present Petition for Certiorari and Prohibition with Prayer for the
Issuance of a Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.
The main issue raised in the petition is whether respondents officers of the DOH acted without or
in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and in violation of the provisions of the Constitution in promulgating the RIRR. 3
On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from
implementing the questioned RIRR.
After the Comment and Reply had been filed, the Court set the case for oral arguments on June
19, 2007. The Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to
wit:
The Court hereby sets the following issues:
1.Whether or not petitioner is a real party-in-interest;
2.Whether Administrative Order No. 2006-0012 or the Revised Implementing
Rules and Regulations (RIRR) issued by the Department of Health
(DOH) is not constitutional;
2.1Whether the RIRR is in accord with the provisions of Executive
Order No. 51 (Milk Code);
2.2Whether pertinent international agreements 1 entered into by the Philippines
are part of the law of the land and may be implemented by the DOH through the
RIRR; If in the affirmative, whether the RIRR is in accord with the international
agreements;
2.3Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the
due process clause and are in restraint of trade; and
2.4Whether Section 13 of the RIRR on Total Effect provides sufficient
standards.

1(1) United Nations Convention on the Rights of the Child; (2) the
WHO and Unicef "2002 Global Strategy on Infant and Young
Child Feeding;" and (3) various World Health Assembly (WHA)
Resolutions.
The parties filed their respective memoranda.
The petition is partly imbued with merit.
On the issue of petitioner's standing
With regard to the issue of whether petitioner may prosecute this case as the real party-in-
interest, the Court adopts the view enunciated in Executive Secretary v. Court of Appeals, 4 to
wit:
 63

The modern view is that an association has standing to complain of injuries to

its members. This view fuses the legal identity of an association with that of its
members.An association has standing to file suit for its workers despite its
lack of direct interest if its members are affected by the action. An
organization has standing to assert the concerns of its constituents.
xxx xxx xxx
. . . We note that, under its Articles of Incorporation, the respondent was
organized . . . to act as the representative of any individual, company, entity or
association on matters related to the manpower recruitment industry, and to
perform other acts and activities necessary to accomplish the purposes
embodied therein. Therespondent is, thus, the appropriate party to assert the
rights of its members, because it and its members are in every practical
sense identical. . . . The respondent [association] is but the medium through
which its individual members seek to make more effective the expression of
their voices and the redress of their grievances. 5 (Emphasis supplied)
which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco, 6 where the Court
ruled that an association has the legal personality to represent its members because the results
of the case will affect their vital interests. 7
Herein petitioner's Amended Articles of Incorporation contains a similar provision just like
inExecutive Secretary, that the association is formed "to represent directly or through approved
representatives the pharmaceutical and health care industry before the Philippine Government
and any of its agencies, the medical professions and the general public." 8 Thus, as an
organization, petitioner definitely has an interest in fulfilling its avowed purpose of representing
members who are part of the pharmaceutical and health care industry. Petitioner is duly
authorized 9 to take the appropriate course of action to bring to the attention of government
agencies and the courts any grievance suffered by its members which are directly affected by the
RIRR. Petitioner, which is mandated by its Amended Articles of Incorporation to represent the
entire industry, would be remiss in its duties if it fails to act on governmental action that would
affect any of its industry members, no matter how few or numerous they are. Hence, petitioner,
whose legal identity is deemed fused with its members, should be considered as a real party-in-
interest which stands to be benefited or injured by any judgment in the present action.
On the constitutionality of the provisions of the RIRR
First, the Court will determine if pertinent international instruments adverted to by respondents
are part of the law of the land.
Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby
amending and expanding the coverage of said law. The defense of the DOH is that the RIRR
implements not only the Milk Code but also various international instruments 10 regarding infant
and young child nutrition. It is respondents' position that said international instruments are
deemed part of the law of the land and therefore the DOH may implement them through the
RIRR.
The Court notes that the following international instruments invoked by respondents, namely: (1)
The United Nations Convention on the Rights of the Child; (2) The International Covenant on
Economic, Social and Cultural Rights; and (3) the Convention on the Elimination of All Forms
 64

of Discrimination Against Women, only provide in general terms that steps must be taken by
State Parties to diminish infant and child mortality and inform society of the advantages of
breastfeeding, ensure the health and well-being of families, and ensure that women are provided
with services and nutrition in connection with pregnancy and lactation. Said instruments do not
contain specific provisions regarding the use or marketing of breastmilk substitutes.
The international instruments that do have specific provisions regarding breastmilk substitutes
are the ICMBS and various WHA Resolutions.
Under the 1987 Constitution, international law can become part of the sphere of domestic law
either by transformation or incorporation. 11 The transformation method requires that an
international law be transformed into a domestic law through a constitutional mechanism such as
local legislation. The incorporation method applies when, by mere constitutional declaration,
international law is deemed to have the force of domestic law. 12
Treaties become part of the law of the land through transformation pursuant to Article VII,
Section 21 of the Constitution which provides that "[n]o treaty or international agreement shall
be valid and effective unless concurred in by at least two-thirds of all the members of the
Senate." Thus, treaties or conventional international law must go through a process prescribed
by the Constitution for it to be transformed into municipal law that can be applied to domestic
conflicts. 13

The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least
two-thirds of all members of the Senate as required under Section 21, Article VII of the 1987
Constitution.
However, the ICMBS which was adopted by the WHA in 1981 had been transformed into
domestic law through local legislation, the Milk Code. Consequently, it is the Milk Code that has
the force and effect of law in this jurisdiction and not the ICMBS per se.
The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at
this point that the Code did not adopt the provision in the ICMBS absolutely prohibiting
advertising or other forms of promotion to the general public of products within the scope of the
ICMBS. Instead, the Milk Code expressly provides that advertising, promotion, or other
marketing materials may be allowed if such materials are duly authorized and approved by
the Inter-Agency Committee (IAC).
On the other hand, Section 2, Article II of the 1987 Constitution, to wit:
SECTION 2. The Philippines renounces war as an instrument of national
policy, adopts the generally accepted principles of international law as part of
the law of the land and adheres to the policy of peace, equality, justice,
freedom, cooperation and amity with all nations. (Emphasis supplied)
embodies the incorporation method. 14
In Mijares v. Ranada, 15 the Court held thus:
[G]enerally accepted principles of international law, by virtue of the
incorporation clause of the Constitution, form part of the laws of the land even
if they do not derive from treaty obligations. The classical formulation in
international law sees those customary rules accepted as binding result
 65

from the combination [of] two elements: the established, widespread, and
consistent practice on the part of States; and a psychological element known
as the opinion juris sive necessitates(opinion as to law or necessity). Implicit in
the latter element is a belief that the practice in question is rendered
obligatory by the existence of a rule of law requiring it. 16 (Emphasis
supplied)
"Generally accepted principles of international law" refers to norms of general or customary
international law which are binding on all states, 17 i.e., renunciation of war as an instrument of
national policy, the principle of sovereign immunity, 18 a person's right to life, liberty and due
process, 19 and pacta sunt servanda, 20 among others. The concept of "generally accepted
principles of law" has also been depicted in this wise:
Some legal scholars and judges look upon certain "general principles of law" as
a primary source of international law because they have the "character of jus
rationale" and are "valid through all kinds of human societies." (Judge
Tanaka in his dissenting opinion in the 1966 South West Africa Case, 1966
I.C.J. 296). O'Connell holds that certain priniciples are part of international law
because they are "basic to legal systems generally" and hence part of the jus
gentium. These principles, he believes, are established by a process of
reasoning based on the common identity of all legal systems. If there should be
doubt or disagreement, one must look to state practice and determine whether
the municipal law principle provides a just and acceptable solution. . .
. 21 (Emphasis supplied)
Fr. Joaquin G. Bernas defines customary international law as follows:
Custom or customary international law means "a general and consistent practice
of states followed by them from a sense of legal obligation [opinio juris]."
(Restatement) This statement contains the two basic elements of custom:
the material factor, that is, how states behave, and the psychological
or subjective factor, that is, why they behave the way they do.
xxx xxx xxx
The initial factor for determining the existence of custom is the actual behavior
of states. This includes several elements: duration, consistency, and generality
of the practice of states.
The required duration can be either short or long. . . .
xxx xxx xxx
Duration therefore is not the most important element. More important is the
consistency and the generality of the practice. . . .
xxx xxx xxx
Once the existence of state practice has been established, it becomes necessary
to determine why states behave the way they do. Do states behave the way they
do because they consider it obligatory to behave thus or do they do it only as
a matter of courtesy? Opinio juris, or the belief that a certain form of
 66

behavior is obligatory, is what makes practice an international rule.

Without it, practice is not law. 22 (Underscoring and Emphasis supplied)
Clearly, customary international law is deemed incorporated into our domestic system. 23
WHA Resolutions have not been embodied in any local legislation. Have they attained the status
of customary law and should they then be deemed incorporated as part of the law of the land?
The World Health Organization (WHO) is one of the international specialized agencies allied
with the United Nations (UN) by virtue of Article 57, 24 in relation to Article 6325 of the UN
Charter. Under the 1946 WHO Constitution,it is the WHA which determines the policies of the
WHO, 26 and has the power to adopt regulations concerning "advertising and labeling of
biological, pharmaceutical and similar products moving in international commerce," 27 and to
"make recommendations to members with respect to any matter within the competence of the
Organization." 28 The legal effect of its regulations, as opposed to recommendations, is quite
different.
Regulations, along with conventions and agreements, duly adopted by the WHA bind member
states thus:
Article 19. The Health Assembly shall have authority to adopt conventions or
agreements with respect to any matter within the competence of the
Organization. A two-thirds vote of the Health Assembly shall be required for
the adoption of such conventions or agreements, which shall come into force
for each Member when accepted by it in accordance with its constitutional
processes.
Article 20.Each Member undertakes that it will, within eighteen months after
the adoption by the Health Assembly of a convention or agreement, take action
relative to the acceptance of such convention or agreement. Each Member
shall notify the Director-General of the action taken, and if it does not accept
such convention or agreement within the time limit, it will furnish a statement
of the reasons for non-acceptance. In case of acceptance, each Member agrees
to make an annual report to the Director-General in accordance with Chapter
XIV.
Article 21.The Health Assembly shall have authority to adopt regulations
concerning: (a) sanitary and quarantine requirements and other procedures
designed to prevent the international spread of disease; (b) nomenclatures with
respect to diseases, causes of death and public health practices; (c) standards
with respect to diagnostic procedures for international use; (d) standards with
respect to the safety, purity and potency of biological, pharmaceutical and
similar products moving in international commerce; (e) advertising and
labeling of biological, pharmaceutical and similar products moving in
international commerce.
Article 22.Regulations adopted pursuant to Article 21 shall come into force
for all Members after due notice has been given of their adoption by the
Health Assembly except for such Members as may notify the Director-General
of rejection or reservations within the period stated in the notice. (Emphasis
supplied)
 67

On the other hand, under Article 23, recommendations of the WHA do not come into
force for members, in the same way that conventions or agreements under Article 19
and regulations under Article 21 come into force. Article 23 of the WHO Constitution reads:
Article 23.The Health Assembly shall have authority to make
recommendations to Members with respect to any matter within the
competence of the Organization. (Emphasis supplied)
The absence of a provision in Article 23 of any mechanism by which the recommendation would
come into force for member states is conspicuous.
The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are
generally not binding, but they "carry moral and political weight, as they constitute the judgment
on a health issue of the collective membership of the highest international body in the field of
health." 29 Even the ICMBS itself was adopted as a mere recommendation, as WHA Resolution
No. 34.22 states:
"The Thirty-Fourth World Health Assembly . . . adopts, in the sense of Article
23 of the Constitution, the International Code of Marketing of Breastmilk
Substitutes annexed to the present resolution." (Emphasis supplied)
The Introduction to the ICMBS also reads as follows:
In January 1981, the Executive Board of the World Health Organization at its
sixty-seventh session, considered the fourth draft of the code, endorsed it, and
unanimously recommended to the Thirty-fourth World Health Assembly the
text of a resolution by which it would adopt the code in the form of a
recommendation rather than a regulation. . . . (Emphasis supplied)
The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the
WHO Constitution,to wit:
Art. 62.Each member shall report annually on the action taken with respect to
recommendations made to it by the Organization, and with respect to
conventions, agreements and regulations.
Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions
urging member states to implement the ICMBS are merely recommendatory and legally non-
binding. Thus, unlike what has been done with the ICMBS whereby the legislature
enacted most of the provisions into law which is the Milk Code, the subsequent WHA
Resolutions, 30 specifically providing for exclusive breastfeeding from 0-6 months,
continued breastfeeding up to 24 months, and absolutely prohibiting advertisements
and promotions of breastmilk substitutes, have not been adopted as a domestic law.

It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms,
principles and practices that influence state behavior. 31
"Soft law" does not fall into any of the categories of international law set forth in Article 38,
Chapter III of the 1946 Statute of the International Court of Justice. 32 It is, however, an
expression of non-binding norms, principles, and practices that influence state
behavior. 33 Certain declarations and resolutions of the UN General Assembly fall under this
category. 34 The most notable is the UN Declaration of Human Rights, which this Court has
 68

enforced in various cases, specifically, Government of Hongkong Special Administrative Region

v. Olalia, 35 Mejoff v. Director of Prisons, 36 Mijares v. Raada 37 and Shangri-la International
Hotel Management, Ltd. v. Developers Group of Companies, Inc. 38
The World Intellectual Property Organization (WIPO), a specialized agency attached to the UN
with the mandate to promote and protect intellectual property worldwide, has resorted to soft law
as a rapid means of norm creation, in order "to reflect and respond to the changing needs and
demands of its constituents." 39 Other international organizations which have resorted to soft
law include the International Labor Organization and the Food and Agriculture Organization (in
the form of theCodex Alimentarius). 40
WHO has resorted to soft law. This was most evident at the time of the Severe Acute Respiratory
Syndrome (SARS) and Avian flu outbreaks.
Although the IHR Resolution does not create new international law binding
on WHO member states, it provides an excellent example of the power of "soft
law" in international relations. International lawyers typically distinguish
binding rules of international law-"hard law"-from non-binding norms,
principles, and practices that influence state behavior-"soft law." WHO has
during its existence generated many soft law norms, creating a "soft law
regime" in international governance for public health.
The "soft law" SARS and IHR Resolutions represent significant steps in laying
the political groundwork for improved international cooperation on infectious
diseases. These resolutions clearly define WHO member states' normative duty
to cooperate fully with other countries and with WHO in connection with
infectious disease surveillance and response to outbreaks.
This duty is neither binding nor enforceable, but, in the wake of the SARS
epidemic, the duty is powerful politically for two reasons. First, the SARS
outbreak has taught the lesson that participating in, and enhancing, international
cooperation on infectious disease controls is in a country's self-interest . . . if
this warning is heeded, the "soft law" in the SARS and IHR Resolution could
inform the development of general and consistent state practice on infectious
disease surveillance and outbreak response, perhaps crystallizing eventually into
customary international law on infectious disease prevention and control. 41
In the Philippines, the executive department implemented certain measures recommended by
WHO to address the outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No.
201 on April 26, 2003 and E.O. No. 280 on February 2, 2004, delegating to various departments
broad powers to close down schools/establishments, conduct health surveillance and monitoring,
and ban importation of poultry and agricultural products.
It must be emphasized that even under such an international emergency, the duty of a state to
implement the IHR Resolution was still considered not binding or enforceable, although said
resolutions had great political influence.
As previously discussed, for an international rule to be considered as customary law, it must be
established that such rule is being followed by states because theyconsider it obligatory to
comply with such rules (opinio juris). Respondents have not presented any evidence to prove
that the WHA Resolutions, although signed by most of the member states, were in fact enforced
 69

or practiced by at least a majority of the member states; neither have respondents proven that any
compliance by member states with said WHA Resolutions was obligatory in nature.
Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary
international law that may be deemed part of the law of the land.
Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into
domestic law. The provisions of the WHA Resolutions cannot be considered as part of the
law of the land that can be implemented by executive agencies without the need of a law
enacted by the legislature.
Second, the Court will determine whether the DOH may implement the provisions of the WHA
Resolutions by virtue of its powers and functions under the Revised Administrative Code even in
the absence of a domestic law.
Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the
DOH shall define the national health policy and implement a national health plan within the
framework of the government's general policies and plans, and issue orders and regulations
concerning the implementation of established health policies.
It is crucial to ascertain whether the absolute prohibition on advertising and other forms of
promotion of breastmilk substitutes provided in some WHA Resolutions has been adopted as
part of the national health policy.
Respondents submit that the national policy on infant and young child feeding is embodied in
A.O. No. 2005-0014, dated May 23, 2005. Basically, the Administrative Order declared the
following policy guidelines: (1) ideal breastfeeding practices, such as early initiation of
breastfeeding, exclusive breastfeeding for the first six months, extended breastfeeding up to two
years and beyond; (2) appropriate complementary feeding, which is to start at age six months; (3)
micronutrient supplementation; (4) universal salt iodization; (5) the exercise of other feeding
options; and (6) feeding in exceptionally difficult circumstances. Indeed, the primacy of
breastfeeding for children is emphasized as a national health policy. However, nowhere in A.O.
No. 2005-0014 is it declared that as part of such health policy, the advertisement or
promotion of breastmilk substitutes should be absolutely prohibited.
The national policy of protection, promotion and support of breastfeeding cannot automatically
be equated with a total ban on advertising for breastmilk substitutes.
In view of the enactment of the Milk Code which does not contain a total ban on the advertising
and promotion of breastmilk substitutes, but instead, specifically creates an IAC which will
regulate said advertising and promotion, it follows that a total ban policy could be implemented
only pursuant to a law amending the Milk Code passed by the constitutionally authorized
branch of government, the legislature.
Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions,
can be validly implemented by the DOH through the subject RIRR.
Third, the Court will now determine whether the provisions of the RIRR are in accordance with
those of the Milk Code.
In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the
following:
 70

1.The Milk Code limits its coverage to children 0-12 months old, but the RIRR
extended its coverage to "young children" or those from ages two years
old and beyond:
MILK CODE RIRR

WHEREAS, in order to ensure that safe Section 2. Purpose These Revised

and adequate nutrition for infants is
provided, there is a need to protect and
promote breastfeeding and to inform the
public about the proper use of breastmilk
substitutes and supplements and related
products through adequate, consistent and
objective information and appropriate
regulation of the marketing and distribution
of the said substitutes, supplements and
related products;
Rules and Regulations are hereby promulgated
to ensure the provision of safe and adequate
nutrition for infants and young children by the
promotion, protection and support of
breastfeeding and by ensuring the proper use of
breastmilk substitutes, breastmilk supplements
and related products when these are medically
indicated and only when necessary, on the
basis of adequate information and through
appropriate marketing and distribution.

SECTION 4 (e). "Infant" means a Section 5 (ff). "Young Child" means a person
person falling within the age bracket of from the age of more than twelve (12) months
0-12 months. up to the age of three (3) years (36 months).
2.The Milk Code recognizes that infant formula may be a proper and possible
substitute for breastmilk in certain instances; but the RIRR provides
"exclusive breastfeeding for infants from 0-6 months" and declares that
"there is no substitute nor replacement for breastmilk":
MILK CODE RIRR

WHEREAS, in order to ensure that safe Section 4. Declaration of Principles The

and adequate nutrition for infants is following are the underlying principles from
provided, there is a need to protect and which the revised rules and regulations are
promote breastfeeding and to inform the premised upon:
public about the proper use of breastmilk
substitutes and supplements and related a. Exclusive breastfeeding is for infants
products through adequate, consistent and from 0 to six (6) months.
objective information and appropriate b. There is no substitute or replacement for
regulation of the marketing and distribution breastmilk.
of the said substitutes, supplements and
related products;
3.The Milk Code only regulates and does not impose unreasonable requirements
for advertising and promotion; RIRR imposes an absolute ban on such
activities for breastmilk substitutes intended for infants from 0-24
months old or beyond, and forbids the use of health and nutritional
claims. Section 13 of the RIRR, which provides for a "total effect" in the
promotion of products within the scope of the Code, is vague:
MILK CODE RIRR

SECTION 6. The General Public and
Mothers.
(a) No advertising, promotion or other
marketing materials, whether written, audio
or visual, for products within the scope of
this Code shall be printed, published,
distributed, exhibited and broadcast unless
such materials are duly authorized and
approved by an inter-agency committee
created herein pursuant to the applicable
standards provided for in this Code.
71
Section 4. Declaration of Principles The
following are the underlying principles from
which the revised rules and regulations are
premised upon:
xxx xxx xxx
f. Advertising, promotions, or sponsor-ships
of infant formula, breastmilk substitutes and
other related products are prohibited.
Section 11. Prohibition No advertising,
promotions, sponsorships, or marketing
materials and activities for breastmilk
substitutes intended for infants and young
children up to twenty-four (24) months, shall
be allowed, because they tend to convey or give
subliminal messages or impressions that
undermine breastmilk and breastfeeding or
otherwise exaggerate breastmilk substitutes
and/or replacements, as well as related
products covered within the scope of this Code.
Section 13. "Total Effect" Promotion of
products within the scope of this Code must be
objective and should not equate or make the
product appear to be as good or equal to
breastmilk or breastfeeding in the advertising
concept. It must not in any case undermine
breastmilk or breastfeeding. The "total effect"
should not directly or indirectly suggest that
buying their product would produce better
individuals, or resulting in greater love,
intelligence, ability, harmony or in any manner
bring better health to the baby or other such
exaggerated and unsubstantiated claim.
Section 15. Content of Materials. The
following shall not be included in advertising,
promotional and marketing materials:
a. Texts, pictures, illustrations or information
which discourage or tend to undermine the
benefits or superiority of breastfeeding or
which idealize the use of breastmilk substitutes

4.The RIRR imposes additional labeling requirements not found in the Milk
Code:
MILK CODE
SECTION 10. Containers/Label.
(a) Containers and/or labels shall be
designed to provide the necessary
information about the appropriate
use of the products, and in such a
way as not to discourage
breastfeeding.
(b) Each container shall have a clear,
conspicuous and easily readable
and understandable message in
Pilipino or English printed on it, or
on a label, which message can not
readily become separated from it,
and which shall include the
following points:
(i) the words "Important Notice"
or their equivalent;
(ii) a statement of the superiority
of breastfeeding;
(iii) a statement that the product
shall be used only on the advice
72
and milk supplements. In this connection, no
pictures of babies and children together with
their mothers, fathers, siblings, grandparents,
other relatives or caregivers (or yayas) shall be
used in any advertisements for infant formula
and breastmilk supplements;
b. The term "humanized," "maternalized,"
"close to mother's milk" or similar words in
describing breastmilk substitutes or milk
supplements;
c. Pictures or texts that idealize the use of
infant and milk formula.
Section 16. All health and nutrition claims for
products within the scope of the Code are
absolutely prohibited. For this purpose, any
phrase or words that connotes to increase
emotional, intellectual abilities of the infant
and young child and other like phrases
shall not be allowed.
RIRR
Section 26. Content Each container/label
shall contain such message, in both Filipino
and English languages, and which message
cannot be readily separated therefrom, relative
the following points:
(a) The words or phrase "Important
Notice" or "Government Warning" or
their equivalent;
(b) A statement of the superiority of
breastfeeding;
(c) A statement that there is no substitute
for breastmilk;
(d) A statement that the product shall be
used only on the advice of a health
worker as to the need for its use and
the proper methods of use;
(e) Instructions for appropriate
preparation, and a warning against
the health hazards of inappropriate
preparation; and
(f) The health hazards of unnecessary or
 73

of a health worker as to the improper use of infant formula and

need for its use and the proper other related products including
methods of use; and information that powdered infant
(iv) instructions for appropriate formula may contain pathogenic
preparation, and a warning microorganisms and must be prepared
against the health hazards of and used appropriately.
inappropriate preparation.
5.The Milk Code allows dissemination of information on infant formula to
health professionals; the RIRR totally prohibits such activity:
MILK CODE RIRR

SECTION 7. Health Care System. Section 22. No manufacturer, distributor, or

(b) No facility of the health care system representatives of products covered by the
shall be used for the purpose of promoting Code shall be allowed to conduct or be
infant formula or other products within the involved in any activity on breastfeeding
scope of this Code. This Code does not, promotion, education and production of
however, preclude the dissemination of Information, Education and Communication
information to health professionals as (IEC) materials on breastfeeding, holding of or
provided in Section 8 (b). participating as speakers in classes or seminars
for women and children activities and to avoid
SECTION 8. Health Workers. the use of these venues to market their brands
(b) Information provided by manufacturers or company names.
and distributors to health professionals
regarding products within the scope of this SECTION 16. All health and nutrition claims
Code shall be restricted to scientific and for products within the scope of the Code are
factual matters and such information shall absolutely prohibited. For this purpose, any
not imply or create a belief that bottle- phrase or words that connotes to increase
feeding is equivalent or superior to emotional, intellectual abilities of the infant
breastfeeding. It shall also include the and young child and other like phrases shall not
information specified in Section 5 (b). be allowed.
6.The Milk Code permits milk manufacturers and distributors to extend
assistance in research and continuing education of health professionals;
RIRR absolutely forbids the same.
MILK CODE RIRR

SECTION 8. Health Workers Section 4. Declaration of Principles

(e) Manufacturers and distributors of
products within the scope of this Code may
assist in the research, scholarships and
continuing education, of health
professionals, in accordance with the rules
and regulations promulgated by the
Ministry of Health.
The following are the underlying principles
from which the revised rules and regulations
are premised upon:
i. Milk companies, and their
representatives, should not form part of
any policymaking body or entity in relation
to the advancement of breasfeeding.

SECTION 22. No manufacturer, distributor,

or representatives of products covered by the
 74

Code shall be allowed to conduct or be

involved in any activity on breastfeeding
promotion, education and production of
Information, Education and Communication
(IEC) materials on breastfeeding, holding of or
participating as speakers in classes or seminars
for women and children activities and to avoid
the use of these venues to market their brands
or company names.

SECTION 32. Primary Responsibility of

Health Workers It is the primary
responsibility of the health workers to promote,
protect and support breastfeeding and
appropriate infant and young child feeding.
Part of this responsibility is to continuously
update their knowledge and skills on
breastfeeding. No assistance, support, logistics
or training from milk companies shall be
permitted.
7.The Milk Code regulates the giving of donations; RIRR absolutely prohibits
it.
MILK CODE RIRR

SECTION 6. The General Public and Section 51. Donations Within the Scope of
Mothers. This Code Donations of products,
(f) Nothing herein contained shall prevent materials, defined and covered under the Milk
donations from manufacturers and Code and these implementing rules and
distributors of products within the scope of regulations, shall be strictly prohibited.
this Code upon request by or with the
approval of the Ministry of Health. Section 52. Other Donations By Milk
Companies Not Covered by this Code.
Donations of products, equipments, and the
like, not otherwise falling within the scope of
this Code or these Rules, given by milk
companies and their agents, representatives,
whether in kind or in cash, may only be
coursed through the Inter Agency Committee
(IAC), which shall determine whether such
donation be accepted or otherwise.
8.The RIRR provides for administrative sanctions not imposed by the Milk
Code.
MILK CODE RIRR

Section 46. Administrative Sanctions.

The following administrative sanctions shall be
 75

imposed upon any person, juridical or natural,

found to have violated the provisions of the
Code and its implementing Rules and
Regulations:
a) 1st violation Warning;
b) 2nd violation Administrative fine
of a minimum of Ten Thousand
(P10,000.00) to Fifty Thousand
(P50,000.00) Pesos, depending on the
gravity and extent of the violation,
including the recall of the offending
product;
c) 3rd violation Administrative Fine
of a minimum of Sixty Thousand
(P60,000.00) to One Hundred Fifty
Thousand (P150,000.00) Pesos,
depending on the gravity and extent of
the violation, and in addition thereto,
the recall of the offending product,
and suspension of the Certificate of
Product Registration (CPR);
d) 4th violation Administrative Fine
of a minimum of Two Hundred
Thousand (P200,000.00) to Five
Hundred (P500,000.00) Thousand
Pesos, depending on the gravity and
extent of the violation; and in addition
thereto, the recall of the product,
revocation of the CPR, suspension of
the License to Operate (LTO) for one
year;
e) 5th and succeeding repeated
violations Administrative Fine of
One Million (P1,000,000.00) Pesos,
the recall of the offending product,
cancellation of the CPR, revocation
of the License to Operate (LTO) of
the company concerned, including the
blacklisting of the company to be
furnished the Department of Budget
and Management (DBM) and the
Department of Trade and Industry
(DTI);
f) An additional penalty of Two
Thousand Five Hundred (P2,500.00)
Pesos per day shall be made for every
 76

day the violation continues after

having received the order from
the IAC or other such appropriate
body, notifying and penalizing the
company for the infraction.
For purposes of determining whether or not
there is "repeated" violation, each product
violation belonging or owned by a company,
including those of their subsidiaries, are
deemed to be violations of the concerned milk
company and shall not be based on the specific
violating product alone.
9.The RIRR provides for repeal of existing laws to the contrary.
The Court shall resolve the merits of the allegations of petitioner seriatim.
1.Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12
months old. Section 3 of the Milk Code states:
SECTION 3. Scope of the Code The Code applies to the marketing, and
practices related thereto, of the following products: breastmilk substitutes,
including infant formula; other milk products, foods and beverages, including
bottle-fed complementary foods, when marketed or otherwise represented to be
suitable, with or without modification, for use as a partial or total replacement
of breastmilk; feeding bottles and teats. It also applies to their quality and
availability, and to information concerning their use.
Clearly, the coverage of the Milk Code is not dependent on the age of the child but on
the kind of product being marketed to the public. The law treats infant formula, bottle-fed
complementary food, and breastmilk substitute as separate and distinct product categories.
Section 4 (h) of the Milk Code defines infant formula as "a breastmilk substitute . . . to satisfy
the normal nutritional requirements of infants up to between four to six months of age, and
adapted to their physiological characteristics"; while under Section 4 (b), bottle-fed
complementary food refers to "any food, whether manufactured or locally prepared, suitable as a
complement to breastmilk or infant formula, when either becomes insufficient to satisfy the
nutritional requirements of the infant." An infant under Section 4 (e) is a person falling within
the age bracket 0-12 months. It is the nourishment of this group of infants or children aged 0-12
months that is sought to be promoted and protected by the Milk Code.
But there is another target group. Breastmilk substitute is defined under Section 4 (a) as "any
food being marketed or otherwise presented as a partial or total replacement for breastmilk,
whether or not suitable for that purpose." This section conspicuously lacks reference to any
particular age-group of children. Hence, the provision of the Milk Code cannot be
considered exclusive for children aged 0-12 months. In other words, breastmilk substitutes
may also be intended for young children more than 12 months of age. Therefore, by regulating
breastmilk substitutes, the Milk Code also intends to protect and promote the nourishment of
children more than 12 months old.
 77

Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided
in Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be
used by children aged over 12 months.
There is, therefore, nothing objectionable with Sections 2 42 and 5 (ff) 43 of the RIRR.
2.It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize
that breastmilk substitutes may be a proper and possible substitute for breastmilk.
The entirety of the RIRR, not merely truncated portions thereof, must be considered and
construed together. As held in De Luna v. Pascual, 44 "[t]he particular words, clauses and
phrases in the Rule should not be studied as detached and isolated expressions, but the whole and
every part thereof must be considered in fixing the meaning of any of its parts and in order to
produce a harmonious whole."
Section 7 of the RIRR provides that "when medically indicated and only when necessary, the
use of breastmilk substitutes is proper if based on complete and updated information." Section
8 of the RIRR also states that information and educational materials should include information
on the proper use of infant formula when the use thereof is needed.
Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of
breastmilk substitutes may be proper.
3.The Court shall ascertain the merits of allegations 3 45 and 4 46 together as they are interlinked
with each other.
To resolve the question of whether the labeling requirements and advertising regulations under
the RIRR are valid, it is important to deal first with the nature, purpose, and depth of the
regulatory powers of the DOH, as defined in general under the 1987 Administrative
Code, 47 and as delegated in particular under the Milk Code.
Health is a legitimate subject matter for regulation by the DOH (and certain other administrative
agencies) in exercise of police powers delegated to it. The sheer span of jurisprudence on that
matter precludes the need to further discuss it. 48 However, health information, particularly
advertising materials on apparently non-toxic products like breastmilk substitutes and
supplements, is a relatively new area for regulation by the DOH. 49
As early as the 1917 Revised Administrative Code of the Philippine Islands, 50 health
information was already within the ambit of the regulatory powers of the predecessor of
DOH. 51 Section 938 thereof charged it with the duty to protect the health of the people, and
vested it with such powers as "(g) the dissemination of hygienic information among the people
and especially the inculcation of knowledge as to the proper care of infants and the methods of
preventing and combating dangerous communicable diseases."
Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state
policy pronounced under Section 15, Article II of the 1987 Constitution, which is "to protect and
promote the right to health of the people and instill health consciousness among them." 52 To
that end, it was granted under Section 3 of the Administrative Code the power to "(6) propagate
health information and educate the population on important health, medical and environmental
matters which have health implications." 53
When it comes to information regarding nutrition of infants and young children, however, the
Milk Code specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the
 78

power to ensure that there is adequate, consistent and objective information on breastfeeding and
use of breastmilk substitutes, supplements and related products; and the power to control such
information. These are expressly provided for in Sections 12 and 5 (a), to wit:
SECTION 12.Implementation and Monitoring
xxx xxx xxx
(b)The Ministry of Health shall be principally responsible for the
implementation and enforcement of the provisions of this Code. For this
purpose, the Ministry of Health shall have the following powers and functions:
(1)To promulgate such rules and regulations as are necessary or proper
for the implementation of this Code and the accomplishment of its
purposes and objectives.
xxx xxx xxx
(4)To exercise such other powers and functions as may be necessary for
or incidental to the attainment of the purposes and objectives of this
Code.
SECTION 5. Information and Education
(a)The government shall ensure that objective and consistent information is
provided on infant feeding, for use by families and those involved in the field of
infant nutrition. This responsibility shall cover the planning, provision, design
and dissemination of information, and the control thereof, on infant nutrition.
(Emphasis supplied)
Further, DOH is authorized by the Milk Code to control the content of any information on
breastmilk vis- -vis breastmilk substitutes, supplement and related products, in the following
manner:
SECTION 5. . . .
(b)Informational and educational materials, whether written, audio, or visual,
dealing with the feeding of infants and intended to reach pregnant women and
mothers of infants, shall include clear information on all the following points:
(1) the benefits and superiority of breastfeeding; (2) maternal nutrition, and the
preparation for and maintenance of breastfeeding; (3) the negative effect on
breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing
the decision not to breastfeed; and (5) where needed, the proper use of infant
formula, whether manufactured industrially or home-prepared. When such
materials contain information about the use of infant formula, they shall
include the social and financial implications of its use; the health hazards of
inappropriate foods or feeding methods; and, in particular, the health hazards
of unnecessary or improper use of infant formula and other breastmilk
substitutes. Such materials shall not use any picture or text which may
idealize the use of breastmilk substitutes.

SECTION 8. Health Workers

 79

xxx xxx xxx

(b)Information provided by manufacturers and distributors to health
professionals regarding products within the scope of this Code shall be
restricted to scientific and factual matters, and such information shall not
imply or create a belief that bottlefeeding is equivalent or superior to
breastfeeding. It shall also include the information specified in Section 5(b).
SECTION 10.Containers/Label
(a)Containers and/or labels shall be designed to provide the necessary
information about the appropriate use of the products, and in such a way as not
to discourage breastfeeding.
xxx xxx xxx
(d)The term "humanized," "maternalized" or similar terms shall not be used.
(Emphasis supplied)
The DOH is also authorized to control the purpose of the information and to whom such
information may be disseminated under Sections 6 through 9 of the Milk Code54 to ensure that
the information that would reach pregnant women, mothers of infants, and health professionals
and workers in the health care system is restricted to scientific and factual matters and
shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding.
It bears emphasis, however, that the DOH's power under the Milk Code to control information
regarding breastmilk vis-a-visbreastmilk substitutes is not absolute as the power to control does
not encompass the power to absolutely prohibit the advertising, marketing, and promotion of
breastmilk substitutes.
The following are the provisions of the Milk Code that unequivocally indicate that the control
over information given to the DOH is not absolute and that absolute prohibition is not
contemplated by the Code:
a)Section 2 which requires adequate information and appropriate marketing and distribution of
breastmilk substitutes, to wit:
SECTION 2. Aim of the Code The aim of the Code is to contribute to the
provision of safe and adequate nutrition for infants by the protection and
promotion of breastfeeding and by ensuring the proper use of breastmilk
substitutes and breastmilk supplements when these are necessary, on the basis
of adequate information and through appropriate marketing and distribution.
b)Section 3 which specifically states that the Code applies to the marketing of and practices
related to breastmilk substitutes, including infant formula, and to information concerning their
use;
c)Section 5 (a) which provides that the government shall ensure that objective and consistent
information is provided on infant feeding;
d)Section 5 (b) which provides that written, audio or visual informational and educational
materials shall not use any picture or text which may idealize the use of breastmilk substitutes
and should include information on the health hazards of unnecessary or improper use of said
product;
 80

e)Section 6 (a) in relation to Section 12 (a) which creates and empowers the IAC to review and
examine advertising, promotion, and other marketing materials;
f)Section 8 (b) which states that milk companies may provide information to health professionals
but such information should be restricted to factual and scientific matters and shall not imply or
create a belief that bottlefeeding is equivalent or superior to breastfeeding; and
g)Section 10 which provides that containers or labels should not contain information that would
discourage breastfeeding and idealize the use of infant formula.
It is in this context that the Court now examines the assailed provisions of the RIRR regarding
labeling and advertising.
Sections 13 55 on "total effect" and 26 56 of Rule VII of the RIRR contain some labeling
requirements, specifically: a) that there be a statement that there is no substitute to breastmilk;
and b) that there be a statement that powdered infant formula may contain pathogenic
microorganisms and must be prepared and used appropriately. Section 16 57 of the RIRR
prohibits all health and nutrition claims for products within the scope of the Milk Code, such as
claims of increased emotional and intellectual abilities of the infant and young child.
These requirements and limitations are consistent with the provisions of Section 8 of the Milk
Code, to wit:
SECTION 8. Health workers
xxx xxx xxx
(b)Information provided by manufacturers and distributors to health
professionals regarding products within the scope of this Code shall
be restricted to scientific and factual matters, and such information shall
not imply or create a belief that bottlefeeding is equivalent or superior to
breastfeeding. It shall also include the information specified in Section
5. 58 (Emphasis supplied)
and Section 10 (d) 59 which bars the use on containers and labels of the terms "humanized,"
"maternalized," or similar terms.
These provisions of the Milk Code expressly forbid information that would imply or create a
belief that there is any milk product equivalent to breastmilk or which is humanized or
maternalized, as such information would be inconsistent with the superiority of breastfeeding.
It may be argued that Section 8 of the Milk Code refers only to information given to health
workers regarding breastmilk substitutes, not to containers and labels thereof. However, such
restrictive application of Section 8 (b) will result in the absurd situation in which milk companies
and distributors are forbidden to claim to health workers that their products are substitutes or
equivalents of breastmilk, and yet be allowed to display on the containers and labels of their
products the exact opposite message. That askewed interpretation of the Milk Code is precisely
what Section 5 (a) thereof seeks to avoid by mandating that all information regarding
breastmilk vis-a-vis breastmilk substitutes be consistent, at the same time giving the government
control over planning, provision, design, and dissemination of information on infant feeding.
Thus, Section 26 (c) of the RIRR which requires containers and labels to state that the product
offered is not a substitute for breastmilk, is a reasonable means of enforcing Section 8 (b) of the
 81

Milk Code and deterring circumvention of the protection and promotion of breastfeeding as
embodied in Section 2 60 of the Milk Code.
Section 26 (f) 61 of the RIRR is an equally reasonable labeling requirement. It implements
Section 5 (b) of the Milk Code which reads:
SECTION 5. . . .
xxx xxx xxx
(b)Informational and educational materials, whether written, audio, or visual,
dealing with the feeding of infants and intended to reach pregnant women and
mothers of infants, shall include clear information on all the following points: . .
. (5) where needed, the proper use of infant formula, whether manufactured
industrially or home-prepared. When such materials contain information about
the use of infant formula, they shall include the social and financial implications
of its use; the health hazards of inappropriate foods or feeding methods; and,
in particular, the health hazards of unnecessary or improper use of infant
formula and other breastmilk substitutes. Such materials shall not use any
picture or text which may idealize the use of breastmilk substitutes. (Emphasis
supplied)
The label of a product contains information about said product intended for the buyers thereof.
The buyers of breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely
adds a fair warning about the likelihood of pathogenic microorganisms being present in infant
formula and other related products when these are prepared and used inappropriately.
Petitioner's counsel has admitted during the hearing on June 19, 2007 that formula milk is prone
to contaminations and there is as yet no technology that allows production of powdered infant
formula that eliminates all forms of contamination. 62
Ineluctably, the requirement under Section 26 (f) of the RIRR for the label to contain the
message regarding health hazards including the possibility of contamination with pathogenic
microorganisms is in accordance with Section 5 (b) of the Milk Code.
The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk
substitutes and supplements and related products cannot be questioned. It is its intervention into
the area of advertising, promotion, and marketing that is being assailed by petitioner.
In furtherance of Section 6 (a) of the Milk Code, to wit:
SECTION 6. The General Public and Mothers.
(a)No advertising, promotion or other marketing materials, whether written,
audio or visual, for products within the scope of this Code shall be printed,
published, distributed, exhibited and broadcast unless such materials are duly
authorized and approved by an inter-agency committee created herein pursuant
to the applicable standards provided for in this Code.
the Milk Code invested regulatory authority over advertising, promotional and marketing
materials to an IAC, thus:
SECTION 12. Implementation and Monitoring
 82

(a)For purposes of Section 6(a) of this Code, an inter-agency committee

composed of the following members is hereby created:
Minister of HealthChairman
Minister of Trade and IndustryMember
Minister of JusticeMember
Minister of Social Services and DevelopmentMember
The members may designate their duly authorized representative to every
meeting of the Committee.
The Committee shall have the following powers and functions:
(1)To review and examine all advertising, promotion or other marketing
materials, whether written, audio or visual, on products within the scope of this
Code;
(2)To approve or disapprove, delete objectionable portions from and prohibit
the printing, publication, distribution, exhibition and broadcast of, all
advertising promotion or other marketing materials, whether written, audio or
visual, on products within the scope of this Code;

(3)To prescribe the internal and operational procedure for the exercise of its
powers and functions as well as the performance of its duties and
responsibilities; and
(4)To promulgate such rules and regulations as are necessary or proper for
the implementation of Section 6(a) of this Code. . . . (Emphasis supplied)
However, Section 11 of the RIRR, to wit:
SECTION 11. Prohibition No advertising, promotions, sponsorships, or
marketing materials and activities for breastmilk substitutes intended for infants
and young children up to twenty-four (24) months, shall be allowed, because
they tend to convey or give subliminal messages or impressions that undermine
breastmilk and breastfeeding or otherwise exaggerate breastmilk substitutes
and/or replacements, as well as related products covered within the scope of this
Code.
prohibits advertising, promotions, sponsorships or marketing materials and activities for
breastmilk substitutes in line with the RIRR's declaration of principle under Section 4 (f), to
wit:
SECTION 4. Declaration of Principles
xxx xxx xxx
(f)Advertising, promotions, or sponsorships of infant formula, breastmilk
substitutes and other related products are prohibited.
The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory
authority given to the IAC but also imposed absolute prohibition on advertising, promotion,
and marketing.
 83

Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in
Section 6 thereof for prior approval by IAC of all advertising, marketing and promotional
materials prior to dissemination.
Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly insisted,
during the oral arguments on June 19, 2007, that the prohibition under Section 11 is not actually
operational, viz:
SOLICITOR GENERAL DEVANADERA:
xxx xxx xxx
. . . Now, the crux of the matter that is being questioned by Petitioner is whether
or not there is an absolute prohibition on advertising making AO 2006-12
unconstitutional. We maintained that what AO 2006-12 provides is not an
absolute prohibition because Section 11 while it states and it is entitled
prohibition it states that no advertising, promotion, sponsorship or marketing
materials and activities for breast milk substitutes intended for infants and
young children up to 24 months shall be allowed because this is the standard
they tend to convey or give subliminal messages or impression undermine that
breastmilk or breastfeeding . . . .
We have to read Section 11 together with the other Sections because the other
Section, Section 12, provides for the inter agency committee that is empowered
to process and evaluate all the advertising and promotion materials.
xxx xxx xxx
What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it
simply regulates the advertisement and the promotions of breastfeeding milk
substitutes.
xxx xxx xxx
Now, the prohibition on advertising, Your Honor, must be taken together with
the provision on the Inter-Agency Committee that processes and evaluates
because there may be some information dissemination that are straight forward
information dissemination. What the AO 2006 is trying to prevent is any
material that will undermine the practice of breastfeeding, Your Honor.
xxx xxx xxx
ASSOCIATE JUSTICE SANTIAGO:
Madam Solicitor General, under the Milk Code, which body has authority or
power to promulgate Rules and Regulations regarding the Advertising,
Promotion and Marketing of Breastmilk Substitutes?
SOLICITOR GENERAL DEVANADERA:
Your Honor, please, it is provided that the Inter-Agency Committee, Your
Honor.
xxx xxx xxx
ASSOCIATE JUSTICE SANTIAGO:
 84

. . . Don't you think that the Department of Health overstepped its rule making
authority when it totally banned advertising and promotion under Section 11
prescribed the total effect rule as well as the content of materials under Section
13 and 15 of the rules and regulations?
SOLICITOR GENERAL DEVANADERA:
Your Honor, please, first we would like to stress that there is no total absolute
ban. Second, the Inter-Agency Committee is under the Department of Health,
Your Honor.
xxx xxx xxx
ASSOCIATE JUSTICE NAZARIO:
. . . Did I hear you correctly, Madam Solicitor, that there is no absolute ban on
advertising of breastmilk substitutes in the Revised Rules?
SOLICITOR GENERAL DEVANADERA:
Yes, your Honor.
ASSOCIATE JUSTICE NAZARIO:
But, would you nevertheless agree that there is an absolute ban on advertising of
breastmilk substitutes intended for children two (2) years old and younger?
SOLICITOR GENERAL DEVANADERA:
It's not an absolute ban, Your Honor, because we have the Inter-Agency
Committee that can evaluate some advertising and promotional materials,
subject to the standards that we have stated earlier, which are they should not
undermine breastfeeding, Your Honor.
xxx xxx xxx
. . . Section 11, while it is titled Prohibition, it must be taken in relation with the
other Sections, particularly 12 and 13 and 15, Your Honor, because it is
recognized that the Inter-Agency Committee has that power to evaluate
promotional materials, Your Honor.
ASSOCIATE JUSTICE NAZARIO:
So in short, will you please clarify there's no absolute ban on advertisement
regarding milk substitute regarding infants two (2) years below?
SOLICITOR GENERAL DEVANADERA:
We can proudly say that the general rule is that there is a prohibition, however,
we take exceptions and standards have been set. One of which is that, the Inter-
Agency Committee can allow if the advertising and promotions will not
undermine breastmilk and breastfeeding, Your Honor. 63
Sections 11 and 4 (f) of the RIRR are clearly violative of the Milk Code.
However, although it is the IAC which is authorized to promulgate rules and regulations for the
approval or rejection of advertising, promotional, or other marketing materials under Section 12
(a) of the Milk Code, said provision must be related to Section 6 thereof which in turn provides
 85

that the rules and regulations must be "pursuant to the applicable standards provided for in this
Code." Said standards are set forth in Sections 5 (b), 8 (b), and 10 of the Code, which, at the risk
of being repetitious, and for easy reference, are quoted hereunder:
SECTION 5. Information and Education
xxx xxx xxx
(b)Informational and educational materials, whether written, audio, or visual,
dealing with the feeding of infants and intended to reach pregnant women and
mothers of infants, shall include clear information on all the following points:
(1) the benefits and superiority of breastfeeding; (2) maternal nutrition, and the
preparation for and maintenance of breastfeeding; (3) the negative effect on
breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing
the decision not to breastfeed; and (5) where needed, the proper use of infant
formula, whether manufactured industrially or home-prepared. When such
materials contain information about the use of infant formula, they shall include
the social and financial implications of its use; the health hazards of
inappropriate foods of feeding methods; and, in particular, the health hazards of
unnecessary or improper use of infant formula and other breastmilk substitutes.
Such materials shall not use any picture or text which may idealize the use of
breastmilk substitutes.
xxx xxx xxx
SECTION 8. Health Workers.
xxx xxx xxx
(b)Information provided by manufacturers and distributors to health
professionals regarding products within the scope of this Code shall be
restricted to scientific and factual matters and such information shall not imply
or create a belief that bottle feeding is equivalent or superior to breastfeeding. It
shall also include the information specified in Section 5(b).
xxx xxx xxx
SECTION 10. Containers/Label
(a)Containers and/or labels shall be designed to provide the necessary
information about the appropriate use of the products, and in such a way as not
to discourage breastfeeding.
(b)Each container shall have a clear, conspicuous and easily readable and
understandable message in Pilipino or English printed on it, or on a label, which
message can not readily become separated from it, and which shall include the
following points:
(i)the words "Important Notice" or their equivalent;
(ii)a statement of the superiority of breastfeeding;
(iii)a statement that the product shall be used only on the advice of a
health worker as to the need for its use and the proper methods of use;
and
 86

(iv)instructions for appropriate preparation, and a warning against the

health hazards of inappropriate preparation.
Section 12 (b) of the Milk Code designates the DOH as the principal implementing agency for
the enforcement of the provisions of the Code. In relation to such responsibility of the DOH,
Section 5 (a) of the Milk Code states that:
SECTION 5. Information and Education
(a)The government shall ensure that objective and
consistent information is provided on infant feeding, for use by families
and those involved in the field of infant nutrition. This responsibility
shall cover the planning, provision, design and dissemination of
information, and the control thereof, on infant nutrition. (Emphasis
supplied)
Thus, the DOH has the significant responsibility to translate into operational terms the
standards set forth in Sections 5, 8, and 10 of the Milk Code, by which the IAC shall
screen advertising, promotional, or other marketing materials.
It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR
which reads as follows:

SECTION 13."Total Effect" Promotion of products within the scope of this

Code must be objective and should not equate or make the product appear to be
as good or equal to breastmilk or breastfeeding in the advertising concept. It
must not in any case undermine breastmilk or breastfeeding. The "total effect"
should not directly or indirectly suggest that buying their product would
produce better individuals, or resulting in greater love, intelligence, ability,
harmony or in any manner bring better health to the baby or other such
exaggerated and unsubstantiated claim.
Such standards bind the IAC in formulating its rules and regulations on advertising,
promotion, and marketing. Through that single provision, the DOH exercises control over the
information content of advertising, promotional and marketing materials on breastmilk vis-a-
vis breastmilk substitutes, supplements and other related products. It also sets a viable
standard against which the IAC may screen such materials before they are made public.
In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs, 64 the Court held:
. . . [T]his Court had, in the past, accepted as sufficient standards the following:
"public interest," "justice and equity," "public convenience and welfare," and
"simplicity, economy and welfare." 65
In this case, correct information as to infant feeding and nutrition is infused with public interest
and welfare.
4.With regard to activities for dissemination of information to health professionals, the Court
also finds that there is no inconsistency between the provisions of the Milk Code and the RIRR.
Section 7 (b) 66 of the Milk Code, in relation to Section 8 (b) 67 of the same Code, allows
dissemination of information to health professionals but suchinformation is restricted to
scientific and factual matters.
 87

Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of
information to health professionals on scientific and factual matters. What it prohibits is the
involvement of the manufacturer and distributor of the products covered by the Code in activities
for the promotion, education and production of Information, Education and Communication
(IEC) materials regarding breastfeeding that are intended for women and children. Said
provision cannot be construed to encompass even the dissemination of information to health
professionals, as restricted by the Milk Code.
5.Next, petitioner alleges that Section 8 (e) 68 of the Milk Code permits milk manufacturers and
distributors to extend assistance in research and in the continuing education of health
professionals, while Sections 22 and 32 of the RIRR absolutely forbid the same. Petitioner also
assails Section 4 (i) 69 of the RIRR prohibiting milk manufacturers' and distributors'
participation in any policymaking body in relation to the advancement of breastfeeding.
Section 4 (i) of the RIRR provides that milk companies and their representatives should not form
part of any policymaking body or entity in relation to the advancement of breastfeeding. The
Court finds nothing in said provisions which contravenes the Milk Code. Note that under Section
12 (b) of the Milk Code, it is the DOH which shall be principally responsible for the
implementation and enforcement of the provisions of said Code. It is entirely up to the DOH to
decide which entities to call upon or allow to be part of policymaking bodies on breastfeeding.
Therefore, the RIRR's prohibition on milk companies' participation in any policymaking body in
relation to the advancement of breastfeeding is in accord with the Milk Code.
Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from
giving reasearch assistance and continuing education to health professionals. Section 22 70 of
the RIRR does not pertain to research assistance to or the continuing education of health
professionals; rather, it deals with breastfeeding promotion and education for women and
children. Nothing in Section 22 of the RIRR prohibits milk companies from giving assistance
for research or continuing education to health professionals; hence, petitioner's argument against
this particular provision must be struck down.
It is Sections 9 71 and 10 72 of the RIRR which govern research assistance. Said sections of the
RIRR provide that research assistance for health workers and researchers may be allowed
upon approval of an ethics committee, and with certain disclosure requirements imposed
on the milk company and on the recipient of the research award.
The Milk Code endows the DOH with the power to determine how such research or educational
assistance may be given by milk companies or under what conditions health workers may accept
the assistance. Thus, Sections 9 and 10 of the RIRR imposing limitations on the kind of research
done or extent of assistance given by milk companies are completely in accord with the Milk
Code.
Petitioner complains that Section 32 73 of the RIRR prohibits milk companies from giving
assistance, support, logistics or training to health workers. This provision is within the
prerogative given to the DOH under Section 8 (e) 74 of the Milk Code, which provides that
manufacturers and distributors of breastmilk substitutes may assist in researches, scholarships
and the continuing education, of health professionals in accordance with the rules and regulations
promulgated by the Ministry of Health, now DOH.
6.As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk
Code. Section 6 (f) of the Milk Code provides that donations may be made by manufacturers and
 88

distributors of breastmilk substitutes upon the request or with the approval of the DOH. The
law does not proscribe the refusal of donations. The Milk Code leaves it purely to the discretion
of the DOH whether to request or accept such donations. The DOH then appropriately exercised
its discretion through Section 51 75 of the RIRR which sets forth its policy not to request or
approve donations from manufacturers and distributors of breastmilk substitutes.
It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any
donation from milk companies not covered by the Code should be coursed through the IAC
which shall determine whether such donation should be accepted or refused. As reasoned out by
respondents, the DOH is not mandated by the Milk Code to accept donations. For that matter, no
person or entity can be forced to accept a donation. There is, therefore, no real inconsistency
between the RIRR and the law because the Milk Code does not prohibit the DOH from refusing
donations.
7.With regard to Section 46 of the RIRR providing for administrative sanctions that are not
found in the Milk Code, the Court upholds petitioner's objection thereto.
Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc. 76 is misplaced.
The glaring difference in said case and the present case before the Court is that, in the Civil
Aeronautics Board, the Civil Aeronautics Administration (CAA) was expressly granted by the
law (R.A. No. 776) the power to impose fines and civil penalties, while the Civil Aeronautics
Board (CAB) was granted by the same law the power to review on appeal the order or decision
of the CAA and to determine whether to impose, remit, mitigate, increase or compromise such
fine and civil penalties. Thus, the Court upheld the CAB's Resolution imposing administrative
fines.
In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc., 77 the Court
upheld the Department of Energy (DOE) Circular No. 2000-06-10 implementing Batas
Pambansa (B.P.) Blg. 33. The circular provided for fines for the commission of prohibited acts.
The Court found that nothing in the circular contravened the law because the DOE was expressly
authorized by B.P. Blg. 33 and R.A. No. 7638 to impose fines or penalties.
In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH
the authority to fix or impose administrative fines. Thus, without any express grant of power to
fix or impose such fines, the DOH cannot provide for those fines in the RIRR. In this regard, the
DOH again exceeded its authority by providing for such fines or sanctions in Section 46 of the
RIRR. Said provision is, therefore, null and void.
The DOH is not left without any means to enforce its rules and regulations. Section 12 (b) (3) of
the Milk Code authorizes the DOH to "cause the prosecution of the violators of this Code and
other pertinent laws on products covered by this Code." Section 13 of the Milk Code provides for
the penalties to be imposed on violators of the provision of the Milk Code or the rules and
regulations issued pursuant to it, to wit:
SECTION 13. Sanctions
(a)Any person who violates the provisions of this Code or the rules and
regulations issued pursuant to this Code shall, upon conviction, be punished
by a penalty of two (2) months to one (1) year imprisonment or a fine of not less
than One Thousand Pesos (P1,000.00) nor more than Thirty Thousand Pesos
(P30,000.00) or both. Should the offense be committed by a juridical person, the
 89

chairman of the Board of Directors, the president, general manager, or the

partners and/or the persons directly responsible therefor, shall be penalized.
(b)Any license, permit or authority issued by any government agency to any
health worker, distributor, manufacturer, or marketing firm or personnel for the
practice of their profession or occupation, or for the pursuit of their business,
may, upon recommendation of the Ministry of Health, be suspended or revoked
in the event of repeated violations of this Code, or of the rules and regulations
issued pursuant to this Code. (Emphasis supplied)
8.Petitioner's claim that Section 57 of the RIRR repeals existing laws that are contrary to the
RIRR is frivolous.

Section 57 reads:
SECTION 57.Repealing Clause All orders, issuances, and rules and
regulations or parts thereof inconsistent with these revised rules and
implementing regulations are hereby repealed or modified accordingly.
Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and
rules and regulations. Thus, said provision is valid as it is within the DOH's rule-making power.
An administrative agency like respondent possesses quasi-legislative or rule-making power or
the power to make rules and regulations which results in delegated legislation that is within the
confines of the granting statute and the Constitution, and subject to the doctrine of non-
delegability and separability of powers. 78 Such express grant of rule-making power necessarily
includes the power to amend, revise, alter, or repeal the same. 79 This is to allow administrative
agencies flexibility in formulating and adjusting the details and manner by which they are to
implement the provisions of a law, 80 in order to make it more responsive to the times. Hence, it
is a standard provision in administrative rules that prior issuances of administrative agencies that
are inconsistent therewith are declared repealed or modified.
In fine, only Sections 4 (f), 11 and 46 are ultra vires, beyond the authority of the DOH to
promulgate and in contravention of the Milk Code and, therefore, null and void. The rest of the
provisions of the RIRR are in consonance with the Milk Code.
Lastly, petitioner makes a "catch-all" allegation that:
. . . [T]he questioned RIRR sought to be implemented by the Respondents
is unnecessary and oppressive, and is offensive to the due process clause
of the Constitution, insofar as the same is in restraint of trade and because a
provision therein is inadequate to provide the public with a comprehensible
basis to determine whether or not they have committed a
violation. 81 (Emphasis supplied)
Petitioner refers to Sections 4 (f), 82 4 (i), 83 5 (w), 84 11, 85 22, 86 32, 87 46, 88 and
52 89 as the provisions that suppress the trade of milk and, thus, violate the due process
clause of the Constitution.
The framers of the constitution were well aware that trade must be subjected to some form of
regulation for the public good. Public interest must be upheld over business interests. 90 In Pest
 90

Management Association of the Philippines v. Fertilizer and Pesticide Authority, 91 it was held
thus:
. . . Furthermore, as held in Association of Philippine Coconut Desiccators v.
Philippine Coconut Authority, despite the fact that "our present
Constitution enshrines free enterprise as a policy, it nonetheless reserves to
the government the power to intervene whenever necessary to promote the
general welfare." There can be no question that the unregulated use or
proliferation of pesticides would be hazardous to our environment. Thus, in the
aforecited case, the Court declared that "free enterprise does not call for
removal of 'protective regulations'." . . . It must be clearly explained and
proven by competent evidence just exactly how such protective regulation
would result in the restraint of trade. [Emphasis and underscoring supplied]
In this case, petitioner failed to show that the proscription of milk manufacturers' participation in
any policymaking body (Section 4 (i)), classes and seminars for women and children (Section
22); the giving of assistance, support and logistics or training (Section 32); and the giving of
donations (Section 52) would unreasonably hamper the trade of breastmilk substitutes. Petitioner
has not established that the proscribed activities are indispensable to the trade of breastmilk
substitutes. Petitioner failed to demonstrate that the aforementioned provisions of the RIRR are
unreasonable and oppressive for being in restraint of trade.
Petitioner also failed to convince the Court that Section 5 (w) of the RIRR is unreasonable and
oppressive. Said section provides for the definition of the term "milk company," to wit:
SECTION 5 . . . . (w) "Milk Company" shall refer to the owner, manufacturer,
distributor of infant formula, follow-up milk, milk formula, milk supplement,
breastmilk substitute or replacement, or by any other description of such nature,
including their representatives who promote or otherwise advance their
commercial interests in marketing those products;
On the other hand, Section 4 of the Milk Code provides:
(d)"Distributor" means a person, corporation or any other entity in the
public or private sector engaged in the business (whether directly or
indirectly) of marketing at the wholesale or retail level a product within
the scope of this Code. A "primary distributor" is a manufacturer's sales
agent, representative, national distributor or broker.
xxx xxx xxx
(j)"Manufacturer" means a corporation or other entity in the public or
private sector engaged in the business or function (whether directly or
indirectly or through an agent or and entity controlled by or under
contract with it) of manufacturing a products within the scope of this
Code.
Notably, the definition in the RIRR merely merged together under the term "milk company"
the entities defined separately under the Milk Code as "distributor" and "manufacturer." The
RIRR also enumerated in Section 5 (w) the products manufactured or distributed by an entity
that would qualify it as a "milk company," whereas in the Milk Code, what is used is the
 91

phrase "products within the scope of this Code." Those are the only differences between the
definitions given in the Milk Code and the definition as re-stated in the RIRR.
Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and
distributors, the Court sees no harm in the RIRR providing for just one term to encompass both
entities. The definition of "milk company" in the RIRR and the definitions of "distributor" and
"manufacturer" provided for under the Milk Code are practically the same.
The Court is not convinced that the definition of "milk company" provided in the RIRR would
bring about any change in the treatment or regulation of "distributors" and "manufacturers" of
breastmilk substitutes, as defined under the Milk Code.
Except Sections 4 (f), 11 and 46, the rest of the provisions of the RIRR are in consonance with
the objective, purpose and intent of the Milk Code, constituting reasonable regulation of an
industry which affects public health and welfare and, as such, the rest of the RIRR do not
constitute illegal restraint of trade nor are they violative of the due process clause of the
Constitution.
WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4 (f), 11 and 46 of
Administrative Order No. 2006-0012 dated May 12, 2006 are declared NULL and VOID for
being ultra vires. The Department of Health and respondents are PROHIBITED from
implementing said provisions.
The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of
the provisions of Administrative Order No. 2006-0012 is concerned.
SO ORDERED.
 92

EN BANC

[G.R. No. 104768. July 21, 2003.]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. SANDIGANBAYAN,

MAJOR GENERAL JOSEPHUS Q. RAMAS and ELIZABETH
DIMAANO, respondents.

DECISION

CARPIO, J p:

The Case
Before this Court is a petition for review on certiorari seeking to set aside the Resolutions of the
Sandiganbayan (First Division) 1 dated 18 November 1991 and 25 March 1992 in Civil Case No.
0037. The first Resolution dismissed petitioner's Amended Complaint and ordered the return of
the confiscated items to respondent Elizabeth Dimaano, while the second Resolution denied
petitioner's Motion for Reconsideration. Petitioner prays for the grant of the reliefs sought in its
Amended Complaint, or in the alternative, for the remand of this case to the Sandiganbayan
(First Division) for further proceedings allowing petitioner to complete the presentation of its
evidence.
Antecedent Facts
Immediately upon her assumption to office following the successful EDSA Revolution, then
President Corazon C. Aquino issued Executive Order No. 1 ("EO No. 1") creating the
Presidential Commission on Good Government ("PCGG"). EO No. 1 primarily tasked the PCGG
to recover all ill-gotten wealth of former President Ferdinand E. Marcos, his immediate family,
relatives, subordinates and close associates. EO No. 1 vested the PCGG with the power "(a) to
conduct investigation as may be necessary in order to accomplish and carry out the purposes of
this order" and the power "(h) to promulgate such rules and regulations as may be necessary to
carry out the purpose of this order." Accordingly, the PCGG, through its then Chairman Jovito R.
Salonga, created an AFP Anti-Graft Board ("AFP Board") tasked to investigate reports of
unexplained wealth and corrupt practices by AFP personnel, whether in the active service or
retired. 2
Based on its mandate, the AFP Board investigated various reports of alleged unexplained wealth
of respondent Major General Josephus Q. Ramas ("Ramas"). On 27 July 1987, the AFP Board
issued a Resolution on its findings and recommendation on the reported unexplained wealth of
Ramas. The relevant part of the Resolution reads:
III. FINDINGS and EVALUATION:
Evidence in the record showed that respondent is the owner of a house and lot
located at 15-Yakan St., La Vista, Quezon City. He is also the owner of a house
and lot located in Cebu City. The lot has an area of 3,327 square meters.
 93

The value of the property located in Quezon City may be estimated modestly at
P700,000.00.
The equipment/items and communication facilities which were found in the
premises of Elizabeth Dimaano and were confiscated by elements of the PC
Command of Batangas were all covered by invoice receipt in the name of
CAPT. EFREN SALIDO, RSO Command Coy, MSC, PA. These items could
not have been in the possession of Elizabeth Dimaano if not given for her use by
respondent Commanding General of the Philippine Army.
Aside from the military equipment/items and communications equipment, the
raiding team was also able to confiscate money in the amount of P2,870,000.00
and $50,000 US Dollars in the house of Elizabeth Dimaano on 3 March 1986.
Affidavits of members of the Military Security Unit, Military Security
Command, Philippine Army, stationed at Camp Eldridge, Los Baos, Laguna,
disclosed that Elizabeth Dimaano is the mistress of respondent. That respondent
usually goes and stays and sleeps in the alleged house of Elizabeth Dimaano in
Barangay Tengga, Itaas, Batangas City and when he arrives, Elizabeth Dimaano
embraces and kisses respondent. That on February 25, 1986, a person who rode
in a car went to the residence of Elizabeth Dimaano with four (4) attach cases
filled with money and owned by MGen Ramas.
Sworn statement in the record disclosed also that Elizabeth Dimaano had no
visible means of income and is supported by respondent for she was formerly a
mere secretary.
Taking in toto the evidence, Elizabeth Dimaano could not have used the military
equipment/items seized in her house on March 3, 1986 without the consent of
respondent, he being the Commanding General of the Philippine Army. It is
also impossible for Elizabeth Dimaano to claim that she owns the
P2,870,000.00 and $50,000 US Dollars for she had no visible source of income.
This money was never declared in the Statement of Assets and Liabilities of
respondent. There was an intention to cover the existence of these money
because these are all ill-gotten and unexplained wealth. Were it not for the
affidavits of the members of the Military Security Unit assigned at Camp
Eldridge, Los Baos, Laguna, the existence and ownership of these money
would have never been known.
The Statement of Assets and Liabilities of respondent were also submitted for
scrutiny and analysis by the Board's consultant. Although the amount of
P2,870,000.00 and $50,000 US Dollars were not included, still it was disclosed
that respondent has an unexplained wealth of P104,134.60.
IV. CONCLUSION:
In view of the foregoing, the Board finds that a prima facie case exists against
respondent for ill-gotten and unexplained wealth in the amount of
P2,974,134.00 and $50,000 US Dollars.
V. RECOMMENDATION:
 94

Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be

prosecuted and tried for violation of RA 3019, as amended, otherwise known as
"Anti-Graft and Corrupt Practices Act" and RA 1379, as amended, otherwise
known as "The Act for the Forfeiture of Unlawfully Acquired Property." 3
Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic Act No.
1379 ("RA No. 1379") 4 against Ramas.
Before Ramas could answer the petition, then Solicitor General Francisco I. Chavez filed an
Amended Complaint naming the Republic of the Philippines ("petitioner"), represented by the
PCGG, as plaintiff and Ramas as defendant. The Amended Complaint also impleaded Elizabeth
Dimaano ("Dimaano") as co-defendant.
The Amended Complaint alleged that Ramas was the Commanding General of the Philippine
Army until 1986. On the other hand, Dimaano was a confidential agent of the Military Security
Unit, Philippine Army, assigned as a clerk-typist at the office of Ramas from 1 January 1978 to
February 1979. The Amended Complaint further alleged that Ramas "acquired funds, assets and
properties manifestly out of proportion to his salary as an army officer and his other income from
legitimately acquired property by taking undue advantage of his public office and/or using his
power, authority and influence as such officer of the Armed Forces of the Philippines and as a
subordinate and close associate of the deposed President Ferdinand Marcos." 5
The Amended Complaint also alleged that the AFP Board, after a previous inquiry, found
reasonable ground to believe that respondents have violated RA No. 1379. 6The Amended
Complaint prayed for, among others, the forfeiture of respondents' properties, funds and
equipment in favor of the State.
Ramas filed an Answer with Special and/or Affirmative Defenses and Compulsory Counterclaim
to the Amended Complaint. In his Answer, Ramas contended that his property consisted only of
a residential house at La Vista Subdivision, Quezon City, valued at P700,000, which was not out
of proportion to his salary and other legitimate income. He denied ownership of any mansion in
Cebu City and the cash, communications equipment and other items confiscated from the house
of Dimaano.
Dimaano filed her own Answer to the Amended Complaint. Admitting her employment as a
clerk-typist in the office of Ramas from JanuaryNovember 1978 only, Dimaano claimed
ownership of the monies, communications equipment, jewelry and land titles taken from her
house by the Philippine Constabulary raiding team.
After termination of the pre-trial, 7 the court set the case for trial on the merits on 9-11
November 1988.
On 9 November 1988, petitioner asked for a deferment of the hearing due to its lack of
preparation for trial and the absence of witnesses and vital documents to support its case. The
court reset the hearing to 17 and 18 April 1989.
On 13 April 1989, petitioner filed a motion for leave to amend the complaint in order "to charge
the delinquent properties with being subject to forfeiture as having been unlawfully acquired by
defendant Dimaano alone . . . ." 8
Nevertheless, in an order dated 17 April 1989, the Sandiganbayan proceeded with petitioner's
presentation of evidence on the ground that the motion for leave to amend complaint did not state
when petitioner would file the amended complaint. The Sandiganbayan further stated that the
 95

subject matter of the amended complaint was on its face vague and not related to the existing
complaint. The Sandiganbayan also held that due to the time that the case had been pending in
court, petitioner should proceed to present its evidence.
After presenting only three witnesses, petitioner asked for a postponement of the trial.
On 28 September 1989, during the continuation of the trial, petitioner manifested its inability to
proceed to trial because of the absence of other witnesses or lack of further evidence to present.
Instead, petitioner reiterated its motion to amend the complaint to conform to the evidence
already presented or to change the averments to show that Dimaano alone unlawfully acquired
the monies or properties subject of the forfeiture.
The Sandiganbayan noted that petitioner had already delayed the case for over a year mainly
because of its many postponements. Moreover, petitioner would want the case to revert to its
preliminary stage when in fact the case had long been ready for trial. The Sandiganbayan ordered
petitioner to prepare for presentation of its additional evidence, if any.

During the trial on 23 March 1990, petitioner again admitted its inability to present further
evidence. Giving petitioner one more chance to present further evidence or to amend the
complaint to conform to its evidence, the Sandiganbayan reset the trial to 18 May 1990. The
Sandiganbayan, however, hinted that the re-setting was without prejudice to any action that
private respondents might take under the circumstances.
However, on 18 May 1990, petitioner again expressed its inability to proceed to trial because it
had no further evidence to present. Again, in the interest of justice, the Sandiganbayan granted
petitioner 60 days within which to file an appropriate pleading. The Sandiganbayan, however,
warned petitioner that failure to act would constrain the court to take drastic action.
Private respondents then filed their motions to dismiss based on Republic v. Migrino. 9 The
Court held in Migrino that the PCGG does not have jurisdiction to investigate and prosecute
military officers by reason of mere position held without a showing that they are "subordinates"
of former President Marcos.
On 18 November 1991, the Sandiganbayan rendered a resolution, the dispositive portion of
which states:
WHEREFORE, judgment is hereby rendered dismissing the Amended
Complaint, without pronouncement as to costs. The counterclaims are likewise
dismissed for lack of merit, but the confiscated sum of money, communications
equipment, jewelry and land titles are ordered returned to Elizabeth Dimaano.
The records of this case are hereby remanded and referred to the Hon.
Ombudsman, who has primary jurisdiction over the forfeiture cases under R.A.
No. 1379, for such appropriate action as the evidence warrants. This case is also
referred to the Commissioner of the Bureau of Internal Revenue for a
determination of any tax liability of respondent Elizabeth Dimaano in
connection herewith.
SO ORDERED.
On 4 December 1991, petitioner filed its Motion for Reconsideration.
 96

In answer to the Motion for Reconsideration, private respondents filed a Joint

Comment/Opposition to which petitioner filed its Reply on 10 January 1992.
On 25 March 1992, the Sandiganbayan rendered a Resolution denying the Motion for
Reconsideration.
Ruling of the Sandiganbayan
The Sandiganbayan dismissed the Amended Complaint on the following grounds:
(1.) The actions taken by the PCGG are not in accordance with the rulings of the
Supreme Court in Cruz, Jr. v. Sandiganbayan 10 and Republic v.
Migrino11 which involve the same issues.
(2.) No previous inquiry similar to preliminary investigations in criminal cases
was conducted against Ramas and Dimaano.
(3.) The evidence adduced against Ramas does not constitute a prima facie case
against him.
(4.) There was an illegal search and seizure of the items confiscated.
The Issues
Petitioner raises the following issues:
A. RESPONDENT COURT SERIOUSLY ERRED IN CONCLUDING THAT
PETITIONER'S EVIDENCE CANNOT MAKE A CASE FOR
FORFEITURE AND THAT THERE WAS NO SHOWING OF
CONSPIRACY, COLLUSION OR RELATIONSHIP BY
CONSANGUINITY OR AFFINITY BY AND BETWEEN
RESPONDENT RAMAS AND RESPONDENT DIMAANO
NOTWITHSTANDING THE FACT THAT SUCH CONCLUSIONS
WERE CLEARLY UNFOUNDED AND PREMATURE, HAVING
BEEN RENDERED PRIOR TO THE COMPLETION OF THE
PRESENTATION OF THE EVIDENCE OF THE PETITIONER.
B. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE
ACTIONS TAKEN BY THE PETITIONER, INCLUDING THE
FILING OF THE ORIGINAL COMPLAINT AND THE AMENDED
COMPLAINT, SHOULD BE STRUCK OUT IN LINE WITH THE
RULINGS OF THE SUPREME COURT IN CRUZ, JR. v.
SANDIGANBAYAN, 194 SCRA 474 AND REPUBLIC v. MIGRINO,
189 SCRA 289, NOTWITHSTANDING THE FACT THAT:
1. The cases of Cruz, Jr. v. Sandiganbayan, supra, and Republic v.
Migrino, supra, are clearly not applicable to this case;
2. Any procedural defect in the institution of the complaint in Civil Case
No. 0037 was cured and/or waived by respondents with the filing
of their respective answers with counterclaim; and
3. The separate motions to dismiss were evidently improper considering
that they were filed after commencement of the presentation of
 97

the evidence of the petitioner and even before the latter was
allowed to formally offer its evidence and rest its case;
C. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE
ARTICLES AND THINGS SUCH AS SUMS OF MONEY,
COMMUNICATIONS EQUIPMENT, JEWELRY AND LAND
TITLES CONFISCATED FROM THE HOUSE OF RESPONDENT
DIMAANO WERE ILLEGALLY SEIZED AND THEREFORE
EXCLUDED AS EVIDENCE. 12
The Court's Ruling
First Issue: PCGG's Jurisdiction to Investigate Private Respondents
This case involves a revisiting of an old issue already decided by this Court in Cruz, Jr. v.
Sandiganbayan 13 and Republic v. Migrino. 14
The primary issue for resolution is whether the PCGG has the jurisdiction to investigate and
cause the filing of a forfeiture petition against Ramas and Dimaano for unexplained wealth
under RA No. 1379.
We hold that PCGG has no such jurisdiction.
The PCGG created the AFP Board to investigate the unexplained wealth and corrupt practices of
AFP personnel, whether in the active service or retired. 15 The PCGG tasked the AFP Board to
make the necessary recommendations to appropriate government agencies on the action to be
taken based on its findings. 16 The PCGG gave this task to the AFP Board pursuant to the
PCGG's power under Section 3 of EO No. 1 "to conduct investigation as may be necessary in
order to accomplish and to carry out the purposes of this order." EO No. 1 gave the PCGG
specific responsibilities, to wit:
SEC. 2. The Commission shall be charged with the task of assisting the
President in regard to the following matters:
(a) The recovery of all ill-gotten wealth accumulated by former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates and
close associates, whether located in the Philippines or abroad, including
the takeover and sequestration of all business enterprises and entities
owned or controlled by them, during his administration, directly or
through nominees, by taking undue advantage of their public office
and/or using their powers, authority, influence, connections or
relationship.
(b) The investigation of such cases of graft and corruption as the President may
assign to the Commission from time to time.
xxx xxx xxx.
The PCGG, through the AFP Board, can only investigate the unexplained wealth and corrupt
practices of AFP personnel who fall under either of the two categories mentioned in Section 2 of
EO No. 1. These are: (1) AFP personnel who have accumulated ill-gotten wealth during the
administration of former President Marcos by being the latter's immediate family, relative,
subordinate or close associate, taking undue advantage of their public office or using their
 98

powers, influence . . .; 17 or (2) AFP personnel involved in other cases of graft and corruption
provided the President assigns their cases to the PCGG. 18
Petitioner, however, does not claim that the President assigned Ramas' case to the PCGG.
Therefore, Ramas' case should fall under the first category of AFP personnel before the PCGG
could exercise its jurisdiction over him. Petitioner argues that Ramas was undoubtedly a
subordinate of former President Marcos because of his position as the Commanding General of
the Philippine Army. Petitioner claims that Ramas' position enabled him to receive orders
directly from his commander-in-chief, undeniably making him a subordinate of former President
Marcos.
We hold that Ramas was not a "subordinate" of former President Marcos in the sense
contemplated under EO No. 1 and its amendments.
Mere position held by a military officer does not automatically make him a "subordinate" as this
term is used in EO Nos. 1, 2,14 and 14-A absent a showing that he enjoyed close association
with former President Marcos. Migrino discussed this issue in this wise:
A close reading of EO No. 1 and related executive orders will readily show
what is contemplated within the term 'subordinate.' The Whereas Clauses of EO
No. 1 express the urgent need to recover the ill gotten wealth amassed by former
President Ferdinand E. Marcos, his immediate family, relatives, and close
associates both here and abroad.
EO No. 2 freezes 'all assets and properties in the Philippines in which former
President Marcos and/or his wife, Mrs. Imelda Marcos, their close relatives,
subordinates, business associates, dummies, agents, or nominees have any
interest or participation.'
Applying the rule in statutory construction known as ejusdem generis that is
'[W]here general words follow an enumeration of persons or things by
words of a particular and specific meaning, such general words are not
to be construed in their widest extent, but are to be held as applying only
to persons or things of the same kind or class as those specifically
mentioned [Smith, Bell & Co., Ltd. vs. Register of Deeds of Davao, 96
Phil. 53, 58, citing Black on Interpretation of Laws, 2nd Ed., 203].'
[T]he term "subordinate" as used in EO Nos. 1 & 2 refers to one who enjoys a
close association with former President Marcos and/or his wife, similar to the
immediate family member, relative, and close associate in EO No. 1 and the
close relative, business associate, dummy, agent, or nominee in EO No. 2.
xxx xxx xxx
It does not suffice, as in this case, that the respondent is or was a government
official or employee during the administration of former President
Marcos. There must be a prima facie showing that the respondent unlawfully
accumulated wealth by virtue of his close association or relation with former
Pres. Marcos and/or his wife.(Emphasis supplied)
Ramas' position alone as Commanding General of the Philippine Army with the rank of Major
General 19 does not suffice to make him a "subordinate" of former President Marcos for
 99

purposes of EO No. 1 and its amendments. The PCGG has to provide a prima facie showing that
Ramas was a close associate of former President Marcos, in the same manner that business
associates, dummies, agents or nominees of former President Marcos were close to him. Such
close association is manifested either by Ramas' complicity with former President Marcos in the
accumulation of ill-gotten wealth by the deposed President or by former President Marcos'
acquiescence in Ramas' own accumulation of ill-gotten wealth if any.

This, the PCGG failed to do.

Petitioner's attempt to differentiate the instant case from Migrino does not convince us. Petitioner
argues that unlike in Migrino, the AFP Board Resolution in the instant case states that the AFP
Board conducted the investigation pursuant to EO Nos. 1, 2,14 and 14-A in relation to RA No.
1379. Petitioner asserts that there is a presumption that the PCGG was acting within its
jurisdiction of investigating crony-related cases of graft and corruption and that Ramas was truly
a subordinate of the former President. However, the same AFP Board Resolution belies this
contention. Although the Resolution begins with such statement, it ends with the following
recommendation:
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be
prosecuted and tried for violation of RA 3019, as amended, otherwise known as
"Anti-Graft and Corrupt Practices Act" and RA 1379, as amended, otherwise
known as "The Act for the Forfeiture of Unlawfully Acquired Property." 20
Thus, although the PCGG sought to investigate and prosecute private respondents under EO
Nos. 1, 2,14 and 14-A, the result yielded a finding of violation of Republic Acts Nos. 3019
and 1379 without any relation to EO Nos. 1, 2,14 and 14-A. This absence of relation to EO
No. 1 and its amendments proves fatal to petitioner's case. EO No. 1 created the PCGG for a
specific and limited purpose, and necessarily its powers must be construed to address such
specific and limited purpose.
Moreover, the resolution of the AFP Board and even the Amended Complaint do not show that
the properties Ramas allegedly owned were accumulated by him in his capacity as a
"subordinate" of his commander-in chief. Petitioner merely enumerated the properties Ramas
allegedly owned and suggested that these properties were disproportionate to his salary and other
legitimate income without showing that Ramas amassed them because of his close association
with former President Marcos. Petitioner, in fact, admits that the AFP Board resolution does not
contain a finding that Ramas accumulated his wealth because of his close association with
former President Marcos, thus:
10. While it is true that the resolution of the Anti-Graft Board of the New Armed
Forces of the Philippines did not categorically find a prima facie evidence
showing that respondent Ramas unlawfully accumulated wealth by virtue of his
close association or relation with former President Marcos and/or his wife, it is
submitted that such omission was not fatal. The resolution of the Anti-Graft
Board should be read in the context of the law creating the same and the
objective of the investigation which was, as stated in the above, pursuant to
 100

Republic Act Nos. 3019 and 1379 in relation to Executive Order Nos. 1, 2, 14
and 14-a; 21 (Italics supplied)
Such omission is fatal. Petitioner forgets that it is precisely a prima facie showing that the ill-
gotten wealth was accumulated by a "subordinate" of former President Marcos that vests
jurisdiction on PCGG. EO No. 1 22 clearly premises the creation of the PCGG on the urgent
need to recover all ill-gotten wealth amassed by former President Marcos, his immediate family,
relatives, subordinates and close associates. Therefore, to say that such omission was not fatal is
clearly contrary to the intent behind the creation of the PCGG.
In Cruz, Jr. v. Sandiganbayan, 23 the Court outlined the cases that fall under the jurisdiction of
the PCGG pursuant to EO Nos. 1, 2,24 14, 25 14-A: 26
A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation
with Sections 1, 2 and 3 of Executive Order No. 14, shows what the authority of
the respondent PCGG to investigate and prosecute covers:
(a) the investigation and prosecution of the civil action for the recovery of ill-
gotten wealth under Republic Act No. 1379, accumulated by former
President Marcos, his immediate family, relatives, subordinates and
close associates, whether located in the Philippines or abroad, including
the take-over or sequestration of all business enterprises and entities
owned or controlled by them, during his administration, directly or
through his nominees, by taking undue advantage of their public office
and/or using their powers, authority and influence, connections or
relationships; and
(b) the investigation and prosecution of such offenses committed in the
acquisition of said ill-gotten wealth as contemplated under Section 2(a)
of Executive Order No. 1.
However, other violations of the Anti-Graft and Corrupt Practices Act not
otherwise falling under the foregoing categories, require a previous authority of
the President for the respondent PCGG to investigate and prosecute in
accordance with Section 2 (b) of Executive Order No. 1. Otherwise, jurisdiction
over such cases is vested in the Ombudsman and other duly authorized
investigating agencies such as the provincial and city prosecutors, their
assistants, the Chief State Prosecutor and his assistants and the state
prosecutors. (Emphasis supplied)
The proper government agencies, and not the PCGG, should investigate and prosecute forfeiture
petitions not falling under EO No. 1 and its amendments. The preliminary investigation of
unexplained wealth amassed on or before 25 February 1986 falls under the jurisdiction of the
Ombudsman, while the authority to file the corresponding forfeiture petition rests with the
Solicitor General. 27 The Ombudsman Act or Republic Act No. 6770 ("RA No. 6770") vests in
the Ombudsman the power to conduct preliminary investigation and to file forfeiture proceedings
involving unexplained wealth amassed after 25 February 1986. 28
After the pronouncements of the Court in Cruz, the PCGG still pursued this case despite the
absence of a prima facie finding that Ramas was a "subordinate" of former President Marcos.
The petition for forfeiture filed with the Sandiganbayan should be dismissed for lack of authority
 101

by the PCGG to investigate respondents since there is no prima facie showing that EO No. 1 and
its amendments apply to respondents. The AFP Board Resolution and even the Amended
Complaint state that there are violations of RA Nos. 3019 and 1379. Thus, the PCGG should
have recommended Ramas' case to the Ombudsman who has jurisdiction to conduct the
preliminary investigation of ordinary unexplained wealth and graft cases. As stated in Migrino:
[But] in view of the patent lack of authority of the PCGG to investigate and
cause the prosecution of private respondent for violation of Rep. Acts Nos. 3019
and 1379, the PCGG must also be enjoined from proceeding with the case,
without prejudice to any action that may be taken by the proper prosecutory
agency. The rule of law mandates that an agency of government be allowed to
exercise only the powers granted to it.
Petitioner's argument that private respondents have waived any defect in the filing of the
forfeiture petition by submitting their respective Answers with counterclaim deserves no merit as
well.
Petitioner has no jurisdiction over private respondents. Thus, there is no jurisdiction to waive in
the first place. The PCGG cannot exercise investigative or prosecutorial powers never granted to
it. PCGG's powers are specific and limited. Unless given additional assignment by the President,
PCGG's sole task is only to recover the ill-gotten wealth of the Marcoses, their relatives and
cronies. 29 Without these elements, the PCGG cannot claim jurisdiction over a case.
Private respondents questioned the authority and jurisdiction of the PCGG to investigate and
prosecute their cases by filing their Motion to Dismiss as soon as they learned of the
pronouncement of the Court in Migrino. This case was decided on 30 August 1990, which
explains why private respondents only filed their Motion to Dismiss on 8 October 1990.
Nevertheless, we have held that the parties may raise lack of jurisdiction at any stage of the
proceeding. 30 Thus, we hold that there was no waiver of jurisdiction in this case. Jurisdiction is
vested by law and not by the parties to an action. 31
Consequently, the petition should be dismissed for lack of jurisdiction by the PCGG to conduct
the preliminary investigation. The Ombudsman may still conduct the proper preliminary
investigation for violation of RA No. 1379, and if warranted, the Solicitor General may file the
forfeiture petition with the Sandiganbayan. 32 The right of the State to forfeit unexplained
wealth under RA No. 1379 is not subject to prescription, laches or estoppel. 33
Second Issue: Propriety of Dismissal of Case
Before Completion of Presentation of Evidence
Petitioner also contends that the Sandiganbayan erred in dismissing the case before completion
of the presentation of petitioner's evidence.
We disagree.
Based on the findings of the Sandiganbayan and the records of this case, we find that petitioner
has only itself to blame for non-completion of the presentation of its evidence. First, this case has
been pending for four years before the Sandiganbayan dismissed it. Petitioner filed its Amended
Complaint on 11 August 1987, and only began to present its evidence on 17 April 1989.
Petitioner had almost two years to prepare its evidence. However, despite this sufficient time,
petitioner still delayed the presentation of the rest of its evidence by filing numerous motions for
postponements and extensions. Even before the date set for the presentation of its evidence,
 102

petitioner filed, on 13 April 1989, a Motion for Leave to Amend the Complaint. 34 The motion
sought "to charge the delinquent properties (which comprise most of petitioner's evidence) with
being subject to forfeiture as having been unlawfully acquired by defendant Dimaano alone . . .
."
The Sandiganbayan, however, refused to defer the presentation of petitioner's evidence since
petitioner did not state when it would file the amended complaint. On 18 April 1989, the
Sandiganbayan set the continuation of the presentation of evidence on 28-29 September and 9-11
October 1989, giving petitioner ample time to prepare its evidence. Still, on 28 September 1989,
petitioner manifested its inability to proceed with the presentation of its evidence. The
Sandiganbayan issued an Order expressing its view on the matter, to wit:

The Court has gone through extended inquiry and a narration of the above
events because this case has been ready for trial for over a year and much of the
delay hereon has been due to the inability of the government to produce on
scheduled dates for pre-trial and for trial documents and witnesses, allegedly
upon the failure of the military to supply them for the preparation of the
presentation of evidence thereon. Of equal interest is the fact that this Court has
been held to task in public about its alleged failure to move cases such as this
one beyond the preliminary stage, when, in view of the developments such as
those of today, this Court is now faced with a situation where a case already in
progress will revert back to the preliminary stage, despite a five-month pause
where appropriate action could have been undertaken by the plaintiff
Republic. 35
On 9 October 1989, the PCGG manifested in court that it was conducting a preliminary
investigation on the unexplained wealth of private respondents as mandated byRA No.
1379. 36 The PCGG prayed for an additional four months to conduct the preliminary
investigation. The Sandiganbayan granted this request and scheduled the presentation of
evidence on 26-29 March 1990. However, on the scheduled date, petitioner failed to inform the
court of the result of the preliminary investigation the PCGG supposedly conducted. Again, the
Sandiganbayan gave petitioner until 18 May 1990 to continue with the presentation of its
evidence and to inform the court of "what lies ahead insofar as the status of the case is concerned
. . . ." 37 Still on the date set, petitioner failed to present its evidence. Finally, on 11 July 1990,
petitioner filed its Re-Amended Complaint. 38 The Sandiganbayan correctly observed that a case
already pending for years would revert to its preliminary stage if the court were to accept the Re-
Amended Complaint.
Based on these circumstances, obviously petitioner has only itself to blame for failure to
complete the presentation of its evidence. The Sandiganbayan gave petitioner more than
sufficient time to finish the presentation of its evidence. The Sandiganbayan overlooked
petitioner's delays and yet petitioner ended the long-string of delays with the filing of a Re-
Amended Complaint, which would only prolong even more the disposition of the case.
Moreover, the pronouncements of the Court in Migrino and Cruz prompted the Sandiganbayan to
dismiss the case since the PCGG has no jurisdiction to investigate and prosecute the case against
private respondents. This alone would have been sufficient legal basis for the Sandiganbayan to
dismiss the forfeiture case against private respondents.
 103

Thus, we hold that the Sandiganbayan did not err in dismissing the case before completion of the
presentation of petitioner's evidence.
Third Issue: Legality of the Search and Seizure
Petitioner claims that the Sandiganbayan erred in declaring the properties confiscated from
Dimaano's house as illegally seized and therefore inadmissible in evidence. This issue bears a
significant effect on petitioner's case since these properties comprise most of petitioner's
evidence against private respondents. Petitioner will not have much evidence to support its case
against private respondents if these properties are inadmissible in evidence.
On 3 March 1986, the Constabulary raiding team served at Dimaano's residence a search warrant
captioned "Illegal Possession of Firearms and Ammunition." Dimaano was not present during
the raid but Dimaano's cousins witnessed the raid. The raiding team seized the items detailed in
the seizure receipt together with other itemsnot included in the search warrant. The raiding team
seized these items: once baby armalite rifle with two magazines; 40 rounds of 5.56 ammunition;
one pistol, caliber .45; communications equipment, cash consisting of P2,870,000 and
US$50,000, jewelry, and land titles.
Petitioner wants the Court to take judicial notice that the raiding team conducted the search and
seizure "on March 3, 1986 or five days after the successful EDSA revolution. 39 Petitioner
argues that a revolutionary government was operative at that time by virtue of Proclamation No.
1 announcing that President Aquino and Vice President Laurel were "taking power in the name
and by the will of the Filipino people." 40 Petitioner asserts that the revolutionary government
effectively withheld the operation of the 1973 Constitution which guaranteed private
respondents' exclusionary right.
Moreover, petitioner argues that the exclusionary right arising from an illegal search applies only
beginning 2 February 1987, the date of ratification of the 1987 Constitution. Petitioner contends
that all rights under the Bill of Rights had already reverted to its embryonic stage at the time of
the search. Therefore, the government may confiscate the monies and items taken from Dimaano
and use the same in evidence against her since at the time of their seizure, private respondents
did not enjoy any constitutional right.
Petitioner is partly right in its arguments.
The EDSA Revolution took place on 23-25 February 1986. As succinctly stated in President
Aquino's Proclamation No. 3 dated 25 March 1986, the EDSA Revolution was "done in defiance
of the provisions of the 1973 Constitution." 41 The resulting government was indisputably a
revolutionary government bound by no constitution or legal limitations except treaty obligations
that the revolutionary government, as the de jure government in the Philippines, assumed under
international law.
The correct issues are: (1) whether the revolutionary government was bound by the Bill of Rights
of the 1973 Constitution during the interregnum, that is, after the actual and effective take-over
of power by the revolutionary government following the cessation of resistance by loyalist
forces up to 24 March 1986 (immediately before the adoption of the Provisional Constitution);
and (2) whether the protection accorded to individuals under the International Covenant on Civil
and Political Rights ("Covenant") and the Universal Declaration of Human Rights
("Declaration") remained in effect during the interregnum.
 104

We hold that the Bill of Rights under the 1973 Constitution was not operative during
the interregnum. However, we rule that the protection accorded to individuals under the
Covenant and the Declaration remained in effect during the interregnum.
During the interregnum, the directives and orders of the revolutionary government were the
supreme law because no constitution limited the extent and scope of such directives and orders.
With the abrogation of the 1973 Constitution by the successful revolution, there was no
municipal law higher than the directives and orders of the revolutionary government. Thus,
during the interregnum, a person could not invoke any exclusionary right under a Bill of Rights
because there was neither aconstitution nor a Bill of Rights during the interregnum. As the Court
explained in Letter of Associate Justice Reynato S. Puno: 42
A revolution has been defined as "the complete overthrow of the established
government in any country or state by those who were previously subject to it"
or as "a sudden, radical and fundamental change in the government or political
system, usually effected with violence or at least some acts of violence." In
Kelsen's book, General Theory of Law and State, it is defined as that which
"occurs whenever the legal order of a community is nullified and replaced by a
new order . . . a way not prescribed by the first order itself."
It was through the February 1986 revolution, a relatively peaceful one, and
more popularly known as the "people power revolution" that the Filipino people
tore themselves away from an existing regime. This revolution also saw the
unprecedented rise to power of the Aquino government.
From the natural law point of view, the right of revolution has been defined as
"an inherent right of a people to cast out their rulers, change their policy or
effect radical reforms in their system of government or institutions by force or a
general uprising when the legal and constitutional methods of making such
change have proved inadequate or are so obstructed as to be unavailable." It has
been said that "the locus of positive law-making power lies with the people of
the state" and from there is derived "the right of the people to abolish, to reform
and to alter any existing form of government without regard to the
existing constitution."
xxx xxx xxx
It is widely known that Mrs. Aquino's rise to the presidency was not due to
constitutional processes; in fact, it was achieved in violation of the provisions of
the 1973 Constitution as a Batasang Pambansa resolution had earlier declared
Mr. Marcos as the winner in the 1986 presidential election. Thus it can be said
that the organization of Mrs. Aquino's Government which was met by little
resistance and her control of the state evidenced by the appointment of the
Cabinet and other key officers of the administration, the departure of the Marcos
Cabinet officials, revamp of the Judiciary and the Military signaled the
point where the legal system then in effect, had ceased to be obeyed by the
Filipino. (Emphasis supplied)
To hold that the Bill of Rights under the 1973 Constitution remained operative during
the interregnum would render void all sequestration orders issued by the Philippine Commission
on Good Government ("PCGG") before the adoption of the Freedom Constitution. The
 105

sequestration orders, which direct the freezing and even the take-over of private property by
mere executive issuance without judicial action, would violate the due process and search and
seizure clauses of the Bill of Rights.DEHaTC
During the interregnum, the government in power was concededly a revolutionary government
bound by no constitution. No one could validly question the sequestration orders as violative of
the Bill of Rights because there was no Bill of Rights during the interregnum. However, upon the
adoption of the Freedom Constitution, the sequestered companies assailed the sequestration
orders as contrary to the Bill of Rights of the Freedom Constitution.

In Bataan Shipyard & Engineering Co. Inc. vs. Presidential Commission on Good
Government, 43 petitioner Baseco, while conceding there was no Bill of Rights during
theinterregnum, questioned the continued validity of the sequestration orders upon adoption
of the Freedom Constitution in view of the due process clause in its Bill of Rights. The Court
ruled that the Freedom Constitution, and later the 1987 Constitution, expressly recognized the
validity of sequestration orders, thus:
If any doubt should still persist in the face of the foregoing considerations as to
the validity and propriety of sequestration, freeze and takeover orders, it should
be dispelled by the fact that these particular remedies and the authority of the
PCGG to issue them have received constitutional approbation and sanction. As
already mentioned, the Provisional or "Freedom" Constitution recognizes the
power and duty of the President to enact "measures to achieve the mandate of
the people to . . . (r)ecover ill-gotten properties amassed by the leaders and
supporters of the previous regime and protect the interest of the people through
orders of sequestration or freezing of assets or accounts." And as also already
adverted to, Section 26, Article XVIII of the 1987 Constitution treats of, and
ratifies the "authority to issue sequestration or freeze orders under Proclamation
No. 3 dated March 25, 1986."
The framers of both the Freedom Constitution and the 1987 Constitution were fully aware that
the sequestration orders would clash with the Bill of Rights. Thus, the framers of both
constitutions had to include specific language recognizing the validity of the sequestration
orders. The following discourse by Commissioner Joaquin G. Bernas during the deliberations of
the Constitutional Commission is instructive:
FR. BERNAS: Madam President, there is something schizophrenic about the
arguments in defense of the present amendment.
For instance, I have carefully studied Minister Salonga's lecture in the Gregorio
Araneta University Foundation, of which all of us have been given a copy. On
the one hand, he argues that everything the Commission is doing is traditionally
legal. This is repeated by Commissioner Romulo also. Minister Salonga spends
a major portion of his lecture developing that argument. On the other hand,
almost as an afterthought, he says that in the end what matters are the results
and not the legal niceties, thus suggesting that the PCGG should be allowed to
make some legal shortcuts, another word for niceties or exceptions.
 106

Now, if everything the PCGG is doing is legal, why is it asking the CONCOM
for special protection? The answer is clear. What they are doing will not stand
the test of ordinary due process, hence they are asking for protection, for
exceptions. Grandes malos, grandes remedios, fine, as the saying stands, but let
us not say grandes malos, grande y malos remedios. That is not an allowable
extrapolation. Hence, we should not give the exceptions asked for, and let me
elaborate and give three reasons:
First, the whole point of the February Revolution and of the work of the
CONCOM is to hasten constitutional normalization. Very much at the heart of
the constitutional normalization is the full effectivity of the Bill of Rights. We
cannot, in one breath, ask for constitutional normalization and at the same time
ask for a temporary halt to the full functioning of what is at the heart of
constitutionalism. That would be hypocritical; that would be a repetition of
Marcosian protestation of due process and rule of law. The New Society word
for that is "backsliding." It is tragic when we begin to backslide even before we
get there.
Second, this is really a corollary of the first. Habits tend to become ingrained.
The committee report asks for extraordinary exceptions from the Bill of Rights
for six months after the convening of Congress, and Congress may even extend
this longer.
Good deeds repeated ripen into virtue; bad deeds repeated become vice. What
the committee report is asking for is that we should allow the new government
to acquire the vice of disregarding the Bill of Rights.
Vices, once they become ingrained, become difficult to shed. The practitioners
of the vice begin to think that they have a vested right to its practice, and they
will fight tooth and nail to keep the franchise. That would be an unhealthy way
of consolidating the gains of a democratic revolution.
Third, the argument that what matters are the results and not the legal niceties is
an argument that is very disturbing. When it comes from a staunch Christian
like Commissioner Salonga, a Minister, and repeated verbatim by another
staunch Christian like Commissioner Tingson, it becomes doubly disturbing and
even discombobulating. The argument makes the PCGG an auctioneer, placing
the Bill of Rights on the auction block. If the price is right, the search and
seizure clause will be sold. "Open your Swiss bank account to us and we will
award you the search and seizure clause. You can keep it in your private safe."
Alternatively, the argument looks on the present government as hostage to the
hoarders of hidden wealth. The hoarders will release the hidden health if the
ransom price is paid and the ransom price is the Bill of Rights, specifically the
due process in the search and seizure clauses. So, there is something positively
revolving about either argument. The Bill of Rights is not for sale to the highest
bidder nor can it be used to ransom captive dollars. This nation will survive and
grow strong, only if it would become convinced of the values enshrined in the
Constitution of a price that is beyond monetary estimation.
 107

For these reasons, the honorable course for the Constitutional Commission is to
delete all of Section 8 of the committee report and allow the new Constitution to
take effect in full vigor. If Section 8 is deleted, the PCGG has two options. First,
it can pursue the Salonga and the Romulo argument that what the PCGG has
been doing has been completely within the pale of the law. If sustained, the
PCGG can go on and should be able to go on, even without the support of
Section 8. If not sustained, however, the PCGG has only one honorable option,
it must bow to the majesty of the Bill of Rights.
The PCGG extrapolation of the law is defended by staunch Christians. Let me
conclude with what another Christian replied when asked to toy around with the
law. From his prison cell, Thomas More said, "I'll give the devil benefit of law
for my nation's safety sake." I ask the Commission to give the devil benefit of
law for our nation's sake. And we should delete Section 8.
Thank you, Madam President. (Emphasis supplied)
Despite the impassioned plea by Commissioner Bernas against the amendment excepting
sequestration orders from the Bill of Rights, the Constitutional Commission still adopted the
amendment as Section 26, 44 Article XVIII of the 1987 Constitution. The framers of the
Constitution were fully aware that absent Section 26, sequestration orders would not stand the
test of due process under the Bill of Rights.
Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force during
the interregnum, absent a constitutional provision excepting sequestration orders from such Bill
of Rights, would clearly render all sequestration orders void during the interregnum.
Nevertheless, even during the interregnum the Filipino people continued to enjoy, under the
Covenant and the Declaration, almost the same rights found in the Bill of Rights of the 1973
Constitution.
The revolutionary government, after installing itself as the de jure government, assumed
responsibility for the State's good faith compliance with the Covenant to which the Philippines is
a signatory. Article 2(1) of the Covenant requires each signatory State "to respect and to ensure
to all individuals within its territory and subject to its jurisdiction the rights 45 recognized in the
present Covenant." Under Article 17(1) of the Covenant, the revolutionary government had the
duty to insure that "[n]o one shall be subjected to arbitrary or unlawful interference with his
privacy, family, home or correspondence."
The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that
"[n]o one shall be arbitrarily deprived of his property." Although the signatories to the
Declaration did not intend it as a legally binding document, being only a declaration, the Court
has interpreted the Declaration as part of the generally accepted principles of international law
and binding on the State. 46 Thus, the revolutionary government was also obligated under
international law to observe the rights47 of individuals under the Declaration.
The revolutionary government did not repudiate the Covenant or the Declaration during
the interregnum. Whether the revolutionary government could have repudiated all its obligations
under the Covenant or the Declaration is another matter and is not the issue here. Suffice it to say
that the Court considers the Declaration as part of customary international law, and that Filipinos
as human beings are proper subjects of the rules of international law laid down in the Covenant.
The fact is the revolutionary government did not repudiate the Covenant or the Declaration in the
 108

same way it repudiated the 1973 Constitution. As the de jure government, the revolutionary
government could not escape responsibility for the State's good faith compliance with its treaty
obligations under international law.
It was only upon the adoption of the Provisional Constitution on 25 March 1986 that the
directives and orders of the revolutionary government became subject to a higher municipal law
that, if contravened, rendered such directives and orders void. The Provisional
Constitution adopted verbatim the Bill of Rights of the 1973 Constitution. 48 The Provisional
Constitution served as a self-limitation by the revolutionary government to avoid abuses of the
absolute powers entrusted to it by the people.

During the interregnum when no constitution or Bill of Rights existed, directives and orders
issued by government officers were valid so long as these officers did not exceed the authority
granted them by the revolutionary government. The directives and orders should not have also
violated the Covenant or the Declaration. In this case, the revolutionary government
presumptively sanctioned the warrant since the revolutionary government did not repudiate it.
The warrant, issued by a judge upon proper application, specified the items to be searched and
seized. The warrant is thus valid with respect to the items specifically described in the warrant.
However, the Constabulary raiding team seized items not included in the warrant. As admitted
by petitioner's witnesses, the raiding team confiscated items not included in the warrant, thus:
Direct Examination of Capt. Rodolfo Sebastian
AJ AMORES
Q. According to the search warrant, you are supposed to seize only for weapons.
What else, aside from the weapons, were seized from the house of Miss
Elizabeth Dimaano?
A. The communications equipment, money in Philippine currency and US
dollars, some jewelries, land titles, sir.
Q. Now, the search warrant speaks only of weapons to be seized from the house
of Elizabeth Dimaano. Do you know the reason why your team also
seized other properties not mentioned in said search warrant?
A. During the conversation right after the conduct of said raid, I was informed
that the reason why they also brought the other items not included in the
search warrant was because the money and other jewelries were
contained in attach cases and cartons with markings "Sony Trinitron,"
and I think three (3) vaults or steel safes. Believing that the attach cases
and the steel safes were containing firearms, they forced open these
containers only to find out that they contained money.
xxx xxx xxx
Q. You said you found money instead of weapons, do you know the reason why
your team seized this money instead of weapons?
A I think the overall team leader and the other two officers assisting him
decided to bring along also the money because at that time it was already
 109

dark and they felt most secured if they will bring that because they might
be suspected also of taking money out of those items, your Honor. 49
Cross-examination
Atty. Banaag
Q. Were you present when the search warrant in connection with this case was
applied before the Municipal Trial Court of Batangas, Branch 1?
A. Yes, sir.
Q. And the search warrant applied for by you was for the search and seizure of
five (5) baby armalite rifles M-16 and five (5) boxes of ammunition?
A. Yes, sir.
xxx xxx xxx
AJ AMORES
Q. Before you applied for a search warrant, did you conduct surveillance in the
house of Miss Elizabeth Dimaano?
A. The Intelligence Operatives conducted surveillance together with the MSU
elements, your Honor.
Q. And this party believed there were weapons deposited in the house of Miss
Elizabeth Dimaano?
A. Yes, your Honor.
Q. And they so swore before the Municipal Trial Judge?
A. Yes, your Honor.
Q. But they did not mention to you, the applicant for the search warrant, any
other properties or contraband which could be found in the residence of
Miss Elizabeth Dimaano?
A. They just gave us still unconfirmed report about some hidden items, for
instance, the communications equipment and money. However, I did not
include that in the application for search warrant considering that we
have not established concrete evidence about that. So when . . .
Q. So that when you applied for search warrant, you had reason to believe that
only weapons were in the house of Miss Elizabeth Dimaano?
A. Yes, your Honor. 50
xxx xxx xxx
Q. You stated that a .45 caliber pistol was seized along with one armalite rifle
M-16 and how many ammunition?
A. Forty, sir.
Q. And this became the subject of your complaint with the issuing Court, with
the fiscal's office who charged Elizabeth Dimaano for Illegal Possession
of Firearms and Ammunition?
 110

A. Yes, sir.
Q. Do you know what happened to that case?
A. I think it was dismissed, sir.
Q. In the fiscal's office?
A. Yes, sir.
Q. Because the armalite rifle you seized, as well as the .45 caliber pistol had a
Memorandum Receipt in the name of Felino Melegrito, is that not
correct?
A. I think that was the reason, sir.
Q. There were other articles seized which were not included in the search
warrant, like for instance, jewelries. Why did you seize the jewelries?
A. I think it was the decision of the overall team leader and his assistant to bring
along also the jewelries and other items, sir. I do not really know where
it was taken but they brought along also these articles. I do not really
know their reason for bringing the same, but I just learned that these
were taken because they might get lost if they will just leave this behind.
xxx xxx xxx
Q. How about the money seized by your raiding team, they were not also
included in the search warrant?
A. Yes sir; but I believe they were also taken considering that the money was
discovered to be contained in attach cases. These attach cases were
suspected to be containing pistols or other high powered firearms, but in
the course of the search the contents turned out to be money. So the team
leader also decided to take this considering that they believed that if they
will just leave the money behind, it might get lost also.
Q. That holds true also with respect to the other articles that were seized by your
raiding team, like Transfer Certificates of Title of lands?
A. Yes, sir. I think they were contained in one of the vaults that were opened. 51
It is obvious from the testimony of Captain Sebastian that the warrant did not include the monies,
communications equipment, jewelry and land titles that the raiding team confiscated. The search
warrant did not particularly describe these items and the raiding team confiscated them on its
own authority. The raiding team had no legal basis to seize these items without showing that
these items could be the subject of warrantless search and seizure. 52 Clearly, the raiding team
exceeded its authority when it seized these items.
The seizure of these items was therefore void, and unless these items are contraband per
se, 53 and they are not, they must be returned to the person from whom the raiding seized them.
However, we do not declare that such person is the lawful owner of these items, merely that the
search and seizure warrant could not be used as basis to seize and withhold these items from the
possessor. We thus hold that these items should be returned immediately to Dimaano.
 111

WHEREFORE, the petition for certiorari is DISMISSED. The questioned Resolutions of the
Sandiganbayan dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037, remanding
the records of this case to the Ombudsman for such appropriate action as the evidence may
warrant, and referring this case to the Commissioner of the Bureau of Internal Revenue for a
determination of any tax liability of respondent Elizabeth Dimaano, are AFFIRMED.
SO ORDERED.
 112

EN BANC

[G.R. Nos. 184461-62. May 31, 2011.]

LT. COL. ROGELIO BOAC, LT. COL. FELIPE ANOTADO AND LT.
FRANCIS MIRABELLE SAMSON, petitioners, vs. ERLINDA T.
CADAPAN AND CONCEPCION E. EMPEO, respondents.

DECISION

CARPIO MORALES, J p:

At 2:00 a.m. of June 26, 2006, armed men abducted Sherlyn Cadapan (Sherlyn),
Karen Empeo (Karen) and Manuel Merino (Merino) from a house in San Miguel, Hagonoy,
Bulacan. The three were herded onto a jeep bearing license plate RTF 597 that sped towards
an undisclosed location.
Having thereafter heard nothing from Sherlyn, Karen and Merino, their respective
families scoured nearby police precincts and military camps in the hope of finding them but
the same yielded nothing.
On July 17, 2006, spouses Asher and Erlinda Cadapan and Concepcion Empeo filed
a petition for habeas corpus 1 before the Court, docketed as G.R. No. 173228, impleading
then Generals Romeo Tolentino and Jovito Palparan (Gen. Palparan), Lt. Col. Rogelio Boac
(Lt. Col. Boac), Arnel Enriquez and Lt. Francis Mirabelle Samson (Lt. Mirabelle) as
respondents. By Resolution of July 19, 2006, 2 the Court issued a writ of habeas
corpus, returnable to the Presiding Justice of the Court of Appeals.
The habeas corpus petition was docketed at the appellate court as CA-G.R. SP No.
95303.
By Return of the Writ dated July 21, 2006, 3 the respondents in the habeas
corpus petition denied that Sherlyn, Karen and Merino are in the custody of the military. To
the Return were attached affidavits from the respondents, except Enriquez, who all attested
that they do not know Sherlyn, Karen and Merino; that they had inquired from their
subordinates about the reported abduction and disappearance of the three but their inquiry
yielded nothing; and that the military does not own nor possess a stainless steel jeep with
plate number RTF 597. Also appended to the Return was a certification from the Land
Transportation Office (LTO) that plate number RTF 597 had not yet been manufactured as of
July 26, 2006. DaScAI
Trial thereupon ensued at the appellate court.
Witness Wilfredo Ramos, owner of the house where the three were abducted,
recounted that on June 26, 2006, while he was inside his house in Hagonoy, he witnessed
armed men wearing bonnets abduct Sherlyn and Karen from his house and also abduct
 113

Merino on their way out; and that tied and blindfolded, the three were boarded on a jeep and
taken towards Iba in Hagonoy. 4
Witness Alberto Ramirez (Ramirez) recalled that on June 28, 2006, while he was
sleeping in his house, he was awakened by Merino who, in the company of a group of
unidentified armed men, repaired to his house; that onboard a stainless jeep bearing plate
number RTF 597, he (Ramirez) was taken to a place in Mercado, Hagonoy and was asked by
one Enriquez if he knew "Sierra," "Tanya," "Vincent" and "Lisa"; and that Enriquez
described the appearance of two ladies which matched those of Sherlyn and Karen, whom he
was familiar with as the two had previously slept in his house. 5
Another witness, Oscar Leuterio, who was himself previously abducted by armed
men and detained for five months, testified that when he was detained in Fort Magsaysay in
Nueva Ecija, he saw two women fitting the descriptions of Sherlyn and Karen, and also saw
Merino, his kumpare. 6
Lt. Col. Boac, the then commander of Task Force Malolos, a special operations team
tasked to neutralize the intelligence network of communists and other armed groups, declared
that he conducted an inquiry on the abduction of Sherlyn, Karen and Merino but his
subordinates denied knowledge thereof. 7
While he denied having received any order from Gen. Palparan to investigate the
disappearance of Sherlyn, Karen and Merino, his assistance in locating the missing persons
was sought by the mayor of Hagonoy.
Major Dominador Dingle, the then division adjutant of the Philippine Army's 7th
Infantry Division in Fort Magsaysay, denied that a certain Arnel Enriquez is a member of his
infantry as in fact his name did not appear in the roster of troops. 8
Roberto Se, a supervisor of the Equipment, Plate Number and Supply Units of the
LTO, denied that his office manufactured and issued a plate number bearing number RTF
597. 9
On rebuttal, Lt. Mirabelle, Lt. Col. Boac and Gen. Palparan took the witness stand as
hostile witnesses.
Lt. Mirabelle testified that she did not receive any report on the abduction of
Sherlyn, Karen and Merino nor any order to investigate the matter. And she denied knowing
anything about the abduction of Ramirez nor who were Ka Tanya or Ka Lisa. 10
Gen. Palparan testified that during a debate in a televised program, he mentioned the
names of Ka Lisa and Ka Tanya as the ones involved in revolutionary tax activities; and that
he ordered Lt. Col. Boac to conduct an investigation on the disappearance of Sherlyn, Karen
and Merino. 11 When pressed to elaborate, he stated: "I said that I got the report that it
stated that it was Ka Tanya and Ka Lisa that, I mean, that incident happened in Hagonoy,
Bulacan was the abduction of Ka Lisa and Ka Tanya, Your Honor, and another one. That
was the report coming from the people in the area." 12
By Decision of March 29, 2007, 13 the Court of Appeals dismissed the habeas
corpus petition in this wise: IEHSDA
As Sherlyn Cadapan, Karen Empeo and Manuel Merino are indeed
missing, the present petition for habeas corpus is not the appropriate
 114

remedy since the main office or function of the habeas corpus is to inquire
into the legality of one's detention which presupposes that respondents
have actual custody of the persons subject of the petition. The reason
therefor is that the courts have limited powers, means and resources to conduct
an investigation. . . . .
It being the situation, the proper remedy is not a habeas corpus proceeding but
criminal proceedings by initiating criminal suit for abduction or kidnapping as a
crime punishable by law. In the case of Martinez v. Mendoza, supra, the
Supreme Court restated the doctrine that habeas corpus may not be used as a
means of obtaining evidence on the whereabouts of a person, or as a means of
finding out who has specifically abducted or caused the disappearance of a
certain person. (emphasis and underscoring supplied)
Thus the appellate court disposed:
WHEREFORE, the petition for habeas corpus is hereby DISMISSED, there
being no strong evidence that the missing persons are in the custody of the
respondents.
The Court, however, further resolves to refer the case to the Commission on
Human Rights, the National Bureau of Investigation and the Philippine National
Police for separate investigations and appropriate actions as may be warranted
by their findings and to furnish the Court with their separate reports on the
outcome of their investigations and the actions taken thereon.
Let copies of this decision be furnished the Commission on Human Rights, the
National Bureau of Investigation and the Philippine National Police for their
appropriate actions.
SO ORDERED. (emphasis and underscoring supplied)
Petitioners in CA-G.R. SP No. 95303 moved for a reconsideration of the appellate
court's decision. They also moved to present newly discovered evidence consisting of the
testimonies of Adoracion Paulino, Sherlyn's mother-in-law who was allegedly threatened by
soldiers; and Raymond Manalo who allegedly met Sherlyn, Karen and Merino in the course
of his detention at a military camp.
During the pendency of the motion for reconsideration in CA-G.R. SP No. 95303,
Erlinda Cadapan and Concepcion Empeo filed before this Court a Petition for Writ
of Amparo 14 with Prayers for Inspection of Place and Production of Documents dated
October 24, 2007, docketed as G.R. No. 179994. The petition impleaded the same
respondents in the habeas corpus petition, with the addition of then President Gloria
Macapagal-Arroyo, then Armed Forces of the Phil. (AFP) Chief of Staff Hermogenes
Esperon, Jr., then Phil. National Police (PNP) Chief Gen. Avelino Razon (Gen. Razon), Lt.
Col. Felipe Anotado (Lt. Col. Anotado) and Donald Caigas.
Then President Arroyo was eventually dropped as respondent in light of her immunity
from suit while in office.
Petitioners in G.R. No. 179994 also prayed that they be allowed to inspect the
detention areas of the following places:
 115

1. 7th Infantry Division at Fort Magsaysay, Laur, Nueva Ecija

2. 24th Infantry Batallion at Limay, Bataan
3. Army Detachment inside Valmocina Farm, Pinaod, San Ildefonso, Bulacan
4. Camp Tecson, San Miguel, Bulacan
5. The Resthouse of Donald Caigas alias Allan or Alvin of the 24th Infantry
Batallion at Barangay Banog, Bolinao, Pangasinan
6. 56th Infantry Batallion Headquarters at Iba, Hagonoy, Bulacan
7. Army Detachment at Barangay Mercado, Hagonoy, Bulacan
8. Beach House [at] Iba, Zambales used as a safehouse with a retired military
personnel as a caretaker;
By Resolution of October 25, 2007, the Court issued in G.R. No. 179994 a writ
of amparo returnable to the Special Former Eleventh Division of the appellate court, and
ordered the consolidation of the amparo petition with the pending habeas corpus petition.
Docketed as CA-G.R. SP No. 002, respondents in the amparo case, through the
Solicitor General, filed their Return of the Writ on November 6, 2007. 15 In the Return, Gen.
Palparan, Lt. Col. Boac and Lt. Mirabelle reiterated their earlier narrations in the habeas
corpus case.
Gen. Hermogenes Esperon, Jr. stated in the Return that he immediately caused to
investigate and verify the identities of the missing persons and was aware of the earlier
decision of the appellate court ordering the police, the Commission on Human Rights and the
National Bureau of Investigation to take further action on the matter. 16
Lt. Col. Felipe Anotado, the then battalion commander of the 24th Infantry Battalion
based in Balanga City, Bataan, denied any involvement in the abduction. While the 24th
Infantry Battalion detachment was reported to be a detention site of the missing persons, Lt.
Col. Anotado claimed that he found no untoward incident when he visited said detachment.
He also claimed that there was no report of the death of Merino per his inquiry with the local
police. 17
Police Director General Avelino Razon narrated that he ordered the compilation of
pertinent records, papers and other documents of the PNP on the abduction of the three, and
that the police exhausted all possible actions available under the circumstances. 18 aIcHSC
In addition to the witnesses already presented in the habeas corpus case, petitioners
called on Adoracion Paulino and Raymond Manalo to testify during the trial.
Adoracion Paulino recalled that her daughter-in-law Sherlyn showed up at home on
April 11, 2007, accompanied by two men and three women whom she believed were
soldiers. She averred that she did not report the incident to the police nor inform Sherlyn's
mother about the visit. 19
Raymond Manalo (Manalo) claimed that he met the three abducted persons when he
was illegally detained by military men in Camp Tecson in San Miguel, Bulacan. His group
was later taken to a camp in Limay, Bataan. He recalled that Lt. Col. Anotado was the one
who interrogated him while in detention. 20
 116

In his Sinumpaang Salaysay, 21 Manalo recounted:

xxx xxx xxx
59. Saan ka dinala mula sa Sapang?
Pagkalipas ng humigit kumulang 3 buwan sa Sapang, dinala ako sa Camp
Tecson sa ilalim ng 24th IB.
xxx xxx xxx
Sa loob ng barracks ko nakilala si Sherlyn Cadapan, isang estudyante ng UP.
Ipinapalinis din sa akin ang loob ng barracks. Sa isang kwarto sa loob ng
barracks, may nakita akong babae na nakakadena[.] Noong una,
pinagbawalan akong makipag-usap sa kanya. Sa ikatlo o ikaapat na
araw, nakausap ko yung babaeng nagngangalang Sherlyn. Binigyan ko
siya ng pagkain. Sinabi niya sa akin na dinukot si[ya] sa Hagonoy,
Bulacan at matindi ang tortyur na dinaranas niya. Sabi niya gusto niyang
umuwi at makasama ang kanyang magulang. Umiiyak siya. Sabi niya sa
akin ang buong pangalan niya ay Sherlyn Cadapan, mula sa Laguna. Sa
araw tinatanggal ang kanyang kadena at inuutusan si Sherlyn na
maglaba.
xxx xxx xxx.
61. Sino ang mga nakilala mo sa Camp Tecson?
Dito sa Camp Tecson naming nakilala si 'Allan Alvin' (maya-maya nalaman
naming na siya pala si Donald Caigas), ng 24th IB, na tinatawag na
'master' o 'commander' ng kanyang mga tauhan.
Pagkalipas ng 2 araw matapos dalhin si Reynaldo sa Camp Tecson dumating
sina Karen Empeo at Manuel Merino na mga bihag din. Inilagay si
Karen at Manuel sa kwarto ni 'Allan[.]' Kami naman ni Reynaldo ay
nasa katabing kwarto, kasama si Sherlyn.
xxx xxx xxx
62. . . .
Kaming mga lalake (ako, si Reynaldo at si Manuel) ay ginawang utusan, habang
sina Sherlyn at Karen ay ginawang labandera.
Si Sherlyn ang pinahirapan nina Mickey, Donald at Billy. Sabi ni Sherlyn sa
akin na siya'y ginahasa.
xxx xxx xxx
63. . . .
xxx xxx xxx
Kaming lima (ako, si Reynaldo, si Sherlyn, si Karen at si [Merino]) ang dinala
sa Limay. Sinakay ako, si Reynaldo, si Sherlyn at si [Merino] sa isang
stainless na jeep. SiKaren ay isinakay sa itim na sasakyan ni Donald
Caigas. . . .
 117

xxx xxx xxx

66. Saan pa kayo dinala mula sa Limay, Bataan?
Mula sa Limay, kaming 5 (ako, si Reynaldo, si Sherlyn, Si Karen at si Manuel)
ay dinala sa isang safehouse sa Zambales, tabi ng dagat. . . .
(underscoring supplied; italics and emphasis in the original)
On rebuttal, Lt. Col. Anotado and Col. Eduardo Boyles Davalan were called to the witness stand.
Lt. Col. Anotado denied seeing or meeting Manalo. He posited
that Manalo recognized him because he was very active in conducting lectures in Bataan and
even appeared on television regarding an incident involving the 24th Infantry Batallion. He
contended that it was impossible for Manalo, Sherlyn, Karen and Merino to be detained in
the Limay detachment which had no detention area.
Col. Eduardo Boyles Davalan, the then chief of staff of the First Scout Ranger
Regiment in Camp Tecson, testified that the camp is not a detention facility, nor does it
conduct military operations as it only serves as a training facility for scout rangers. He
averred that his regiment does not have any command relation with either the 7th Infantry
Division or the 24th Infantry Battalion. 22
By Decision of September 17, 2008, 23 the appellate court granted the Motion for
Reconsideration in CA-G.R. SP No. 95303 (the habeas corpus case) andordered the
immediate releaseof Sherlyn, Karen and Merino in CA-G.R. SP No. 00002
(the amparo case). Thus it disposed:
WHEREFORE, in CA-G.R. SP NO. 95303 (Habeas Corpus case), the Motion
for Reconsideration is GRANTED.
Accordingly, in both CA-G.R. SP NO. 95303 (Habeas Corpus case) and in CA-
G.R. SP NO. 00002 (Amparo case), the respondents are thereby ordered to
immediately RELEASE, or cause the release, from detention the persons of
Sher[lyn] Cadapan, Karen Empeo and Manuel Merino.
Respondent Director General Avelino Razon is hereby ordered to resume [the]
PNP's unfinished investigation so that the truth will be fully ascertained and
appropriate charges filed against those truly responsible.
SO ORDERED. HESAIT
In reconsidering its earlier Decision in the habeas corpus case, the appellate court
relied heavily on the testimony of Manalo in this wise:
With the additional testimony of Raymond Manalo, the petitioners have
been able to convincingly prove the fact of their detention by some elements
in the military. His testimony is a first hand account that military and
civilian personnel under the 7th Infantry Division were responsible for the
abduction of Sherlyn Cadapan, Karen Empeo and Manuel Merino. He
also confirmed the claim of Oscar Leuterio that the latter was detained in Fort
Magsaysay. It was there where he (Leuterio) saw Manuel Merino.
His testimony that Leuterio saw Manuel Merino in Fort Magsaysay may be
hearsay but not with respect to his meeting with, and talking to, the three
 118

desaparecidos. His testimony on those points was no hearsay.

Raymond Manalo saw the three with his very own eyes as they were detained
and tortured together. In fact, he claimed to be a witness to the burning of
Manuel Merino. In the absence of confirmatory proof, however, the Court will
presume that he is still alive.
The testimony of Raymond Manalo can no longer be ignored and brushed
aside. His narration and those of the earlier witnesses, taken together, constitute
more than substantial evidence warranting an order that the three be released
from detention if they are not being held for a lawful cause. They may be
moved from place to place but still they are considered under detention and
custody of the respondents.
His testimony was clear, consistent and convincing. . . . .
xxx xxx xxx
The additional testimonies of Lt. Col. Felipe Anotado and Col. Eduardo Boyles
Davalan were of no help either. Again, their averments were the same negative
ones which cannot prevail over those of Raymond Manalo. Indeed, Camp
Tecson has been utilized as a training camp for army scout rangers. Even
Raymond Manalo noticed it but the camp's use for purposes other than training
cannot be discounted.
xxx xxx xxx
In view of the foregoing, there is now a clear and credible evidence that the
three missing persons, [Sherlyn, Karen and Merino], are being detained in
military camps and bases under the 7th Infantry Division. Being not held for a
lawful cause, they should be immediately released from detention. (italic in the
original; emphasis and underscoring supplied)
Meanwhile, in the amparo case, the appellate court deemed it a superfluity to issue
any inspection order or production order in light of the release order. As it earlier ruled in
the habeas corpus case, it found that the three detainees' right to life, liberty and security was
being violated, hence, the need to immediately release them, or cause their release. The
appellate court went on to direct the PNP to proceed further with its investigation since there
were enough leads as indicated in the records to ascertain the truth and file the appropriate
charges against those responsible for the abduction and detention of the three.
Lt. Col. Rogelio Boac, et al. challenged before this Court, via petition for review, the
September 17, 2008 Decision of the appellate court. This was docketed asG.R. Nos. 184461-
62, the first above-captioned case subject of the present Decision.
Erlinda Cadapan and Concepcion Empeo, on the other hand, filed their own petition
for review also challenging the same September 17, 2008 Decision of the appellate court
only insofar as the amparo aspect is concerned. Their petition, docketed as G.R. No. 179994,
was redocketed as G.R. No. 184495, the second above-captioned case.
By Resolution of June 15, 2010, the Court ordered the consolidation of G.R. No.
184495 with G.R. Nos. 1844461-62. 24
 119

Meanwhile, Erlinda Cadapan and Concepcion Empeo filed before the appellate
court a Motion to Cite Respondents in Contempt of Court for failure of the respondents in
the amparo and habeas corpus cases to comply with the directive of the appellate court to
immediately release the three missing persons. By Resolution of March 5, 2009, 25 the
appellate court denied the motion, ratiocinating thus:
While the Court, in the dispositive portion, ordered the respondents "to
immediately RELEASE, or cause the release, from detention the persons of
Sherlyn Cadapan, Karen Empeo and Manuel Merino," the decision is not ipso
facto executory. The use of the term "immediately" does not mean that that it is
automatically executory. There is nothing in the Rule on the Writ of
Amparo which states that a decision rendered is immediately executory. . . . .
Neither did the decision become final and executory considering that both
parties questioned the Decision/Resolution before the Supreme Court. . . . .
Besides, the Court has no basis. The petitioners did not file a motion for
execution pending appeal under Section 2 of Rule 39. There being no motion,
the Court could not have issued, and did not issue, a writ of execution. . . . .
(underscoring supplied)
Via a petition for certiorari filed on March 30, 2009 before this Court, Erlinda
Cadapan and Concepcion Empeo challenged the appellate court's March 5, 2009 Resolution
denying their motion to cite respondents in contempt. The petition was docketed as G.R. No.
187109, the last above-captioned case subject of the present Decision.
Only Lt. Col. Anotado and Lt. Mirabelle remained of the original respondents in
the amparo and habeas corpus cases as the other respondents had retired from government
service. 26 The AFP has denied that Arnel Enriquez was a member of the Philippine
Army. 27 The whereabouts of Donald Caigas remain unknown. 28
In G.R. Nos. 184461-62, petitioners posit as follows:
I
. . . THE COURT OF APPEALS GROSSLY MISAPPRECIATED THE
VALUE OF THE TESTIMONY OF RAYMOND MANALO.
II
THE PETITION[S] FOR HABEAS CORPUS AND WRIT OF AMPARO
SHOULD BE DISMISSED BECAUSE RESPONDENTS FAILED TO PROVE
BY THE REQUIRED QUANTUM OF EVIDENCE THAT PETITIONERS
HAVE SHERLYN CADAPAN, KAREN EMPEO AND MANUEL MERINO
ARE IN THEIR CUSTODY.
III
PETITIONERS' DENIALS PER SE SHOULD NOT HAVE BEEN TAKEN
AGAINST THEM BECAUSE THEY DID NOT REALLY HAVE ANY
INVOLVEMENT IN THE ALLEGED ABDUCTION; MOREOVER, THE
SUPPOSED INCONSISTENCIES IN THEIR TESTIMONIES ARE ON
POINTS IRRELEVANT TO THE PETITION.
 120

IV
THE DISPOSITIVE PORTION OF THE ASSAILED DECISION IS VAGUE
AND INCONGRUENT WITH THE FINDINGS OF THE COURT OF
APPEALS.
V
THE COURT OF APPEALS IGNORED AND FAILED TO RULE UPON
THE FATAL PROCEDURAL INFIRMITIES IN THE PETITION FOR WRIT
OF AMPARO. 29 aSEDHC
In G.R. No. 184495, petitioners posit as follows:
5. The Court of Appeals erred in not granting the Interim Relief for Inspection
of Places;
6. The Court of Appeals erred in not granting the Interim Relief for Production
of Documents;
7. The Court of Appeals erred in not finding that the Police Director Gen.
Avelino Razon did not make extraordinary diligence in investigating the
enforced disappearance of the aggrieved parties . . .
8. The Court of Appeals erred in not finding that this was not the command
coming from the highest echelon of powers of the Armed Forces of the
Philippines, Philippine Army and the Seventh Infantry Division of the
Philippine Army to enforcibly disappear [sic] the aggrieved parties . . .
9. The Court of Appeals erred in dropping President Gloria Macapagal Arroyo
as party respondent in this case;
10. The Court of Appeals erred in not finding that President Gloria Macapagal
Arroyo had command responsibility in the enforced disappearance and
continued detention of the three aggrieved parties . . .
11. The Court of Appeals erred in not finding that the Armed Forces Chief of
Staff then Hermogenes Esperon and the Present Chief of Staff as having
command responsibility in the enforced disappearance and continued
detention of the three aggrieved parties . . . 30
In G.R. No. 187109, petitioners raise the following issues:
[1] Whether . . . the decision in the Court of Appeals has become final and
executory[.]
[2] Whether . . . there is a need to file a motion for execution in a Habeas
Corpus decision or in an Amparo decision[.]
[3] Whether . . . an appeal can stay the decision of a Habeas Corpus [case] [or]
an Amparo case[.]31
Essentially, the consolidated petitions present three primary issues, viz.: a) whether
the testimony of Raymond Manalo is credible; b) whether the chief of the AFP, the
commanding general of the Philippine Army, as well as the heads of the concerned units had
command responsibility over the abduction and detention of Sherlyn, Karen and Merino; and
 121

c) whether there is a need to file a motion for execution to cause the release of the aggrieved
parties.
G.R. Nos. 184461-62
Petitioners Lt. Col. Boac, et al. contend that the appellate court erred in giving full
credence to the testimony of Manalo who could not even accurately describe the structures of
Camp Tecson where he claimed to have been detained along with Sherlyn, Karen and
Merino. They underscore that Camp Tecson is not under the jurisdiction of the 24th Infantry
Batallion and that Manalo's testimony is incredible and full of inconsistencies. 32
In Secretary of National Defense v. Manalo, 33 an original petition for Prohibition,
Injunction and Temporary Restraining Order which was treated as a petition under
the Amparo Rule, said Rule having taken effect during the pendency of the petition, the
Court ruled on the truthfulness and veracity of the personal account ofManalo which
included his encounter with Sherlyn, Kara and Merino while on detention. Thus it held:
We affirm the factual findings of the appellate court, largely based on
respondent Raymond Manalo's affidavit and testimony, viz.:
xxx xxx xxx.
We reject the claim of petitioners that respondent Raymond Manalo's
statements were not corroborated by other independent and credible pieces
of evidence. Raymond's affidavit and testimony were corroborated by the
affidavit of respondent Reynaldo Manalo. The testimony and medical reports
prepared by forensic specialist Dr. Molino, and the pictures of the scars left by
the physical injuries inflicted on respondents, also corroborate respondents'
accounts of the torture they endured while in detention. Respondent
Raymond Manalo's familiarity with the facilities in Fort Magsaysay such as the
"DTU," as shown in his testimony and confirmed by Lt. Col. Jimenez to be the
"Division Training Unit," firms up respondents' story that they were detained
for some time in said military facility. (citations omitted; emphasis and
underscoring supplied)
On Manalo's having allegedly encountered Sherlyn, Karen and Merino while on detention,
the Court in the immediately cited case synthesized his tale as follows:
The next day, Raymond's chains were removed and he was ordered to clean
outside the barracks. It was then he learned that he was in a detachment of the
Rangers. There were many soldiers, hundreds of them were training. He was
also ordered to clean inside the barracks. In one of the rooms therein, he met
Sherlyn Cadapan from Laguna. She told him that she was a student of the
University of the Philippines and was abducted in Hagonoy, Bulacan. She
confided that she had been subjected to severe torture and raped. She was crying
and longing to go home and be with her parents. During the day, her chains
were removed and she was made to do the laundry.
After a week, Reynaldo was also brought to Camp Tecson. Two days from his
arrival, two other captives, Karen Empeo and Manuel Merino, arrived.
Karen and Manuel were put in the room with "Allan" whose name they later
came to know as Donald Caigas, called "master" or "commander" by his men in
 122

the 24th Infantry Battalion. Raymond and Reynaldo were put in the adjoining
room. At times, Raymond and Reynaldo were threatened, and Reynaldo was
beaten up. In the daytime, their chains were removed, but were put back on at
night. They were threatened that if they escaped, their families would all be
killed.
On or about October 6, 2006, Hilario arrived in Camp Tecson. He told the
detainees that they should be thankful they were still alive and should continue
along their "renewed life." Before the hearing of November 6 or 8, 2006,
respondents were brought to their parents to instruct them not to attend the
hearing. However, their parents had already left for Manila. Respondents were
brought back to Camp Tecson. They stayed in that camp from September 2006
to November 2006, and Raymond was instructed to continue using the name
"Oscar" and holding himself out as a military trainee. He got acquainted with
soldiers of the 24th Infantry Battalion whose names and descriptions he stated
in his affidavit.
On November 22, 2006, respondents, along with Sherlyn, Karen, and
Manuel, were transferred to a camp of the 24th Infantry Battalion in
Limay, Bataan. There were many huts in the camp. They stayed in that camp
until May 8, 2007. Some soldiers of the battalion stayed with them. While there,
battalion soldiers whom Raymond knew as "Mar" and "Billy" beat him up and
hit him in the stomach with their guns. Sherlyn and Karen also suffered
enormous torture in the camp. They were all made to clean, cook, and help in
raising livestock.
Raymond recalled that when "Operation Lubog" was launched, Caigas and
some other soldiers brought him and Manuel with them to take and kill all
sympathizers of the NPA. They were brought to Barangay Bayan-bayanan,
Bataan where he witnessed the killing of an old man doing kaingin. The soldiers
said he was killed because he had a son who was a member of the NPA and he
coddled NPA members in his house. Another time, in another "Operation
Lubog," Raymond was brought to Barangay Orion in a house where NPA men
stayed. When they arrived, only the old man of the house who was sick was
there. They spared him and killed only his son right before Raymond's eyes.
From Limay, Raymond, Reynaldo, Sherlyn, Karen, and Manuel were
transferred to Zambales, in a safehouse near the sea. Caigas and some of his
men stayed with them. A retired army soldier was in charge of the house. Like
in Limay, the five detainees were made to do errands and chores. They stayed in
Zambales from May 8 or 9, 2007 until June 2007. SEIacA
In June 2007, Caigas brought the five back to the camp in Limay.
Raymond, Reynaldo, and Manuel were tasked to bring food to detainees
brought to the camp. Raymond narrated what he witnessed and experienced in
the camp, viz.:
xxx xxx xxx. 34 (emphasis and underscoring supplied)
The Court takes judicial notice of its Decision in the just cited Secretary of National
Defense v. Manalo 35 which assessed the account of Manalo to be a candid and forthright
 123

narrative of his and his brother Reynaldo's abduction by the military in 2006; and of the
corroborative testimonies, in the same case, of Manalo's brother Reynaldo and a forensic
specialist, as well as Manalo's graphic description of the detention area. There is thus no
compelling reason for the Court, in the present case, to disturb its appreciation in Manalo's
testimony. The outright denial of petitioners Lt. Col. Boac, et al. thus crumbles.
Petitioners go on to point out that the assailed Decision of the appellate court is
"vague and incongruent with [its] findings" for, so they contend, while the appellate court
referred to the perpetrators as "misguided and self-righteous civilian and military elements of
the 7th Infantry Division," it failed to identify who these perpetrators are. Moreover,
petitioners assert that Donald Caigas and Arnel Enriquez are not members of the AFP. They
furthermore point out that their co-petitioners Generals Esperon, Tolentino and Palparan have
already retired from the service and thus have no more control of any military camp or base
in the country. 36
There is nothing vague and/or incongruent about the categorical order of the appellate
court for petitioners to release Sherlyn, Karen and Merino. In its discourse, the appellate
court merely referred to "a few misguided self-righteous people who resort to the
extrajudicial process of neutralizing those who disagree with the country's democratic system
of government." Nowhere did it specifically refer to the members of the 7th Infantry Division
as the "misguided self-righteous" ones.
Petitioners finally point out that the parents of Sherlyn and Karen do not have the
requisite standing to file the amparo petition on behalf of Merino. They call attention to the
fact that in the amparo petition, the parents of Sherlyn and Karen merely indicated that they
were "concerned with Manuel Merino" as basis for filing the petition on his behalf. 37
Section 2 of the Rule on the Writ of Amparo 38 provides:
The petition may be filed by the aggrieved party or by any qualified person or
entity in the following order:
(a) Any member of the immediate family, namely: the spouse, children and
parents of the aggrieved party;
(b) Any ascendant, descendant or collateral relative of the aggrieved party
within the fourth civil degree of consanguinity or affinity, in default of those
mentioned in the preceding paragraph; or
(c) Any concerned citizen, organization, association or institution, if there is
no known member of the immediate family or relative of the aggrieved
party.
Indeed, the parents of Sherlyn and Karen failed to allege that there were no known
members of the immediate family or relatives of Merino. The exclusive and successive order
mandated by the above-quoted provision must be followed. The order of priority is not
without reason "to prevent the indiscriminate and groundless filing of petitions
for amparo which may even prejudice the right to life, liberty or security of the aggrieved
party." 39
 124

The Court notes that the parents of Sherlyn and Karen also filed the petition
for habeas corpus on Merino's behalf. No objection was raised therein for, in ahabeas
corpus proceeding, any person may apply for the writ on behalf of the aggrieved party. 40
It is thus only with respect to the amparo petition that the parents of Sherlyn and
Karen are precluded from filing the application on Merino's behalf as they are not authorized
parties under the Rule.
G.R. No. 184495
Preliminarily, the Court finds the appellate court's dismissal of the petitions against
then President Arroyo well-taken, owing to her immunity from suit at the time the habeas
corpus and amparo petitions were filed. 41
Settled is the doctrine that the President, during his tenure of office or actual
incumbency, may not be sued in any civil or criminal case, and there is no need
to provide for it in the Constitution or law. It will degrade the dignity of the high
office of the President, the Head of State, if he can be dragged into court
litigations while serving as such. Furthermore, it is important that he be freed
from any form of harassment, hindrance or distraction to enable him to fully
attend to the performance of his official duties and functions. Unlike the
legislative and judicial branch, only one constitutes the executive branch and
anything which impairs his usefulness in the discharge of the many great and
important duties imposed upon him by the Constitution necessarily impairs the
operation of the Government. . . . 42
Parenthetically, the petitions are bereft of any allegation that then President Arroyo
permitted, condoned or performed any wrongdoing against the three missing persons.
On the issue of whether a military commander may be held liable for the acts of his
subordinates in an amparo proceeding, a brief discussion of the concept ofcommand
responsibility and its application insofar as amparo cases already decided by the Court is in
order.
Rubrico v. Macapagal Arroyo 43 expounded on the concept of command
responsibility as follows:
The evolution of the command responsibility doctrine finds its context in the
development of laws of war and armed combats. According to Fr. Bernas,
"command responsibility," in its simplest terms, means the "responsibility of
commanders for crimes committed by subordinate members of the armed forces
or other persons subject to their control in international wars or domestic
conflict." In this sense, command responsibility is properly a form of criminal
complicity. The Hague Conventions of 1907 adopted the doctrine of command
responsibility, foreshadowing the present-day precept of holding a superior
accountable for the atrocities committed by his subordinates should he be remiss
in his duty of control over them. As then formulated, command responsibility is
"an omission mode of individual criminal liability," whereby the superior is
made responsible for crimes committed by his subordinates for failing to
prevent or punish the perpetrators (as opposed to crimes he ordered). (citations
omitted; emphasis in the original; underscoring supplied) 44
 125

It bears stressing that command responsibility is properly a form of criminal

complicity, 45 and thus a substantive rule that points to criminal or administrative liability.
An amparo proceeding is not criminal in nature nor does it ascertain the criminal
liability of individuals or entities involved. Neither does it partake of a civil or administrative
suit. 46 Rather, it is a remedial measure designed to direct specified courses of action to
government agencies to safeguard the constitutional right to life, liberty and security of
aggrieved individuals. 47
Thus Razon, Jr. v. Tagitis 48 enlightens:
[An amparo proceeding] does nor determine guilt nor pinpoint criminal
culpability for the disappearance [threats thereof or extrajudicial killings]; it
determines responsibility, or at least accountability, for the enforced
disappearance . . . for purposes of imposing the appropriate remedies to address
the disappearance . . . 49(emphasis and underscoring supplied) ECaTAI
Further, Tagitis defines what constitutes "responsibility" and "accountability," viz.:
. . . . Responsibility refers to the extent the actors have been established by
substantial evidence to have participated in whatever way, by action or
omission, in an enforced disappearance, as a measure of the remedies this Court
shall craft, among them, the directive to file the appropriate criminal and civil
cases against the responsible parties in the proper courts. Accountability, on the
other hand, refers to the measure of remedies that should be addressed to those
who exhibited involvement in the enforced disappearance without bringing the
level of their complicity to the level of responsibility defined above; or who are
imputed with knowledge relating to the enforced disappearance and who carry
the burden of disclosure; or those who carry, but have failed to discharge, the
burden of extraordinary diligence in the investigation of the enforced
disappearance. In all these cases, the issuance of the Writ of Amparo is justified
by our primary goal of addressing the disappearance, so that the life of the
victim is preserved and his liberty and security are restored. 50 (emphasis in the
original; underscoring supplied)
Rubrico categorically denies the application of command responsibility
in amparo cases to determine criminal liability. 51 The Court maintains its adherence to this
pronouncement as far as amparo cases are concerned.
Rubrico, however, recognizes a preliminary yet limited application of command
responsibility in amparo cases to instances of determining
the responsible oraccountable individuals or entities that are duty-bound to abate any
transgression on the life, liberty or security of the aggrieved party.
If command responsibility were to be invoked and applied to these proceedings,
it should, at most, be only to determine the author who, at the first instance,
is accountable for, and has the duty to address, the disappearance and
harassments complained of, so as to enable the Court to devise remedial
measures that may be appropriate under the premises to protect rights
covered by the writ of amparo. As intimated earlier, however, the
determination should not be pursued to fix criminal liability on respondents
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preparatory to criminal prosecution, or as a prelude to administrative

disciplinary proceedings under existing administrative issuances, if there be
any. 52 (emphasis and underscoring supplied)
In other words, command responsibility may be loosely applied in amparo cases in
order to identify those accountable individuals that have the power to effectively implement
whatever processes an amparo court would issue. 53 In such application, the amparo court
does not impute criminal responsibility but merely pinpoint the superiors it considers to be in
the best position to protect the rights of the aggrieved party.
Such identification of the responsible and accountable superiors may well be a
preliminary determination of criminal liability which, of course, is still subject to further
investigation by the appropriate government agency.
Relatedly, the legislature came up with Republic Act No. 9851 54 (RA 9851) to
include command responsibility as a form of criminal complicity in crimes against
international humanitarian law, genocide and other crimes. 55 RA 9851 is thus the
substantive law that definitively imputes criminal liability to those superiors who, despite
their position, still fail to take all necessary and reasonable measures within their power to
prevent or repress the commission of illegal acts or to submit these matters to the competent
authorities for investigation and prosecution.
The Court finds that the appellate court erred when it did not specifically name the
respondents that it found to be responsible for the abduction and continued detention of
Sherlyn, Karen and Merino. For, from the records, it appears that the responsible and
accountable individuals are Lt. Col. Anotado, Lt. Mirabelle, Gen. Palparan, Lt. Col. Boac,
Arnel Enriquez and Donald Caigas. They should thus be made to comply with the September
17, 2008 Decision of the appellate court to IMMEDIATELY RELEASE Sherlyn, Karen and
Merino.
The petitions against Generals Esperon, Razon and Tolentino should be dismissed for
lack of merit as there is no showing that they were even remotely accountable and
responsible for the abduction and continued detention of Sherlyn, Karen and Merino.
G.R. No. 187109.
Contrary to the ruling of the appellate court, there is no need to file a motion for
execution for an amparo or habeas corpus decision. Since the right to life, liberty and
security of a person is at stake, the proceedings should not be delayed and execution of any
decision thereon must be expedited as soon as possible since any form of delay, even for a
day, may jeopardize the very rights that these writs seek to immediately protect.
The Solicitor General's argument that the Rules of Court supplement the Rule on the
Writ of Amparo is misplaced. The Rules of Court only find suppletory application in
an amparo proceeding if the Rules strengthen, rather than weaken, the procedural efficacy of
the writ. As it is, the Rule dispenses with dilatory motions in view of the urgency in securing
the life, liberty or security of the aggrieved party. Suffice it to state that a motion for
execution is inconsistent with the extraordinary and expeditious remedy being offered by
an amparo proceeding.
In fine, the appellate court erred in ruling that its directive to immediately release
Sherlyn, Karen and Merino was not automatically executory. For that would defeat the very
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purpose of having summary proceedings 56 in amparo petitions. Summary proceedings, it

bears emphasis, are immediately executory without prejudice to further appeals that may be
taken therefrom. 57
WHEREFORE, in light of the foregoing discussions, the Court renders the
following judgment:
1. The Petitions in G.R. Nos. 184461-62 and G.R. No. 184495 are DISMISSED. The
Decision of the Court of Appeals dated September 17, 2008 is AFFIRMED with
modification in that respondents in G.R. No. 184495, namely Lt. Col. Felipe Anotado, Lt.
Francis Mirabelle Samson, Gen. Jovito Palparan, Lt. Col. Rogelio Boac, Arnel Enriquez and
Donald Caigas are ordered to immediately release Sherlyn Cadapan, Karen Empeo and
Manuel Merino from detention.
The petitions against Generals Esperon, Razon and Tolentino are DISMISSED.
2. The petition in G.R. No. 187109 is GRANTED. The named respondents are
directed to forthwith comply with the September 17, 2008 Decision of the appellate court.
Owing to the retirement and/or reassignment to other places of assignment of some of the
respondents herein and in G.R. No. 184495, the incumbent commanding general of the 7th
Infantry Division and the incumbent battalion commander of the 24th Infantry Battalion,
both of the Philippine Army, are enjoined to fully ensure the release of Sherlyn Cadapan,
Karen Empeo and Manuel Merino from detention. aSEDHC
Respondents Lt. Col. Felipe Anotado, Lt. Francis Mirabelle Samson, Gen. Jovito
Palparan, Lt. Col. Rogelio Boac, Arnel Enriquez and Donald Caigas shall
remainpersonally impleaded in the petitions to answer for any responsibilities and/or
accountabilities they may have incurred during their incumbencies.
Let copies of this Decision and the records of these cases be furnished the Department
of Justice (DOJ), the Philippine National Police (PNP) and the Armed Forces of the
Philippines (AFP) for further investigation to determine the respective criminal and
administrative liabilities of respondents.
All the present petitions are REMANDED to the Court of Appeals for appropriate
action, directed at monitoring of the DOJ, PNP and AFP investigations and the validation of
their results.
SO ORDERED.